Nash v. Hermosilla

Burnett, J., delivered the opinion of the Court—Terry, C. J., concurring.

The cases upon this subject are numerous, and it is difficult to deduce from them any certain and definite rule. In fact, the transactions of individuals are so various, and the circumstances of many cases so peculiar, that no certain rule can be adopted for all cases. But, from the decisions, the following results seem to be substantially correct:

1. When the party stipulates to pay a stated sum for a given period of time during the continuance of the failure, then the damages are to be considered as liquidated. (Aylet v. Dodd, 2 Atk., 238 ; Fletcher v. Dyck, 2 Term R., 32 ; Smith v. Smith, 4 Wend., 468.)

2. When the agreement is not to cany on trade at a particular place ; not to run a stage-coach on a particular road; not to publish a rival newspaper; not to run a rival steamer on a particular route. In all these cases, the sum stated must be taken as liquidated damages. (Green v. Price, 13 Meeson & W., 695; Leighton v. Wales, 3 ib., 545; Williams v. Dakin, 22 Wend., 401; Cal. Steam Nav. Co. v. Wright, 6 Cal., 258.)

3. When the party stipulates to marry no other person; to convey land or pay a named sum, the price of the land having been received by him; the damages are liquidated. (Lowe v. Peers, 3 Burr., 225; Slasson v. Beadle, 7 John., 71.)

4. When a named sum is to bo paid for every acre of land ploughed up contrary to agreement; when a stated sum is to be paid for each article not delivered; the damages must be considered as liquidated.

5. When the party stipulates to erect a building in a particular manner, within a given time, and upon failure to pay a named sum, it must be considered in the nature of a penalty. (Tayloe v. Sandiford, 7 Wheaton, 13 ; Moore & Hunt v. Platte County, 8 Mo., 467.)

In Taylor v. Sandiford, Chief Justice Marshall said : “In general, a sum of money in gross, to be paid for the non-performance of an agreement, is considered as a penalty. * * It will not, of course, be considered as liquidated damages; and it will be incumbent on the party who claims them to show that they were so considered by the contracting parties.”

The present case seems to fall within the rule applicable to building contracts. In this case, the defendant stipulated that she would erect a brick building to cover such portion of the lot as would be satisfactory to plaintiff, and give him possession within three weeks; the plaintiff to have possession for six months, with the privilege of twelve months, or more; and upon failure to perform the agreement, she was to pay to plaintiff the sum of five hundred dollars damages.

It will be seen that there are several things for the defendant to do, a failure to perform any one of which would have been a violation of the agreement. If the building had been erected upon a portion of the lot not satisfactory to the plaintiff, or the house not finished for a single day beyond the stipulated time, the defendant would have been liable for the whole sum, upon the theory of the plaintiff's counsel. So, too, if the plaintiff had been disturbed in his possession for one day, during the term of six months, or denied the privilege of the additional term. There is no statement in the agreement that the sum was to be taken as liquidated damages. If the defendant had failed to erect a suitable brick building, although finished within the time specified, it would have been a violation of the contract.

We are of opinion that the damages mentioned were not liquidated, but a mere penalty to secure the performance of the contract, or the payment of such damages as the plaintiff might be entitled to under the circumstances. In building contracts, it may be difficult to say what amount of injury the plaintiff has sustained by reason of the non-completion of the building within the exact time stated. And yet this difficulty in ascertaining the amount of the injury occasioned by the delay, has not induced the Courts, in such cases, to consider the sum as liquidated damages.

Judgment affirmed.