286 S.E.2d 911 (W. Va. 1982)
On October 2, 1978, Richard and Mildred Zinn agreed to sell to Samuel and Diana Stonebraker a house and land located in Preston County for the sum of $25,000.1 The contract entered into by the parties acknowledged receipt of a $1500 down payment and established a financing arrangement whereby the vendors agreed to accept the balance of the purchase price, $23,500, in monthly installments of $189.09 at an annual interest rate of 9%.2 A deed of trust lien in favor of the First Federal Savings and Loan of Waynesburg, Pennsylvania, previously given by the vendors, was acknowledged.3
The purchasers took possession of the property and assumed all other responsibilities normally associated with homeownership, including payment of property insurance and taxes, maintenance and repairs.4 The purchasers occupied the premises from November 1978 to November 1979 and made monthly payments.5 In November 1979, the purchasers notified the vendors that they could not afford both the cost of the necessary repairs to the property and the monthly house payments, and that they intended to vacate the premises.6 Prior to December 1, 1979, the purchasers vacated the property.7
This action was commenced on December 6, 1979, when the vendors filed a complaint in the Magistrate Court of Monongalia County, seeking to recover damages for property allegedly removed from the premises by the purchasers.8 This action was later consolidated with an action alleging that the contract was usurious and unconscionable which was filed by the purchasers in the Circuit Court of Preston County.9 The trial court found that the vendors were entitled to liquidated damages by way of being able to keep the money paid by the purchasers.10 From this judgment, the purchasers appeal.11
Whether the forfeiture clause of the installment sales contract is a penalty and therefore unenforceable?12
A stipulated sum is for liquidated damages only where the damages which the parties might reasonably anticipate are difficult to ascertain because of their indefiniteness or uncertainty.13 The amount stipulated must be either a reasonable estimate of the damages which would probably be caused by a breach or reasonably proportionate to the damages which have actually been caused by the breach.14 A clause for damages in a contract is a penalty rather than a liquidated damage provision when the amount is grossly disproportional in comparison to the damages actually incurred.15
No. On October 2, 1978 Richard and Mildred Zinn agreed to sell to Samuel and Diana Stonebraker a house and land for $25,000 with a $1,500 down payment and the $23,500 balance paid in monthly installments of $189.09 at 9% interest.16 The purchasers occupied the premises from November 1978 to November 1979 and made monthly payments before vacating prior to December 1, 1979.17 The vendors retained approximately $3,850 which included the $1,500 down payment plus monthly payments of $189.09 for approximately twelve months.18 The parties agree that the $189.09 payment was a fair monthly rental for the property.19
The vendors incurred expenses for the original sale and conveyance of the property and expenses in selling the property a second time and alleged that the purchasers damaged the property during their possession.20 The retention of approximately $3,850 was not excessive when the expenses the vendors incurred in conjunction with regaining the property are taken into account.21
The forfeiture clause is not a penalty and is enforceable as a valid liquidated damages provision.22
Whether installment land contracts should be declared entitled to the same protections and restrictions afforded deeds of trust?23
This Court will not decide nonjurisdictional questions which have not been raised in the trial court.24
No. Purchasers did not raise this issue below and the trial court had no occasion to rule on it.25 The facts involve purchasers who occupied the premises for only one year and made payments totaling about $3,850 on a $25,000 contract.26 The court declined to consider the theory because it is not applicable to these facts.27
The court properly declined to consider recharacterizing the installment land contract as an equitable mortgage entitled to the protections of deeds of trust.28
Whether the trial court erred in dismissing the purchasers' usury claim prior to consideration by a jury?29
Where the installment land contract provides for a monthly payment which covers interest set at a higher rate than allowed by law and amortization of the principal balance owed.30 Such monthly payment must not be grossly disproportional to the fair monthly rental value of the property.31 In that case, the interest rate will not be held usurious in the absence of other extraordinary factors.32 Most courts hold that where there is an installment land contract and interest is charged, the interest is simply considered as a part of the purchase price.33
No. The contract called for monthly installments of $189.09 at 9% on the $23,500 balance.34 The monthly payment is not grossly disproportional to the fair monthly rental value of the property.35 There is an absence of any of the factors condemned in Carper except that the 9% interest term appears on the face of the contract.36 The purchasers have protection in the event of a default because the total payments that they have made are analyzed to determine if the vendor has received a grossly disproportional sum.37
The trial court did not err in dismissing the usury claim.38