Close v. Blumenthal

Decision Date12 August 1960
Docket NumberNo. 9196,9196
Partiesd 51 Wayne C. CLOSE, Plaintiff and Respondent, v. Harold G. BLUMENTHAL and Virginia A. Blumenthal, Defendants and Appellants.
CourtUtah Supreme Court

A. M. Marsden, Glen S. Hatch, Salt Lake City, for appellants.

Dallas H. Young, Jr., Provo, for respondent.

CROCKETT, Chief Justice.

Defendants appeal from a judgment for specific performance of an earnest money agreement for the purchase of real property.

On the 28th day of April, 1959, at Provo, Utah, defendants Harold and Virginia Blumenthal, in connection with buying a home, signed a document entitled 'Earnest Money Receipt and Offer to Purchase,' which was also signed by the plaintiff, Wayne C. Close, as seller. The agreement called for $500 at the time it was signed, which was paid, and for the remaining $25,500 of the purchase price to be paid by June 1, 1959. The defendants did not pay this amount but notified the plaintiff that they would not complete the purchase of the property.

The language of the agreement pertinent to the issues here involved is: 'In the event the purchaser fails to pay the balance of said purchase price, or complete said purchase as herein provided, the amounts paid hereon shall, at the option of the seller, be retained as liquidated and agreed damages.' The plaintiff did not return, nor offer to return, the $500 before commencing this action.

The question here is whether he can thus retain the money advanced and also get specific performance of the agreement.

This Court on two occasions recently has ruled that under earnest money agreements containing clauses identical to the one quoted above, where the buyer failed to complete the purchase, the sellers could not retain the deposit and also recover damages, Andreasen v. Hansen, 8 Utah 2d 370, 335 P.2d 404; McMullin v. Shimmin, 10 Utah 2d 142, 349 P.2d 720. It was held that where there was an option to be exercised regarding the forfeiture of the deposit as liquidated damages, the fact that the money was kept was incontrovertible evidence that the seller had exercised the option to keep it; and that being so, he was deemed to have kept it for the purpose indicated in the contract, that is, as liquidated damages. We are now asked to come to a different conclusion because of the fact that the plaintiff here is seeking specific performance instead of damages, but we see no rational basis for doing so.

In regard to earnest money receipts of this character, it is pertinent to observe that the attempt to enforce this clause of the contract is almost invariably against a purchaser who has been induced to sign it and deposit money under the impression that its forfeiture will be the extent of his loss if he decides not to buy the property. And the suit is by a seller who wants to be sure to keep the money in hand, and also seek additional relief....

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12 cases
  • Selvig v. Blockbuster Enters., LC
    • United States
    • Utah Supreme Court
    • 27 Septiembre 2011
    ...give the seller of property an alternative remedy in the event the buyer fails to consummate the transaction. See Close v. Blumenthal, 11 Utah 2d 51, 354 P.2d 856, 857 (1960) (“[T]he attempt to enforce [the election of remedies] clause of the contract is almost invariably against a purchase......
  • Giomona Corp. v. Dawson
    • United States
    • Missouri Court of Appeals
    • 20 Julio 1978
    ...520, 88 F.Supp. 415, 421(5, 6) (1950); Tobin v. United States, 103 Ct.Cl. 480, 59 F.Supp. 410, 416 (1945); Close v. Blumenthal, 11 Utah 2d 51, 354 P.2d 856, 857(2) (1960); 25 C.J.S. Damages § 114, p. The trial court did not err in rejecting defendants' contention that the exhibits call for ......
  • Selvig v. Blockbuster Enter. LC, 20090494
    • United States
    • Utah Supreme Court
    • 19 Julio 2011
    ...to give the seller of property an alternative remedy in the event the buyer fails to consummate the transaction. See Close v. Blumenthal, 354 P.2d 856, 857 (Utah 1960) ("[T]he attempt to enforce [the election of remedies] clause of the contract is almost invariably against a purchaser who [......
  • Rocky Mountain Hospitality, LLC v. Mountain Classic Real Estate, Inc.
    • United States
    • Utah Supreme Court
    • 22 Diciembre 2022
    ...cases, Palmer v. Hayes ,19 in which the court analyzed four of our cases — Andreasen v. Hansen ,20 Dowding v. Land Funding Ltd. ,21 Close v. Blumenthal ,22 and McMullin v. Shimmin ,23 —and determined that those cases "uniformly hold that before a seller may pursue a remedy other than liquid......
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