Bramwell Inv. Co. v. Uggla

• Decision Date: 14 December 1932
• Docket Number: 5168
• Citation: Bramwell Inv. Co. v. Uggla, 81 Utah 85, 16 P.2d 913 (Utah 1932)
• Court: Utah Supreme Court
• Parties: BRAMWELL INV. CO. v. UGGLA et ux

16 P.2d 913

81 Utah 85

BRAMWELL INV. CO. v. UGGLA et ux

No. 5168

Supreme Court of Utah

December 14, 1932

Appeal from District Court, Second District, Weber County; Geo. S Barker, Judge.

Action by the Bramwell Investment Company against Gayle Uggla and wife.From a judgment in favor of defendants, plaintiff appeals.

REVERSED AND REMANDED, WITH DIRECTIONS.

P. E Norseth and J. E. Evans, both of Ogden, for appellant.

De Vine, Howell & Stine and Lewis J. Wallace, all of Ogden, for respondents.

ELIAS HANSEN, J. CHERRY, C. J., and STRAUP, FOLLAND, and EPHRAIM HANSON, JJ., concur.

OPINION

ELIAS HANSEN, J.

Plaintiff brought this action to recover upon a promissory note in the principal sum of $ 500, together with interest, costs, and attorney's fees.The complaint is in the usual form.Defendants answered.In their answer they allege that the note was without consideration, that it was given as the initial payment on a contract for the purchase of real property, and that such contract was canceled and terminated by the plaintiff prior to the time it commenced the action to recover on the note.The action was originally commenced in the city court of Ogden City, Utah.The trial resulted in a judgment in favor of the defendants.Plaintiff appealed to the district court of Weber county, Utah.The trial in that court resulted in a judgment in favor of the defendants.Plaintiff prosecutes this appeal from the judgment entered in the district court.

The facts out of which this litigation arose are these: On August 1, 1928, the plaintiff, as seller, and the defendants as buyers, entered into a written contract for the sale and purchase of a city lot and the improvements thereon located at 832 Binford avenue, in Ogden City, Weber county Utah.The defendants are husband and wife.The contract made by the parties contains, among others, the following provisions:

"Said buyers agree to pay for said described premises the sum of Fifty-one hundred and twenty-eight dollars, payable in Ogden, Utah, strictly within the following terms, to-wit: Five Hundred Dollars cash, receipt whereof is hereby acknowledged, and Fifty Dollars or more Sept. 1, 1928, and same amount or more each calendar month thereafter until principal and interest are paid in full.

"In case full payment is made within one year, a special reduction of $ 200.00 will be made from contract. * * *

"In the event of a failure to comply with the terms hereof by the buyer or upon failure to make any payments when the same shall become due or within thirty days thereafter, the seller shall, at his option, be released from all obligations in law and equity to convey said property and the buyer shall forfeit as liquidated damages all payments which have been made theretofore on this contract, and the buyer agrees that the seller may, at his option, re-enter and take possession of said premises without legal process as in its first and former state, together with all improvements and additions made by the buyer thereon, and the said additions and improvements shall remain with the land and become the property of the seller, the buyer becoming at once a tenant at will of the seller.It is agreed that time is of the essence of this agreement."

At the same time the contract was executed defendants executed and delivered to the plaintiff the promissory note sued upon in this action.The note was made payable August 1, 1929.After the contract and note were executed, the keys to the house located on the premises covered by the contract of sale were delivered to the defendants.They left the keys with a neighbor.On the morning of the day after the contract was executed, the defendantGayle Uggla, together with his father, called on the president of the defendant corporation, and informed him that defendants would not go through with the contract they had signed the day before.The president of the defendant corporation refused to cancel the contract.Some time later the defendantMildred Uggla called at the office of the plaintiff corporation and asked that the contract be canceled.The president of the plaintiff corporation again refused to cancel the same.At that conversation Mrs. Uggla stated, "We are not going to take possession of the property and if we have to pay the note we will have to take the loss."So far as appears, the defendants did not move into the house located on the premises here involved, but they examined it a few times after the contract was entered into.The evidence shows that there was no fraud or mistake connected with the execution of the contract.On December 5, 1928, the plaintiff wrote the defendants a letter which reads as follows:

"Gayle and Mildred Uggla, Laramie, Wyoming.

"This is to give you legal notice that inasmuch as your payments on your building contract covering real estate No. 832 Binford Avenue is now in default and that you have vacated the property, you are hereby notified that unless your back payments and delinquency are paid on or before the sixteenth day of December your contract will be cancelled and we will re-possess the property."

The letter was registered, and the return card showed that it was received by the defendants.Nothing further was done in the matter until February, 1929, when the plaintiff corporation took possession of and rented the property.The defendants made no payment on the purchase price of the property, unless it may be said that the promissory note constituted a payment.Upon these facts, the court below found that the promissory note sued upon was without consideration, and that, plaintiff having rescinded the contract of sale, it is thereby precluded from maintaining an action on the promissory note.The claim that the note was without consideration cannot be successfully maintained.It was given by the defendants and accepted by the plaintiff as and for the initial payment on the contract for the purchase and sale of the property described in the contract.In the transaction of which the note formed a part, the plaintiff gave up a legal right, namely, the right to continue in the possession and absolute ownership of the property, and the defendants acquired a right, namely, the right to immediate possession, and, upon compliance with the terms of the contract, a conveyance to them of the property.Rights thus lost by one and acquired by the other constituted a sufficient consideration to support defendants' promise to pay the note.

A more difficult question to determine is: Were the defendants relieved from their liability to pay the note because plaintiff informed them that, unless the delinquent installments on the contract were paid on or before December 16, 1928, the contract would be canceled, and because of the further fact that plaintiff took possession of the property in February, 1928.Defendants contend that such acts on the part of the plaintiff relieved them from the payment of the note.On the other hand, plaintiff contends that, the note having been given and accepted as cash, and the parties having stipulated in their contract the amount that should be paid as liquidated damages in case of default in payments, the defendants were not relieved from liability to pay the note because of what was done by the plaintiff after the note was executed.In the case of Dopp v. Richards, 43 Utah 332, 135 P. 98, 102, it is said that the refusal of the vendee to make the payments on a contract, which was similar to the contract here involved, gave the vendor the choice of any of the following remedies:

"(1) An action for specific performance, (2) a suit at law to recover the purchase price, with interest, and (3) to re-enter and take possession of the land, and sue to recover damages for the breach of the contract."

The case of Harsh v. Neil, 52 Utah 533, 175 P 606 follows and applies the law as announced in the case of Dopp v. Richards, supra.In both of the foregoing cases payments had been made on the contracts, and the vendors were seeking to enforce further payments after the contracts had been declared forfeited by the vendors.It was held that, the vendors having declared a forfeiture of the contracts, they could not maintain an action on the contracts for any part of the purchase price.Neither of those cases involve the exact question which is here presented; namely, may a vendor maintain an action against the vendees on a promissory note given by them as the initial payment on a contract for the purchase of real property after the vendor has declared a forfeiture of the contract and taken possession of the property because of the failure of the vendees to pay the...