Court Opinion

ID: 9532151
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:18:38.899405+00
Date Added: 2024-06-11T13:28:41.039599
License: Public Domain

WOLFE, Chief Justice
(dissenting).
I dissent. Plaintiffs and appellants contend that the trial court, in the Salt Lake County case erred in its conclusion of law:
“That by reason of plaintiffs’ failure to make the payments of rent, provide the insurance coverage and payment therefor, as provided for in said contract, and failure to pay the expenses and obligations incurred in connection with their operation of the business known as ‘Ski Inn’ after October 1, 1948, as provided in said contract, and their insolvency on October 1, 1948 defendant was excused and was not obligated to install a ski tow, as provided in said contract.”
Paragraph 8 of the sale and lease agreement provides:
“First party [defendant Knight] agrees that he will install near the said Ski Inn, not later than the beginning of the 1948-49 ski season, a fully operable ski tow. It is expressly agreed, however, that none of the proceeds from such ski tow will go to the Second parties [plaintiffs]”.
As the main opinion points out, plaintiffs paid $3,000 at the time of execution of the agreement and paid $125 rent for the months of May and June. They insured the equipment for $6,500 but provided no insurance on the building. *282The June payment of $3,000 to apply on fixtures and equipment was orally extended by defendant. This brings us up to what I consider the critical month of August 1948.
Accepting the findings in the Salt Lake County case (see difference on this point in the majority opinion) the facts are that defendant agreed that if the plaintiffs paid $1,000 on the fixtures and made prompt payment of the arrears in rent and provided insurance coverage, that he would agree to a moratorium as to the $2,000 balance on the fixtures until January 1, 1949. Plaintiffs paid $1000 on August 9th. A third party, A. L. Rudy, was at all times ready and willing to construct a ski tow at no expense to defendant, when instructed to do so by defendant. Yet on August 27th defendant informed plaintiffs that no ski tow would be installed by defendant unless the rent and full insurance coverage were paid for.
The trial court’s conclusions of law that the defendant’s promise to have the ski tow constructed was excused must be based on one of two theories; either that the plaintiff’s breach in failing to pay rent, etc., was first in point of time or that it was a substantial failure of performance which excused defendant’s breach. This contract is execu-tory in so many of its features that it is erroneous to excuse the defendant’s breach merely because the plaintiffs defaulted first. The nature and inherent importance of the respective covenants breached must be the decisive factor in our determination whether justification existed or not.
I believe that the building of the ski tow was a material factor and the principal inducement to plaintiffs’ execution of the lease agreement. The principal source of income to the Ski Inn would be from customers who would be attracted by the operation of the ski tow. Success hinged upon performance of this covenant. It was an essential if not vital part of the consideration. On August 27th, when defendant announced his refusal to perform this part of *283the agreement, plaintiffs owed two months back rent ($250) and had bought $6,500 worth of insurance instead of $15,000 as provided in the contract. Plaintiffs had paid $4,000 on the purchase price, $250 in rent and had expended some $2,000 on permanent improvements. Defendant had agreed less than three weeks previously to postpone payment of the balance of the purchase price until the winter season got under way. He treated the contract as though fully in effect, but insisted on complete payment of rent and insurance before he would instruct Rudy to build the ski tow. Williston on Contracts, Revised Ed., Vol. 3, page 2360, states the rule as follows:
“Where several promises are made by one party, a breach of one of them necessarily goes to only part of the consideration, but it may be a vital part, or it may be a minor part. A breach of a separate collateral promise of minor importance will not justify refusal by the other party to perform if the main promise to him has been or is being substantially performed”.
See also comment A on Section 275 of the Restatement of the Law of Contracts.
The majority opinion states in effect that the plaintiffs acquiesced in the defendant’s refusal to have the ski tow built by failing to demand that this be done. Defendant told the plaintiff in plain words that he refused to order the ski tow built. His intention was clearly expressed. Must the plaintiffs thereafter implore or insist that defendant perform? I know of no rule of law that requires a party to a contract to insist upon the other party’s performance after he has just been told that performance will not be forthcoming until all demands are complied with. There is no estoppel here. Nor is plaintiffs’ failure to ask in their pleadings that defendant be required to build a ski tow, material. The agreement had completely broken down at the time plaintiffs filed their complaint. The complaint prayed for damages for the defendant’s failure to perform this part of the agreement.
*284Especially in view of the judgment rendered against plaintiffs for $750 rent for the months of July through December 1948, I believe that the court erred in excusing defendant’s failure to have the ski tow constructed. The trial court has granted specific performance to the defendant in that he required plaintiff to pay rent for the period of time that defendant’s vital breach is said to be excused. Certainly there is no estoppel in this case, nor is the promise to build a ski tow of such minor significance that defendant’s breach in regard thereto is considered inconsequential in view of the judgment against plaintiffs for rent.
I would reverse the judgment and remand the case to the trial court. In view of my minority position, it is not necessary to express my opinion whether the damages of each should be ascertained and offset, or if under these circumstances the court should determine whether or not the liquidated damages clause was in reality a penalty clause, so as to permit equity to abrogate it and assess the actual damages only.
CROCKETT, J., being disqualified, did not participate herein.