Lemle v. Barry , 181 Cal. 1 ( 1919 )

I concur in the judgment.

The complaint does not allege that the plaintiff ever tendered to the defendants the one-half of the price that was to be paid upon the execution of the deed. The contract set forth in the complaint shows that the agreement of the defendants to convey the title and that of the plaintiff to pay the first half of the price upon such conveyance were dependent and concurrent covenants. In this respect the case differs fromGlock v. Howard, 123 Cal. 1, [69 Am. St. Rep. 17, 43 L. R. A. 199, 55 P. 713], where the payment of the price was made a condition precedent to the right to demand a deed. What is said in that case on the subject must be considered with this difference in mind. But under the contract here involved a tender would be necessary as a condition precedent to the accrual of a cause of action for damages against a vendor for a refusal to convey. This is the cause of action stated in the complaint. Such tender may be rendered unnecessary, however, by the conduct of the vendors, and where this occurs the tender is excused and the action will lie without it. The question is discussed at length in Gray v. Dougherty, 25 Cal. 278. It is there said that where the vendee "by any adversary steps makes it known that he does not intend to observe and perform his covenant except upon compulsion, thus in effect refusing in advance of a demand, neither law nor equity imposes upon the vendee the observance of a ceremony thus made idle and fruitless." (Page 280.) In this case the complaint avers that the defendants gave notice to the plaintiff that they had declared the contract rights of plaintiff forfeited and that the contract was terminated. This was notice in advance that they would not perform, and under the rule above stated, it absolved the plaintiff from the necessity of making a tender of payment and demand for a deed in order to put the defendants in default and lay a foundation for the action. (See, also, 39 Cyc. 1562; Merrill v. Hexter, 52 Or. 138, [94 P. 972, 96 P. 865]; Sharp v. West, 150 Fed. 461; 2 Warvelle on Vendors, sec. 756.) For these reasons I believe the complaint stated a good cause of action and that the court erred in sustaining a demurrer thereto.

It appears from the reference in the opinion of Justice Wilbur to case No. 2676 between the same parties, that the plaintiff is at the same time pursuing two remedies against the defendants, based on the same transaction; one to recover the price paid, upon the theory that there has been a rescission or abandonment, the other to recover damages for the breach of the covenant to convey. In view of this fact, it seems proper to say that the two remedies are inconsistent and that a recovery cannot be allowed in both actions. (McGibbon v.Schmidt, 172 Cal. 75, [155 P. 460], and cases there cited.) When the defendant wrongfully repudiated the contract of sale, the plaintiff had his election, either to consider it rescinded and sue for the part of the price he had paid, or to consider it still in force and sue for damages caused by the breach. When a contract is rescinded, it ceases to exist. If the action to rescind or an action based on an alleged rescission or abandonment is successful, the contract is forever ended and its covenants cannot thereafter be enforced by any action. If it fails because the alleged rescission did not take place, it has been held that the prosecution of such action does not bar a subsequent action for damages for breach of the contract or to enforce the contract specifically. (Zimmerman v. Robinson, 128 Iowa, 72, [5 Ann. Cas. 960, 102 N.W. 814]; Harrill v.Davis, 168 Fed. 187, [22 L. R. A. (N. S.) 1152, and note, 94 C. C. A. 47]; Bunch v. Grave, 111 Ind. 351, [12 N.E. 514]; Clark v. Heath, 101 Me. 530, [8 L. R. A. (N. S.) 144, and note, 64 A. 913].) But if the facts exist which justify a rescission by one party, and he exercises his right and declares a rescission in some effectual manner, he terminates the contract, and it cannot thereafter be made the basis of an action for damages caused by a breach of its covenants. The questions that may arise under such a dilemma are not presented upon this appeal, for the record in neither case shows the pendency of the other action and the court cannot take judicial notice of it. The matter is mentioned in order to call the attention of the parties to the conditions that may arise in the subsequent progress of the two cases.

Olney, J., concurred.