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Yu v. Paperchase Partnership11/18/1992
MONTGOMERY, Justice.
This is a "vendor and purchaser" case, involving the rights and liabilities, and other legal relations, between two of the parties interested in an installment land sale contract -- the original vendor and a subvendee. The vendor is Paperchase Partnership ("Paperchase"); the subvendee is a married couple, Mr. and Mrs. Daniel T. Yu ("the Yus"). These parties, along with others interested in the contract, were before this Court on a previous occasion. In , we held that a subsequent contract between the original vendees, the Bruckners, and a later purchaser, as well as another contract between the later purchaser and the Yus, did not constitute "assignments" in violation of a clause in the original contract prohibiting assignment without the vendor's consent. The issue in the present case is whether the vendor (Paperchase) had the power to terminate the contract and forfeit the subvendee's (the Yus') interest when there was a default in the vendees' obligation to pay the real estate taxes on the property subject to the contract ("the Property") and the vendor did not notify the subvendee of the default or give it an opportunity to cure.
The trial court, in litigation instituted by the Yus to set aside the forfeiture, ruled that the vendor did not have such power under these circumstances and entered summary judgment in favor of the Yus. We agree with this ruling and affirm.
I.
Paperchase sold the Property to the Bruckners for $180,000 in March 1977, using a standard-form real estate contract containing the following clause:
It is mutually agreed that time is of the essence of this contract. Should the Purchaser fail to make any of the said payments [as required by the contract] . . . or fail or refuse to repay any sums advanced by the Owner . . . and continue in default for ten (10) [later amended to 15] days after written demand for such payments . . . has been mailed to the Purchaser . . . at 9108 Hannett N.E., Albuquerque, New Mexico, then the Owner may, at his option, either declare the whole amount remaining unpaid to be then due, and proceed to enforce the payment of the same; or he may terminate this contract and retain all sums theretofore paid hereunder as rental.
In 1979 the Bruckners sold the Property to A & O Investments for an undisclosed amount; in 1980 A & O Investments sold it to the Yus for $230,000; and in 1984 the Yus sold it to Maurice and Clara Strahl for $312,000. All of these sales were accomplished by standard-form real estate contracts, and each subpurchaser except the Strahls assumed the prior contracts and encumbrances. Paperchase was not notified in writing of the sales, nor was its consent obtained. In 1981, however, Daniel Yu telephoned Robert Buel, one of Paperchase's partners, and advised him that he had purchased the Property. After the Yus purchased the Property, they expended more than $200,000 in principal payments and improvements.
In April 1982, Paperchase sued the Bruckners, A & O Investments, and the Yus for a declaratory judgment that Paperchase could either accelerate the balance due on the contract or forfeit the purchasers' interest in the Property. This was the litigation resolved in Paperchase Partnership v. Bruckner. Paperchase served the summons in that lawsuit on the Bruckners at their then current address, to which they had moved in December 1977, not at the address on Hannett stipulated in the contract. Additionally, Paperchase attached to its complaint a copy of the Yus' real estate contract with A & O Investments, which showed the Yus' address.
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