The action is for money had and received to the plaintiff's use. The bank answered by a general denial. It is true, the contract offered in evidence as a defense to the action is not void except so far as it attempts to fix $2000 as the measure of damages sustained by Richards for any breach of plaintiff's contract, and to authorize the bank to pay it to Richards. It is absolutely void in these respects. (Condon v.Kemper, 47 Kan. 126, 27 P. 829, and cases cited in the opinion.) If the bank intended to rely for a defense upon the possibility that Richards might have some claim against it for damages, it could have relieved itself of all liability as well as all necessity for further appearance in the action and from further costs by simply depositing the money in court, and asking that Richards be made a party and required to set up any claims he might have to the fund, and disclaiming its right to hold any portion of it. On the contrary, it assumed the burden of defending itself and relied solely upon its right to retain the money and to pay the whole of it to Richards unless the contract was fully performed by the plaintiff.
The exchange of properties according to the contract was to have been completed on or before January 10, 1912. Plaintiff demanded the return of his money January 28, 1912. The action was not commenced until November 28, 1912, eleven months after the contract was made. No evidence was offered *Page 489 nor suggestion made that Richards had in fact suffered or claimed damages in any sum against the plaintiff. So far as the record discloses the contract had been mutually abandoned by the parties.
The majority opinion is to the effect that the provision for the payment of $2000 is not void except so far as it attempts to fix the measure of damages, and in support of this distinction it is suggested that the courts always permit the injured party to sue upon the contract and recover his actual damages, as was done in Condon v. Kemper, supra, where the $500 fixed as damages was held to be a penalty, but Condon was permitted to recover $100. While it is true in that case the party injured by the breach was allowed, in an action upon the contract, to recover his actual damages, the provision of the contract fixing the damages at $500 was held to be void. It can not be said that he recovered upon that clause of the contract. The law gives any party to a contract the right to recover the actual damages he sustains by the failure of the other party to perform, without anything being said in the contract that he shall have damages in case the contract is broken. The clause in the contract upon which the bank based its sole defense is void. A stipulation of this nature in a contract can add nothing to the right to recover for a breach; and it is not necessary in order to preserve the right to recover damages for the courts to indulge the fiction that the stipulation, though void and unenforceable for the only purpose for which it was intended, still possesses some virtue. It is void for all purposes. The bank can not be heard to set up the claim that it has the right to retain the fund as collateral security for such damages as plaintiff may be liable for to Richards. It admits that its only authority for retaining the money is by the terms of the contract. It failed to have Richards brought into the action, and as against the plaintiff it set up no valid defense.
Mr. Justice BURCH authorizes me to say that he joins in this dissent.
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