12 Barb. 366 | N.Y. Sup. Ct. | 1852
As the articles of agreement did not specify the place at which the conveyances to be executed by the plaintiff should be tendered, it was competent for the parties, subsequently, to appoint a place by parol, for that purpose. (Franchot v. Leach, 5 Cowen, 506.) This was done accordingly; and the plaintiff was ready and offered to perform at that place, but the defendant did not appear.
Although the articles of agreement were under seal, it was competent, nevertheless, for the parties, on the expiration of the contract, to enlarge the time for performance by parol. This was not an alteration of the original contract. In Fleming v. Gilbert, (3 John. 528,) the time for the performance of the condition of a bond had been enlarged by a parol agreement of the parties, and it was held, that evidence of such fact was admissible on the part of the defendant, who was sued for not performing at the day mentioned in the bond. This doctrine was approved in The Mayor of New- York v. Butler, (1 Barb. S. C. Rep. 327.)
This extension of the time was, in the present case, made at the instance, and for the benefit of the defendant. In Hasbrouck v. Tappen, (15 John. 200,) a case in some respects similar to the present, it was held, that a parol enlargement of the time of the performance of an agreement by the vendor did not revive his right to recover a sum which was fixed and liquidated by the agreement, as the amount of damages to be p$.id by the party failing in performance. As remarked by Sutherland, J. in Dearborn v. Cross, (7 Cowen, 48, 50,) the enlargement of the time is nothing more than a waiver of strict performance. The defendant having solicited the delay, can not urge it as a defense. This would be to convert an indulgence yielded to his solicitation, into a weapon. And the law does not, any more than religion, justify a return of evil for good, or of ingratitude for benefits.
The important question in the case is, whether the sum of five hundred dollars mentioned in the contract, was merely a penalty to secure the' performance of the agreement, as the defendant
Much of the embarrassment experienced in the discussion of questions of this kind, arises from not discriminating properly between contracts having a similitude to each other, but which are materially different. First. The agreement may be to do or refrain from doing some particular act, or in default thereof to pay a given sum of money. This agreement was well known to the civil law. {Inst. lib. 3, tit. 16, § 7.) This is not a penal, but more properly, an alternative obligation. The case of Slosson v. Beadle, (7 John. 72.) and Pearson v. Williams, (24 Wend. 244,) are examples of this contract. Second. The agreement may assume the technical form of a bond containing a given penalty, conditioned to become void on the payment of a less sum, or the performance of some particular act. Here there is no express promise to do any thing, except what is implied from the condition, and that is sanctioned by the penalty. Third. The agreement may bind the party absolutely to do or refrain from doing the particular act, and then proceed to declare that if the promise is not performed, the party stipulating shall pay a given sum of money as a penalty. And lastly, the agreement may in all respects resemble the last, except that the fixed sum may be declared payable as liquidated or stated damages, or as a forfeiture. (Sedg. on Dam. 419.)
In case the agreement assumes the form of a bond, or the sum reserved is denominated a penalty, the prima facie presumption is that the larger sum is intended merely as security, and not as liquidated damages. On the contrary, if the sum specified be declared affirmatively to be liquidated damages, and negatively also, that it should not be considered as a penalty or in the nature of" a penalty, although the inference is that the parties meant what they expressed, yet there are certain rules of law which may control the meaning, and convert the sum so mentioned into a penalty.
A brief reference to a few of the cases, will show the propriety of the foregoing distinctions. Thus, in Astley v. Weldon, (2 B. & P. 346,) an agreement was entered into by the defend
The case of Astley v. Weldon, was followed in Kemble v. Farren, (6 Bing. 141.) In the last mentioned case, the defendant had agreed with the plaintiff to act as principal comedian, at Covent Garden, and to conform to its rules ; the plaintiff was to pay £3.6s. 8d. every night that the theater should be open, and the agreement contained a clause that if either party failed to fulfill his agreement, or any part thereof, or any stipulation therein contained, each party should pay the other the sum of £1000, to which sum it was agreed that the damages should amount, and which sum was declared by the parties to be liquidated and ascertained damages, and not a penalty or penal sum, or in the nature thereof. The breach alledged, was a refusal to act during the second season, and the jury gave a verdict for £750. A motion was made to increase this verdict to £1000, on the ground that that sum was the amount liquidated by the parties, but it was denied. Lord Tindal, Ch. J., in delivering the judgment of the court, said that it was difficult to suppose any words more precise or explicit than those used in the agreement. And if the clause had been limited to breaches which were of an uncertain nature
It is well settled that no damages can ever be so liquidated between the parties for the mere non-payment of money, as to evade the provisions of law which fix the rate of interest. (Orr v. Churchill, 1 H. Black. 232. Gray v. Crosby, 18 John. 219.)
