193 A.D. 145 | N.Y. App. Div. | 1920
This is an action to recover damages for the breach of a contract to convey real estate. The plaintiff agreed to sell the defendant a farm which the parties in express terms valued at the sum of $4,500; to turn over to the defendant the
Whether a fixed sum, stipulated to be paid for the nonperformance of a contract, enjoys the character of an unen
The provisions of the contract in relation to the transfer of a mortgage, the turning over of farm produce, and the payment of moneys, were clearly inserted for no other purpose than to balance a trade, the sole object of which was the exchange of farm land for village lots. Each party to an ordinary trade, whether of chattels or of real estate, undoubtedly expects to better himself thereby. Since each will sincerely believe that the other is getting the worse of the bargain, the instance will be rare when either party will honestly consider that his own default will cause substantial damage. The instance will be still rarer where each will believe that no matter which party may default an identical sum will in either case accurately measure the loss which will be sustained. In our case the minds of the parties agreed that the plaintiff’s farm was worth $4,500, that the defendant’s lots were worth $3,500, and that the payments to be made exactly balanced the differing values of the things exchanged. As they in express terms agreed that the exchange for all financial purposes was an even trade it cannot be thought that either of them in good faith believed that the sum of $500 would fittingly compensate for non-performance, no matter which party might make default. "Moreover, the express words of the parties indicate that they had in mind to impose a penalty, for they have said that “ the said party so failing shall/or/eii * * * the smn of $500.00.” There is an additional reason which leads to this conclusion. The stipulated sum is to be paid if “ either of the parties hereto fail to perform all of the agreements herein contained.” If, in pursuance of the contract, the plaintiff had conveyed his farm to the defendant and paid him the sums of money agreed upon, but had not delivered to bim the produce on the farm, the value of which was estimated at $280, he would, under the terms of this agreement, have become liable to pay to the defendant, not the value of that produce, but the greater sum of $500. On the other hand,
The judgment should be affirmed.
All concur, John M. Kellogg, P. J., in the result.
- Judgment affirmed, with costs.