Rose v. Garn

• Decision Date: 10 July 1920
• Docket Number: 3461
• Citation: 191 P. 645,56 Utah 533
• Court: Utah Supreme Court
• Parties: ROSE v. GARN

191 P. 645

56 Utah 533

ROSE v. GARN

No. 3461

Supreme Court of Utah

July 10, 1920

Appeal from District Court, First District, Box Elder County; J. D Call, Judge.

Action by Thomas J. P. Rose against M. A. Garn. Judgment for defendant, and plaintiff appeals.

AFFIRMED.

Walters & Harris, of Logan, for appellant.

W. J Lowe, of Brigham, for respondent.

CORFMAN C. J. WEBER and THURMAN, JJ., FRICK, J., GIDEON, J concurring.

OPINION

CORFMAN, C. J.

Plaintiff commenced this action against the defendant to compel the specific performance of a contract made August 15, 1918, with respect to real property situated in Box Elder county, Utah, and certain farming implements used in connection therewith. Attached to and made a part of plaintiff's complaint was the contract. A deed for the real estate and a bill of sale for the personal property were made by the plaintiffs as vendor to the defendant as vendee simultaneously with the contract and placed with the Bank of Garland, Utah, as an "escrow holder," to be delivered to the defendant "upon payment to the said escrow holder of the sum of $ 29,000, as follows, to-wit: $ 500.00 September 1, 1918, $ 28,500.00 on or before January 1, 1919." Said contract or escrow agreement between the parties further provided:

"In the event that said payments are not made when due, or thirty days thereafter, said deed, abstract, and other papers deposited with this agreement shall become null and void and all sums of money theretofore paid by the grantee shall be forfeited to the grantors as liquidated damages."

There are other provisions in the contract to the effect that the defendant shall be entitled to the immediate possession of the property, and that defendant shall pay all taxes, assessments, water charges, or rents assessed, levied, or charged against the land or water stock during the life of the contract except for the year 1918. It is further alleged in substance by the amended complaint of the plaintiff that immediately after the execution of the contract by the parties defendant paid $ 500 on the purchase price ($ 29,000) of the property and entered into the possession of the same and thereafter on September 1, 1918, pursuant to the terms of the contract, made a further payment of $ 500; that the defendant continued in possession of the property until on or about February 4, 1919, at which time defendant attempted to repudiate the agreement and refused to proceed further under the same.

The prayer of the complaint is for specific performance of the contract, for judgment against the defendant in the sum of $ 28,500, and that a vendor's lien be declared against the property; that the property be sold to satisfy the same, and for general equitable relief.

The defendant filed both a general and special demurrer to the amended complaint, and the demurrer being sustained the plaintiff refused to further plead, whereupon a judgment of dismissal was entered by the district court from which the plaintiff appeals.

Necessarily, the case involves a construction of the contract sued upon, and the only question raised for our determination on the appeal is whether or not the judgment of dismissal entered by the district court is to be sustained.

The defendant contends that his failure to make any further payment on the purchase price of the property or to further perform, under the provisions of the contract, and the forfeiture of the sum paid as provided for therein, relieved him from further obligation or liability to the plaintiff. The plaintiff insists that by the defendant's failure to further perform the conditions of the contract he was not confined in his remedy against the defendant to a retainment of the money paid as liquidated damages, but that he had an election of remedies, viz.:

"That at his election he may (1) specifically enforce the contract, or (2) sue at law to recover the purchase price remaining due, or (3) re-enter and take possession of the lands and recover damages for the breach of the contract."

In the present case, as pointed out, plaintiff sues for specific performance and general equitable relief. Evidently the district court took the view in passing on the defendant's demurrer to the plaintiff's complaint that, under the provisions of the contract in question, upon the failure of the defendant to make further payments on the purchase price of the property or to further perform, the plaintiff was limited in his rights to the retention of the installments then paid and to repossession of the property. It is quite true that courts have generally held that forfeiture clauses in contracts affecting the sale of real property are usually made for the sole benefit of the vendor as contended for by plaintiff in this instance. Counsel for plaintiff have cited us to numerous cases and authorities upon which they rely in support of their contention. Among them is the leading case of Wilcoxson v. Stitt, 65 Cal. 596, 4 P. 629, 52 Am. Rep. 310, followed in the following cases: Freeman v. Griswold, 4 Cal. Unrep. Cas. 256, 34 P. 327; Bohart v. Investment Co. 49 Kan. 94, 30 P. 180; Shermere v. Pritchard, 104 Wis. 287, 80 N.W. 458; Meagher v. Hoyle, 173 Mass. 577, 54 N.E. 347; Steel v. Long, 104 Iowa 39, 73 N.W. 470; Maffett v. Railway Co., 46 Ore. 443, 80 P. 489; Westervelt v. Huiskamp, 101 Iowa 196, 70 N.W. 125; Cullen v. Land Co. (Colo.) 184 P. 303; Smith v. Mohn, 87 Cal. 489, 25 P. 696; Reed v. Hickey, 13 Cal.App. 136, 109 P. 38; Newton v. Hull, 90 Cal. 487, 27 P. 429; North Stockton v. Fischer, 138 Cal. 100, 70 P. 1082; Fouts v. Foudray, 31 Okla. 221, 120 P. 960, 38 L.R.A. (N. S.) 256, Ann. Cas. 1913E, 301; Lumber etc., Co. v. Town Co., 51 Kan. 394, 32 P. 1100. In the case of Wilcoxson v. Stitt the contract before the court was one wherein the plaintiff agreed to purchase, for a stipulated price payable in installments, certain real property on or before a specified date. The contract in legal effect was an absolute sale and contained the following provision:

"In the event of failure to comply with the terms and all the conditions hereof by the party of the second part the party of the first part shall be released from all obligations, either in law or equity, to convey said property or any part thereof, and the said party of the second part shall forfeit all right thereto and this agreement shall be void."

Upon failure to make payment of all of the installments, the plaintiff brought an action to recover the balance of the unpaid purchase price. The California court held the plaintiff was entitled to a recovery. Justice THORNTON, the writer of the opinion, in speaking of the provision of the contract above quoted, took occasion to say:

"That such agreement is void only at the election of the plaintiff, who can avoid it or enforce it at his option."

Similar views are expressed in the opinions of the courts in the other cases cited by plaintiff's counsel, and it may be...