Sackett v. Spindler,

248 Cal. App. 2d 220, 56 Cal. Rptr. 435 (1967)

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Nature of the Case

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Facts

Spindler (D) owned and operated a newspaper in Santa Clara, CA called the Santa Clara Journal. On July 8, 1961, D entered into an agreement with Sackett (P) for P to purchase all the stock in the holding company for the newspaper for $85,000. The agreement obligated P to pay interest at the rate of 6 percent on any unpaid balance. And finally, the contract provided for delivery of the full amount of stock to Sackett free of encumbrances when he made his final payment under the contract. The contract called for terms with final payment by August 15th, and P made the first payments on time. During this period, D had acquired the stock owned by the minority shareholders of S & S Newspapers, had endorsed the stock certificates, and had given all but 454 shares to P's attorneys to hold in escrow until P had paid D the $59,200 balance due under the contract. The balance of $59,200 was paid on August 10. The final check bounced, and on September 1, D reclaimed all the stock certificates held by P's attorney. On September 12th, P made contact with D and indicated that his problems were settled and that he could close the deal. D then served P with notice that unless the final $59,200 was paid with interest by September 22, the deal was off and D would seek damages. P then paid D $3,944.26 for working capital but failed to make any further payments by September 22, and then asked for extension until September 29. That date passed and P once again asked for another deal. P then wrote D that his assets from a divorce proceeding were finally cleared and he was able to close the deal and offered to pay the balance due under the contract over a period of time through a 'liquidating trust.'. D rejected this offer but said he would close the deal if the balance was paid. No tender or offer of cash or its equivalent was made, and P thereafter failed to communicate with D until shortly before the commencement of this action. D had trouble making a profit and obtained a loan of approximately $4,000 by mortgaging various items of personal property owned by him. D sold half of his stock in S & S Newspapers for $10,000. D converted the paper from a daily to a weekly. In July 1962, D repurchased for $10,000 the stock which he had sold the previous November and sold the full 6,316 shares for $22,000, which sale netted D $20,680 after payment of brokerage commission. P sued. D was awarded $34,575.74 in damages. P appealed.