Procedural Posture

Procedural Posture

Defendant buyers appealed a judgment of the Superior Court of Los Angeles County (California) in favor of plaintiff sellers on their claim for the alleged value of stock that the buyers agreed to deliver into escrow for the purchase of the sellers’ land.

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Overview

The parties’ agreement was embraced in escrow instructions signed by them. No time for performance was specified and the evidence showed that neither party had complied with the terms of the agreement. The sellers failed to deliver a deed and the buyers failed to deliver the stock. The trial court found against the sellers on the issue of performance, but went beyond the pleadings and excused nonperformance. The trial court awarded a money judgment to the sellers based on the value of the stock at the time the agreement was made, and awarded a good and sufficient grant deed to the buyers. Reversing, the court held that upon the alleged breach of the contract of exchange, the sellers were entitled to bring an action at law for damages based on the value of the stock at the time of the breach. The court found that the cause was tried and determined upon an erroneous theory, and that the judgment for the value of the stock at the time the contract was made could not be sustained.

Outcome

The court reversed the trial court’s judgment for the sellers in their claim for damages against the buyers arising from the breach of a contract of exchange involving stock and real property.