Brewer v. Myers

• Decision Date: 09 December 1976
• Docket Number: No. 985,985
• Citation: 545 S.W.2d 235
• Parties: Clyde BREWER et al., Appellants, v. Harold D. MYERS, Appellee.
• Court: Texas Court of Appeals

Page 235

545 S.W.2d 235

Clyde BREWER et al., Appellants, v. Harold D. MYERS, Appellee.

No. 985.

Court of Civil Appeals of Texas,

Tyler.

Dec. 9, 1976.

J. Preston Brashear, III, Garland, for appellants.

Michael V. Killough, Killough & Killough, Dallas, for appellee.

MOORE, Justice.

This is an appeal from a summary judgment. The question to be determined is whether the provision for liquidated damages in a contract for the sale of real estate limits the seller to the retention of a stipulated sum as his exclusive remedy or whether the contract grants the seller an option to seek actual damages sustained by the seller.

Plaintiffs, Clyde and Norma Brewer, brought this against defendant, Harold Myers, for damages for breach of contract alleging that Myers entered into a written agreement to purchase from them a house and lot located in Garland, Texas, and that after signing the earnest money contract to purchase the property, the defendant refused to consummate the transaction. The defendant answered by a general denial and, subsequently, filed a motion for summary judgment under Rule 166--A in which he alleged that he had deposited the sum of $200 with an agent of the plaintiffs pursuant to the terms of the earnest money contract; that under the terms of the contract plaintiffs' exclusive remedy for his failure or refusal to purchase the property was to accept the forfeiture of said earnest money deposit; and that the earnest money deposit had not been returned to him. Plaintiffs did not reply to the motion. The trial court granted the motion and entered a summary judgment that the plaintiffs take nothing. From such judgment plaintiffs perfected this appeal. We affirm.

The evidence is not in dispute. The parties executed the earnest money contract, and the defendant paid the $200 deposit to the agent of the plaintiffs. The defendant failed and refused to purchase the property. Plaintiffs did not return the $200 earnest money, nor did they tender such amount prior to filing the present suit for damages .

Plaintiffs seek a reversal by a single point of error consisting of four subpoints. In the first subpoint, plaintiffs assert that this controversy presents only a law question in that the only issue presented is whether the contract limits the plaintiffs' damages to the $200 earnest money or whether the contract grants plaintiffs an option to either accept the $200 earnest money or to sue for actual damages. Plaintiffs argue that the provision in the contract stating that seller 'shall have the Right to retain said cash deposit as liquidated damages' (emphasis supplied), should be interpreted to mean that they have a right to elect between liquidated damages or actual damages. Consequently, they contend that the court erred in interpreting the contract to mean that they have no right to sue for actual damages and entering a summary judgment against them. We agree with the trial court's interpretation of the agreement and accordingly overrule plaintiffs' first subpoint.

It is a well settled rule that unless it is ambiguous on its face a written instrument will be enforced as written when neither party asserts that the contract terms are ambiguous so as to necessitate the introduction of extrinsic evidence for its interpretation. Ross v. Burleson, 274 S.W.2d 105, 107 (Tex.Civ.App.--San Antonio 1954, no writ); see Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154 (1951). The rule holds true even though the precise meaning of the language used in the contract may be doubtful. Sale v. Contran Corporation, 486 S.W.2d 161, 165 (Tex.Civ.App.--Dallas 1972, writ ref'd n.r.e.); Wynnewood State Bank v. Embrey, 451 S.W.2d 930 (Tex.Civ.App.--Dallas 1970, writ ref'd n.r.e.).

The material parts of the contract in question provide as follows: '. . . the purchaser has deposited with Mike Lewis Real Estate Escrow the sum of $200 as earnest money and part payment, the receipt of which is hereby acknowledged by said deposit holder . . ..' The contract further provides 'In the event Purchaser is the defaulting party, Seller shall have the right to retain said cash deposit as liquidated damages for the breach of this contract.'

It is settled law that in the situation where a contract of sale executed by two parties contains a stipulation to the effect that a sum of earnest money, placed in escrow by the proposed purchaser and in law regarded as liquidated damages, shall be paid to the seller if the seller fulfills his obligations and the purchaser fails to perform his obligation to purchase, the stipulation carries with it the necessary implication that the seller binds himself, by the stipulation, to accept such sum as compensation for his loss resulting from the happening of the contingency named. Having thus bound himself to accept the sum for such damages as may be suffered by reason of nonperformance of the contract on the part of the purchaser, the seller cannot sue the proposed purchaser for actual damages. Moss & Raley v. Wren, 102 Tex. 567, 120 S.W. 847 (1909) rev'g 113 S.W. 739 (1908); Huffhines v. Bourland, 280 S.W. 561, 563 (Tex.Com.App.1926, jdmt. adopted); See generally 17 Tex.Jur.2d Damages secs. 151 & 152.

Here, by the terms of...