135 P. 98 | Utah | 1913
Lead Opinion
Tbis action was commenced by plaintiffs, as vendors, to recover damages against the defendant, as assignee of the vendee, for a breach of contract for the sale of real estate. The material parts of the contract are that on the 14th day of April, 1908, the plaintiffs herein entered into a contract with one C. R. Jepperson, whereby the plaintiffs sold to said Jepperson a certain parcel of land in Cache County, Utah, for the agreed price of $2660, payable as follows: $285 upon the execution of the contract, which amount was duly paid; $315 on or before October 1, 1911; and the remaining $2000, which was evidenced by a note and mortgage, a first lien on the land sold, was also to be paid on the 1st day of October, 1911. The deferred payments bore interest at the rate of nine per cent, per annum, payable on the 1st day of October of each year. The vendee took possession of the land under the contract, and agreed to pay the taxes. -A deed was executed and placed in escrow with a bank named in the contract at Logan, Utah, which was to be delivered to the vendee upon his compliance with the conditions of the contract- — otherwise to be returned to the vendees. The contract contained the following stipulations:
“In the event of a failure to comply with the terms hereof by the said party of the second part, the said parties of the first part shall be released from all obligations in law or equity to convey said property as hereinbefore provided, and the said party of the second part shall forfeit all right thereto, and shall also forfeit to the parties of the first part as liquidated damages all payments that may have been made on this agreement.” “Time is the essence of this contract, and if default be made.by the party of the second part in any of the conditions named herein, then the parties of the first part may at their option declare this agreement null and void, and the said Cache Valley Banking Company is hereby authorized to surrender the above-mentioned deed to the order of the said parties of the first part.”
After entering into the foregoing contract the vendee, Jepperson, assigned all of his interest therein to the defend
The defendant makes no claim whatever to the land. In the complaint the plaintiffs allege that by reason of the breach aforesaid' they were damaged in the sum of $1500, upon which the defendant was entitled to a credit for the sum of $158 for payments made pursuant to the terms of the contract. Plaintiffs in their complaint also sought to be relieved from the stipulation in the contract with respect to liquidated damages, which stipulation we have quoted above. Plaintiffs sought to be relieved from the said stipulation upon the alleged' ground that “the provision contained in the contract with reference to a forfeiture of all sums paid on said contract as liquidated damages was intended by the said parties to be a penalty in the event of a breach of the same.” The defendant answered complaint; but it is not necessary to set forth the averments contained therein, except to state that, in view that the plaintiffs had admitted that defendant had paid the sum of $758, and had elected to terminate the contract and to repossess themselves of the land in question, and because of the payments that had been made by the defendant upon the contract as aforesaid, he denied any further liability.
At the trial it was stipulated that the plaintiffs had “declared said contract null and void” as provided therein. It was further stipulated that, in case the court deemed it material, which materiality was denied by defendant, the “rental value of the premises described in the complaint was and is $250 per annum.” It was also stipulated, subject to its materiality, which was denied by the plaintiffs, that in the month of January, 1912, the plaintiffs sold the land in question for the sum of $2754.75. The plaintiff William P. Dbpp, in support of the allegation in the com
“I left the making of the contract with Mr. Thompson, and we (Dopp and Jepperson) did not have any conversation in regard to the damages; all we said was that we would get Mr. Thompson to make out the contract, and we both read it over, and agreed that it was all right, and signed it.”
This is all of the evidence in the record upon that subject. The question that arises in the legal mind is, How could -ordinary minds more completely have met and agreed upon a proposition than did the minds of the parties to the contract in question, as appears from the foregoing statement? 'There was some further evidence produced by the plaintiffs; but what was produced was entirely immaterial to any issue in the case.
Upon substantially the foregoing admissions, stipulations, and evidence, the plaintiffs rested, and the defendant moved for a nonsuit, which was denied.
The defendant testified, and produced receipts in support of his testimony, that he had paid $811.66 upon the contract, and further testified' that, in addition thereto, he had paid all of the taxes on the land after taking possession thereof under the contract. The court excluded defendant’s testimony with respect to the payment of' the $811.66 and the receipts, because of defendant’s admissions in his answer; but his testimony with regard to the payment of taxes remained in the record, and is not denied.
The court made findings of fact in which, among other facts, it found that the defendant had paid $75 & on said ■contract; that the rental value of said land was $250' for each year for the four years commencing with 1908 and •ending with 1911; that the damages sustained by the plaintiffs was $1000, upon which defendant was entitled to credit for said $758 paid on said contract, leaving a balance due plaintiffs as damages the sum of $242. Conclusions of law
The appellant contends that the court erred in not enforcing the terms of the contract as agreed to by the parties-thereto, and that it further erred in holding that the respondent was entitled to recover anything under the provisions of the contract in question. Respondent seeks to-sustain the judgment and rulings of the court upon the-ground that the forfeiture clause in said contract, which we have set forth in full, should be treated as a penalty and not as a binding stipulation for liquidated damages.
“Where the damages provided for in the agreement are disproportionate to the several covenants therein provided, in some eases being grossly excessive and in others entirely inadequate, they will be construed as a penalty rather than as liquidated. Where the damages are uncertain in their nature, difficult to ascertain or impossible to be estimated with certainty, by reference to any pecuniary standard, and where the parties themselves are more intimately acquainted with all the peculiar circumstances, and are-therefore better able to compute the actual or probable damages,*339 it lias been the rule to allow the parties to ascertain for themselves, and provide in the agreement itself the amount of damages which shall be paid. Where a party has defaulted in the performance ■of some contract, involving a stipulation of forfeiture, the courts as a general rule construe the same as liquidated damages rather than as a penalty, unless it can be seen from the evidence that the forfeiture is disproportionate to the breach.”
It is also stated in Cyc. that, whenever the actual damages, ■■accruing as the result of a breach of an executory contract, can readily and accurately be ascertained, the courts are inclined to, and as a general rule do, construe the amount named as a penalty rather than as liquidated damages.
We are of the opinion, therefore, that the amount stipulated as constituting liquidated damages in the contract in question cannot be construed as a penalty, but must be held to be liquidated damages, and must be enforced as such. The district court erred, therefore, in not sustaining the motion for a nonsuit, for the reason that, when the respondents rested, there was no evidence whatever justifying a finding that they had sustained any damages whatever, or that they were entitled to recover anything under the terms of the contract pleaded in their complaint.
The question of whether the appellant could hare complained is not before us, and upon that question we express no opinion.
We remark that the measure of damages which is adopted by some courts is less favorable to the respondents than the one we have adopted above. We think the measure of damages herein adopted is eminently fair and just to all parties, giving the vendor the full benefit of his contract, while it denies to the vendee any advantage by refusing to comply with its terms.
The judgment is therefore reversed, and the cause is remanded to the district court of Cache County, with directions to vacate the judgment, sustain the motion for nonsuit, and enter judgment dismissing the action at the cost of respondents. Appellant to recover costs on appeal.
Concurrence Opinion
I concur in the judgment of reversal, but think the case should be remanded for a new trial. The action is one at law, not in equity. Of course, on this record the plaintiffs have shown no right to recover. What they may show on a retrial of this cause, or on a trial of a fresh •action, the dismissal of this on a judgment of nonsuit, not being an adjudication on the merits, is another question. Since the plaintiffs may prosecute a fresh" action at law for breach of contract — and surely they may do that — I see no reason why this cause should not be remanded for a new trial. If, from what is determined by us, they should be advised that nothing more can be presented which may or ought to influence a different result, the one can be abandoned as readily as the other.