Landfield v. Cohen

California Court of Appeal Dec 14, 1948 No. Civ. 16607Published

Before: Moore

AI Brief

AI-generated · verify before citing

Holding. A vendee who defaults on a real estate purchase contract without equitable excuse cannot recover partial payments made toward the purchase price, regardless of whether the contract explicitly provides for forfeiture or liquidated damages.

Issues

Whether a defaulting vendee may recover a partial payment on a real estate contract in the absence of a forfeiture clause.
Whether the vendee was in default for failing to deposit the balance of the purchase price by the specified date.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The vendee of real property after his own default under his contract of purchase without equitable excuse therefor cannot maintain an action to recover moneys he has paid on the purchase price.”

“The vendor’s right to retain moneys paid on a purchase contract arises out of the very nature of the agreement of free moral agents and exists whether or not the contract provides for forfeiture or liquidated damages”

MOORE, P. J.

Having been denied recovery of $4,000 theretofore paid as part of $156,000—the purchase price of certain real property—appellants demand reversal of the judgr ment on the grounds that (1) respondents did not plead and prove a forfeiture of the partial payment or damages resulting from appellants’ failure to perform their agreement of purchase, (2) appellants were not in default by reason of their failure to deposit the balance of $152,000 in escrow on or before the date specified in the agreement for such deposit.

On May 16, 1946, respondents contracted to sell a parcel of urban property to appellants. The agreement was memorialized by escrow instructions to a title company, in which it was recited that “$4,000 has been paid outside of escrow.” It was also stipulated that respondents would deliver a deed of the property to the escrow agent on or before June 29, 1946; that “this escrow is contingent upon the grantor acquiring the title to the property involved ... Time is of the essence of these instructions. If this escrow is not in condition to close by July 1, 1946, any party who then shall have fully complied with his instructions may, in writing, demand the return of his money and/or property; but if none have complied, no demand for return thereof shall be recognized until five days after the escrow holder shall have mailed copies of such demand to all other parties ... If no such demand is made, close this escrow as soon as possible.”

While appellants did not deposit the $152,000 in the escrow on June 29, 1946, respondents did deposit their grant deed with the escrow holder. On July 8,1946, appellants attempted to cancel the escrow instructions, refused to pay the $152,000 and demanded a return of the $4,000 for the alleged reasons that respondents had not furnished the escrow holder with $42,000 with which to discharge an existing encumbrance - on the property. Prior to the date of escrow respondents had by competitive bid purchased the property from the trustees in bankruptcy of a bankrupt corporation for the sum of $152,000. Appellant Mike Landfield was present in court at the purchase and Imew the terms thereof. Those terms required (1) respondents to consummate the transaction with the bankrupt’s trustees by means of an escrow with the same title company chosen by appellants to hold their escrow with

[179]

Landfield v. Cohen

AI Brief

MOORE, P. J.

More from California Court of Appeal

Related research

AI Brief