Court Opinion

ID: 7005013
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:48:55.215046+00
Date Added: 2024-06-11T16:10:02.840343
License: Public Domain

Mr. Justice Dibell, dissenting. In this state when a question arises whether a sum named in such a contract is to be treated as a penalty or as liquidated damages, the effort of the court is “ to get at the true intent of the parties and to do justice between them.” Hennessy v. Metzger, 152 Ill. 505; Gobble v. Linder, 76 Ill. 157. It is obvious that the defendants, the county and the town, as municipalities, could not sustain any damage by reason of the failure to complete this bridge at the date fixed by the contract. There was a serious interruption of travel. This bridge was on the main line of travel between certain villages, and people were hauling coal at that time of the year from certain coal mines to their homes. This was the regular line of travel for heavily loaded teams. They could not pass over this route while the new bridge was in course of construction. There was another road three-quarters of a mile west, but that road was not only out of the regular line of travel but also it passed over hills where as heavy loads could not be drawn as on the highway where this bridge is located. The parties must be presumed to have contracted in view of the fact that no substantial damages could be suffered by the municipal corporations themselves by delay in erecting the bridge, while those members of the communities they.represented who had occasion to do heavy teaming over that road would be seriously inconvenienced by such delay. This was not a mere formal clause. The contract when signed contained no such provision. The clause here in question was written below the signatures' to the contract, and the second signature of the bridge company was then added. It would be a violent presumption to suppose that when, after the contract had been signed, the parties took the trouble to add this specific clause, to wit, “ The conditions of this contract are such that the Stupp Bros. Bridge and Iron Co., through their agent, B. L. Miller, agrees to pay a penalty of five dollars for each day the bridge is not completed after the first day of January, 1903,” they did this merely to entitle the county and the town to the right to recover one cent as damages for any delay, no matter how protracted, in the completion of the bridge after the period given bjr the contract for its construction. On the contrary, in view of the fact that the county and town as such would suffer no substantial damages by such delay, but that the public would, it seems to me obvious that the parties intended by this clause to fix a definite sum as agreed and liquidated damages for any such delay. The contract price to be paid for the bridge was §1,370. The sum of §5 for each day’s delay was entirely reasonable as liquidated damages, and yet was sufficient to have a tendency to induce the builders to keep their contract. Most of the cases on this subject are where the contract had prescribed an unconscionable sum as liquidated damages, and the courts, to avoid an injustice, construed the sum named as really intended as a penalty, and confined the aggrieved party to compensation. It is clear that, where no reason for holding to the contrary appears, the courts always incline to construe such provisions as a penalty only, and not as liquidated damages, no matter what words are used; and in some of the earlier of such cases it has been said the courts would never construe the word penalty to mean liquidated damages. An early edition of Sedgwick on the Measure of Damages is quoted to that effect in Scofield v. Tompkins, 95 Ill. 190. But in the eighth edition of that work, vol. 1, sections 406, 408, it is laid down that the mere use of the words penalty, penal, or forfeit, on one side, or stipulated damages on the other, will not decide tlié question, and that where the intention of the parties is allowed to govern, there is no reason why the use of a particular word should be of conclusive force, but in such case the inquiry is whether the parties intended the sum to be accepted as compensation. This abandonment of the former rule that the word penalty would never be construed to mean liquidated damages, is recognized in Iroquois Furnace Co. v. Wilkin Mfg. Co., 181 Ill. 582, where it is said that though the word penalty prima facie excludes the notion of stipulated damages, yet “ the use of the word ‘ penalty,’ or the words ‘ liquidated damages,’ is not conclusive.” In Gobble v. Linder, supra, the court said: “ Where the parties to the agreement have expressly declared the sum to be intended as a forfeiture or penaltjr, and no other intent is to be collected from the instrument,, it will generally be so treated, and the recovery will be limited to the damages sustained by the breach of the covenant it was to secure. On the other hand, it will be inferred the parties intended the sum named as liquidated damages where the damages arising from the breach are uncertain, and are not capable of being ascertained by any satisfactory and known rule, or where, from the nature of the case and the tenor of the agreement, it is apparent the damages have already been the subject of actual and fair calculation and adjustment.” In the case at bar the parties used the word penalty, but I am of opinion another intent is to be collected from the instrument. This clause' was added after the contract to build the bridge had been signed. This makes it obvious that the authorities of the county and town who executed the contract considered such a clause important enough to require it to be written under the contract and signed again. The contracting municipal corporations could not suffer any actual damages. If we construe the word used to mean a penalty merely, the added clause would only give them the right to one cent as damages for delay, which sum they could have recovered for a breach of the original contract, if this clause had not been added. 1 am of opinion that the parties would not have taken the trouble to add that clause for such a purpose. They meant something more. I think it obvious they intended thereby to calculate, adjust and fix the actual damages which the builders should pay for such delay. The word used in the contract should- more readily yield to the real intention of the parties where a reasonable daily sum is fixed, than where one gross sum is named for all delay, brief or protracted. Therefore, I am of opinion the court erred in sustaining the demurrer to the special plea, setting up this clause and the breach thereof, and that the judgment ought not to stand.