Court Opinion

ID: 8255978
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:31:38.505111+00
Date Added: 2024-06-11T16:42:59.607412
License: Public Domain

Mr. Chief Justice Sharkey
delivered the opinion of the court.
The most material question in the case arises out of the last clause of the covenant. For the plaintiff in error, it is contended, that it is a penalty, and that the actual damages sustained should be the measure of recovery; but for the defendant in error, it is insisted, that he had a right to recover the 5000 dollars as stipulated damages.
The authorities which bear a strict analogy to the'case, so far as they have come under review, are not entirely reconcilable.' The true principle, however, which must govern in the legal interpretation of the contract, is demonstrable by reason, and well defined by a majority of the authorities. We do not mean to assert that such a contract cannot in any case be enforced. As regards covenants of a certain description, it might. The distinction is, that an agreement for liquidated damages for the non-performance of covenants of an uncertain nature and amount, may be enforced, for the amount of the damages agreed on, but it cannot, where the covenant is certain and fixed as to the amount; This is the distinction taken in Kemble v. Farren, 6 Bingham, 141. The agreement was in substance this: — the defendant engaged to act as comedian at Covent Garden theatre for four seasons, and in all things to conform to the regulations of the theatre. The plaintiff agreed to pay him 3/. 6.s. 8d. every night the theatre should be open. It contained a clause that if either of the parties should refuse or neglect to fulfil said agreement, or any part thereof, or any stipulation therein, such party should pay to the other, the sum of 1000/., to which sum it was thereby agreed the damages should amount, and which sum was thereby declared to be liquidated and ascertained damages, and not a penalty or penal sum, or in the nature thereof. The court said that if this clause had been limited to breaches which were of an uncertain nature and amount, it would have had the effect of ascertaining *414the damages. It was, however, considered as a penalty, because it extended to covenants which were certain in amount. If the plaintiff had failed to make a single payment of 31. 65. 8c?., the defendant would have been entitled to the stipulated damages. The court very justly said, “ that a very large sum should immediately become payable, in consequence of the non-payment of a very small sum, and that the former should not be considered as a penalty, appears to be a contradiction in terms. The same may be said in the present case. The two cases are not distinguishable in principle. The plaintiff in error was to pay 2400 dollars, for the non-payment of which the defendant in error claims 5000, The covenant on which the suit is brought is certain in amount as to plaintiff in error, and although the covenants of the defendant in error were uncertain, it does not vary the rule. This was also the nature of the agreement in the case cited, and then the suit was actually brought for the non-performance of an uncertain covenant, and still the rule was properly applied, because mutual covenants must be mutually binding on both parties, and when they are not obligatory on one, they are not on the other.
The same rule is also recognised in the case of Dennis v. Cummins, 3 Johns. Cas. 297, and also in the case of Gray v. Crosby, 18 Johns. Rep. 219, in which the further distinction was taken, that liquidated damages must be in lieu of a performance of any thing that is covenanted to be done, and operate as a discharge of the covenant, in all cases where they can be recovered. Admitting, then, that the defendant in error could recover the stipulated damages in this case, would such recovery discharge the plaintiff in error from his covenant? It is not by any means certain that it would, but this question need not now be discussed.
The case of Rielly v. Jones, 1 Bingham, 302, cited at bar, is in conflict with these decisions. It was decided, however, some time anterior to the case of Kemble v. Farren, andas it was cited on the argument of the latter case, it may be considered as virtually, although it was not expressly, overruled. The judges briefly delivered these opinions seriatim, but did not, as did Tindal, C. J., in Kemble v. Farren, give any reasons for their decision, further than that they conceived it to have been the intention *415of the parties to fix the damages, and that no authority had been produced against it. We, therefore, think the case of Kemble v. Farren, contains the true rule, and as it is well fortified by the case of Dennis v. Cummins and Gray v. Crosby, we must adopt it, and we think that it applies in its full extent to the case before us. The object of the parties must have been to secure a performance of the contract in all its parts. Suppose Bright had paid for the land, but had failed to pay for the corn or the fodder, such failure would have been equally a breach of the covenant, and could it be seriously contended that 5000 dollars could be recovered for the non-payment of 406 dollars and 25 cents, which was the price of the corn? Such a position cannot be maintained, and yet it would be the result if a breach of the covenant gives the right to the damages claimed. This conclusion shows, that the above rule is founded on the strictest principles of justice, and although injustice may sometimes be done where the covenant is uncertain, and liquidated damages are recoverable, yet it arises from the impossibility of fixing truly the amount of damages, and the parties are allowed to fix them themselves.
It is said that this question is not reached by the demurrer. That is true; but the court after overruling the demurrer, gave judgment by default, for the full amount of the damages claimed, and this was error which is fairly presented by the record.
Another ground taken in the argument is, that Rowland did not tender such a deed as he was bound to do. The deed tendered is pleaded with a proferí, and although that was unnecessary, being mere inducement, ■ yet having made profert, the defendant was entitled to oyer, which he prayed and set out the deed. It is sufficient to remark on this subject that Rowland was not bound to plead a tender. His agreement was to make a deed, after he should receive the money, and this made the covenants independent. He was only bound to plead a readiness to perform his part. If they had agreed to make title and pay the money on the same day, without specifying as particularly as they have done, which act was to be performed first, the covenants would have been dependent. Rowland, however, did tender a deed with warranty, and it is a sufficient answer to this objection, that Bright did not object to its sufficiency. The *416rule is, that if a title be tendered, which appears on its face to conform to the contract, if there be an objection to it, on account of incumbrances, the party who is to. receive it, must make his objections, as an excuse for refusing to receive it. Brown v. Bellows, 4 Pickering, 179.
This objection is, therefore, not well-founded, but on the first point, the judgment must be reversed, the cause remanded, and a venire de novo awarded.