Case ID: scl_36/html/0115-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Curia, per Withers, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James Worrell v. George M'Clinaghan and wife.
    
    There was a stipulation in the contract for building a house, that the house should be finished by a certain day, and in default there was to be a deduction of $100 for every month which intervened between that day and the finishing of the house: — Held, that the forfeiture took the character of damages, liquidated, .or stated, and not that of a penalty, and that the jury should have been so instructed, as matter of law.
    
      Before Evans, J., at Darlington, Fall Term, 1849.-
    This was an actioii of assumpsit or covenant, on a contract for the price of building a house. The contract specified,. with great minuteness, every thing to be done. On the comp]et-ori qje the plaintiff was to receive $1100, and l^e father sum of $500 at the end of one year, and $500 at the end of two years. The action was brought before the last payment was due. There was a stipulation at the conclusion of the contract, that the house was to be finished on the 1st day of June next after its date, in November, 1845, and in default, there was to be a deduction of $100 for every month which intervened between that day and the finishing of the house. The house was not finished until December. On the trial, the defendants claimed a deduction of $600 for this delay. It appeared from the evidence, that the contract had originally been by parol, and the work progressing slowly, and the time for its completion having nearly expired, Mrs. McClinaghan, then Mrs. Pawley, became impatient, and proposed to have the contract put in writing, which was assented to. She sent for Mr. Ervin, who drew the written contract. He said a further time was allowed, sufficient, as was supposed, to finish the house, and that the forfeiture was inserted for the purpose of enforcing the completion of the house, as Mrs. Pawley was subjected to much inconvenience, as well for the want of the house, as the presence of so many workmen. On this part of the case the question was, whether it was a penalty or a forfeiture in the nature of assessed damages. The Circuit Judge charged the jury that it was a question of intention, to be determined by the contract itself, taken in connection with facts of the case. He did not charge them upon it as a question of law, but intimated his own'opinion that it was to be considered as damages which the parties had agreed on as a compensation, which the defendants sustained by the delay.
    Yery large payments and discounts were proved. The evidence on this point, with a statement and calculation of interest, (made by Mr. Ervin, the defendants’ attorney,) was submitted to the jury. They rendered a verdict for the defendant for about $90. The verdict showed very clearly that they did not allow the $600 for the delay in finishing the house, but there were no means of ascertaining how they had come to their conclusion on the other matters of defence. The house was finished substantially, according to the contract, except some defect where it was joined to the old house. This, the witnesses said, might originally have been remedied at a small cost, but would now cost $150. His Honor thought this a very extravagant estimate, and thinks it likely the jury did not allow it. There were some items of $40 or $50, which were not fully proved in the discount.
    The defendants moved the Court of Appeals for a new trial, on the following grounds:
    
      1. Because, under a proper construction of the contract, the sum of $100 per month, agreed to be paid, by the plaintiff the defendants for every additional month that he might require to perform the contract after the 1st of June, 1846, was not intended as a penalty to secure the defendants from any special damages which they might thereby sustain, but was stipulated damages — and the proper construction of the said contract was a matter of law, and His Honor should have so instructed the jury.
    
      2. Because his Honor erred in charging the jury that they might come to the conclusion, from the subject matter of the contract and the evidence, that the parties intended the forfeiture to operate only as a penalty; and if so, that the defendants were entitled to recover only to the amount of damages actually sustained by them.
    3. Because, under the charge of his Honor, and the evidence adduced on the trial, the jury were bound to have rendered a verdict in favor of the defendants fora larger sum, even supposing that they disregarded the forfeiture entirely, and allowed only the sum of $75 for the deficiency of work done on the building under the contract, which said last amount appears to have been allowed by them.
    
      Ervin dp Dqrgan, for the motion.
    Law, contra.
   Curia, per Withers, J.

Each of the questions presented to this Court, might be the theme of ample discussion, which, if there were leisure for that purpose, might-become instructing to the profession. We are, however, under pressure at the heels of the Court, and are driven to be' economical of time and words.

