Caras v. Parker

• Decision Date: 01 April 1957
• Citation: 149 Cal.App.2d 621,309 P.2d 104
• Court: California Court of Appeals Court of Appeals
• Parties: John CARAS and Olympia Caras, Plaintiffs and Respondents, v. James E. PARKER, Leon Goldberg and Fannie Goldberg, Defendants, Leon Goldberg and Frannie Goldberg, Appellants. Civ. 21961.

Page 104

309 P.2d 104

149 Cal.App.2d 621

John CARAS and Olympia Caras, Plaintiffs and Respondents, v. James E. PARKER, Leon Goldberg and Fannie Goldberg, Defendants Leon Goldberg and Frannie Goldberg, Appellants.

Civ. 21961.

District Court of Appeal, Second District, Division 1, California.

April 1, 1957.

Hearing Denied May 29, 1957.

Low & Stone, Beverly Hills, for appellants.

Tanner, Thornton & Myers, Los Angeles, for respondents.

FOURT, Justice.

This is an appeal by defendants Leon and Fannie Goldberg, from a judgment ordering them to convey certain real property to plaintiffs, in an action for specific performance of a contract of sale.

A resume of the pertinent facts of the case is as follows: Defendant James E. Parker was the owner of two lots in the city of Manhattan Beach. Parker agreed, on February 27, 1952, to sell this property to plaintiffs for the sum of $3,900. A six months escrow was entered into by plaintiffs and Parker at the Security-First National Bank of Los Angeles, El Segundo Branch, with the bank as the escrow agent.

It that part of the escrow instructions executed by plaintiffs as 'Buyer,' and at the end of the printed matter on the first page, the following appears in typewriting 'This escrow is contingent upon Buyer securing approval of city of Manhattan Beach of property described above to be divided into eight lots.' There was uncontradicted testimony that this provision was inserted at the buyer's request. The instructions signed by Parker as 'Seller,' authorized the escrow agent to deliver the deed when there was deposited in the escrow for his account the sum of $3,900, and Parker approved and agreed to be bound by the buyers' instructions.

An initial payment of $200 was made by plaintiffs to the broker, Hackius, who deposited it in the escrow on February 28, 1952. On August 11, 1952, there was a deposit in the escrow of $1,995.50, made in the form of a check of Dee B. Tanner, one of the attorneys herein for plaintiffs, and a deposit of $1,775.50, made in the form of a check of plaintiffs on the same day, or a total of $3,911.00, deposited in the escrow. A deed executed by Parker to plaintiffs, dated February 27, 1952, was deposited in the escrow. At the time the final monies were deposited, the escrow agent was requested by plaintiffs to modify the instructions to provide that 'Title would vest in John Caras, a married man, an undivided one-half interest, and Dee B. Tanner, a married man, an undivided one-half interest.'

Sometime about April, 1952, defendants Leon and Fannie Goldberg, husband and wife, hereinafter referred to as the Goldbergs, with information and knowledge of the escrow and of the agreement between Parker and plaintiffs, went to the latter and offered them $1,000, profit if they would, in effect, let the Goldbergs buy the property in question. This offer was refused by plaintiffs.

On April 23, 1952, Parker wrote a letter to the escrow holder wherein he repudiated the agreement. He wrote: 'Please cancel Escrow #351408 as it serves no practical purpose since it is for 6 mos duration & I have no time to close my affairs before I reenter service.

'Mr. Hackius promised action in 30 days after escrow date & has failed to keep his promise. This leaves me with no time & consequently no further benefits to be gained.'

The Goldbergs then purchased the property from Parker. An escrow was set up in the Inglewood Escrow Company on May 8, 1952, between Parker and the Goldbergs, and a deposit of $100 was made and the escrow was closed on July 9, 1952, the price being $5,800. On the latter date the deed was recorded from Parker to Goldberg.

A complaint was filed by plaintiffs on September 10, 1952, at which time they did not know that Parker had sold the property to the Goldbergs. Upon learning of the latter sale, and the facts and circumstances surrounding it, plaintiffs promptly filed an amended complaint on November 25, 1952, wherein it was alleged that the Goldbergs' purchase from Parker was with full knowledge of plaintiffs' contract, and that the Goldbergs conspired with Parker to breach the contract and convey the property to them, instead of to plaintiffs.

