Court Opinion

ID: 9543071
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:41:47.577878+00
Date Added: 2024-06-11T15:09:38.081101
License: Public Domain

PRATT, Chief Justice
(dissenting).
Plaintiffs, vendees, brought this action upon the theory of a breach by defendants, vendors, of an oral modification of the original oral contract, by which modification it was claimed by plaintiffs that they were to receive the one-half interest in the property upon payment of the $4,000 and the partnership contract was to be entered into at that time; and that defendants failed to deliver at that time, or at all; and failed to enter into the partnership contract with them. The lower court found that there was no such modification of the original contract, and that defendants had not breached the original contract; but that plaintiffs had never paid the balance of $5,000 entitling them to the property transfer and the contract. The evidence in the case will support the lower court’s findings of fact, so we should take those facts to be true.
At no time did plaintiffs tender the balance of the $5,000 —a condition precedent to any duty upon the part of the defendants to comply with the original agreement at the risk of being held for damages for breach. Until such a tender, the inactivity of the defendants is not evidence of their intention to rescind the contract; and, unless they are in the position of having rescinded the contract the law recited by the prevailing opinion is inapplicable. Plaintiffs do not found their cause of action upon the theory of defendants’ rescission, but the prevailing opinion seeks to place them in that position just the same. The effect is *602to allow the plaintiffs to found a rescission upon their own default in order to recover back what they have paid. Apparently time was not of the essence in the oral contract between the parties; and that being so, a tender of the balance. of $5,000 even after November 15, 1948, would have placed upon the shoulders of defendants the burden of taking a stand either to comply with the contract, or to repudiate it. Absent the tender the inactivity of the defendants was no indication that they would not perform; or that they intended not to perform. The vendees cannot make their own default the foundation for a conclusion of rescission on the part of the vendors. To be a little more specific: The following excerpt from plaintiff Mr. Young’s direct examination is enlightening:
“Q. Have you been ready and willing to go ahead with the deal? A. Well, yes, anytime. I can get the money whenever he is ready to, but it will take me a little while to get, and I told him [Hansen] ‘I can take and get the money on my other property, but I would maybe lose two hundred dollars.’ And he said that I will stand half if you will get it. I said, ‘No, the most sensible solution is to get the money from the sale of the house because I can get it without losing any money.’ [The house had not been sold at the time of trial.]
“Q. And you said you would get it and he hasn’t done anything, about it? A. No, he hasn’t.
“The Court: Just a moment, what is this, he said he would stand, half the loss? . A. I offered to get the money, you see, of five thousand dollars. You see, I have two homes I have sold and I could take and sell the contracts on those and raise the money, but it takes quite a little time and you would have to lose money on the property.”
This conversation in which Hansen agreed to stand half the loss necessary to enable Mr. Young to raise the balance of $5,000 in order to finish the transaction, occurred after November 15, 1948, after the money was due and owing. If Hansen was willing to pay one-half the cost of Young raising the money to pay off the balance as Young says Hansen was, it certainly is inconsistent with the idea that the Hansens would not perform their part of the contract^ or that at the time this conversation transpired, Hansen *603had indicated that he refused to go on with the contract. Even Young concedes that the earliest time Hansen stated he would not go through with the deal was around February 10, 1949, approximately three months after payment was to have been made according to the contract as found by the court.
Hansen testified that the difficulties between the parties started after November 15, 1948. Mrs. Hansen says the trouble was from about January 1, 1949, on. Mr. and Mrs. Young both testified that the trouble started after November 15, 1948.
Thus, the friction spoken of in the majority opinion occurred after the breach by the plaintiffs of their obligations to pay the money on November 15, 1948. The fact that friction arose after the default in payment and consequent breach on the part of the plaintiffs and stemmed from that breach, is certainly no reason to hold that defendants must first perform before the defaulting plaintiffs were called upon to perform. If an explanation as to why the Hansens did not perform is deemed necessary, then Mr. Hansen’s statements that he became jittery after November 15th, because it appeared that the Youngs weren’t going through with the deal is certainly a sufficient justification for his not going beyond the duties imposed on him by contract. From all that appears, , the Hansens still retained title to the property on November 15,. 1948, and were ready, willing and able to comply with the contract on that date, and, taking Mr. Young’s statement, quoted above, so remained for some time after that date.
It is true, that there is involved a considerable sum of money, which the Youngs stand to lose under the decision of the lower court. The record and the findings of the trial court show that the Youngs, not,the Hansens brought about this situation whereby they might suffer- the loss. The Youngs could have adequately protected themselves from loss by a proper tender but they failed to do so, and. ill *604order to triumph in this case have tried the case on the theory that the defendants breached some subsequent modification of the original contract, and thus they the plaintiffs were entitled to recover. The trial court held to the contrary, that they, not the defendants were in default and guilty of a breach, and in so holding indicated that the defendants were under no duty to act unless and until plaintiffs had acted. The only testimony on the part of the plaintiffs to the effect that they had offered to pay the $5,000 came in the form of statements that they had a source other than the sale of their home from which they could and would get the money if the defendants would make out the papers, but that it would take time for them to get the money. Young, however, seemingly repudiates this, when, after having told Hansen that he could raise the money, but that it would net him a loss of $200, and after Hansen had offered to stand half this loss in order to get the $5,000 paid, he refused to get the money from this other source, but stated that the most sensible solution would be to pay the money out of the proceeds from the sale of his home because that way he wouldn’t lose money. Apparently, plaintiff, Mr. Young, had determined that in any event he wasn’t going to pay from any source except the proceeds of the house. The house was listed at $16,000 and was never sold. At the time of trial the plaintiff, Young, testified that it still hadn’t been sold, and that he now has it listed at $12,500.
