## Facts

- Sellers Dario and Felicitas De Leon contracted in writing to sell a tract of land to buyer Cristobal P. Aldrete for $1,500, payable in installments, with the final payment due April 1, 1961.
- Aldrete paid $1,070 (about 70% of the price) but failed to make payments on schedule and remained in default.
- Aldrete made no further payments.
- The De Leons later conveyed the same tract to a third party for $1,300, effectively ending the original contract.
- Aldrete sued the De Leons for restitution of the amounts he had paid, plus related charges and interest.
- The trial court awarded Aldrete $1,512.60, reflecting his payments and additional amounts such as interest and certain transaction-related charges.

## Issues

1. Whether a defaulting purchaser under an installment land-sale contract may recover restitution of payments made after the seller terminates the contract and resells the property.
2. Whether the sellers may retain all payments as forfeiture or liquidated damages when retention substantially exceeds the sellers’ actual loss from the buyer’s default.

## Decision

- The court affirmed the judgment granting Aldrete substantial restitution (with limited modification as to certain components of the award).
- The court held that a purchaser’s default does not automatically bar restitution when the seller has terminated the contract and resold the property.
- The De Leons could not retain Aldrete’s full $1,070 when their actual loss, measured against the resale and the contract price, was only about $200; keeping the excess would be unjust enrichment.

## Legal Principles

- A defaulting buyer may obtain restitution of payments made under a land-sale contract to the extent those payments exceed the seller’s actual damages after termination and resale.
- Retention of installment payments operates impermissibly as a penalty where it places the seller in a better position than performance would have, rather than compensating for proved loss.
- In determining restitution, the seller’s recoverable amount is limited to actual damages and legitimate expenses attributable to the breach; the excess must be returned to avoid unjust enrichment.

## Conclusion

The court held that after sellers terminated an installment land-sale contract by reselling the property, the defaulting buyer was entitled to recover payments exceeding the sellers’ actual damages, because allowing the sellers to keep the excess would constitute unjust enrichment.


De Leon v. Aldrete, 398 S.W.2d 160 (Tex. Civ. App. 1965)