The courts in this state have inclined to treat a fixed sum as a penalty, and to permit the real damages to be inquired into when the sum fixed was greatly disproportionate to the presumed actual damage. That was the ground on which Dennis v. Cummins, (3 John. Cases, 297,) seems to have been decided. There was room in that case to presume that by the term damages, the parties intended a penalty merely.
In Knapp v. Maltby, (13 Wend. 587,) the defendant covenanted to assign to the plaintiff a lease, and to deliver possession thereof, with the following provision : “ And I further covenant
It is difficult, and perhaps, impossible, to establish a general rule on this subject, that will be free from every objection. In general it may be said, that when the sum specified in the contract is described by the parties as liquidated damages, and is not to secure the payment of a less sum of money, nor the performance of an act, or the failure to perform, in which the damages for a breach of the contract will be certain, the language will be deemed expressive of the intent of the parties, and the specified sum will not be treated as a penalty. The cases of Dakin v. Williams, (17 Wend. 447,) and S. C. in error, (22 Id. 201,) and Pearson v. Williams, (24 Id. 246, and S. C. in error, 26 Id. 630,) were decided upon this ground. Most of the English cases, as well as those of our own courts, are reviewed in the preceding, and it can not be necessary to go over them again.
In the present case, although there were several things to be done on the part of the plaintiff, and two things on the part of the defendant, yet the stipulated sum of five hundred dollars was required to be paid for “ a failure to perform the agreements and covenants by the failing party to be performed.” A mere technical breach, in a single particular, did not, as in some of the cases, work a forfeiture of the whole sum. The sum became due only on a total failure to perform. This sum, too, is not denominated a penalty, but is described as the liquidated damages of the party injured by the breach of the contract. These damages were in their nature uncertain, and not capable of calculation without a resort to evidence. They were less certain than in Knapp v. Maltby, (supra,) which the court held to be a clear case of liquidated damages. The covenant was not to secure the payment of a less sum of money, but a much larger sum, and something else, and there is no apparent or oppressive disproportion between the probable damage and the sum agreed upon. The parties were the best judges of the
This case, too, differs from Jackson v. Baker, (2 Ed. Ch. R. 471.) There the parties agreed to forfeit and pay, &c. for any violation of the agreement, or any part thereof, &c. five thousand dollars. The words forfeit and pay are the operative words in Dennis v. Cummins, (3 John. Cas. 297. The word forfeit is an appropriate expression to denote a penalty, and when used in such contracts, increases the presumption that the parties merely intended to secure the performance of the agreement by a penalty. In the present case, no words indicating a penalty are used, and the sum Specified is expressly denominated liquidated damages.
The judgment of the referee must be affirmed.
Cady, J. concurred.
I regret to be constrained to dissent from the views of my brethren in this case. I think the report erroneous upon two grounds: first, non-performance of the contract by the plaintiff; secondly, it was not a case of liquidated damages.
The familiar rule is, that as between the parties no evidence, oral or written, not under seal, can be admitted to discharge, contradict or vary a contract by deed. TJnum quodque ligamen dissolvitur eodem ligamine quod ligatur. This rule is found in some of the earliest English reports, and has been acted upon there from the earliest periods ; and I think is clearly the law in this state. (Blannerhasset v. Pierson, 3 Lev. 234 Snow v. Franklin, 1 Lutw. 358. Blake's case, 6 Coke, 44 a. Allen v. Blague, Cro. Jac. 99. Thompson v. Brower, 7 Taunt. 656. Heard v. Wadham, 1 East, 629. Doe v. Gladdin, 6 Ad. & E. N. S. 962. Littlor v. Holland, 3 T. R. 590. Brad-
In Harris v. Goodman, (supra,) the defendant was induced to take letters of administration on the promise of the plaintiff, that he would not prosecute. In May v. Blakeney, (supra,) the plaintiff had a judgment non obstante veredicto against the defendants for removing erections, contrary to a covenant, although they had been erected under an express license in writing, to erect and remove them. This case was decided in 1841, and was elaborately argued. And in Doe v. Gladwin, (6 A. & E. N. S. 962,) decided in 1844, the tenant lost her land because she had neglected to insure in the names of lessor and lessee, although she had insured in the name of the lessor and shown this policy to the lessee, who approved of it, and afterwards accepted rent. The court considered the action “ unusually harsh,” but said that “ no case has gone the length of intimating that a breach of covenant can be justified by a parol license to break it. This would be to confound well established legal principles.” Where there is an executory contract for the delivery of property, a refusal by the vendee to receive it, in many cases, is sufficient. (Cort v. Amber gate, &c. Railway Co. 15 Jur. 877; S. C. 6 Eng. L. and Eq. Rep. 230.) But that is not this case.
