McCutchen v. Brink

• Decision Date: 27 March 1924
• Docket Number: 18431.
• Citation: 129 Wash. 103,224 P. 605
• Parties: McCUTCHEN et ux. v. BRINK.
• Court: Washington Supreme Court

224 P. 605

129 Wash. 103

McCUTCHEN et ux. v. BRINK.

No. 18431.

Supreme Court of Washington

March 27, 1924

Department 1.

Appeal from Superior Court, Whitman County; McCroskey, Judge.

Action by A. J. McCutchen and wife against Minda Brink. Judgment for plaintiffs, and defendant appeals. Affirmed.

H. J Welty, of La Crosse (Thomas Neill, of Pullman, of counsel) for appellant.

Le Roy McCann, of Colfax, for respondents.

MACKINTOSH J.

This action is here upon findings of fact, conclusions of law, and judgment. From them it appears that in January, 1921, the respondents owned lots in the town of Garfield, which by written contract they agreed to sell to the appellant for the sum of $3,500, and which the appellant agreed to purchase for that sum. Two hundred dollars were paid in cash, and the balance of $3,300 was paid by the giving of a promissory note, due November 1, 1921. At the time of the making of the contract the respondents executed a deed, which was placed in escrow to be delivered upon payment of the note. The fourth paragraph of the contract was as follows:

'It is expressly agreed that time is of the essence of this contract, and in case of default by the party of the second part, her heirs or assigns, in any of the conditions above stipulated to be performed by her, then and in that case, this contract shall become void and the party of the second part shall have forfeited her rights hereunder and said premises shall revert to and revest in said first parties without any declaration of forfeiture or act of reentry, or any other act to be performed by said first parties, and any payments that shall have been made, shall become forfeited to the parties of the first part, which said payments it is hereby especially agreed shall in that case be deemed as damages hereby liquidated for the nonperformance of this contract by said second party.'

The note was never paid, and this action was commenced for the sum of $3,300, costs, and attorney's fee and to compel the appellant to accept the deed.

The judgment from which this appeal is taken complies with the prayer of the respondent's complaint. It is the theory of the appellant, to quote her, that 'the parties to the contract provided therein for the remedy in case of breach of its conditions, namely, that in case of failure to make the payments at the time mentioned the contract should be void and all rights of the vendee should be forfeited, and all payments made should be deemed liquidated damages, and, having thus provided the remedy for the breach of the contract, that remedy is exclusive.' In other words, that the vendor had only one remedy for the breach by the vendee, and that it is not the usual case where the vendor had the choice of either compelling specific performance or of declaring the contract at an end and retaining the liquidated damages therein provided.

This question is not a new one, and has been determined adversely to the appellant's theory. In Asia Investment Company v. Levin, 118 Wash. 620, 204 P. 808, the question was thoroughly considered, and it was there said:

'What is probably the most difficult question in this case now presents itself, and that is, whether this provision in the contract in regard to liquidated damages should be interpreted as an agreement between the parties, so that the vendor's right to specific performance has been foreclosed. In other words, whether the language of the phrase which we have set out means that all the rights of the vendor under the contract have been settled, and that the sole relief for the vendee's failure to comply lies in the retention of the amount agreed upon as liquidated damages. Although vendors have the right either to a suit in law for damages or one in equity for specific performance, they can, by so agreeing in the contract, waive their right to recourse to either or both of those remedies, and, if it appears that the vendor has agreed that liquidated damages shall be the exclusive resort, or, on the other hand, that he may only maintain an action for specific performance, full effect will be given to such an agreement. We are called on, then, to interpret the meaning of the phrase, 'the same being in settlement of and being hereby fixed as liquidated damages.' Assuming that this phrase is ambiguous, it should be given such interpretation as not to deprive the parties using it of their rights. Unless it is clear that it was the intention that the parties definitely decided to limit their rights, the courts will not interpret language to have that effect. In other words, language in contracts which is subject to two interpretations will be so interpreted as to preserve the rights of all the parties, rather than be interpreted in such a way as to destroy the rights of either one. Applying this rule to the language here, it would seem to be that the proper interpretation to give it is that the $500 paid should be taken 'in settlement * * * of liquidated damages,' the amount of which 'being hereby fixed as liquidated damages.'

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