Doryon v. Salant

• Decision Date: 08 December 1977
• Citation: 75 Cal.App.3d 706,142 Cal.Rptr. 378
• Court: California Court of Appeals Court of Appeals
• Parties: Dan and Vicky DORYON, Plaintiffs and Appellants, v. Marvin and Cecile SALANT, Defendants and Respondents. Civ. 50492.

Page 378

142 Cal.Rptr. 378

75 Cal.App.3d 706

Dan and Vicky DORYON, Plaintiffs and Appellants, v. Marvin and Cecile SALANT, Defendants and Respondents.

Civ. 50492.

Court of Appeal, Second District, Division 5, California.

Dec. 8, 1977.

Hearing Denied Feb. 1, 1978.

[75 Cal.App.3d 708] Harold Rostow, Los Angeles, for plaintiffs and appellants.

Sydney Halem, Los Angeles, for defendant and respondent Marvin Salant.

Milton R. Gunter, Beverly Hills, for defendant and respondent Cecile Salant.

KAUS, Presiding Justice.

Plaintiffs Dan and Vicky Doryon brought an action for specific performance against Marvin and Cecile Salant. After a court trial, judgment was entered in favor of defendants. ¹

FACTS

This dispute involves residential property located at 6211 West Fifth Street in Los Angeles. Defendants retained Ginza Realty to sell the house. On August 20, 1974, plaintiffs signed a form "Offer to Purchase & Deposit Receipt" which provided:

Plaintiffs agreed to buy the property for $65,000. They paid Ginza Realty a deposit of $1,000 and agreed to deposit an additional $2,000 "at opening of escrow . . . within 5 days from date hereof," and an additional $10,000 before the close of escrow a total down payment of $13,000. The offer was "subject to buyer obtaining a 1st trust deed and note for $52,000 payable at $490.97 per month . . . for a period of 25 years at 101/2 percent interest or less." The parties agreed "to enter into a 60 day escrow and to sign all necessary escrow instructions within 5 days from the date hereof." The offer also provided: "Time is of the essence of this contract but time for any act required to be done may be extended not longer than thirty days by the undersigned broker."

On August 27, defendants made a counteroffer which raised the purchase price to $68,500, and provided that the buyers would have "21 working days from opening of escrow to obtain a 1st trust deed and note, . . ." The preprinted counteroffer also provided: "OTHER TERMS: All other terms to remain the same."

Plaintiffs signed and accepted the counteroffer on August 28, 1974.

The deposit receipt also provided in the preprinted portion that Crestview Escrow would handle the escrow. However, on August 29 or 30 when the Ginza agent went to defendants' house to tell them that the counteroffer had been accepted, defendant Marvin Salant said that he did not want Crestview to handle the escrow, but that he wanted a bank of his choice, which bank he had not decided upon. On September 3, the agent opened an escrow at a branch of the Security Pacific bank nearest defendants' house. The Security Bank typed up escrow instructions. The agent brought the instructions to plaintiffs who promptly signed them. These instructions included the provision that $1,000 would be deposited in escrow by Ginza Realty and $2,000 would be deposited "upon signing of these instructions."

On September 4, 1974, plaintiffs gave the Ginza agent a check for $2,000 payable to Ginza. However, it was not until September 17 that Ginza deposited even $1,000 in escrow. No other amounts were deposited in escrow. Ginza apparently deposited plaintiffs' $2,000 check in its trust account. The sellers never signed the escrow instructions. On September 17, 1974, plaintiffs obtained a commitment from a savings and loan institution for a $51,000 loan.

On September 19, plaintiffs signed supplemental escrow instructions which recited the terms of the loan commitment and added: "This complies with all requirements of this escrow for Buyer to obtain a new loan and the contingency regarding same as set out (in the) original escrow instructions dated September 3, 1974 is hereby deleted."

Between September 17 and October 1, the Ginza salesman repeatedly called defendants to ask them to sign the escrow instructions. Defendants stalled. First they wanted to know the exact cost of the termite report. Then there was a further delay because their attorney allegedly had "the papers" and was out of town for several days. Defendants never stated that they At trial, defendant Marvin Salant was asked the reason that he did not sign the escrow instructions. His response was: "We thought the price was too low."

would not sign the escrow instructions, but on October 1, their attorney wrote Ginza that they would refuse to do so, because the fair market price of the property was $71,500 and Ginza had negligently undervalued it.

