Court Opinion

ID: 7106046
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:21:05.994742+00
Date Added: 2024-06-11T16:13:34.531413
License: Public Domain

OPINION UPON REHEARING.
Given, J.
On the former submission the judgment of the district court was affirmed. The questions involved being important, and such as may frequently arise, a rehearing was granted, and we have carefully reviewed the case in the light of all the arguments and authorities cited.
*727The first contention is whether the ten dollars per diem mentioned in the contract is to be considered as a penalty or as liquidated damages. It is not questioned but that the intention of the parties is to control, and that in arriving at their intention the subject-matter of the contract, • and the facts and circumstances attending its execution, may be considered. The appellant contends that the opinion erroneously holds the burden of showing these facts and circumstances to be upon the plaintiff. Tayloe v. Sandiford, 7 Wheat. 13, is cited, and largely relied upon. In that case, as in this, the question was whether the sum mentioned in the agreement was penalty or stipulated damages. The language of that agreement was: ‘ ‘The said house to be completely finished on or before the twenty-fourth day of December next, under the penalty of one thousand dollars in case of failure..” The court says: “In general, a sum of money in gross to be paid for the nonperformance of an agreement is considered as a penalty, the legal operation of which is to cover the damages which the party in whose favor the stipulation is made may have sustained from the breach of contract by the 'opposite party. It will not, of course, be considered as liquidated damages; and it will be incumbent on the party who claims them as such to show that they were so considered by the contracting parties. Much stronger is the inference in favor of its being a penalty when it is expressly reserved as one. The parties themselves denominate 'it a penalty, and it would require very strong evidence to authorize the court to say that their own words do not express their own intentions.” The contract in this case does not name a sum in gross, but a per diem to be paid for each day that the defendant Wickham might be deprived of the use of his house by reason of its not being completed at the time agreed. The parties had a right to fix this per diem upon the basis of the value of the of use the *728house to the defendant, even at a high rate, and they had a right to name a sum that would be an incentive to Lainson to complete the house by the time agreed upon. In Tayloe’s case the agreement, taken alone, showed the one thousand dollars to be penalty. This agreement, taken alone, shows the ten dollars per day to be liquidated damages, and, under the rule in Tayloe’s case, it was incumbent on the party claiming it to be penalty to show that it was so considered by the contracting parties.
Our re-examination of the facts confirms us in the correctness of the conclusion announced on the question of estoppel. The former opinion seems to us to be correct, and it is, therefore, adhered to, and the judgment affirmed.