It is not easy to discover upon what principle the plaintiff can say, the extension of time for performance would not be an alteration of the contract. But as we have seen, it did not extend the time in this case, for the indorsements were merely inoperative and void for that purpose. The result was, that neither performed, nor offered to perform the covenant, and both lost all claim to damages by that default. It is said the defendant admits he did not perform, and that is so, and of course he has no cause of action. But he denies performance by the plaintiff, and the latter did not perform, or offer to perform, according to the terms of the covenantand he is, therefore, also in default, and can not sue. There is no proof that the plaintiff offered to perform on the 1st of April. Indeed he has hardly so alledged. Hulbert heard him say on the 2d, he was
But again; admitting the indorsements are valid, they include nothing but the delivery of the conveyances and the payment of the money. Nothing is said about the trees and the hay; nor is there any proof of performance, or an offer to perform, as to those things. The indorsements are in writing, and can not be enlarged by parol. The plaintiff must fulfill before he takes $500 from the other contracting party. The mere existence of hay or trees belonging to the plaintiff, or that might have been procured, sufficient to fulfill their part of the contract, was not performance or tender of performance.
Nor do I agree with the learned referee on the question of damages: I understand the rule to be, that where the instrument contains covenants for the performance of several things, particularly if of various degrees of importance, and a large sum is stated at the end, to be paid on a breach of performance, it is a penalty; though it may be different in some cases, where a sum is fixed as damages for the performance or omission of a specified act. This rule is settled by the overwhelming number and authority of the decisions. (Reporter's note, 1 Holt's N. P. R. 45. Astley v. Weldon, 2 B. & P. 346. Kemble v. Farren, 6 Bing. 141. Dakin v. Williams, 17 Wend. 455. S. C. 22 Id. 261. Jackson v. Baker, 2 Edw. Ch. Rep. 471. Davies v. Penton, 6 B. & C. 216. Boys v. Ancell, 5 Bing. N. C. 390. Horner v. Flintoff, 9 M. & W. 678. Price v. Green, 16 Id. 354. Breckhan v. Drake, 8 Id. 846. 9 Paige, 106. Chit. on Con. 758, 761. 1 Saund. Rep. 58, n. 1, n. d, ed. 1846.) And, perhaps, the rule may be qualified as laid down by Bayley, J. in Davies v. Penton, and reaffirmed in Horner v. Flintoff. That “ where the sum which is to be a security for the performance of an agreement to do several acts, will, in case of breaches of the agreement be, in some instances,
But the respondent’s counsel insists that the rule does not apply here, because the contract does not state that the damages are to be paid on the failure to perform “ either” of the agreements and covenants. That I think brings the case more clearly, if possible, within the rule. In Knapp v. Maltby, (13 Wend. 587,) it was stipulated that $500 should be the liquidated damages for non-performance of “ any or either” of the covenants. However, similar words were used in Kemble v. Farren, and the decision followed that of Astley v. Weldon. In this last case the contract was for the services of the defendant for a term of years, and under certain stipulations, and it was agreed that if 11 either of them neglected to perform that agreement according to the tenor and effect and true intent and meaning thereof,” he should pay £200; and this was held to be a penalty. The covenant in Knapp v. Maltby, was, in substance, to perform a single act, convey and deliver possession. And Mr, Justice Sutherland cites 5 Cowen, 144, and 7 Id. 307, neither of which conflict with the law as laid down by Mr. Justice Heath in Astley v. Weldon. And in Pearson v. Williams, (24 Wend. 244,) the stipulated sum was considered as a part of the contract, price.
In the case now before us, one party was to do six things— make two conveyances, one assignment, and transfer the hay, grain and trees—certainly of various degrees of importance. The other, two—pay money and give a bond. If it is a case of liquidated, damages, failure to deliver one and a half tons of hay, or any part of it, or one tree, would have made the plaintiff liable for $500; for it will hardly be contended that the damages are liquidated as against the defendant, and not as against the plaintiff. Ordinarily the damages on an agreement to purchase are merely nominal. And if uncertainty as to nature and amount is to be the criterion, as hinted by the chancellor in Williams v. Dakin, there is no such' difficulty in this case.
Possibly the plaintiff can compel specific performance, but he can not recover damages upon any implied agreement arising from the indorsements.
Judgment affirmed.
WUlard, Hand and Cady, Justices.]