Case ID: misc_16/html/0289-02.html
Source: Caselaw Access Project
Author: {"author": "Conlan, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward R. Mawson, Appellant, v. Michael Leavitt, Respondent.
    (City Court of New York, General Term,
    March, 1896.)
    Contract — liquidated damages.
    A contract by which one party was to furnish his theatre for a week and the other to furnish a company to play therein, the profits to be .divided, provided that for a violation thereof by either party he should forfeit and pay to the other §500 on demand as liquidated damages. Held, that such sum was not disproportionate to the amount of damages that might reasonably be within the contemplation of the parties, and that it .was' not intended to be a penalty, but the covenant was one for liquidated damages.
    Appeal from judgment in- favor of defendant.
    Mitchell L. Erlanger, for appellant.
    Dittenhóefer, Gerber &■ J ames, for respondent.
   Conlan, J.

This is an appeal.from a judgment entered after trial had before the court without a jury.

The action was brought to recover liquidated damages provided for in a reciprocal contract entered into between the parties, substantially as follows:

, The contract provided that .the defendant should furnish his theatre in Denver, Colorado, for one week commencing February 27, 1893, and the plaintiff should furnish his theatrical company and play in said theatre for said week, the proceeds to be divided. The contract or agreement concluded with the following clause:

It is further agreed and understood by the parties hereto, that for any violation of the above-mentioned covenants by either party (acts of Providence excepted), he or they, shall forfeit or pay over to the other party the'sum of five hundred dollars on demand as liquidated damages.”

The court after hearing all the evidence made the following findings of fact and conclusions of law:

VII. That the said defendant, during the week contracted for, permitted an attraction other than that of the plaintiff to play at his said theatre.

VIII. That no fire, national or local calamity, or any other ' unforeseen accident or obstacle, arose which - rendered the fulfillment of the contract impossible upon the part of the defendant.

IX. That the said defendant broke the said agreement without just cause or excuse.

X. That the defendant did not furnish his theatre to the plaintiff for the term and as specified in the contract, but notified the plaintiff that he could not do so.

XII. That the clause specified in the contract providing that for any Violation of the.covenants therein contained either party will forfeit and pay over to the other the sum.of five hundred dollars op demand, was intended to be and was a penalty and not liquidated damages.

Counsel for the plaintiff asked the court to find as follows:

XI. That the clause in said contract specified in the above finding VI of fact, provides, in.the event of a breach by either party, for liquidated damages and not for a penalty.

XII. That the damages under the agreement being liquidated,, plaintiff is entitled to recover the stipulated amount without further proof of loss.

The court refused to so find, to which refusal the plaintiff excepted. The court thereupon ordered judgment for the plaintiff for six cents. We' think this was error. The contract imposed reciprocal obligations and fixed the amount of damages to be paid in case of a breach by either party. The amount so fixed was not disproportionate to the amount of damages that might reasonably be within the contemplation of the parties at the time, and they had a perfect right to fix and limit that liability.

The covenant was one of liquidated damages, and on the facts as found by the court the plaintiff was entitled to judgment for the amount stipulated.

Judgment appealed from reversed and a new trial ordered, with costs to the appellant to abide the event.

Pitzsimons and O’Dwyer, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.