Bruggeman v. Sokol

• Decision Date: 27 January 1954
• Parties: BRUGGEMAN et ux. v. SOKOL et al. Civ. 4757.
• Court: California Court of Appeals Court of Appeals

Page 575

265 P.2d 575

122 Cal.App.2d 876

BRUGGEMAN et ux. v. SOKOL et al.

Civ. 4757.

District Court of Appeal, Fourth District, California.

Jan. 27, 1954.

Buchalter, Nemer & Fields, Los Angeles, for appellants.

Milford W. Dahl, Santa Ana, for respondents.

MUSSELL, Justice.

Defendants and cross-complainants appeal from a judgment and decree quieting title in plaintiffs as joint tenants of certain real property in Orange county and declaring that defendants and cross-complainants have no right, title, interest, claim or estate therein. Defendants, in their answer to the complaint to quiet title, admitted that the record title was in plaintiffs but claimed title to the property by reason of the terms of an escrow agreement and in their cross-complaint sought a decree providing for specific performance of the contract. The trial court concluded that the agreement was unenforceable, quieted plaintiffs' title to the property, and defendants have appealed from the judgment.

On June 19, 1950, plaintiffs and defendant George Sokol signed escrow instructions which provided in part as follows: 'The total consideration of this transaction is $75,000. The first money derived from the sale of the homes to be built on the subject property is to be paid to the seller and continuing as each sale of the constructed homes is completed until the entire amount of $75,000 has been paid * * * which you are instructed to use when, after recording the necessary instruments, you are able to procure a * * * policy of title insurance * * * on the following described property situated in the county of Orange, State of California: Property located at the Northeast corner of 9th & Garden Grove Blvd., in the City of Garden Grove, containing approximately 5 acres. * * * 20 acres more or less located 675 feet east of 9th Street and running gast along Garden Grove Blvd. 640 feet more or less. Legal to be inserted and made a part hereof. * * * Showing title vested in Garden Homes, Inc. (A Calif. Corporation being organized). * * * The successful consummation of this escrow is contingent upon the following:

'1. F. H. A. & V. A. approval for construction loans to file.

'2. Interim Finance to be obtained by the buyers. Buyer will give you written notice when these approvals have been obtained.

'The second trust deed to file concurrently with the construction loans is to be as follows: $75,000.00, payable the net proceeds from the sale of each house on subject property, interest at the rate of 5% per annum from 90 days from the recording date of the deed to this property. This deed of trust is to be in favor of Herman Bruggeman and Florence Bruggeman, husband and wife as joint tenants. Beneficiary agrees to issue Partial Reconveyances upon the request of trustor.

'It is understood and agreed that this is to be a 90 days escrow; however, in the event the buyers need additional time to obtain the necessary approvals, the time element is automatically waived and the buyers may continue to obtain the approvals without additional approval of the sellers.'

These instructions were signed 'Garden Homes, Inc. (being organized) George Sokol' and by the plaintiffs.

On September 6, 1950, these instructions were modified by a writing signed by 'Sunshine Terrace Homes, being inc. by M. C. Sokol' and by plaintiffs. It was agreed therein that a part of the property referred to in the original instructions (approximately 5 acres) was to be conveyed to Garden Homes, Inc., for a consideration of $17,040, 'to be in form of a note secured by a second deed of trust on said property (the same terms and conditions as set out in the original escrow instructions).' The instrument then provided as follows: 'You are to hold this escrow open for the sale of the balance of the property involved. Instructions will be given you at a later date re: price and description.'

On September 11, 1950, plaintiffs and Sunshine Terrace Homes, Inc., executed a further amendment to the escrow instructions providing therein that the title to the property described in the amendment of September 6, 1950, would be taken in the name of Sunshine Terrace Homes, Inc.; that certain lots described therein would be covered by a second deed of trust and that a partial reconveyance for each lot would be issued upon the payment of $950 for each lot so released.

On September 14, 1950, Sunshine Terrace Homes, Inc., advised plaintiffs by letter that they were desirous of proceeding with the development of plaintiffs' property in smaller groups than previously anticipated and that they would pay an additional $2,000 on or before one year after completion of the first group of houses should they for some unforeseen reason not be able to proceed with the entire development.

On March 21, 1951, plaintiffs advised the escrow agency that all escrow instructions pertaining to more than five acres (as described in the amendment dated September 6, 1950) were canceled and the sale involved in the escrow was limited to five acres.

On March 30, 1951, the original escrow instructions were again modified by a written agreement which provided in part that the payment of the sum of $17,040 provided for in the amendment of September 6, 1950, was to be paid in the following manner: The sum of $5,250 to be paid for lots 1 to 6, inclusive; the sum of $1,040 for lot 7, and $950 each for lots 8 to 15, inclusive, and lots 35, 36 and 37 in tract numbered 1466. This tract embraced the five acres described in the amendment of September 6, 1950, and five acres purchased by one Bears. Plaintiffs' remaining property was an undeveloped area. Since the payments set forth in the March 30 modification did not total the sum of $17,040, a further modification was executed on April 2, 1951, in which it was agreed that there would be one note in the sum of $15,700 and another in the sum of $1,340, secured by second deeds of trust, with interest at 5% from December 28, 1950. The deeds of trust were to be signed concurrently 'with the first trust deed or building loan being arranged through F.H.A. commitments'.

The March 30, 1951, amendment also provided that the escrow agency should:

'Hold for the seller, Herman Bruggeman and Luella Bruggeman, the sum of $2,000.00 which you are to pay to said seller, in addition to the price of $3,000.00 per acre, in event that the purchaser does not proceed with the entire development as originally contemplated in escrow No. 968 within one year from this date. The above transaction is to be completed in the office of Stephen & Stephen, 108 West Broadway, Anaheim, Calif. on or before March 30th, 1952.'

On March 31, 1951, plaintiffs notified the escrow agency that all previous instructions in the escrow were canceled provided the amendment to the instructions dated March 30, 1951, was signed by all parties involved.

The houses built on tract No. 1466 were completed in the latter part of 1952 and sold and the said sum of $17,040, with interest, was paid to plaintiffs. About ten months after the completion of the houses the F.H.A. informed Sokol that the area had proved itself and that construction could be continued in that area.

Defendant Sokol testified that he had plans drawn for the houses he was considering building on the 19 acres of undeveloped property but that Mr. Bruggeman refused to let him go on the property to have it surveyed and graded and stated that 'He didn't want to go ahead with those 19 acres'; that Bruggeman refused to let him go on the property after March or April of 1952.

On March 25, 1952, the escrow agent advised plaintiffs by letter that he had received a letter from Sokol instructing them to proceed with previous arrangements to purchase the balance of plaintiffs' property. The agent then said 'We believe it would be better that you all call at our office together before we proceed with the transaction', and in a letter to plaintiffs, dated April 2, 1952, the escrow agent expressed his hope that the parties could get together, iron out their differences and enable the agency to proceed and close the escrow. No deeds or instruments of conveyance were deposited in the escrow by plaintiffs and no documents of indebtedness were deposited therein by Sokol in connection with the undeveloped acreage.

Sunshine Terrace Homes, a corporation, was named as defendant in the amended complaint herein and after filing its answer, stipulated that it could be withdrawn and a default judgment entered against the corporation. It was also stipulated that the defendant Garden Homes, Inc., was never incorporated and that it is one and the same as 'Sokol'.

Defendants first contend that the terms of the written escrow instructions of June 19, 1950, together with the subsequent amendments and modifications thereto are definite and certain and that the agreement between the...