Leiter v. Eltinge

• Decision Date: 09 November 1966
• Citation: 246 Cal.App.2d 306,54 Cal.Rptr. 703
• Court: California Court of Appeals Court of Appeals
• Parties: Paul LEITER, Plaintiff and Appellant, v. George M. ELTINGE et al., Defendants and Respondents. Civ. 8034.

Page 703

54 Cal.Rptr. 703

246 Cal.App.2d 306

Paul LEITER, Plaintiff and Appellant, v. George M. ELTINGE et al., Defendants and Respondents.

Civ. 8034.

Court of Appeal, Fourth District, Division 2, California.

Nov. 9, 1966.

Rehearing Denied Dec. 6, 1966.

[246 Cal.App.2d 308] Rutan & Tucker, Garvin F. Shallenberger, and Peter V. Shackter, Santa Ana, for plaintiff and appellant.

Hubert Maiden, Paul P. Selvin, and Selvin, Cohen & Rosen, Los Angeles, for defendants and respondents, George M. Eltinge, George L. Graziadio, and Eltinge and Graziadio Development Co., a partnership.

Arthur Strock, Newport Beach, for defendant and respondent, Security Title Ins. Co.

Orlan S. Friedman, Beverly Hills, for defendant and respondent, S. V. Hunsaker & Sons.

OPINION

McCABE, Presiding Justice.

Appeal from a judgment entered in favor of defendants upon granting of the motion made pursuant to section 631.8, Code of Civil Procedure, in an action seeking specific performance of a land sale contract and damages for breach of contract.

At least during the month of July 1963 there was an escrow on the same real property here involved wherein Eltinge was the buyer and Tidewater Oil was the seller. The escrow instructions in the Tidewater-Eltinge transaction were not before the court. When the escrow was entered into does not appear. There was testimony the Tidewater-Eltinge escrow had a closing date of July 31 or August 1, 1963.

On July 19, 1963, Tidewater forwarded a deed to the escrow agent, which deed contained an incorrect description of the land. On July 25 Tidewater sent a letter to the escrow holder authorizing it to correct the legal description in the deed. Tidewater did not forward a new and different deed to the escrow holder. The escrow holder in the Eltinge-Tidewater escrow was the same as in the Leiter-Eltinge escrow. Eltinge did not obtain title to the property in question in the present litigation before July 31, 1963.

The plaintiff (hereinafter referred to as 'Leiter') was the vendee under a land sale contract entered into with the defendant vendors, Eltinge, Graziadio, and Eltinge and Graziadio Development Co., a partnership (hereinafter referred to collectively as 'Eltinge'). Plaintiff thereafter contracted to sell the real property, which was the subject of the Eltinge-Leiter agreement, to the remaining defendants, S. V. Hunsaker & Sons (hereinafter referred to as 'Hunsaker').

In February 1963 plaintiff Leiter entered into an agreement with defendant Eltinge for the purchase of approximately 47 acres of land. Pursuant to their understanding, and on February 20, 1963, the parties opened an escrow (No. 49132--E) with Security Title Insurance Company in Santa Ana. The agreed purchase price was $866,540.00 or $18,500.00 per acre, with an initial deposit of some $2,000.00 to open the escrow. Among the provisions of the escrow agreement which are pertinent to the present controversy are the following:

'The parties expect to complete this escrow on or before May 25, 1963; however, the buyer may extend the time limit for closing escrow to June 25, 1963, by releasing prior to May 25, 1963, an additional $5,000.00 to the seller; and then may extend the escrow to July 25, 1963, by releasing prior to June 25, 1963, another or additional $5,000.00 to the seller. In no event shall the closing of escrow extend beyond July 25, 1963. All funds released to seller shall apply on purchase price and shall be retained by seller.'

The foregoing provision was typed on the First page of the escrow instructions. A second printed provision appeared on the reverse or Second page of these instructions, as follows:

'All disbursements are to be made by check of SECURITY TITLE INSURANCE COMPANY. You have (see reverse) days within which to comply with these instructions and additional time as may be required provided written demand to cancel by any party is not handed you after the time given to comply. Filing in public offices of any documents herein called for may preclude cancellation by less than all the parties hereto.'

Subsequently, by making the required deposits and releases of the thus deposited sums to Eltinge, Leiter extended the closing date of the escrow to July 25, 1963. There is no reference in the Leiter-Eltinge escrow instructions to the Eltinge-Tidewater escrow or transaction.

