11 N.H. 234 | Superior Court of New Hampshire | 1840
In this case motion is made to set aside the verdict, on the ground that the sum named in the obligation in suit constituted a mere penalty, and cannot be regarded as liquidated damages, or as forming any criterion for the amount of the verdict for the plaintiff.
If this be so, the verdict should be set aside, and a hearing be had in chancery, to determine the actual damage sustained ; for which, merely, judgment should be rendered.
The question thus raised is one difficult to be determined, owing to the contradictory decisions upon this subject. Courts, from a desire to avoid cases of seeming hardship, have, in many instances, made decisions disregarding the evident intent and design of the parties, to contracts ; and a va~
• The difficulty under this classification of cases has been to determine whether the precise sum stipulated to be paid is
We see no reason why contracts of this kind should not be judged of by the same rules of construction as other contracts ; or why a technical, restricted meaning, should be given to particular phrases without recurrence to other portions of the instrument to learn the design of the parties.
The more modern decisions upon this subject have turned on the construction of the agreement according to its general intent. In Reilly vs. Jones, 8 Moore’s Rep. 244, it is said that where it may be fairly collected that the intent of the parties was that the damages stipulated for, as between themselves, were to be considered as liquidated damages, they cannot be treated as a penalty, although they might operate as such in a popular sense. The same case is reported in 1 Bing. 302: and there is a similar case in Holt’s N. P. Rep. 43, Barton vs. Glover.
The rule is well laid down in 3 Shep. 273, Gowan vs. Gerrish, that the lawful intention of the parties, in a case free from fraud, when it can be ascertained must have a decisive influence in determining whether the sum stated is to be regarded as a penalty, or as liquidated damages. And in Knapp vs. Maltby, 13 Wend. 587, where the instrument was, I further covenant that in case of non-performance of any or either of the above covenants I will forfeit the sum of five hundred dol
The words forfeit or forfeiture, penal sum or penalty, have in some instances been regarded as furnishing a very strong, if not conclusive indication, of the intention of the parties in an instrument of this description ; but the weight to be given to such phraseology will depend entirely on its connection with other parts of the instrument. If an individual promises to pay the damage which may be incurred, under a given penalty, or under a forfeiture, the damage only in such case is agreed to be paid. On the other hand, the penalty may be expressly agreed to be paid in such terms as to admit of no doubt that such was the intent of the parties; and where such is the case, notwithstanding it may be named as a forfeiture, or the parties are spoken of as bound in a certain sum, if it was clearly the design of the parties that such sum should be paid, it is holden in the more modem decisions as liquidated damages.
The court are of opinion in this case that the sum inserted in the contract, to be paid on its non-fulfilment, was designed by the parties as liquidated damages. The defendant promised, “ if he did not conform to his agreement, to pay the sum of five hundred dollars, as a forfeiture for its non-performance and a portion of the money was advanced to him at the time, which, by the contract, was to be in part of the damage, or of the purchase money, as the circumstances in the end might require.
The minuteness and particularity with which these provisions were made, tend to show that the design of the parties was to ensure a performance of the contract without fail.
Such, in our view, having been the intention of the parties in the contract now under consideration, the instruction of the court as to the rule of damage was correct, and there must be
Judgment on the verdict for the plaintiff.