MacOn v. Zeiler

Hammond, J., delivered the opinion of the Court. The buyers of a house and lot brought suit for recovery of the deposit they had made, on the claim of a breach of contract by the sellers. The sellers counterclaimed, alleging that it was the buyers who had breached the contract and so caused them great damage in excess of the amount of the deposit. Judge Berry, sitting without a jury, found that the buyers had not been legally justified in refusing to settle for the property they had agreed to purchase, and had forfeited their deposit.

With regard to the counterclaim, he held that the proper measure of damage in a suit by a seller for a breach by the buyer “is the difference between the contract price and the market price at the time of breach, less any amount paid on account by the Buyer” and that no proof of such difference had been shown. Each side appealed from the judgment against them. In this Court the sellers, the appellants, urge that the true measure of damage is “not the difference between the contract sale price and the fair market value, as of the date of breach, but rather their actual damages, which necessarily and consequentially flow from the breach and which were fairly within the contemplation of the parties at the time of the execution of the contract, especially where no forfeiture of deposit has been asserted by the pleadings.” If the contention had to be decided, there would be presented for decision interesting questions as to whether the rule applied by the trial court is correct and all inclusive or, whether other expenses which the sellers claim, such as cost of a survey and of termite inspection, were also recoverable, as well as whether the trial court’s measure included in it either or both of the elements of special damage and whether the failure to ¹⁶² establish damage under the general rule permitted recovery of special or additional damage, if otherwise they would not be recoverable. In the view we take of the case we do not reach any of these questions or the adequacy of the testimony as to damages and the court’s rulings thereon.

(The record gives indication that the sellers suffered little, if any,' damages over and above the amount of the deposit they retained.) We think that the trial court’s determination that the buyers had breached the contract was justified and that under the agreement of the parties, expressed in their contract, the deposit was forfeited to the sellers as liquidated damages. (In their cross-appeal the buyers challenge the correctness of the decision that they breached the contract but not the forfeiture of the deposit, if they were in the wrong.) The sellers offered their home property, located on Sudbrook Lane in Pikesville, for $28,000 in fee. The buyers offered $20,000 for the house and the rear portion of the lot. Intending to get their total asking price by selling the Sudbrook Lane frontage for $8,000, the sellers agreed to sell and the buyers agreed to buy 204 Sudbrook Lane with a proviso in the written contract that “the actual property to be conveyed hereunder is as shown on the accompanying sketch, which is attached hereto and made a part hereof, and a survey will be made at the expense of the Sellers to determine a proper metes and bounds description.” The rough freehand sketch showed two lots fronting on Sudbrook Lane of a depth of one hundred forty-five feet, with a twenty-five foot right of way between them.

The rear lines of these lots were to be the front line of the lot being bought. The house is shown as being approximately in the middle of the proposed rear lot. A deposit of $1,000 was put down. When the survey was first made, it became apparent that if the depth of the front lots, which were to be kept by the sellers, was set at one hundred forty-five feet from the true boundary point, the front line of the lot being bought would be very close to the house, much closer