The first question is, have the parties to this contract established a measure of redress, that, in legal.contemplation, is a penalty ; or is it a measure of liquidated, stipulated, or stated damages? If the first, then, the plaintiff, Worrell, afforded to the defendants only a security, in writing, for such actual damages as might result from his default in the particulars specified; if the latter, a standard has been fixed behind which the Court cannot go.

The first observation which strikes us is, that if one hundred dollars per month, to be forfeited on failure to complete the building by the first day of June, was intended to be but a security for a sum of damage otherwise to be ascertained, the parties accomplished but little by the deliberate contract— nothing, it would seem, in favor of the party who was intended to be benefit ted, for the employer might have recovered, on general principles, all special damage resulting from a violation of contract by the carpenter; and no surety undertook for him, nor was other security of any kind added to his personal responsibility. It would, in .that view, become rather a protection to him whose default was intended to be punished, by limiting the extent beyond which reimbursement could not be enforced against him.

Some writers put such an agreement as that before us upon the footing of alternative or conditional agreements, where a party has the election to perform a stipulation, or, instead thereof, to pay a fixed sum of money. There is no sensible distinction between the present case and that of Fletcher v. Dyche, where a party had contracted to do certain iron work for a certain sum within 6 weeks, and if not, to “foifeit and pay” £10 for every week, until it was finished. Buller, J. said, “ It is as strongly a case of liquidated damages as can possibly exist, and is like the case of demurrage.”

The present is not of that class of cases where the forfeiture is limited to a variety of breaches intended to be prohibited, each one of which was of a precise nature and amount, but it is limited to a single breach, the actual damages resulting from which, would be of uncertain nature and amount: if it related to a failure to furnish a pair of hinges of a certain value, for example, as well as other defaults, we might be startled with the unreasonableness of holding the case to be one of stated damages. But it is of the other character, — it settles the amount of damages, in their nature uncertain, fora well defined default, and presents an instance in which it was both lawful and reasonable that the parties should super-cede the uncertainties and delay attending a contest in testimony, and the expense of calling witnesses, by a measure established for the contingency.

Without running through the cases on this fruitful head of law, we are content to say that we see no room to question that the forfeiture in this case takes the character of damages, liquidated, or stated, and not that of a penalty. This opinion the Judge intimated to the jury as his own, but he did not charge therh upon it as a question of law. This gives rise to the second point of inquiry, to wit:

Ought the jury to have been so instructed as matter of law? We think they should have been so instructed.

No doubt was raised upon the facts of the execution of the contract, and of its binding efficacy. We have already shown that the terms used, upon the question here, were not ambiguous. Now, suppose the jury had found, by way of special verdict, that the contract had been duly executed by the parties and was binding upon them, nothing but its legal construction by the Court as matter of law would have remained. We are not so much accustomed (perhaps unfortunately) as they are in England, to special verdicts. Our verdicts usually are the exponents of a result compounded of •law and fact. Every general verdict, indeed every issue on the record, found by the jury, involves both law and fact; for every issue has its. law apd the question must always-be, whether the facts proved satisfy the negative or affirmative. The exposition of the law to which both parties in the present case were entitled was the same as if a special verdict had found the contract, in its terms. The terms were unambiguous in their legal import; the fact of the-execution of the instrument was not disputed; such terms import liquidated damages, and, therefore, the jury should have been told, as matter of law, that if the plaintiff had made the default, as alleged by the defendants, he must account to them for one hundred dollars -per month from the period the default occurred. It was a case where a principle of law applied to the special facts proved and unconlested, and fixed their legal' quality: it measured their effect: it furnished a standard to be given to the jury, a priori. whereby the branch of the case to which it applied was to be adjusted with precision. The general rule on this subject, as laid down by Starkie on idence, is in these words: The construction of a written document is matter of pure law, as it seems, in all cases where the meaning and intention, of the framers are by law to be collected froni the document itself.’’

We are left to infer from the report, that the jury did not allow the defendants the benefit of the stipulated damages, to which, it has been shown, they were entitled. While we fear that the plaintiff has made a contract which will work harshly upon him, yet it is his contract; we cannot dispense with the law that arises upon it, and, therefore, a new trial must be ordered.

Evans, Wardlaw,- and Frost, JJ., concurred.

Motion granted. -