Appeal from order of Court of Common Pleas of Union County, No. 45 of 1974, in case of George E. Harris, IV and Margaret L. Harris v. John T. Dawson, Jr., and Diane L. Dawson.
Frederick D. Kessler, with him Wayne A. Bromfield, and Fetter and Kessler, for appellants.
Carl Rice, submitted a brief for appellees.
Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Van der Voort, J. Jacobs, J., concurs in the result. Dissenting Opinion by Price, J. Hoffman and Spaeth, JJ., join in this dissenting opinion.
[ 239 Pa. Super. Page 317]
This case arises on appeal from an order of the court below sustaining preliminary objections in the nature of a demurrer to plaintiff's complaint in assumpsit for damages incurred by reason of an alleged breach of contract for the sale of land. We reverse the order for the reasons hereinafter stated.
The contract price of the land was $60,000 on which a down payment of $100 was made when the contract was signed. The purchaser declined to complete the contract and refused the deed tendered to him at the time of closing. The seller thereupon sold the property to a third party for $54,000 and brought suit against the original buyer for the difference between the contract price and the ultimate selling price with adjustments for taxes and commissions. Preliminary objections were sustained and the complaint dismissed on the ground that by the terms of the contract the plaintiff was limited in recoverable damages to the down payment.
The demurrer to the cause of action is based on that portion of the sales contract which reads:
"Should the buyer fail to make settlement as herein provided, and the said time is hereby agreed to be the essence of this agreement, sum or sums paid on account are to be retained by the seller, either on account of the purchase money or as compensation for the damages and
[ 239 Pa. Super. Page 318]
expenses he has been put to in this behalf, as the seller shall elect, and in the latter case the contract shall become null and void and all copies to be returned to the seller for cancellation."
It is the defaulting buyer's position that the seller precluded himself from suing for the purchase price by reselling the property and is, therefore, relegated to a claim for damages limited to the $100 down payment. We do not so read the contract. Had the seller not resold the property, there is no doubt that he could have sued for the full purchase price in an action based on specific performance, crediting the buyer with the $100 down payment: Cape May Real Estate Company v. Henderson, 231 Pa. 82, 79 A. 982 (1911). It seems to us equally clear that the seller is likewise suing for the enforcement of his contract rather than damages when he resells the property after default and then sues for the difference between the contract price and the price realized on the sale.
If the plaintiff's suit for the difference between the contract price and the price realized on resale were to be treated as an action for damages rather than an enforcement of the contract, we would be compelled to treat the $100 limitation void as a penalty in view of its unreasonableness in the light of actual damages: Unit Vending Corp. v. Tobin Enterprises, Inc., 194 Pa. Superior Ct. 470, 473, 168 A.2d 750 (1961). ...