Walker v. Graham

CARDINE, Justice,

partially dissenting, with whom ROSE, Justice, joins.

I would affirm the judgment of the district court insofar as it awards the earnest money deposit in the amount of $5,000 to appellees. The parties entered into a purchase, offer and acceptance agreement under which appellees agreed to sell their residence and appellants agreed to purchase the same for $665,000. Appellants paid appellees $5,000 as earnest money and as consideration for appellees’ promise to sell at the price and upon the terms and considerations stated. Appellees were obligated to sell; appellants were obligated to buy. Within a few days, appellants informed appellees that they would breach the agreement and would not purchase the residence at the price stated. Appellees treated the agreement as terminated and sold the residence to a third party for the sum of $600,000.

The portion of the agreement that deals with the rights and remedies of the parties upon breach provides:

“15. Time is of the essence hereof, and if any payment or any other condition hereof is not made, tendered or performed by either the Seller or Purchaser as herein provided, then this contract, at the option of the party who is not in default or breach, may at that party’s option, be terminated by such party, in which case the nondefaulting party may recover such damages as may be proper or such party may require specific performance of the other herein. In the event of such default by the Purchaser, and the Seller elects to treat the contract as terminated, then all payments made hereunder shall be forfeited and retained on behalf of the Seller. In the event, however, the nonbreaching or nonde-faulting party elects to treat this contract as being in full force and effect, then nothing herein shall be construed to prevent its specific performance.”

The opinion of the court correctly holds that the right of a nonbreaching party to

(a) “recover such damages as may be proper”

and

(b) to retain on behalf of seller “all payments made hereunder”

are separate remedies, each available to the nonbreaching seller. That the sellers did not recover damages should not prevent them from the benefits of the written agreement with respect to the earnest money deposit. The buyers in this action did not seek to recover the $5,000 deposit. Buyers candidly admitted that, per the agreement, it should be retained by sellers. The question of the right to this deposit, which this court seeks to answer, was never presented to the jury nor decided. I do not see how this court can now direct entry of a judgment against appellants in the amount of $5,000 — the earnest money deposit — when appellees did not pray for nor seek this relief in this litigation.

I concur with the majority disposition as to the attorney’s fee.