Beatty Et Ux. v. Flannery

The case which we review on this appeal had its origin in an action on the common counts brought by appellants, as plaintiffs, against the defendant-appellee. The plaintiffs attached to their declaration a "bill of particulars" stating that the defendant was indebted to plaintiffs for $3,000, as evidenced by a "receipt" thereto attached. The "receipt" was a form of contract for the purchase and sale of land for use by realtors, in which the defendant, a real estate broker, acknowledged receipt of the sum of $3,000 "as earnest money and in part payment on account of the purchase price" of certain property owned by Hunter R. and Louise L. Smith. The total purchase price of the property was stated to be $30,000, and it was provided that the plaintiffs, as purchasers, would pay to the Smiths the balance due under the contract, and would execute all papers necessary for the completion of the purchase, within 90 days. The contract contained the usual provision for the delivery of an abstract showing good and merchantable title, allowed the seller a reasonable time in which to remedy any defects of title, and provided further that, if the title was not remediable, the plaintiffs were entitled to a return of their "earnest money." The contract also contained a forfeiture provision, in these words: "That in case of the failure of the purchaser to make either of the payments, or any part thereof, or to perform any of the covenants on his part made or entered into, this contract shall, at the option of the Seller, be terminated and voided and the purchaser shall forfeit said earnest money; and the same shall be retained by the Seller as liquidated damages, and the escrow agent [the defendant herein] is hereby authorized by the purchaser to pay over to the Seller the said earnest money." The contract also provided that the Seller would pay the defendant, as real estate broker, for his services in negotiating the sale.