There was a motion by the Goldbergs for a judgment on the pleadings, which was granted, and upon appeal that judgment was reversed, Caras v. Parker, 131 Cal.App.2d 141, at page 142, 280 P.2d 226, at page 227, the court stating: 'If the facts alleged can be proved, plaintiffs are entitled to specific performance of their contract as against them all.'

Plaintiffs alleged in their complaint the performance of all the conditions to be performed by them, and the answer of the Goldbergs denied the same.

At the trial, appellants made an offer of proof to the effect that plaintiffs had never fulfilled the condition set forth in the escrow in that the approval of the city of Manhattan Beach had never been obtained for the division of the property into eight lots and that there had been no waiver of that condition. The offer of proof was denied.

The court found that plaintiffs had fully performed all of the conditions of the agreement required to be performed by them, and that since August 11, 1952, they have been entitled to have the property conveyed to them. It was also found that Parker's attempted cancellation of the escrow was without right and a breach of the contract. Further, the facts were found to be substantially the same as the facts heretofore related. The court then gave judgment to the plaintiffs, wherein the Goldbergs were ordered to convey the property to plaintiffs by a deed, plus costs of suit.

As grounds for reversal appellants contend that (1) there is no evidence to support the finding that plaintiffs performed all of the conditions of the agreement required to be performed by them; (2) there is a material variance between plaintiffs' pleading of performance and claim of waiver at the trial; (3) there was no specifically enforceable right against appellants since the contract lacked mutuality of obligation and remedy; (4) the attorney who acquired a one-half interest in the property and the litigation should be brought in as a real party in interest and (5) a specific judgment against respondents, without awarding them compensation or restitution and settling all the rights of all parties to the property is inequitable.

These contentions are without merit. The condition or contingency in question makes it apparent that the agreement between plaintiffs and Parker was an option contract and not a contract of sale. Plaintiffs had six months in which they could attempt to secure the approval of the city to divide the property into eight lots and pay the balance of the purchase price. They were under no obligation to do either. As stated in Menzel v. Primm, 6 Cal.App. 204, 209, 91 P. 754, 756: 'The distinction between a contract to purchase or sell real estate and an option to purchase is that the contract to purchase or sell creates a mutual obligation on the one party to sell and on the other to purchase, while an option merely gives the right to purchase within a limited time without imposing any obligation to purchase.' 29 Am. & Eng. Ency. of Law, 2d Ed., p. 606. In other words, an option is a contract by which the owner of property invests another with the exclusive right to purchase said property at a stipulated sum within a limited or reasonable time in the future. Or, stated in another form, it is a right 'acquired by contract to accept or reject a present offer, within a limited or reasonable time in the future.' 21 Am. & Eng. Ency. of Law, p. 924. When the offer thus made is, within the time stipulated, accepted by any sufficient act or words of the party acquiring the right to accept or reject such offer, the transaction between the parties, ipso facto, ceases to be an option, but becomes a sale or contract of sale, according to the circumstances of the acceptance.'

An option founded upon a valuable consideration cannot be withdrawn or revoked within the time fixed, and it will be binding and obligatory upon the optionor, or his assigns with notice, until it expires by its own limitation. Braselton v. Vokal, 53 Cal.App. 582, 586, 200 P. 670; Dawson v. Goff, 43 Cal.2d 310, 316-317, 273 P.2d 1; Jonas v. Leland, 77 Cal.App.2d 770, 777, 176 P.2d 764; Copple v. Aigeltinger, 167 Cal. 706, 710, 140 P. 1073.

Since an option agreement supported by consideration is an enforceable contract, notwithstanding its unilateral character, it is a sufficient foundation for the escrow of a deed to the property for the purchase of which the option was given. Feisthamel v. Campbell, 55 Cal.App. 774, 779, 205 P. 25.

Parker deposited in the escrow a deed to the property, executed by him to plaintiffs, which he authorized the escrow agent to deliver when he held in the escrow, for the account of Parker, the sum of $3,900. Escrow instructions signed by both parties, where they constitute all the necessary elements of a contract, may be regarded as the written contract of the parties. White v. Reskin, 90 Cal.App. 512, 517, 265 P. 1016; Brown v. Roberts, 121 Cal.App. 654, 658, 9 P.2d 517; Williams v Rush, 134 Cal.App. 554, 558, 25 P.2d 888...