The evidence that defendant acted on the advice of counsel obviously could have been disbelieved by the trial court. It must be remembered that the test of bad faith under section 3306 of the Civil Code, supra, is whether there is a deliberate refusal to perform without just cause or excuse ( Nelson v. Fernando Nelson Sons, 5 Cal.2d 511 [ 55 P.2d 859]; Engasser v. Jones, 88 Cal.App.2d 171 [ 198 P.2d 546]; Pixley v. First Federal Sav. Loan Assn., 110 Cal.App.2d 427 [ 243 P.2d 100]; Johnson v. Goldberg, 130 Cal.App.2d 571 [ 279 P.2d 131]; Rasmussen v. Moe, 138 Cal.App.2d 499 [ 292 P.2d 226]) and whether there is good or bad faith is a question of fact ( Rasmussen v. Moe, supra, 138 Cal.App.2d 499). As stated, proof that a party acted on the advice of counsel may be a factor in establishing the defense of good faith.
We disagree. (2) It is settled that when a seller of real property fails or refuses to convey, a buyer who has made advance payments toward the purchase price may recover interest on those payments as damages for breach of contract. ( Vineland Homes, Inc. v. Barish (1956) 138 Cal.App.2d 747, 760 [ 292 P.2d 941]; Rasmussen v. Moe (1956) 138 Cal.App.2d 499, 504 [ 292 P.2d 226]; Civ. Code, ยง 3306) This rule is not limited to sales of real property; it applies to sales in general. For example, in Tomlinson v. Wander Seed Bulb Co. (1960) 177 Cal.App.2d 462 [ 2 Cal.Rptr. 310], the buyer made a down payment on 2,000 pounds of seed, but the seller delivered only 744 pounds.
[4] "The term bad faith, as used in the statute [Civ. Code, ยง 3306] does not require a showing of fraud, but only of a deliberate refusal to perform without just cause or excuse." ( Rasmussen v. Moe, 138 Cal.App.2d 499, 503 [ 292 P.2d 226]); and the question of bad faith was a question of fact. (See Engasser v. Jones, supra, p. 177.)
The plaintiff charged and the court found that defendants "without cause or reason have deliberately refused to perform said agreements . . ." and concluded that defendants acted in bad faith. [3] In Rasmussen v. Moe, 138 Cal.App.2d 499, 503 [4] [ 292 P.2d 226] (referring to Civ. Code Section 3306), the court said: "The term bad faith, as used in the statute does not require a show of fraud, but only of a deliberate refusal to perform without just cause or excuse." See also Engasser v. Jones, 88 Cal.App.2d 171, 177 [7] [ 198 P.2d 546]. [4] A question of bad faith, as is true here, usually resolves itself into a question of fact.
[7] Said Civil Code, section 3306, "relating to detriment caused by breach of agreement to convey an estate in real property being a special provision, prevails over general statutes on damages. ( Boshes v. Miller, 119 Cal.App.2d 332, 336 [ 259 P.2d 447].)" ( Rasmussen v. Moe, 138 Cal.App.2d 499, 503 [3] [ 292 P.2d 226].) In some phases of this cause it would appear to be an attempted partial exchange, especially as to the "Wing foot" house upon the use of which the damages complained of are based.
" Cal.Civ.Code ยง 3306 (1954). The vendee is "entitled to the return of the principal paid," Engasser v. Jones, 88 Cal.App.2d 171, 176, 198 P.2d 546, 549 (1948); and interest thereon, Rasmussen v. Moe, 138 Cal.App.2d 499, 504, 292 P.2d 226 (1956). Where the seller breaches in bad faith, as Ocean Air did here, the buyer is entitled to damages for the loss of his bargain plus payments and advances under the contract.
Fraud, however need not be shown. See Collins v. Marvel Land Co., 13 Cal.App.3d 34, 42, 91 Cal.Rptr. 291 (1970); Rasmussen v. Moe, 138 Cal.App.2d 499, 503, 292 P.2d 226 (1956); Mercer v. Lemmens, 230 Cal.App.2d 167, 173, 40 Cal.Rptr. 803 (1964). Burke Investors contends that it should be reimbursed for the purchase money it paid into escrow, with interest, plus benefit of the bargain damages for Nite Lite's alleged bad faith conduct.
Fraud, however need not be shown. See Collins v. Marvel Land Co., 13 Cal.App.3d 34, 42, 91 Cal.Rptr. 291 (1970); Rasmussen v. Moe, 138 Cal.App.2d 499, 503, 292 P.2d 226 (1956); Mercer v. Lemmens, 230 Cal.App.2d 167, 173, 40 Cal.Rptr. 803 (1964). Burke Investors contends that it should be reimbursed for the purchase money it paid into escrow, with interest, plus benefit of the bargain damages for Nite Lite's alleged bad faith conduct.
Charles County Broadcasting Co., Inc. v. Meares (1973), 270 Md. 321, 311 A.2d 27, 31. As applied to an insurer under an insurance policy it is said that "bad faith" embraces more than negligence and imports dishonest purpose or conscious wrongdoing. Simpson v. Motorists Mutual Insurance Company (7th Cir. 1974), 494 F.2d 850, 853. Although in Rasmussen v. Moe (1956), 138 Cal.2d 499, 292 P.2d 226, 229, it was held that the negligence of a vendor which put him in a position of being unable to perform his contract was sufficient to show bad faith, it has also been held in California that in general bad faith extends beyond fraud or dishonesty and embraces unfair dealings; it often denotes a deliberate refusal to perform without just or reasonable cause. County of Inyo v. City of Los Angeles (1978), 144 Cal.Rptr. 71, 77, 78 Cal.App.3d 82. A refusal to perform without just cause or excuse is sufficient to constitute bad faith according to Brandolino v. Lindsay (1969), 75 Cal.Rptr. 56, 60, 269 Cal.App.2d 319.
Common law and equity require that if a party obligated to sell land retains possession, forcing the buyer to place funds on deposit with the court pending settlement of the action, then the seller is not entitled to the accrued interest on the deposited funds. Rasmussen v. Moe, 138 Cal.App.2d 499, 292 P.2d 226, 230 (2 Dist. 1956); Resnick v. Goldman, 133 So.2d 770, 771-772 (Fla. 1961). The trial court's finding that Archer and Wolfe had enjoyed possession and all rights of ownership of the Anderson Ranch since Miller's July 1, 1983 tender of the $650,000 necessary to exercise the Option was supported by substantial evidence.