Court Opinion

ID: 5580774
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:38:32.234091+00
Date Added: 2024-06-11T08:36:04.985013
License: Public Domain

Buck, J.
(After stating the facts.) The court erred in overruling the demurrer to the petition. Section 4390 of the Civil Code reads as follows: “Damages are given as compensation for the injury sustained. If the parties agree, in their contract, what the damages for a breach shall be, they are said to be liquidated; and unless the agreement violates some principle of law, the parties are bound thereby.” And section 4391 reads: “Penalties in bonds are not liquidated damages; and even if called such, yet if it appears unreasonable and not so actually intended by the parties, the law will give only the actual damages, and in all cases where the damage is capable of .computation, and is not uncertain in its character, such stipulations will be declared to be penalties.” In the case of Allison v. Dunwody, 100 Ga. 51 (28 S. E. 651), it was said. “In the case of Lea v. Whitaker, 8 L. R. C. P. 70, Keating, J., says: ‘The cases upon the subject of penalty or liquidated damages are very numerous. The result of them seems to be this, that what the courts look at is the real intention of the parties as it is to be gathered from the language they have used. No case that I am aware of has decided that, if it be manifest that the parties meant the sum fixed to be liquidated damages, the court will interfere to frustrate that intention/ Much to the same effect as in the two eases thus quoted is the tenor of the decisions of this court. Sims v. Cox, 40 Ga. 76 [20 Am. R. 560]; Goodman v. Henderson, 58 Ga. 567. And in this last case Justice Jackson lays especial stress upon the fact *664that ‘the damages were agreed upon by the parties themselves; they fixed them, not as a penalty,- but as stipulated and liquidated, and so wrote it down in the agreement.’ ‘The language of the instrument itself must of course be primarily looked to and considered, though the use of the words “penalty” or “liquidated damages” will by no means always be conclusive,’ is the holding of this court in the ease of Sanders & Ables v. Garter, 91 Ga. 450 [17 S. E. 345], in which Justice Lumpkin deals with the subject of ‘penalties’ and ‘liquidated damages’ at considerable length. This and the other Georgia decisions upon this subject manifestly lean to that class of cases in which no ‘greater liberty is taken with the language of the parties’ than is necessary to ascertain the true intent of the contract and to prevent the exaction of harsh penalties under the guise of liquidated damages.” See also the case of Mayor &c. of Washington v. Potomac Engineering &c. Co., 132 Ga. 849 (65 S. E. 80). From the contract or contracts which we have to construe in the present ease it will be seen that the parties agreed in express terms, in case one of them should fail or-refuse to comply with its terms, that the sum of money already paid to the defendants would be retained by them as liquidated damages. The sum which was to be retained upon the happening of the contingency provided for does not appear to be unreasonable in amount. The plaintiffs by the extension, for which they paid $1,000, had not only the advantage of an extension of the time, but they had the further consideration of being given 'an opportunity of selling the lands; and if there had been a rise in the value of the lands, and they could, in the ten or eleven months time of the extension, have sold the lands at an increased value, they could have compelled the vendors to comply with the contract and convey to them or their assignee the property in question. Here was a tract of 3,900 acres, supposedly of the value of $69,000. A slight increase in the value of the lands for the ten or eleven months during which, under the contract last made between the parties, the time of payment of the notes was extended, might have given a large profit to the vendees. At least, the opportunity extended, through the period stated, of finding a purchaser was a legitimate subject of trade. In the petition it is alleged that the vendors kept possession of the lands and enjoyed the rents and profits issuing therefrom; but what these rents and *665profits amounted to in value is not stated, and it is not made to appear that they had such value as made the sum of $5,000, agreed upon as liquidated damages, an unreasonable sum. Notwithstanding the allegations in the petition that the sum stipulated as liquidated damages was really intended as a penalty, we think it is for the court to construe the contract; and the court should have held that the amount so stipulated as damages was not unreasonable, and should have enforced the contract as made.
The case of Allison v. Dunwody, from which we have taken the lengthy quotation appearing above, is on its facts very similar to the instant case. Judgment reversed.

All the Justices concur.