Court Opinion

ID: 3742207
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:05:38.473656+00
Date Added: 2024-06-11T18:03:11.997317
License: Public Domain

I am unable to reconcile myself to accept the "earnest money" or "hand money" concept as a proper statement of the law. In the absence of a provision for forfeiture or penalty, I do not think courts should imply a forfeiture by use of the phrase "earnest money" or from a small earnest money deposit equal to about 3 1/2 percent of the $185,340 less a $45,000 credit for assessments.
In my opinion, the parties had a valid enforceable *Page 5 
contract without a penalty or forfeiture clause, which the purchaser breached. The seller could sue the purchaser to recover his damages for that breach. The purchaser could only sue in equity to recover that amount of the down payment which exceeded the seller's damages and constituted an unjust enrichment. Such an action by the purchaser would certainly be speculative where the seller has not sold the property to someone else. On the other hand, the seller had a right to keep possession of the purchase price. When sued by the purchaser, he merely had to show he had or would have damages or expenses in excess of the down payment. Such an action could only be maintained where a reasonable time had expired within which the seller had an opportunity to sell.
However, once the property has been sold, the seller's damages are readily ascertainable. If he does not get the same price or more, he may sue for the difference in the purchase price plus consequential damages. If he gets the same price or more, he may retain only that portion of the down payment which is equal to his direct consequential damages.
That is the fact situation in the case before us. I feel the matter should be remanded for a hearing to determine the seller's damages. I do not believe that those damages should include any "loss" of "interest" on the money as such "loss" is not consequential. I recognize that the trial court found against the seller on his counterclaim for damages. Since the trial court ordered a forfeiture of the down payment, it found there was a lack of proof on the counterclaim. This made the opinion consistent.
Schottenstein, supra, relied upon by appellees, is distinguishable on its facts. In that case, the seller sued the purchaser on the deposit check because he had stopped payment on it. As between the two parties, the seller was entitled to retain the deposit until he has had an opportunity to sell.
I would remand this case for a new trial on damges only. *Page 6