Meridian Oil Co. v. Dunham

SHAW, J.

Action to enforce specific performance of a contract to convey real estate.

On July 14, 1902, the plaintiff was a corporation having a board of three directors, of which defendant and his wife were members and president and secretary respectively thereof. It had in process of construction an oil refinery located upon certain lands, which were then owned or afterward acquired by defendant. At a meeting held on said date, all the directors being present, its board adopted a resolution to purchase from the defendant the real estate upon which it was constructing its plant, and pay therefor in capital

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stock of the company, and authorized the secretary to issue said stock to the defendant. The stock was issued in accordance with said resolution and delivered to defendant, who conveyed, or caused to be conveyed, to plaintiff all of the property except the three lots involved in this action, and which he did not then own, but subsequently acquired. Plaintiff took possession of the property, including the three lots, and has made valuable improvements thereon, having a number of oil tanks located upon the lots, conveyance of which defendant withholds. After making these improvements, plaintiff learned the condition of the title and demanded a conveyance from defendant, and upon refusal to convey brought this action.

Appellant’s demurrer was properly overruled. The allegations of the complaint sufficiently show that the contract was, as to the defendant, reasonable and just. The consideration for the sale was capital stock of plaintiff company. This was issued to and accepted by defendant, who executed a deed of conveyance to a part of the property. The well-recognized rule that in actions for specific performance the complaint must state the value of the land or other facts showing that the consideration is adequate is not applicable to the facts existing here. After accepting and retaining the agreed consideration, appellant cannot question the adequacy thereof.

(Nicholson

v. Tarpey, 70 Cal. 608, [12 Pac. 778].) The agreement to sell was based upon a parol contract. To justify a court of equity in enforcing the same, there must be, on the part of the purchaser, part performance thereof within the meaning of section 1741, Civil Code. Payment of the purchase price alone does not constitute such part performance. Such payment must be accompanied by a change of possession, or an expenditure of money upon the prop- ' erty. Not only was there a change of possession and payment of the consideration here, but a large expenditure was made upon these lots in the way of improvements thereon, consisting of a number of tanks constituting a part of the plant for its oil refinery.