Mundy v. Culver

By the Court, T. R. Strong, J.

The parties, in the concluding part of their contract, have expressly declared, that if either shall fail to fulfill the covenants and agreements in the contract contained, the party failing shall pay to the other the just and full sum of one thousand dollars, as liquidated damages for the default. More clear and explicit language could not .have been employed, to express an intention to fix and settle the amount of damages to be paid upon non-performance by the failing party; and the parties must be deemed to have entertained such an intention, unless it is apparent from other parts of the contract, applying the legal rules of construction, that they did not mean what they have stated. If such was their intention, the law will carry it into effect. (Dakin v. Williams, 17 Wend. 447, 454. Williams v. Dakin, 22 Id. 201.)

There are various legal rules for ascertaining whether a sum named in a contract, to be paid by a defaulting party, was intended as liquidated damages or a penalty merely. Among these rules, is one well established by numerous decisions, that when a contract is such that the damages, in case of a violation of it, will be uncertain in their nature and amount, and the parties have stipulated that in the event of a breach a certain sum shall be paid by the party in default, as liquidated damages, they will be regarded as having so intended, and that sum will be treated as the measure of damages. (See the cases above cited, and others therein referred to. Sedg. on Dam. 421. Holmes v. Holmes, 12 Barb. 137.)

That rule is applicable to the present case. It has been applied, in several cases in this state, to contracts for the sale and purchase of real estate. (Holmes v. Holmes, above cited. Knapp v. Maltby, 13 Wend. 587. Hasbrouck v. Tappen, 15 John. 200. Slosson v. Beadle, 7 Id. 72.) The damages, in those cases, are held to be sufficiently uncertain to bring them within the rule. In this case, there is greater uncertainty as to the damages in respect to the goods than the land. The sum agreed upon as damages, was designed as the damages for a total non-performance. It is expressed to be for a failure “ to fulfill the covenants and agreements in the contract.” (Esmond v. Van Benschoten, 12 Barb. 366, 374.) The case is not, therefore, one of a contract, with.several stipulations of various degrees of importance, as to some of which the damages might be considered liquidated, whilst for others they may be deemed unliquidated, and a sum of money is made payable on the breach of any of them; nor is it the case of a larger sum stipulated as damages for the non-payment of a smaller one; in which cases the courts have held the sum named, although denominated liquidated damages, a penalty. (Sedg. on Dam. 406, 8, 9, and cases there cited.) Indeed, the contract in question, in legal effect, provides for a single act on each side—the sale of the land and goods by the plaintiff, and the payment therefor by the defendant. . Notwithstanding the form of the contract, it is apparent that what was to be done by each of the parties, was regarded by them as much an entire thing as if it had formed the subject of a single stipulation.

I do not perceive that the evidence offered by the defendant, of the terms and contents of the agreement between him and the witness Knight, for the purchase of the goods by the latter of the defendant, and that Knight was to take the goods as they should be inventoried, according to the contract between the plaintiff and the defendant, and that the plaintiff had knowledge of the contract, was at all relevant to any question in the case.

There was no error in excluding the question, whether the calicoes were saleable as such. The contract embraced “ all the goods, wares and merchandise” which the plaintiff might have on hand in his store, and the defendant was bound to receive the calicoes, if they were of any value. There was no evidence that which would alone have warranted the exclusion of the question, the defendant objected to take the calicoes .with the other goods,

[Monroe General Term, September 4, 1854.

I think no error was committed in the charge to the jury, or in the refusal to charge as requested.

The motion for a new trial must be denied.

Johnson, Welles and T. R. Strong, Justices.]