Massaro v. Bashara

Plaintiff brought his action in assumpsit for money had and received under the principle of "unjust enrichment." Although the action is an "action at law" it is equitable in its nature, liberal in form, and is to be determined by the application of equitable principles. Plaintiff contends that the deposit of $1,000 evidenced by the receipt was made on condition that it be returned in the event plaintiff elected not to purchase the property. Defendant contends that the deposit was a down payment — earnest money — upon the purchase of the property and that within a reasonable time thereafter defendant was ready, able and willing to convey the property to plaintiff. In his cross-petition defendant claims damages in the sum of $1,035 by reason of plaintiff's breach of the alleged contract to purchase the property. Although plaintiff was permitted to establish his claim of the deposit of the money incident to negotiations for the purchase of the property, defendant was denied the right to orally establish his cross-petition for damages by reason of the statute of frauds.

The statute does not make a parol contract for the sale of land void. By withholding a right of action upon it, it simply makes it voidable at the will of either of the parties. But neither party can be compelled to ignore considerations of equity, of good faith, and moral obligations which may arise from such parol contract, and to avoid it by pleading the statute of frauds. Lefferson v. Dallas, 20 Ohio St. 68, 74. In Sites v. Keller, 6 Ohio, 483, the court holds that upon a parol contract for the sale of land, the mere payment of the consideration does not take the case out of the statute of frauds, and draws the distinction that "after such acts of performance as possession or improvements, to rescind the contract would not restore the parties to their original situation; but full compensation for the payment of the purchase money is made by the restoration of principal and interest." In other words, the court recognizes the right of the vendee to recover the purchase price paid under an oral contract to buy land. This is in accord with the general rule that payments made under a contract unenforcible by reason of the statute of frauds may be recovered back where the other party sets up the statute and declines to perform, or where the contract is mutually abandoned. 37 Corpus Juris Secundum, 778. If a purchaser may recover earnest money paid, when proof of the agreement is barred by the statute of frauds upon the principle of unjust enrichment, the vendor by way of cross-petition upon equitable principles should be permitted to prove by oral testimony such damage as he may have suffered as a result of the transaction. The same principle should apply to the circumstances presented in the instant case where the plaintiff contends there was no agreement on his part to purchase the property and the defendant claims there was such an agreement.

Since defendant's claim for damages set forth in his cross-petition arises out of the same transaction set forth in the petition as the foundation of plaintiff's claim, defendant was entitled to have his claim under the cross-petition submitted to the jury for determination, and the court committed error prejudicial to the defendant in dismissing the cross-petition.

FESS, CONN and SAVORD, JJ., of the Sixth Appellate District, sitting by designation in the Seventh Appellate District.