to show that such a condition has not been complied with.
It is true that ordinarily conditions precedent to a contract must be strictly and literally fulfilled and that one of the exceptions to the Parol Evidence Rule permits the introduction of outside evidence to show the existence of an unfulfilled condition precedent to liability. See 32 C.J.S. Evidence § 935 and cases therein cited. But there is an important exception to this general statement. Where the written instrument contains a recitation that it embodies the entire agreement between the parties and that they shall not be bound by any representations, agreements or conditions not therein contained, then parol evidence is inadmissible to show the existence of an unfulfilled condition precedent not set forth in the instrument. Edward T. Kelly Co. v. Von Zakobiel, 168 Wis. 579, 171 N.W. 75; Automobile Battery Co. v. Geraghty & Co., 30 Ga.App. 446, 118 S.E. 412; Fadex Foreign Trading Corp. v. Crown Steel Corp., 272 App.Div. 273, 70 N.Y.S.2d 892, affirmed 297 N.Y. 903, 79 N.E.2d 739. The logic of the distinction is that to show a condition precedent not inconsistent with the writing is not to vary or contradict the terms of the writing, but to show such a condition where the instrument recites that there are none is a contradiction. Edward T. Kelly Co. v. Von Zakobiel, supra. In the case at bar the contract of sale specifically provides, in the language set out above, that it embodies the final agreement between the parties, and that they are not bound by any conditions not herein contained. It is thus the Court's view, in light of the authorities cited, that the signing of Plaintiffs' Exhibit 2 created a valid, enforceable contract for the sale of the premises, in spite of the fact that the deposit was never paid. To hold otherwise would be to allow the use of parol evidence to contradict the specific language of the written instrument.
Having determined that the contract in question is a binding obligation, the Court must next consider the question of what if any damages Plaintiffs are entitled to recover. While it is true, as Defendant points out, that in general the law looks with disfavor on forfeitures, yet there seems to be no doubt that in the District of Columbia real estate forfeitures, treated as liquidated damages, will be enforced in the proper circumstances. Barnette v. Sayers, 53 App.D.C. 167, 169, 289 F. 567. But one important qualification was pointed out in the case of Sheffield, et al. v. Paul T. Stone, Inc., 68 App.D.C. 378, 98 F.2d 250, 252. In that case the purchaser was suing the seller for the return of a deposit paid pursuant to a real estate sales contract. Subsequent to the signing of the contract the purchaser had refused to complete the transaction. The seller resold the property and refused to return purchaser's deposit. In that case the Court had before it a contract provision concerning forfeiture of deposit identical to the one in the instant case (which provision is set out, supra). The Court construed the language to mean that the seller, upon purchaser's default had, in addition to specific performance, two alternative courses open to him; that he might declare the deposit forfeit and thereby relieve the purchaser of any further liability, or he might avail himself of any legal or equitable rights which he might have under the contract and that these alternative choices are mutually exclusive, in that if the seller elects to proceed in one fashion he can not thereafter avail himself of the other remedy. In the Sheffield case the Court held that when the seller resold the property to another purchaser he availed himself of his 'legal or equitable rights' under the contract. He was not thereafter at liberty to retain the deposit as liquidated damages, since by selling the property he had fixed his actual damages, or lack of them. In such a situation the only purpose for which the deposit might be retained would be as a set-off for the actual damages sustained if the subsequent resale were at a price lower than the contract price. But, in Sheffield the Court found that the resale was at a price higher than the contract price and there was no actual damages. Thus the seller was entitled to no part of the deposit.
The Court has set out at length the holding and reasoning of the Sheffield case because, in the Court's view that case controls the issue here for determination. In the instant case the deposit called for was never paid into the hands of the Plaintiffs. Thus they can not be said to have been in a position to forfeit the deposit. In Sheffield the Court of Appeals defines the term "forfeit' the deposit' to mean 'keep it as liquidated damages and call the contract off.' 98 F.2d at page 252. Since as previously stated the $ 5,000 mentioned in the contract in this case as a deposit never came into the possession of the Plaintiffs, obviously Plaintiffs could not 'keep' said sum as a 'forfeit' within the meaning of the term 'forfeit' in Sheffield. Nor is the Court persuaded from a consideration of all of the testimony that $ 5,000, or indeed any sum, was ever deposited with the title company by Defendant to the credit of Plaintiffs. On this issue contradictory testimony was presented by the Plaintiffs and Defendant respectively. However, the issue is resolved by the testimony of the witness Maki, representing the title company. He stated that no such arrangement was agreed to by the title company. It is clearly necessary for a valid escrow agreement that the proposed escrow agent know of and agree to perform such function. Home Ins. Co. of New York v. Wilson, 210 Ky. 237, 275 S.W. 691; Cloud v. Winn, Okl., 303 P.2d 305. What the Plaintiffs did was to exercise their alternative remedy under the contract, i.e. to sell the property to a third party. Having done so they are precluded from seeking to forfeit the deposit. 'If the seller 'avail himself of any legal or equitable rights which he may have under this contract' * * * he cannot thereafter 'forfeit' the deposit'. 98 F.2d at page 252. Nor are Plaintiffs in any position to claim any part of the recited deposit as actual damages, since it is not disputed that they realize from the subsequent sale of the property a sum greater than the $ 60,000 set as the price in the contract with Defendant.
Therefore, in the circumstances established by the record in this case and in consonance with the rule announced in Sheffield, supra, it is the holding of this Court that Plaintiffs have not shown themselves entitled to either liquidated or actual damages and that judgment be entered in favor of Defendant.
This opinion will constitute Findings of Fact and Conclusions of Law by the Court, and counsel for Defendant will prepare an order in conformity with it.
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