Hohener v. Gauss

DEVINE, J.

Appellant, Hohener, gave an assignable option to purchase land which was assigned to respondent, Gauss. The option required payment of $1,200 on or before each six-month period. On April 20, 1961 and October 20, 1961, payments were due. On April 8, 1961, a $1,200 check sent by Gauss was received by Hohener. He simply held the check. On October 3, 1961, a second $1,200 check was received. Both were drawn on the San Lorenzo Branch of First Western Bank. Hohener’s lawyer attempted to have the two cheeks certified, first at United California Bank on November 2, 1961, and later, on December 14, 1961, at the First Western Bank, both banks in Oakland. No attempt was made to have certification or payment by the San Lorenzo Branch. The manager of this bank where Dr. Gauss did business, testified that although his cheeking account was under $1,200, an agreement had been made with Dr. Gauss, before he left for a two-year study period in Chicago, that any overdrafts would he taken care of, because he had many times the amounts of the overdrafts in other funds. Overdrafts to other payees had been honored.

On December 18, 1961, appellant’s attorney sent a letter to Gauss, which was received on January 3, 1962. The letter stated that Hohener “considers the option terminated”; that tender of payment of check where funds are insufficient is not good tender; that the checks are returned with the letter; hut that $500 is offered for quitclaims from Gauss and his assignors. Gauss replied promptly, telling of his arrange

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ment with the hank at San Lorenzo, stating that the checks may he certified or cashed on presentation, and asking if counsel would like the checks returned. No reply having been made, respondent wrote again, returning the cheeks and reminding counsel that three earlier checks of $1,200 each had been sent.

Hohener’s complaint is to quiet title against the option. The trial court found that appellant did not at the time of the delivery of the checks make objection to this method of performance, nor specify that he required any other method of tender of payment; that appellant did not present either cheek to the drawee, and that if he had done so, drawee would have delivered to appellant $1,200 in cash for each check. Judgment was for defendant.