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Issues: Whether the sum described as advance was in substance earnest money or deposit forfeitable on breach, and whether the defendants could retain it without pleading and proving damages.
Analysis: The Court held that the true nature of the payment must be gathered from the contract and surrounding circumstances, and that mere description as advance does not decide the matter. Even where a sum is treated as earnest money, the forfeiture is not automatic in the abstract; the Court must still examine whether the defaulting party is liable only to reasonable compensation, and the party resisting refund must plead and prove the damage suffered. The defendants had neither pleaded nor proved loss, and there was no material showing that the payment was intended and established as forfeitable earnest money so as to justify non-suiting the plaintiff outright.
Conclusion: The plaintiff was entitled to have the matter reconsidered, and the dismissal of the suit on the footing of automatic forfeiture was set aside. The revision petition was allowed and the matter was remanded for fresh disposal.
Ratio Decidendi: A contractual clause for forfeiture of an advance or earnest money does not permit automatic retention of the sum without adjudication of reasonable compensation, and the party seeking forfeiture must plead and prove the loss or damage justifying it.
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