Millgee Investment Co. v. Friedrich

254 Cal. App. 2d 802, 62 Cal. Rptr. 730, 1967 Cal. App. LEXIS 1458
CourtCalifornia Court of Appeal
DecidedSeptember 29, 1967
DocketCiv. 29897
StatusPublished
Cited by2 cases

This text of 254 Cal. App. 2d 802 (Millgee Investment Co. v. Friedrich) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Millgee Investment Co. v. Friedrich, 254 Cal. App. 2d 802, 62 Cal. Rptr. 730, 1967 Cal. App. LEXIS 1458 (Cal. Ct. App. 1967).

Opinion

STEPHENS, J.

This is an appeal by defendants from a judgment rendered against them for $10,000 plus 7 percent interest from December 13, 1960. The complaint, filed by plaintiff, was one for money had and received and for declaratory relief.

The facts are as follows: On or about August 24, 1960, plaintiff and defendants entered into two written instruments. One related to the purchase by plaintiff of certain land owned by defendants, and the other related to the leasing by plaintiff of additional adjacent land also owned by defendants. In connection with these agreements, on September 1, 1960, $10,000 was paid by plaintiff to defendants. The complaint seeks the recovery of this fund plus interest.

Each of the two instruments, in the purchase agreement and the lease agreement, calls for a payment of $10,000. The purchase agreement requires payment to be made by purchaser (plaintiff) to seller (defendants) not later than January 1, 1961, providing buyer (plaintiff) has not exercised his right to terminate the purchase agreement. Further, it provides the sum shall be applied on the purchase price of the property if escrow closes by title passing. It also provides that the sum ($10,000) “shall be retained by Seller as consideration for executing this agreement if the escrow provided for herein does not close because of breach of Buyer.” 1 Paragraph 5 of the purchase agreement provides “It is agreed that Buyer may at any time prior to Jan. 1, 1961, terminate this agreement . . . , in which event this agreement shall become null and void and in which event said lease agreement shall become null and void ...” Provision is made in the agreement for the return to the respective parties to the agreement as carried into escrow of anything of value deposited in the escrow.

The lease agreement provides: “Lessee [plaintiff] agrees to pay to Lessor [defendants] the sum of Ten Thousand Dollars ($10,000.00) before August 26, 1960. In the event Lessee has fully performed all of Lessee’s obligations hereunder but said *804 zoning is not so obtained, Lessor agrees to repay said sum of money to Lessee on January 1, 1961, and all rights and obligations hereunder shall thereupon cease and terminate. In the event said zoning is so obtained, Three Thousand Dollars ($3,000.00) of said sum shall be applied in payment of the first month’s rental due hereunder, and the balance shall be retained as security for the faithful performance by Lessee 99

The lease agreement further provides: “It is agreed that a condition of this lease is the making of an agreement between Lessor and Lessee with respect to the sale by Lessor to Lessee of all land owned by Lessee [sic] that is adjacent to the leased premises and westerly of a southerly extension of the centerline of “C” Street by August 6, 1960, and actual passage of title of said land from Lessor to Lessee by January 1,1961.”

It is conceded that but one sum of $10,000 was intended to be paid under these two agreements and but one sum of $10,000 was in fact paid.

On or before September 15, 1960, plaintiff, as lessee, made application for commercial zoning of the lease land, and through the efforts of defendants, lessors, the property was so zoned on December 13, 1960. On this same day, December 13, 1960, plaintiff mailed its “Notice of Cancellation” in compliance with paragraph 5 of the purchase agreement.

Defendants contend that the documents establish a fully performed contract in the nature of an option. This contention is at variance with the trial court’s findings XX and XXI, wherein it stated: “The Court finds that the $10,000 was not intended by the parties as consideration for an option” and “The Court finds that an option to purchase and lease was not intended. ’ ’

Though the trial court found as a fact that the extrinsic evidence admitted was of “no real help” in resolving the ambiguity, it is apparent that it was of assistance. The court found that the two agreements were prepared by counsel for defendants. 2 Except for finding XI to the effect that “the parties agreed at the trial that only one $10,000 payment was required,” to which there is no objection, we would conclude two such payments were required—one to be made to apply *805 on the purchase price, and one to cover the first month’s rent, and the remainder as security for lease performance. We recognize that this agreement, at time of trial, relative to the intent of the parties as to sums to be paid, is “extrinsic evidence.” This being the fact, and reliance thereon being accepted by the trial court, we must conclude that if substantial evidence (including inferences) sustains the trial court’s reasonable resolution of amibguity, the appellate court is bound thereby.

The first contention of defendants is, “The Uncontroverted Evidence Establishes a Contract Which Became Fully Performed When Respondents Exercised Their Unilateral Right or Option to Terminate.” They argue that plaintiff and defendants agree that the sum of $10,000 was paid by plaintiff on or about September 1, 1960, in connection with the purchase agreement and lease agreement, and that plaintiff has not sought to rescind the agreements, but rather to stand thereon, hence the $10,000 is presumed the consideration for the execution of the respective agreements in the absence of evidence to the contrary.

We concur with defendants that consideration for an agreement supports a right of termination therein. (Brawley v. Crosby etc. Foundation, Inc., 73 Cal.App.2d 103, 118-119 [166 P.2d 392].) We do not agree that the $10,000 paid is not recoverable under these agreements, or that to allow such recovery would make the right termination (and the agreements) unsupported by consideration.

Paragraph 5 of the purchase agreement provided the right to terminate the agreement at any time prior to January 1, 1961. Such termination operated to make null and void both agreements. While this action taken by plaintiff on December 13, 1960, terminated the executory provisions of the agreements, it did not and could not impose a duty upon defendants different than that imposed by the provisions of the agreements. By this termination on December 13, 1960, plaintiff had suffered the detriments of (1) paying, or still being obligated to pay, all escrow fees and expenses in connection with the escrow, excepting cost of title policy, revenue stamps, and cost of preparing deed and one-half of customary escrow fees; (2) all brokers’ commissions (not over 1 percent of values) ; (3) foregoing the benefit of possession and use of $10,000 for the period September 1, 1960, to and including December 13, 1960, this benefit of possession and use, interest and obligation free, being in defendants throughout that *806 period; (4) paying whatever costs there may be attendant to the zoning change and application; (5) the obligation to give written notice of termination. These constitute adequate consideration; hence the $10,000 itself is not the sole consideration, as urged by defendants. (Mutz v. Wallace, 214 Cal.App.2d 100, 111 [29 Cal.Rptr. 170].)

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2 Cal. App. 3d 98 (California Court of Appeal, 1969)

Cite This Page — Counsel Stack

Bluebook (online)
254 Cal. App. 2d 802, 62 Cal. Rptr. 730, 1967 Cal. App. LEXIS 1458, Counsel Stack Legal Research, https://law.counselstack.com/opinion/millgee-investment-co-v-friedrich-calctapp-1967.