Massey v. Love

• Decision Date: 20 October 1970
• Docket Number: No. 42022,42022
• Citation: 1970 OK 199,478 P.2d 948
• Parties: Clyde MASSEY, Plaintiff in Error, v. Zeb LOVE d/b/a Farmers Feed and Seed Store, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 948

478 P.2d 948

Clyde MASSEY, Plaintiff in Error, v. Zeb LOVE d/b/a Farmers Feed and Seed Store, Defendant in Error.

No. 42022.

Supreme Court of Oklahoma.

Oct. 20, 1970.

As Amended Jan. 18, 1971.

Rehearing Denied Jan. 20, 1971.

Appeal from the District Court, Seminole County; Bob Howell, Judge.

Action by Clyde Massey, plaintiff, for recission of an oral contract entered into by him to purchase a feed and seed store from defendant, Zeb Love, doing business as Farmers Feed and Seed Store and for recovery of $2,000 paid. From judgment for defendant holding plaintiff breached the contract and denying recover, plaintiff appeals. Affirmed in part and reversed in part with directions.

Shirk, Withington, Work & Robinson, Oklahoma City, for plaintiff in error.

Allen G. Nichols, Wewoka, Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, for defendant in error.

JACKSON, Justice:

Zeb Love, doing business as Farmers Feed and Seed Store, owned a retail feed and seed store in Wewoka, Oklahoma. Clyde Massey, plaintiff, and Zeb Love, defendant, entered into an oral agreement whereby Massey agreed to buy the stock in trade, fixtures and equipment and to rent the building. Plaintiff Massey paid $2,000.00 down and contended that this amount constituted the full purchase price. Defendant Love contended that he was to receive $2,000.00 plus the wholesale value, or actual cost, of the feed and seed in the store at the time of delivery to Massey. After an inventory was taken Love demanded payment for the seed and feed as reflected by the inventory, approximately $6,400.00. Massey declined to make this payment and Love demanded possession of the store, its equipment and the stock in trade. Massey surrendered his possession of the store and brought this action to recover the $2,000.00 payment and other smaller items.

In defendant Love's answer he alleged the $2,000.00 was paid to him as 'good faith money' or otherwise known as 'liquidated damages if the contract was not carried out by the plaintiff as agreed.' In his cross-petition Love alleged that he was damaged in various ways and that because of the nature of the transaction 'it would be impracticable and extremely difficult to fix and determine his actual damages.' He pleaded the provisions of 15 O.S.1961, Section 215, and prayed that he be permitted to retain the $2,000.00 as liquidated damages, together with other smaller items.

After trial to the court without a jury the court found, after hearing evidence in support of plaintiff's petition and defendant's answer and cross-petition, that the defendant was entitled to retain the $2,000.00 'as damages for the breach of said contract by plaintiff.' Having recovered the $2,000.00 judgment on plaintiff's petition the defendant announced he would dismiss his cross-petition without prejudice. From this judgment plaintiff Massey has appealed upon the original record. 12 O.S.1961, Sections 956 through 956.11.

There inheres in the judgment of the trial court a finding that Massey agreed to pay $2,000.00 plus the inventory value of (actual cost) of the merchandise in the store, and that Massey breached the contract. The evidence supports that conclusion and to that extent the judgment of the trial court is affirmed.

The decisive question is whether the trial court erred in permitting Love to retain the $2,000.00 as damages for Massey's breach of the contract. Applicability of the Commercial Code is not asserted.

Defendant invites attention to Helm v. Rone, 43 Okl. 137, 141 P. 678, Snyder v. Johnson, 44 Okl. 388, 144 P. 1035, Toomey v. Sporn, 145 Okl. 38, 291 P. 22, Hudson v. Elliott, 207 Okl. 676, 252 P.2d 482, Diehl v. Welsh, Okl., 393 P.2d 834, and King v. Oakley, Okl., 434 P.2d 868, for the rule that--

'A vendee who has advanced money, or has done an act, in part performance of an executory contract of sale, and then stops short and refuses to proceed to its ultimate conclusion, the vendor being willing and ready to proceed and fulfill all his stipulations according to the contract, will not be permitted to recover back the money thus advanced.'

It is noticed that all of the cited cases deal with real estate transactions wherein the vendee was attempting to recover back the money advanced.

