## Facts

- Gilton (seller/defendant) and Chapman (buyer/plaintiff) entered into an oral agreement for Chapman to purchase real property from Gilton.
- Chapman paid Gilton $1,000 as a down payment.
- The transaction did not close after the parties’ relationship broke down, with Chapman contending that Gilton refused to go through with the sale.
- Chapman sought to recover the $1,000 down payment and filed suit against Gilton.
- The trial court ruled in Chapman’s favor.
- Gilton appealed the judgment.

## Issues

1. May a buyer recover a down payment made under an oral contract for the sale of land when the sale fails because the seller refuses to perform?

## Decision

- The Supreme Court of Arkansas affirmed the judgment for Chapman.
- The court allowed Chapman to recover the $1,000 down payment after the oral land-sale transaction failed due to Gilton’s refusal to perform.

## Legal Principles

- An oral agreement for the sale of land is generally unenforceable under the Statute of Frauds, but that does not necessarily prevent a claim seeking return of money paid in reliance on the agreement.
- When a land-sale deal fails and the seller refuses to perform, the buyer may seek restitution of payments made to avoid the seller’s unjust retention of the buyer’s money.
- A restitution award in this context is based on the failure of the transaction and the prevention of unjust enrichment, rather than enforcement of the oral land-sale agreement itself.
- On appeal, a judgment for return of a down payment will be upheld where the record supports treating the seller as the party who caused the deal to fail.

## Conclusion

Gilton v. Chapman affirmed a judgment returning a $1,000 down payment to the buyer after an oral agreement to sell land fell apart because the seller refused to perform, and the court permitted restitution notwithstanding the oral nature of the land-sale agreement.


Gilton v. Chapman, 230 S.W.2d 37 (1950)