Plaintiff Leiter admittedly was without the financial resources to pay the balance of the purchase price to Eltinge. After fruitless negotiations with several parties, he finally agreed to dispose of the property to Hunsaker for $21,000.00 an acre or a total purchase price of $973,510.00. To effectuate this agreement an escrow was opened by the parties on July 16, 1963, at Title Insurance and Trust Company. The escrow instructions provided:

'This escrow shall be contingent on Escrow No. 49132--E, Security Title Company, Santa Ana, Don Stewart (Officer). Funds will be transferred from this escrow to Security Title Company in an amount sufficient to close that escrow * * *.

'Time is of the essence of these instructions. If this escrow is not in condition to close by July 22, 1963, ¹ any party who then shall have fully complied with his instructions may, in writing, demand the return of his money and/or property; but if none have complied, no demand for return thereof shall be recognized until five days after the escrow holder shall have mailed copies of such demand to all other parties at their respective addresses shown in the escrow instructions. If no such demand is made, close this escrow as soon as possible.'

Thus, by the terms of the escrow, it was to close before the designated closing date of the Leiter-Eltinge escrow. On the same date, Security Title Insurance Company forwarded a request for funds together with the legal description of the property to the Leiter-Hunsaker escrow at Title Insurance and Trust Company.

At no time, on or prior to July 24, 1963, did plaintiff Leiter deposit a deed to the property in the Leiter-Hunsaker escrow. On the other hand, on or prior to July 24, 1963, Hunsaker was unable to deposit the required purchase monies, but after obtaining a loan commitment on July 26, 1963, made the required deposit of $973,510.00 on July 30, 1963. On July 30 Leiter deposited a deed to Hunsaker in the Leiter-Hunsaker escrow.

During the interim, on July 25, 1963, Eltinge, upon learning Leiter would be unable to deposit the agreed purchase payment into the Eltinge-Leiter escrow, arranged to obtain financing elsewhere to insure performance under the terms of the Tidewater-Eltinge escrow. Simultaneously, Eltinge, by telegram, sent a notice of cancellation to the escrow holder, Security Title Insurance Company, terminating the Eltinge-Leiter escrow if the purchase money and the vendee's deed were not deposited by 9:00 a.m. on July 26, 1963. Thereafter, and on July 31, 1963, by means of the alternative financing, Eltinge obtained title to the property.

On July 30, 1963, Title Insurance (Leiter-Hunsaker transaction) forwarded $973,510.00 to Security Title Insurance Company (Leiter-Eltinge transaction) pursuant to the previously mentioned request. Since the Eltinge-Leiter escrow had been cancelled effective July 26, 1963, at 9:00 a.m., Security Title Insurance Company, on demand, ultimately returned the funds to Hunsaker via the escrow agent.

At trial, Eltinge's broker testified he first informed Eltinge of the Leiter-Hunsaker sale and sale price on July 19th or 20th and again on July 24th or 26th. He also informed Eltinge that Hunsaker had a loan commitment, but would be unable to make the purchase-money deposit on the agreed date.

Plaintiff Leiter appeals from an adverse determination of his claim for specific performance of the land sale contract with Eltinge and for damages in the sum of $120,000.00 against Eltinge or Hunsaker jointly and in the alternative. The Leiter specific performance action against Hunsaker was dismissed during trial.

In summarization of the numerous assignments of error, in essence, plaintiff contends the escrow instructions between Eltinge and plaintiff Leiter constituted the entire agreement of the parties, and in that agreement, time was not made of the essence, hence plaintiff's performance thereunder is timely and he is entitled to specific performance of this contract. Plaintiff Leiter further recognizes his contention is contrary to the finding of the trial court that time was of the essence to the contract. Also, plaintiff asserts: even if he was in default he is still entitled to specific performance by virtue of section 3275, Civil Code. He asks for money damages if specific performance by Eltinge is no longer possible.

Alternatively, plaintiff Leiter contends he was not in default in the Leiter-Hunsaker escrow for that agreement expressly provided Hunsaker must deposit the purchase money to close the Leiter-Eltinge escrow as a Condition precedent to the duty of Leiter to convey to Hunsaker.

Defendants respond generally to plaintiff's assertions, negativing each in turn.

The findings of the trial court were made after a motion for judgment under Code of Civil Procedure, section 631.8 was granted. Since the trial court had the opportunity to weigh the evidence presented, the court's findings and judgment may be accorded the same weight as though they had been made after a trial in which evidence was presented in support of all parties. (Weinstock v. L. A. Carpet, Inc., 234 Cal.App.2d 809, 811, 44 Cal.Rptr. 852; Columbia Engineering Co. v. Joiner, 231 Cal.App.2d 837, 842, 42 Cal.Rptr. 241; Estate of Sharff, 219 Cal.App.2d 128, 132, 33 Cal.Rptr. 52.) The following is then the appropriate rule on appeal where the findings are negative in form: '* * * when two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court * * *' (Callahan v. Gray, 44 Cal.2d 107, 111, 279 P.2d 963, 965; ...