Sturm v. Heim

• Decision Date: 27 February 1964
• Docket Number: No. 7428,7428
• Citation: Sturm v. Heim, 389 P.2d 702, 95 Ariz. 300 (Ariz. 1964)
• Parties: Francis Louis STURM and Christine Antonia Augustine Sturm, his wife, Appellants, v. Gustav F. HEIM and Florence E. Heim, his wife, Appellees.
• Court: Arizona Supreme Court

Page 702

389 P.2d 702

95 Ariz. 300

Francis Louis STURM and Christine Antonia Augustine Sturm, his wife, Appellants, v.Gustav F. HEIM and Florence E. Heim, his wife, Appellees.

No. 7428.

Supreme Court of Arizona, In Division.

Feb. 27, 1964.

Herbert B. Finn, Phoenix, for appellants.

Cordova, Goss & Mariscal, Phoenix, for appellees.

JENNINGS, Justice.

On September 23, 1958, plaintiffs-appellants filed their complaint praying for specific performance of an agreement for the sale of real estate between appellants and defendants-appellees.Certain other relief was requested by appellants, but these prayers are not now at issue.

Appellees answered to the effect that appellants had forfeited all of their rights under the agreement and were barred by the statute of limitations.Appellees also filed a counterclaim to quiet title.Appellants filed a reply in the form of a general denial.

The case was tried to a jury, but the jury was dismissed, being unable to arrive at a verdict.Both parties filed a motion for a directed verdict.The court granted appellees' motion.Judgment was entered on the counterclaim and on the order granting appellees' motion.Appellants' motion for a new trial was denied.

From the order granting appellees' motion and the judgment entered thereon, from the judgment on the counterclaim, and from the orders denying their motions for a directed verdict and a new trial, appellants bring this appeal.

Hereinafter appellants and appellees will be designated 'buyers' and 'sellers' respectively.

The evidence shows that on December 10, 1947, buyers and sellers entered into an agreement for the purchase of eighty acres of real property described as follows:

'The North one-half of the Southwest one-quarter of Section 11, Township 4 North, Range 2 West of the Gila and Salt River Base and Meridian.'

The purchase price was $2,500, $300 of which was to be paid upon the execution of the agreement with the balance payable in installments of $40 per month with interest on the unpaid balance at the rate of four per cent per annum.The monthly payments were to commence upon the 3rd day of January, 1948, and to continue upon the 3rd day of each and every month thereafter until the entire sum was paid.

The buyers agreed to pay all taxes and assessments levied upon the said premises for the year 1948 and subsequent thereto.The sellers covenanted to deliver possession upon the execution of the agreement, and to deliver a warranty deed upon the payment in full of the purchase price.

The agreement contained the following default clause:

'In case the second parties shall fail to make the payments aforesaid, or any of them, punctually and upon the strict terms and at the times and in the manner provided for, and otherwise to conform and to complete all and each of the agreements and stipulations aforesaid stricly and literally, without any failure or default, time being of the essence of this contract, then this contract shall, from the date of such failure, be null and void, and all right and interest hereby created or existing in favor of the second parties, and their heirs or assigns, or derived under this contract, shall utterly cease and determine, and the premises hereby contracted for shall revert to and revest in the first parties, their heirs or assigns, without any declaration of forfeiture or re-entry, or without any other act by first parties to be performed, and without any right of second parties of reclamation of compensation for moneys paid or improvements made, as absolutely, fully and perfectly as if this contract had never been made.And it is hereby further convenanted and agreed by and between the parties hereto that, immediately upon the failure of the second parties to make any of the payments as above provided, all previous payments shall be forfeited to the first parties and shall be retained by said first parties in full liquidation of all damages by them sustained.'(Emphasis ours.)

Shortly after the purchase, the buyers proceeded to build a home upon what they thought was the eighty-acre plot.In choosing a site for the location thereof, they were guided by the advice of Mr. Heim, one of the sellers.The land in question had not been surveyed at the time of the agreement, but a subsequent survey showed that the home had been built on property owned by one Costello.The sellers, in order that the buyers would not lose their home, (the buyers had moved to California during the latter part of 1949) purchased approximately three acres from Costello and had the deed made out to the buyers as a gift.The deed was dated June 30, 1951.

On August 6th, 1951, the sellers sent the buyers a letter enclosing therein the deed to the three acres and explaining that the acreage adjoined the eighty acres which they were purchasing and that they would not lose their home.They also stated that they did not know whether the buyers had paid the taxes on the eighty acres, but that after October 1st, the property would be sold for taxes, if delinquent.

After receiving the letter of August 6th, the buyers hired an attorney, Mr. Sylvan Allen, of Los Angeles, California.The buyers were concerned about whether the three acres were contiguous with the land they were purchasing.Allen wrote to the sellers in September and enclosed therein the monthly payment.He stated that the payment was being made under protest, and was merely to keep the purchase contract in good standing.Up through August, all of the payments had been made on time, but this one was received late on September 24, 1951.This brought the total sum paid up to $2100, 84% of the purchase price.No further payment or tender to pay in accordance with the terms of the contract was made until the filing of the lawsuit seven years later.

This is an executory contract for the sale of real property in which the sellers agreed to deliver possession immediately and a warranty deed to the property...