Freedman v. The Rector, Wardens And Vestrymen Of St. Matthias Parish Of Los Angeles

37 Cal.2d 16 (1951)

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Nature of the Case

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Facts

P signed a deposit agreement for the purchase of two lots owned by D. P paid $ 2,000 down and agreed to pay the balance of $ 16,000 into escrow within 30 days. The escrow instructions provided that the property should be free of encumbrances except 'covenants, conditions, restrictions, reservations, rights, rights of way, [and] easements . . . now of record.' P was informed of all covenants and easements affecting the property, but he took the position thereafter that he was under no obligation to purchase the property until the title had been cleared. On November 20th the escrow agent informed P that the title was clear except for an easement held by the water and power department across the rear 5 feet of one of the lots. This easement was abandoned the following April. On November 28th P wrote D and the escrow agent repudiating the contract and demanding the return of his deposit claiming the property had been misrepresented to him and that D had failed to clear the title as required by the contract. On December 19th P wrote that he would take title and pay the balance of the purchase price as soon as the easement had been cleared. On December 27th D canceled the escrow and sold the property to a third party for $20,000. In January P indicated his willingness to purchase the property. P sued D for specific performance or restitution of this deposit. D got the judgment because P's breach was willful and P appealed.