SCHRADER V. BENTON
635 P.2d 562 (1981)
NATURE OF THE CASE: Benton (D) appealed a summary judgment requiring them to specifically
perform their contract to sell a condominium apartment to Schrader (P).
FACTS: D entered into a Deposit Receipt, Offer and Acceptance (DROA) contract with
Schrader (P). The subject of the sale was Apartment 313, Honokowai East Condominium, Maui,
Hawaii. The total price was $44,500.00, payable via $7,000.00 in cash and a $37,500.00
three-year agreement of sale at 9 percent interest per annum with payments of not less than
$ 325.00 per month. P was entitled to pay 'in full' at any time during the three years
without prepayment penalty. The apartment was being sold free and clear of an existing
$31,800.00 first mortgage in favor of Amfac Financial. The first mortgage contains a
'due-on-sale' provision which requires D to obtain Amfac Financial's consent to the
agreement of sale or to suffer Amfac Financial's immediate acceleration of the due date of
the entire mortgage debt. D was going to get a wrap-around financing deal with D paying 7%
on the lower balance due to Amfac and P paying 9% on the $37,500 balance. Amfac Financial
refused to permit an agreement of sale over its mortgage; but it was willing to consent to
an assumption. D refused to agree to such a change in the structure of the transaction. P
sued for specific performance. Both sides moved for summary judgment. The lower court
granted summary judgment to P and ordered D to convey to P when P (1) pays the purchase
price in cash or (2) assumes the first mortgage, arrange for D to be completely released
from the liability of the first mortgage by May 20, 1981, and pay the balance of the
purchase price, together with interest at 9 percent per annum, in equal monthly payments
amortized from actual closing to May 20, 1981, and (3) adjust 'all income and ordinary
expenses of the property since May 20, 1978, excluding interest paid on the first mortgage'
so that the Buyers would enjoy all profits or suffer all losses since May 20, 1978. D
appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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