Lampman v. Cochran

Full title: LAMPMAN v . COCHRAN

Court: Court of Appeals of the State of New York

Date published: Dec 1, 1857

16 N.Y. 275 (N.Y. 1857)

Opinion

December Term, 1857

Lyman Tremaine, for the appellant.

John H. Reynolds, for the respondent.

SHANKLAND, J.

According to the just rules of construction, the sum of $500 was intended as liquidated damages for a total and entire non-performance of all the stipulations of the contract, on either side; and a total or partial breach of either of the stipulations, on the part of the defendant, is not within the intendment of that clause. The agreement does not say that a breach of each or either of the stipulations shall be visited with $500 liquidated damages, as it should have done if such had been the intention of the parties. The defendant proved he had paid the plaintiff $100 on the contract prior to December 15th, 1851, and the same had been accepted and indorsed. There was not an entire failure, therefore, to perform the contract, but a partial failure only, which, within adjudicated cases, prevents the recovery sought for in this action. ( Shute v. Taylor, 5 Metc., 61.)

But, if this agreement were susceptible of the construction that a partial failure of either stipulation of the contract would forfeit the $500 as liquidated damages, then the case could not be construed as one of liquidated damages, because one of the stipulations is that the defendant is to give his own note for the payment of $200. It is fully settled that where a large sum is agreed to be paid, in default of paying a smaller sum agreed to be paid by the same instrument, then the larger sum is a penalty, although the instrument denominates it liquidated damages.

But the judgment should be affirmed on the ground first mentioned, viz., that although the damages are liquidated, yet it does not arise or accrue in this case, because the defendant partially performed one of the stipulations of the contract, whereas the contract provides only for an entire non-performance.

JOHNSON, J.

The case in which, according to the terms of their contract, $500, as liquidated damages, are to be paid by one party to the other, arises if either party shall fail to perform the contract according to the instrument; and either party has failed if he has so conducted, in respect to the performance of the contract, that the other party can maintain an action against him for non-performance according to the terms of the instrument. Any breach which can be assigned will make out a failure to perform. If the damages are liquidated, then they form the only measure of damages, for either party, upon the breach of all or either of the engagements in the instrument. It might then happen that, for not giving a note of $200, without interest, due on or before April 1, 1852, the party in fault would be bound to pay $500; when, if he gave the $200 note, but did not give his bond and mortgage for $2100, with interest, the remedy of the other party would be limited to a recovery of $500. This shows that, within the rule in Astley v. Weldon (2 Bos. P., 346) and Kemble v. Farren (6 Bing., 141), as the rule deducible from those cases is stated in Cothael v. Talmage (5 Seld., 551), the parties to this contract must be regarded as having given a wrong name to this sum of $500, and that it is in substance a penalty and not liquidated damages. It is not intended at all to deny that the value of the bargain, on a contract for the purchase or sale of real estate, is a subject for previous ascertainment by contract, so as to support an agreement for liquidated damages in case the bargain shall fall through by the fault of either party, but only to show that the contract between these parties cannot be disposed of as possessing that character.

The judgment should be affirmed.

DENIO, Ch. J., SELDEN, BROWN, PAIGE and BOWEN, Js., concurred in the opinion of JOHNSON, J.; COMSTOCK, J., did not sit in the case.

Judgment affirmed.