In Mid-Continent Life Ins. Co. v. Goforth, 193 Okl. 314, 413 P.2d 154, we said it is a general rule that a provision of a contract which undertakes to fix a penalty as liquidated damages for failure to receive and pay for real property, as contracted for, is void, if the actual damages which may be suffered by the seller through the breach are capable of proof. We also said:

'Although our attention has been directed to no case from this court where the rule has been applied to transactions for the sale of real property, it has often been applied where sales of personal property were involved.' (citing cases--see also 6 Okl.Law Rev.P. 363).

In 15 O.S.1961, Sections 213, 214, and 215, it is provided in substance that contracts which impose penalties for any nonperformance, or breach of an obligation, are void, except when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.

In J. I. Case Plowworks v. Stewart, 70 Okl. 210, 173 P. 1048, we applied the statutory rule and held therein that a provision for liquidated damages was void, 'unless it would be 'impracticable or extremely difficult to fix the actual damage' arising from the breach of such contract.' In Waggoner v. Johnston (1965), Okl. 408 P.2d 761, we said that under 15 O.S.1961, Secs. 213, 214, and 215, 'the burden of establishing that the damages were difficult of ascertainment rests on the party seeking the enforcement of the liquidated damage clause, and the fact the parties have expressly stated in the contract that the damages are difficult to determine does not shift the burden of proof on this issue.'

The appeal in this case was upon the original record. The plaintiff in error, Massey, directed the court reporter to transcribe so much of the testimony as Massey thought necessary to present the errors set forth in his petition in error. After the appeal was filed in this court the defendant in error, Love, filed a motion to require Massey to file a complete transcript of All of the evidence presented to the trial court. This court denied that motion but directed the trial court to include in the transcript all portions of the testimony designated by Love upon his advancement of the costs. 12 O.S.1961, Section 956.6. Thereafter Love filed a motion requesting this court to reconsider its former order. We denied the motion but authorized Love to elect whether he would cause that portion of the testimony designated by him to be included in the transcript. He declined to avail himself of that opportunity.

As the record now stands we find no evidence in support of defendant's allegation that it would be impracticable or extremely difficult to determine the actual damages sustained by him by reason of plaintiff's breach of contract. The burden was upon the defendant to make such proof. Waggoner v. Johnson, supra. The burden was also upon defendant under the provisions of 12 O.S.1961, Sec. 956.6, and our order, to provide this court with a transcript of the testimony designated by him. We declined to require appellant (Massey) to provide a complete record as authorized by the provisions of 12 O.S.1961, Sections 956.6 and 959.

The cases cited by defendant for the proposition that it is the duty of the appellant to provide this court with a complete transcript of the testimony are cases wherein the appeals were by case-made. They are not controlling in an appeal upon the original record under the procedure followed herein.

The judgment of the trial court is affirmed insofar as it holds that the plaintiff breached the contract.

The judgment is reversed insofar as it allows damages in the sum of $2,000.00, with directions to conduct a new trial on the question of damages. Actual damages will be the measure of damages, 23 O.S.1961, Sec. 21, unless the proof shows that the parties agreed upon liquidated damages and that it would be impracticable or extremely difficult to fix the actual damages arising from the breach.

WILLIAMS, HODGES, LAVENDER and McINERNEY, JJ., concur.

IRWIN, C.J., BERRY, V.C.J., and DAVISON and BLACKBIRD, JJ., dissent.

BLACKBIRD, Justice (dissenting);

I cannot concur in the Majority opinion's partial reversal of the trial court's judgment. I agree that the opinion is correct in affirming that court's holding that defendant breached the parties' contract.

It must be remembered that, when plaintiff instituted this action against defendant, he was a vendee under an executory contract of sale, who (as defendant's answer alleged, and the trial court determined) had made a down payment of $2,000.00 under the contract, and, despite his breach of the contract in failing and refusing to pay defendant the rest of the contract price, was attempting, by this action, to compel defendant to return the down payment. In such a fact situation, plaintiff just had no cause of action for the recovery of it, as the trial court, in effect, adjudged--for there is no better established principle of law in this jurisdiction, and the majority of others, than the one expressed in the syllabus of Helm v. Rone (1914), 43 Okl. 137, 141 P. 678, as follows:

'Where a vendee pays money in part performance of an executory contract of sale and fails to perform it, he cannot recover of the vendor the money so paid.'

This principle has been consistently adhered to by this Court down through...