Title: Perino v. Jarvis
Citation: 312 P.2d 108
Docket Number: 17893
State: Colorado
Issuer: Colorado Supreme Court
Date: June 10, 1957

312 P.2d 108 (1957) Joe PERINO, Plaintiff in Error, v. J. W. JARVIS, d/b/a Jarvis Real Estate and Livestock Exchange, Defendant in Error. No. 17893. Supreme Court of Colorado. In Department. June 10, 1957. Emigh &amp; Emigh, Durango, for plaintiff in error. Perkins &amp; Cobb, Durango, for defendant in error. DAY, Justice. Trial in this cause was to the court, and the parties appear here as in the trial court, Joe Perino, plaintiff, and J. W. Jarvis, defendant. The action was by plaintiff to recover $1,000 paid to defendant, a real estate broker, in connection with the attempted purchase of a beer business in Arizona. The agreement between the parties was oral, and it is nowhere contended that there was any provision or understanding for the retention of the $1,000 as liquidated damages. A portion of the pleadings are controlling to the issues here. Plaintiff in his complaint alleges: "* * * Plaintiff to deliver to defendant the sum of $1000.00 and it was orally agreed between plaintiff and defendant that said sum would be held by the defendant until the contract had been consummated between the plaintiff *109 and one J. F. Moore, at which time said $1000.00 would be delivered to J. F. Moore as part of the purchase price. * * *" (Emphasis supplied.) To this allegation the defendant entered his general denial, but did not affirmatively assert any agreement or any right in him to retain the $1,000. It developed at the trial that he kept $500 and paid $500 over to Moore. Defendant did not counter claim for the $1,000 or any part thereof. Moore, the principal, for whom the defendant was acting, was not a party to the action, did not appear at the trial and has never asserted any claim for breach of the contract. The trial court in its conclusions of law stated, "as to the ultimate disposition of the sum of $1,000.00, the Court is without jurisdiction to determine as J. F. Moore, an indispensible party to such determination is not before the Court." Plaintiff and defendant were the only witnesses who testified at the trial. A search of the record reveals without dispute that the deal between plaintiff and defendant's principal was never consummated. Defendant's principal was unable to effect a transfer of his liquor license in the state of Arizona, and plaintiff, unable to obtain the license, could not operate the business. Nowhere in his testimony did defendant Jarvis claim any agreement entitling him to retain the $1,000 or any part thereof. There was no testimony by Jarvis that he had sustained any damages by reason of the failure of the deal to be consummated, or that he was entitled to any damages, liquidated or otherwise. On such record the trial court's conclusion of law that it was without jurisdiction to determine the ultimate disposition of the $1,000 involved was error. In the absence of any showing by the defendant that he was entitled to the same, the $1,000 belonged to the plaintiff. The only evidence of defendant Jarvis remotely touching his contention that he was entitled to keep the $1,000 is in the following excerpts of his testimony appearing in the transcript: It will be noted that in the testimony quoted, the essential elements of a contract for the retention of a sum paid as liquidated damages are lacking. The elements are: At most the deposit would be a mere indemnity to secure against loss from the breach of the contract. If so, the depositor is entitled to recover the full amount of the deposit if he establishes that the *110 agreement failed of performance because of the breach of the other party or if there is mutual rescission of the contract. 25 C.J.S. Damages § 116 b, p. 705. In the case at bar, the plaintiff testified that defendant's principal breached the contract by being unable to deliver a transfer of the liquor license. In Thach v. Durham, 120 Colo. 253, 208 P.2d 1159, 1163, 11 A.L.R.2d 690, suit was instituted for return of a down payment on a contract for the purchase of sheep. The defendant in that case asserted his willingness and ability to perform the contract and the refusal of the plaintiff to perform and further alleged by way of counter claim damage in the amount of the down payment together with special damages consisting of expenses incurred by reason of the plaintiff's breach of contract and other losses in excess of the amount of the down payment. In that case the court announced the rule: In the case at bar the defendant did not allege or establish by evidence at the trial a willingness or ability, either on the part of himself or his principal, to perform the alleged contract. What is even more significant he did not allege or prove any damages at all. As to whether the down payment would be in excess of or less than any actual damages suffered by defendant, may only be conjectured in view of his failure to assert or prove any right to the down payment or any part thereof. The judgment is reversed and the cause remanded to the trial court with directions to enter judgment in favor of the plaintiff in the amount of $1,000, plus interest at the rate of 6% from July 5, 1949, until date of payment. MOORE, C. J., and KNAUSS and SUTTON, JJ., concur.