A series of annotations on the subject under controversy, commencing, with 59 A. L. R. 189, and continuing in 102 A. L. R. 852, and 134 A. L. R. 1064, lay down the rule followed in this country, and annotate cases from some 35 jurisdictions sustaining the rule that a vendee who without breach on the part of the vendor, refuses to perform a contract for the purchase of real estate, cannot recover from the vendor the amount paid on the purchase price. Included within these annotations, are two Utah cases sustaining this rule.
*605In the case of McLean v. Wedell, 31 Utah 468, 88 P. 414, plaintiff through a series of transactions had paid $750 on a house and lot under a contract. There was no evidence that defendant had failed to carry out his part of the contract, but rather, showed he was able and willing to perform the obligations under the contract. This court on appeal reversed the trial court where a judgment for the plaintiff had been rendered, stating that the defendant was entitled to a peremptory instruction that as a matter of law the plaintiff could not recover.
Again, in the case of Foxley v. Rich, 35 Utah 162, 99 P. 666, 670, there was a contract to convey and a payment of $500 on the purchase price of $3,500 made on certain land, and the deed was placed in escrow to be delivered after all payments had been made. Three months after a current $500 installment payment was due and unpaid defendant conveyed to his brother, who took with knowledge of vendee’s rights and who it appeared was the holder of the bare legal title only. This court said:
“Having made default in payment in November, 1904, how could he predicate a right to recover back prior payments made by him upon the alleged default of J. Y. Rich occurring in February, 1905? Certainly respondent cannot claim anything for his alleged tender made in January, 1905. Even if this tender had been made in time, it would have been of no legal effect, in view of the fact that it was conditional. In making this tender respondent demanded that Rich comply with respondent’s requests in executing and delivering, certain deeds to lands in which respondent had no interest, and which had no relation to the contract of purchase. * * *”
The court then asks the question,
“When and under what circumstances may the purchaser, under an executory contract for the purchase of real property, recover back money paid upon the contract in case the contract has been abandoned or rescinded?”,
and quotes with approval from the case Boston [Baston] v. Clifford, 68 Ill. 67 at page 69, 18 Am. Rep. 547 as to *606the conditions under which an action to recover part of the purchase price paid may be sustained, as follows:
“(1) Where the rescission is voluntary, and with the mutual consent of the parties, and without default on either side. (2) Where the vendor cannot, or will not, perform the contract on his part. (3) Where the vendor has been guilty of fraud in making the contract, [citations] (4) Where, by the terms of the contract, it is left in the purchaser’s power to rescind it by any action on his part, and he does it. [citation of authorities] (5) Where neither party is ready to complete the contract at the stipulated time, but each is in default.”
The court then analyzed the facts of this case in relation to each and stated:
“The whole matter hinged upon respondent’s refusal or neglect to make the payments as he had agreed to do.”
and in sustaining the result thus reached in the case that the respondent was not entitled to recover back the money paid in stated:
“* * * To permit him to recover hack his payments under the facts and circumstances of this case would, in effect, offer a premium to purchasers of real estate to refuse to comply with their contracts. If the bargain suited them, they would insist on the completion of the purchase; but if it did not, they would refuse to complete it, and sue to recover back the money paid by them. That no part of the purchase money may be recovered back under circumstances like those which are controlling in this case is illustrated in the following cases: Aikman v. Sanborn, 5 Cal. Unrep. Cas. 961, 52 P. 729; Joyce v. Shafer, 97 Cal. 335, 32 P. 320; Dennis v. Strassburger, 89 Cal. 583, 26 P. 1070; Reddish v. Smith, 10 Wash. 178, 38 P. 1003, 45 Am. St. Rep. 781; Garberino v. Roberts, 109 Cal. 125, 41 P. 857; Shively v. Semi-tropic L. & W. Co., 99 Cal. 259, 33 P. 848; Webb. v. Stephenson, 11 Wash. 342, 39 P. 952. While numerous cases might be cited in suport [sic] of the doctrine, the foregoing are quite sufficient. In these cases the facts and circumstances cover a wide field, but in all of them the rule that the purchaser must strictly comply with his agreement, or tender performance at the proper time and in a legal manner, is rigorously enforced. From what has been said it follows that the judgment in favor of respondent is contrary to law, and therefore cannot be permitted tó stand.”
*607For other recent cases from other jurisdictions announcing and sustaining this same rule, see: Sawyer v. Sterling Realty Co., 41 Cal. App. 2d 715, 107 P. 2d 449; Ross v. Southern California Junior College, 15 Cal. App. 2d 541, 59 P. 2d 1038; Rea v. Security Trust & Savings Bank, 129 Cal. App. 663, 19 P. 2d 267; Martinelli v. Hogrefe, 123 Cal. App. 438, 11 P. 2d 412; Fleischer v. Locktoood Lumber Co., 258 App. Div. 900, 16 N. Y. S. 2d 205; United Farmers' City Market v. Donofrio, 43 Ariz. 35, 29 P. 2d 144; Lake v. Bernstein, 215 Iowa 777, 246 N. W. 790, 102 A. L. R. 846; Williamson v. Wilson, 56 Idaho 198, 52 P. 2d 138; Quinlan v. St. John, 28 Wyo. 91, 201 P. 149, 203 P. 1088. Many others could be cited, but these are indicative of the rule which prevails.