55 N.Y.S. 956 | N.Y. App. Term. | 1890
The plaintiff, a theatrical manager, sues the defendants, who are actors, to recover the sum of $500 for the violation of a stipulation contained in the written contract between them, in which the defendants agreed not to perform in any other theater in this city until their engagement with the plaintiff had been fulfilled. The contract fixes the amount sued for as a sum to be paid by the defendants in case of the breach of their engagement, or of any of the conditions contained in the agreement. It is evident that the stipulation in question was violated, and the only point to be determined here is whether the sum sued for was a penalty or liquidated damages. The decisions, both in England and in this country, in which efforts have been made to lay down rules which should determine when the exaction of the payment of a fixed sum for breach of contract is to be treated as a penalty and when it is to be regarded as a liquidation of damages, are numerous, and difficult to reconcile. The latest in this state, however, declare that it is a question of intention to be ascertained upon a consideration of the contract as a whole in the light of surrounding circumstances, and that the particular words used in describing the fixed sum are not controlling. It may be styled “liquidated damages,” and yet be held to be a penalty; or it may be termed a “penalty” or a “forfeit,” and, notwithstanding, be construed as a provision for liquidated damages. A tendency towards a liberality of construction for the purpose of sustaining the agreement which the parties have made is manifest. Cotheal v. Talmage, 9 N. Y. 551; Kemp v. Ice Co., 69 N. Y. 45; Ward v. Building Co., 125 N. Y. 230, 26 N. E. 256; Tode v. Gross, 127 N. Y. 480, 28 N. E. 469. There are certain rules of common concession, which, as far as they go, are controlling in the process of construction. In the first place, where the contract is of such a nature that the damages for its breach are susceptible of exact ascertainment, there is no occasion for an agreement upon an arbitrary sum by way of liquidation, and in such cases the stipulation is treated as a penalty, and will not be enforced,—a rule which is also applicable where the fixed sum is payable upon the breach of any one of several engagements expressed in the contract, if any one of them is of such a nature that the damages for its violation can be determined with reasonable precision. The court will not undertake to sustain the provision in part, but will declare it to be a penalty, and treat it wholly as such, although the other provisions of the contract may be such as to admit of a liquidation of damages for their breach. Further
Judgment affirmed, with costs. All concur.