Woodliff v. Al Parker Sec. Co.

• Decision Date: 22 December 1925
• Docket Number: No. 33.,33.
• Parties: WOODLIFF v. AL PARKER SECURITIES CO.
• Court: Michigan Supreme Court

233 Mich. 154

206 N.W. 499

WOODLIFF

v.AL PARKER SECURITIES CO.

No. 33.

Supreme Court of Michigan.

Dec. 22, 1925.

Error to Circuit Court, Washtenaw County; George W. Sample, Judge.

Action by Richard S. Woodliff against the Al Parker Securities Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Argued before McDONALD, C. J., and CLARK, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ.Stivers & Laird, of Ann Arbor, for appellant.

Cavanaugh & Burke, of Ann Arbor (Louis E. Burke, of Ann Arbor, of counsel), for appellee.

MOORE, J.

At the close of all the testimony, both parties asked for a directed verdict. The trial judge directed a verdict in favor of the plaintiff in the sum of $2,137.50. The case is brought into this court by writ of error.

The plaintiff entered into a written contract with defendant for the purchase of land in Texas, the material parts of which, as to this controversy, read:

‘The company hereby sells to the purchaser, and the purchaser hereby buys from the company, the following described lands: * * * In accordance with the conditions herein mentioned, for a total consideration of $8,000, the purchaser hereby makes the following payment, to be applied in part payment of the total consideration, as soon as the terms herein are fully complied with by the purchaser:

Cash by check $500.00

Promissory note due Oct. 1st 3,500.00

‘The payment above recited is received by the company as earnest money paid, the receipt of which is hereby acknowledged. Purchaser agrees to assume and pay, when due, five vendor's lien notes, in the sum of $360 each, payable in one to five years. [The notes were not offered in evidence.] * * *

‘Failure to pay any part of the earnest money, above mentioned, when same by the terms hereof become due and payable * * * will, at the election of the company, cause this contract to be void and at an end, in which event all sums theretofore paid shall be retained by the company as fixed, stipulated, and liquidated damages.’

Five hundred dollars was paid June 17, 1923, $1,000 was paid January 3, 1923, and $500 was paid January 22, 1923, and on February 6, 1923, defendant notified plaintiff it canceled the contract, and later sold the land. It did not return any of the notes, and it refused to return to the plaintiff the $2,000 he had paid, and he brought suit with the result already stated.

It is the claim of the appellant (we quote from the brief):

‘(2) Under the terms of the contract, when the contract is broken by the purchaser, by failure to pay the earnest money according to its terms, such earnest money as has been paid may be retained by the seller as liquidated damages. The contract provided in particular that ‘all sums [of the earnest money] theretofore paid shall be retained by the company as fixed, stipulated, and liquidated damages.’ This provision in the contract, under the Texas law, is an agreement for stipulated damages, which the courts have always recognized as binding upon the...