Gittelson v. McKnight

243 P. 889, 75 Cal. App. 698, 1925 Cal. App. LEXIS 235
California Court of Appeal·Decided December 22, 1925·No. Docket No. 5277.·Published·Cited by 2 cases

Opinion

LANGDON, P. J.

This is an appeal by some of the defendants from a judgment in favor of plaintiffs decreeing specific performance of an agreement for the purchase and sale of real property in Los Angeles, California. The record bears out the statement of facts appearing in respondents’ brief, from which we quote:

The initial negotiations were carried on between the defendant John H. McKnight for the sellers and Max Gittelson, father of the plaintiffs George, Harry, and Samuel Gittelson, in behalf of the purchasers, which negotiations finally resulted in an offer in writing by said John H. McKnight and an acceptance by said Max Gittlelson; the consideration was $32,000 net to the sellers, $10,000 to be paid in cash, the balance of the purchase price to be by note secured by mortgage on the property, due in five or seven years at eight per cent interest.

On July 9, 1921, Max Gittelson, the agent, brought the purchasers, his sons, and John H. McKnight, the seller, together. Samuel Gittelson, one of the purchasers, accompanied John H. McKnight, the seller, to the office of the Title Company, where they reaffirmed the terms of the contract and signed escrow instructions to the Title Company, which was to be the custodian of the purchase money, note, deed, and other documents. These instructions were dated July 9, 1921, and by their terms the Gittelsons were to deposit $10,000 with the Title Company as a cash payment, a note for $22,500, signed by the plaintiffs, secured by a trust deed on the property, due in seven years from August 1, 1921, with interest at eight per cent per annum, payable quarterly. John H. McKnight was to deposit a deed executed by himself and Agnes W. McKnight, his wife, vesting-title in the plaintiffs, purchasers, in certain undivided interests. The Title Company was to deliver the $10,000 and the note and trust deed securing the same to John H. McKnight and the deed to the purchasers “provided, within 15 *700 days” the Title Company could issue its certificate as called for, and “in the event the conditions of this escrow have not been complied with at the expiration of the time provided for herein,” the Title Company was “to complete the same at the earliest date possible hereafter,” unless purchasers shall have made written demand on the company for the return of the money and instruments deposited by them. To these conditions John IT. McKnight subscribed in the words “the conditions as above are hereby approved,” and he instructed the Title Company to deliver the deed to the purchasers upon payment to the Title Company for his account of $10,000 “within the time as above provided.”

At the time of the signing of the escrow instructions, when Samuel Gittelson was about to deposit the $10,000 called for, the escrow officer of the Title Company stated that the company did not care to have the entire $10,000 deposited at that time and suggested that Gittelson should then deposit $500 and the balance of the $10,000 and sufficient money to cover expenses when the Title Company had finished its preliminary examination and was ready to issue its certificate and should so notify Gittelson. This arrangement was agreed to by all parties and Gittelson deposited the said $500.

Subsequently John H. McKnight deposited with the Title Company, in pursuance with the contract and instructions, a deed to the property, executed and acknowledged by himself and Agnes W. McKnight, conveying the property to the purchasers in certain undivided interests, as called for in the instructions. Also, the Gittelsons deposited in the escrow a note for $22,500, secured by a trust deed on the property, due in seven years from August 1, 1921, with interest at eight per cent per annum, payable quarterly. Also, Agnes W. McKnight, wife of John H. McKnight, deposited in the escrow a paper signed by her, directing the Title Company to pay all money derived from the use of the deed she and' her husband had deposited (particularly specifying that the deed conveyed the land to the Gittelsons, naming them, and stating the undivided interests vested in each, as called for in the instructions) to John H. McKnight, and further ■ specifically instructing the Title Company in these words: *701 “In the event that the conditions of this escrow have not been complied with at the expiration of the time provided for herein, you are instructed to complete the same at your earliest possible date thereafter unless I shall have made written demand "upon you for the return of all instruments deposited by me.”

The Title Company was not ready to issue its certificate called for within the fifteen days provided in the contract and instructions, that is, was not ready so to do on July 24, 1921, but was ready seven days thereafter, to wit, on August 1, 1921. In the meantime, neither the Gittelsons nor the McKnights had in writing, or otherwise, demanded the return of anything in escrow. On August 1, 1921, the Title Company wrote Samuel Gittelson that it had completed its preliminary examination and was ready to receive the balance to be deposited, and stated that the amount of the balance was $9,667, that is $9,500 balance upon cash payment and $167 to cover expenses. This amount was promptly paid by the Gittelsons on August 2, 1921. The Title Company then had the whole $10,000 cash payment to be made under the contract, $167 for expenses, the note and trust deed securing the same, and the deed from the MeKnights. For some reason not explained by the record the Title Company, instead of delivering the $10,000 note and trust deed to John H. McKnight and the deed to the Gittelsons, on said August 2, 1921, held both money and deed for fifteen days, during which time no demands had been made by either the Gittelsons or the MeKnights for the return of anything deposited.

On August 17, 1921, John H. McKnight caused his attorney to write a letter to the Title Company instructing it to cancel all instructions given by him and to deliver the deed to William O’Brien, on whose letter-head the letter was written. This letter gave as the only reason for canceling his instructions and the return of the deed, that the $10,000 was not deposited with the company within the fifteen days from July 9, 1921, and not until August 2d. The Title Company notified Samuel Gittelson that it had received said letter from said McKnight, copied the contents thereof in its letter to Gittelson and refused to complete the transaction.

This action followed. The trial court decreed specific performance of the contract against John H. McKnight and *702 Agnes McKnight, who have appealed. Pending the appeal Agnes McKnight died and John H. McKnight, as the administrator of her estate was substituted in her place and stead as a defendant and appellant in the action.

The greatest ingenuity has been displayed by counsel in urging innumerable hypertechnical objections to the foregoing transaction. Many of the points made do not warrant serious discussion. The objections which have a semolance of merit are based upon the fact that the original transaction was between Gittelson or his agent and John H. McKnight and that Agnes W. McKnight does not appear to have signed the original offer, nor the first escrow instructions. There are numerous replies to be made to these objections, among which we might mention, first, that there was a stipulation in court by the attorneys that John H.

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Gittelson v. McKnight, 243 P. 889, 75 Cal. App. 698, 1925 Cal. App. LEXIS 235 (Cal. Ct. App. 1925).

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