Cleary v. Folger
Before: Foote
Synopsis
Contract of Sale—Dependent Covenants — Time of Essence—Mutual Failure to Perform — Specific Performance. — When a contract for the sale of land provides for a cash payment as a forfeit, and for the execution of a deed upon the payment of a second installment of purchase-money at a date fixed and of a mortgage from the purchaser for the residue, and by its terms makes time of the essence of the contract, the covenants to pay the second installment and to execute the deed are mutual -and dependent, and if neither party tenders performance on his part, or demands performance from the other, at the date fixed, the contract is at an end, and cannot thereafter he enforced by either party.
Id. —Forfeiture of Cash Payment. — The provision in the contract for the payment of the first installment in cash “as a forfeit” is to be construed as making such payment in the nature of liquidated damages, if the purchaser should fail to comply with his agreement at the time fixed.
Id. — Forfeitures not Favored.—Forfeitures, as such, are not favored by tlie courts, and are never enforced if they are couched in ambiguous terms, and it is not perfectly clear what the intentions of the parties were with reference to the forfeiture.
Id.—Recovery back of Cash Payment — Money Had and Received — Recoupment of Damages.—The contract having come to an end by the mutual failure of both parties to perform, the money so paid “as a forfeit” remains in the hands of the vendor as money had and received to the use of the purchaser, subject to be recovered by him, less the amount of damages which the vendor may recoup for the failure of the purchaser to complete the purchase.
Id. •— Pleading for Recoupment of Damages. — In order to recoup such damages, they must be specially pleaded in the action to recover the money received.
Id. — Evidence — Judgment upon Cross-complaint for Specific Performance. — In an action to recover back the money so paid, a judgment rendered upon a cross-complaint for a specific performance of the contract, against the defendant’s right to compel such performance, by reason of the mutual failure of the parties to perform dependent covenants, is not competent evidence in favor of the plaintiff, as it does not tend to determine the question as to what was to become of the money designated in the contract “ as a forfeit.”
Foote, C. This was an action to recover the sum of nine hundred dollars, alleged to have been received by the defendant for the plaintiff’s use. The court below, upon the evidence offered by the plaintiff, granted the motion of nonsuit made by the defendant. From the judgment thereupon rendered, and an order denying a new trial, this appeal is taken.
The facts of the case are, that the two parties to the action entered into a contract, which is as follows: —
“ This agreement, made and entered into this twenty-second day of August, in the year of our Lord one thousand eight hundred and eighty-seven, between J. A. Folger, the party of the first part, and Michael Cleary, the party of the second part, witnesseth, that the said party of the first part, in consideration of the covenants and agreements on the part of the said party of the second part hereinafter contained, agrees to sell and convey unto the said party of the second part, and said second party agrees to buy, all the certain lot or parcel of land situate in Brooklyn township, county of Alameda, and. state of California, and bounded and particularly described as follows, to wit: A tract of land containing seven and one quarter (7i) acres, more or less, on the southeasterly side of the county road, the said road being the first road running north from Hopkins Street after leaving Fruitvale Avenue, going toward the east, now known as the Thorne property, adjoining the lands of Mr. Welsh and Mr. Rhoda, for the sum of $9,425, gold coin of the United States; and the said party of the second part, in consideration of the premises, agrees to pay, at the times and in the manner hereinafter mentioned, to the said party of the first part, the [318]sum of $9,425, gold, coin, as follows, to wit: $900 in gold coin as forfeit; $4,100 in gold coin on or before September 6,1887; the balance due of purchase, namely, $4,425, on mortgage at eight per cent per annum.
“ And the said party of the second part agrees to pay all state and county taxes or assessments, of whatsoever nature, which may become due on the premises above described.
“ In the event of a failure to complj’- with the terms hereof by the said party of the second part, the said party of the first part shall be released from all obligations, in law or equity, to convey said property, and said party of the second part shall forfeit all right thereto. And the said party of the first part, on receiving such payment, at the time and in the manner above mentioned, agrees to execute and deliver to the said party of the second part, or to his assigns, a good and sufficient deed conveying said land free and clear of all encumbrances made, done, or suffered by the said party of the first part.
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