Court Opinion

ID: 3323603
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:41:08.774218+00
Date Added: 2024-06-11T14:00:59.266441
License: Public Domain

The plaintiff sues to recover, as liquidated damages, the total of per diem sums stipulated in a contract for the construction of a pleasure boat to be paid by the defendant, the builder, in the event of delay in its completion as provided in the contract. The defendant contends that these sums, being in the nature of a penalty, and not, as the plaintiff asserts, of liquidated damages, are not recoverable. The defendant, by its contract with the plaintiff, agreed to pay these sums in the event named. It must abide by its bargain in this particular unless its undertaking was one which the law will not permit to be enforced as involving the exaction of a penalty.
"As a general rule parties are allowed to make such contracts as they please, including contracts to liquidate and fix beforehand the amount to be paid as damages for a breach of such contracts; but the courts have always exercised a certain power of control over contracts to liquidate damages, so as to keep them in harmony with the fundamental general rule that compensation shall be commensurate with the extent of the injury. . . . When the nature of the engagement is such that upon a breach of it the amount of damages would be uncertain or difficult of proof, and the parties have beforehand expressly agreed upon the amount of damages and that amount is not greatly disproportionate to the presumable loss, their expressed intent will be carried out." New Britain v. New Britain TelephoneCo., 74 Conn. 326, 332, 333, 50 A. 881, 1015. In the recent cases of Associated Hat Manufacturers v. Baird-UnteidtCo., 88 Conn. 333, 91 A. 373, and Dean v.Connecticut Tobacco Corporation, 88 Conn. 619, *Page 55 92 A. 408, we had our attention again directed to this subject, and the doctrine of the earlier case was reaffirmed. These cases determined that, when certain conditions co-exist, the provision for the payment of a stipulated sum in the event of a breach of contract will be regarded and enforced as one for liquidated damages. These conditions, clearly brought out in the opinions in these cases, are (1) the damages to be anticipated as resulting from the breach must be uncertain in amount or difficult to prove; (2) there must have been an intent on the part of the parties to liquidate them in advance; and (3) the amount stipulated must be a reasonable one, that is to say, not greatly disproportioned to the presumable loss or injury.
As to the second of these conditions, there cannot be any reasonable doubt that the intent of the provision under consideration was not to exact a penalty for non-performance, but to determine in advance the fair amount to be paid as damages in the event of breach. This was a construction contract — one of a kind, therefore, which furnishes conditions peculiarly suitable for provisions liquidating damages, and which very commonly contains such provisions. Dean v.Connecticut Tobacco Corporation, 88 Conn. 619,92 A. 408. The provision in this contract undoubtedly was not understood as differing either in purpose or character from those which so frequently enter into construction contracts and are commonly understood as furnishing the agreed amount of damages.
That the first condition was satisfied is a self-demonstrating proposition. The situation was such that the loss or injury to be anticipated from a breach, and the extent of it, would inevitably lie in the field of uncertainty and be difficult to prove, and that an attempt to measure it in the terms of dollars and cents would be beset by even greater difficulties. *Page 56 
The defendant's contention, and the one upon which it chiefly relies, is that the third condition is necessarily wanting, since the plaintiff, in the absence of the provision in controversy, could recover nothing for delay in the completion and delivery of the yacht, for the reason that it was an article of luxury intended solely for the plaintiff's use for his personal pleasure and gratification, and no direct pecuniary loss through the hiring of a substitute or otherwise was shown. This claim came under our consideration in Cook v. Packard Motor CarCo., 88 Conn. 590, 92 A. 413, and was there overruled. The extended discussion of it contained in the opinion in that case need not be repeated now. The situation there presented was in all respects analogous to the one before us, and the conclusion reached was that one who has been wrongfully deprived of the use of an article is not barred from the recovery of substantial damages therefor by reason of the fact that it was an article of luxury, and by him devoted solely to personal pleasure and gratification.
The plaintiff being in a position to recover substantial damages for the defendant's delay, the latter's only remaining hope lies in its ability to show that $15 a day was unreasonable in amount. The standard of measure here is not furnished by the plaintiff's actual loss or injury, as the event proved, but by the loss or injury which might reasonably have been anticipated at the time the contract was made, or, as we said in New Britain v.New Britain Telephone Co., 74 Conn. 326, 333,50 A. 881, 1015, "the presumable loss." It is the look forward, and not backward, that we are called upon to take, and the plaintiff is under no obligation to show actual damage suffered substantially commensurate with the $15 a day rate in order to support the provision as one in liquidation of damages.
The extent that the plaintiff might have been injured *Page 57 
by delay in the completion of the yacht which he was desirous of using in the fall months for cruising in Chesapeake Bay and later in Florida waters, and the measure of it in money, both lie in a marked degree in the field of uncertainty. It is apparent that the date of delivery was not a matter of unconcern to the plaintiff. He was, as the contract shows, willing to pay $5 a day for earlier delivery. It is quite conceivable that time in the fall was a considerable factor in the execution of cherished plans. Possibly the prospect of having the yacht for fall use was the moving motive in ordering it at all. The defendant was informed of the plaintiff's purpose in using the boat. Presumably it, being a boat builder, was aware of the conditions of pleasure-boat using. They mutually agreed upon the figure which was incorporated into the contract as the measure of damages for delay. They did not indeed formally sit down and canvass the situation, and figure out as best they could what would be a fair allowance for the probable damage which the plaintiff would suffer by delay in the yacht's delivery. That was unnecessary. The defendant was not dealing with a matter concerning which it was without knowledge. It signed the contract voluntarily, and by that signature signified its concurrence in the stipulation as to damages it contained. The situation was one peculiarly appropriate for some stipulation upon that subject. The parties made one which the trial court has found to be reasonable. We cannot say that it erred in reaching that conclusion.
"The courts at one time seemed to be quite strong in their views and would scarcely admit that there ever was a valid contract providing for liquidated damages. Their tendency was to construe the language as a penalty, so that nothing but the actual damages sustained by the party aggrieved could be recovered. Subsequently the courts became more tolerant of such *Page 58 
provisions, and have now become strongly inclined to allow parties to make their own contracts, and to carry out their intentions, even when it would result in the recovery of an amount stated as liquidated damages, upon proof of the violation of the contract, and without proof of the damages actually sustained. . . . The question always is, what did the parties intend by the language used? When such intention is ascertained it is ordinarily the duty of the court to carry it out."United States v. Bethlehem Steel Co., 205 U.S. 105,119, 27 Sup. Ct. Rep. 450.
Complaint is made of the court's admission of evidence of the rental price of a boat like the one under consideration. This identical question was passed upon adversely to the present defendant's contention inCook v. Packard Motor Car Co., 88 Conn. 590,92 A. 413.
The defendant asks for several corrections of the finding. All of these, save one already incidentally passed upon and one other, relate to matters which, in view of our conclusions, are immaterial. The one last referred to deals with the court's finding that delays in payments of instalments did not cause delay in the completion of the boat. It is said that this finding was unwarranted, for the reason that there was no evidence one way or the other upon that subject. This proposition is scarcely justified. There was evidence from the defendant's representative directly in support of the court's statement. But even if the defendant's assertion is well founded, the resulting situation would not help it. It pleaded delays in payments in excuse of its delay in completion, and the burden was upon it to establish its allegation. If no evidence upon the matter was offered, the allegation failed, and with it the excuse it was designed to support. The evidence appears to have established the negative, as the court has found, *Page 59 
but the defendant is by the negative finding put in no worse position than it would be in with the affirmative unproven.
   There is no error.
In this opinion the other judges concurred.