Court Opinion

ID: 8188802
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:11:39.576451+00
Date Added: 2024-06-11T16:40:31.673337
License: Public Domain

Kerwin, J.
As appears from the foregoing statement of facts, the contract in question was executed on the 27th day of February, 1906, and contained mutual provisions to the effect that, in case of failure of the second party (plaintiffs) to fulfil the terms of the contract, the sum of $1,000 paid thereon at the time of execution and delivery should he forfeited to the first party (defendants) and the contract he void; and, in case of failure of the first party (defendants) to fulfil the terms of the contract, the sum of $1,000 agreed to he paid by the second party should be returned to the second party and the contract be void. These provisions are clear and unambiguous, and we see no escape from the conclusion that the parties intended just what they said. It also appears quite clearly from the provisions of the contract that the parties advisedly put these stipulations into the contract. The $1,000 deposited by plaintiffs at the time of execution of the contract was to be applied upon the purchase price and the balance paid on March 1, 1906. The subject matter of the contract involved a large amount of property, contracts, rights, and liabilities, which by the terms of the contract were to be assumed and transferred to the plaintiffs, and which involved certain concessions, and it would seem from the terms of the contract that at the time of its execution it had not been definitely determined whether the parties would be able to carry out the terms of the contract as specified. At least this may be fairly inferred from its terms. So it is quite obvious that the parties to the contract adopted the mutual provisions respecting the terms upon which it might be declared void by either party while it remained executory. And it was doubtless con*626templated that, if the privilege to withdraw from the contract and declare it void were exercised by either party, it would be exercised while the contract remained executory, and that if the plaintiffs desired to exercise their option they could do so and forfeit the $1,000, and if defendants elected to withdraw from the contract and declare it void they might do so before performance under it. The case before us is not one where the parties had performed under the contract, but where it remained executory and had not been performed on either side at the time the option to declare void was exercised.
As contended by counsel for appellants, the controlling question in the case is one of construction of the contract and intention of parties. Upon the allegations of the answer admitted by the demurrer it is conceded that the option on the part of the defendants to declare the contract void and return the $1,000 was exercised on the 28th day of February, 1906, and within one day after the execution of the contract. It was certainly competent for the parties thereto to mutually agree to the annulment of the contract in the manner which the parties here agreed, and fix the terms of such annulment. Here the parties did so in clear and unequivocal terms which leave no room for doubt as to their intention, and no reason is perceived why such agreement should not be enforced. 3 Page, Cont. § 1360; Schwab v. Baremore, 95 Minn. 295, 104 N. W. 10; Foster v. Henderson, 29 Oreg. 210, 45 Pac. 899; Thayer v. Allison, 109 Ill. 180. What the rights of the parties under the contract would be if it were executed or partially executed on either side we need not determine, because such a case is not before us.
It is sufficient to say that the answer states a good defense, hence the demurrer thereto was properly overruled.
By the Court. — The order overruling the demurrer is affirmed. ,