At the end of plaintiffs' case, defendants moved for judgment under section 631.8 of the Code of Civil Procedure. The sole basis for their motion was that, since Ginza was not a licensed escrow agent, plaintiffs had breached the contract by paying the $2,000 deposit to Ginza, rather than into the escrow. Although the court thought that "if morality were involved here, or good faith or things of that sort, I might be tempted to consider the urgings of the plaintiffs, who I feel are in good faith and desired very much to have this property, and maybe deserve to get it," it felt compelled to grant the motion, though not on the ground urged by defendants. The court's reason as stated from the bench and elaborated in a later written memorandum, was that the plaintiffs' offer and the defendants' counteroffer, though accepted by plaintiffs, did not constitute a contract. The court fastened onto the fact that the counteroffer had raised the purchase price from $65,000 to $68,500 leaving, in the court's view, a gap of $3,500, with no provision on how it would be paid or financed. "It cannot be presumed, in the absence of evidence, that the sellers wanted the added $3,500 to be paid them in cash. It might not, for example, have been in their interest tax-wise to do so. The terms of sale were vital to the sellers as well as to the purchasers, and the form of such payment to them is not spelled out in the documents, . . ."

Defendants then submitted proposed findings of fact which included a finding that plaintiffs were "neither ready, willing or able purchasers of the real property." Plaintiffs filed written objections to the proposed findings, pointing out specifically that this finding was not supported by the evidence. No such finding appears in the findings which the court eventually did sign. Those are to the effect that (1) the contract between the parties "lacks essential terms relative to manner of payment of the contract price and does not constitute an enforceable contract in that it cannot be determined from the contract, or from any other evidence, how much of the price was to be in cash, and how much from the first trust deed," and (2) that plaintiffs had breached the contract because the escrow was opened one day late September 3 instead of September 2 and no cash was deposited in escrow until September 17.

DISCUSSION

The court's findings are not supported by the evidence and are contrary to law.

Enforceable Contract

The trial court erred in finding that the purported contract lacked "essential terms relative to the manner of payment of the contract price, . . ."

In a real property transaction, the "material factors to be ascertained from the written contract are the seller, the buyer, the price to be paid, the time and manner of payment, and the property to be transferred, describing it so it may be identified. (Citations.)" (King v. Stanley (1948)32 Cal.2d 584, 589, 197 P.2d 321, 324.)

Those factors were satisfied here. The purchase price, payable by the close of escrow, was $68,500. The sale, was as to the sellers, a cash sale. The provision in plaintiffs' offer that made the sale subject to their being able to obtain a $52,000 loan, was solely for plaintiffs' benefit; if unable to obtain the loan, their performance was excused. ² Defendants' sole right was that within the 21-day period from opening an escrow, the buyers use due diligence to obtain the proposed financing, (Abrams v. Motter (1970) 3 Cal.App.3d 828, 837-838, 83 Cal.Rptr. 855) so that $68,500 in cash would be available at the close of escrow. Defendants would have had no complaint if plaintiffs had elected to forego financing altogether and to pay the purchase price with their own cash.

In short, when plaintiffs signed the supplemental escrow instructions on September 19 well within the 21-day period to the effect that they were satisfied with the $51,000 loan commitment they had obtained, they waived any condition precedent to their performance and defendants were contractually assured of obtaining the full purchase price in cash. That was the full extent of their rights in the matter.

"(A) contracting party may waive provisions placed in a contract solely for his benefit. (Citations.)" (Spellman v. Dixon (1967) 256 Cal.App.2d 1, 4, 63 Cal.Rptr. 668, 671; see also Wesley N. Taylor Co. v. Russell (1961) 194 Cal.App.2d 816, 828, 15 Cal.Rptr. 357, and cases collected; Pease v. Brown (1960) 186 Cal.App.2d 425, 429, 8 Cal.Rptr. 917; Groobman v. Kirk (1958) 159 Cal.App.2d 117, 126, 323 P.2d 867; Johnson v. Lehtonen (1957) 151 Cal.App.2d 579, 581, 312 P.2d 35, and cases discussed.) ³

Wesley N. Taylor Co. v. Russell, supra, 194 Cal.App.2d 816, 15 Cal.Rptr. 357, is very similar to this case. There, the defendant seller entered into an agreement with the prospective buyers, which agreement was contingent on the buyers being able to obtain a 15-year, 6-percent $50,000 mortgage. The buyers were able to obtain only a 12-year mortgage; this was, however, agreeable to them. (194 Cal.App.2d at pp. 825-826, 15 Cal.Rptr. 357.) Still, the seller refused to perform. In holding that the real estate brokers retained by the defendant seller were entitled to their commission, the court ruled: "It is generally held that a provision of the type here involved, one which by its terms is contingent upon the ability of the buyer to obtain a loan, is inserted for the buyer's benefit 'so that he would not be liable for breach of contract unless he could borrow the money with which to pay for the land. He...