Barnette v. Sayers

• Decision Date: 07 May 1923
• Docket Number: 3860.
• Citation: 289 F. 567
• Parties: BARNETTE v. SAYERS.
• Court: U.S. Court of Appeals — District of Columbia Circuit

289 F. 567

BARNETTE v. SAYERS.

No. 3860.

United States Court of Appeals, District of Columbia.

May 7, 1923

Submitted February 12, 1923.

A. Paul Hines, of Washington, D.C., for plaintiff in error.

C. B Bauman and Chapin Brown, both of Washington, D.C., for defendant in error.

Before SMYTH, Chief Justice, ROBB, Associate Justice, and BARBER Judge of the United States Court of Customs Appeals.

BARBER Acting Associate Justice.

The case comes here on a writ of error to the municipal court of the District. Barnette, the plaintiff in error, entered into a written contract with Sayers, the defendant, the material part of which we quote:

'$500.00.

Washington, D.C., Oct. 3, 1921.

'Received of Mrs. B. Barnette, the undersigned purchaser, a deposit of five hundred dollars to be applied as part payment on the purchase of Lot 24, Square 2826, in Washington, District of Columbia, with improvements thereon, known as premises numbered 1368 Quincy St. N.W., in the said District, which said purchaser hereby agrees to purchase upon the following terms and conditions:

'Price of property, $12,000.00.

'Terms of sale to be complied with within 30 days from the date of this agreement; otherwise the deposit may be forfeited at the option of the owner, in which event the purchaser shall be relieved from further liability hereunder, or without forfeiting said deposit the owner may avail himself of any legal or equitable rights which he may have under this contract.'

The plaintiff inspected the property with the defendant before signing the contract, but shortly after she refused to carry it out, on the ground that parties who had examined it for her had reported defects which had not been called to her attention before the deposit was made. January 25, 1922, she brought this suit to recover the $500 and the specifications of her claim were:

'To refund of deposit made on the purchase of No. 1368 Quincy Street N.W., Washington, D.C., because of misrepresentations made by said F.H. Sayers, $500.00.

'Interest and costs.'

The case was fully heard by the municipal court and upon the consideration of testimony of both sides that court rendered judgment for the defendant.

The contention of the plaintiff is that the court erred in finding that the deposit of $500 was intended as liquidated damages rather than as a penalty to secure or compel performance of the contract. So far as the claim of misrepresentation is concerned, the municipal court evidently concluded, and in that conclusion we agree, that plaintiff failed to sustain the burden which devolved upon her of establishing that claim.

The question of whether a contract provides for liquidated damages or a penalty is often one of great difficulty to determine. The authorities are numerous and difficult of reconciliation, as the courts apparently often have had more regard to facts outside the contract and to the supposed equities of each case than to any applicable general principle of law, if such there be. One of the latest and clearest expositions of the law on this question will be found in United States v. Bethlehem Steel Co., 205 U.S. 105, at page 119, 27 Sup.Ct. 450, at page 455 (51 L.Ed. 731), where the court said:

'The courts at one time seemed to be quite strong in their views and would scarcely admit that there ever was a valid contract providing for liquidated damages. Their tendency was to construe the language as a penalty, so that nothing but the actual damages sustained by the party aggrieved could be recovered. Subsequently the courts became more tolerant of such provisions, and have now become strongly inclined to allow parties to make their own contracts, and to carry out their intentions, even when it would result in the recovery of an amount stated as liquidated damages, upon proof of the violation of the contract, and without proof of the damages actually sustained. This whole subject is reviewed in Sun Printing & Publishing Association v. Moore, 183 U.S. 642, 669, where a large number of authorities upon this subject are referred to. * * * The question always is, what did the parties intend by the language used? When such intention is ascertained, it is ordinarily the duty of the court to carry it out.'

Having in mind the salutary rule that, if the intent of the parties can be ascertained from the contract, it should be enforced, we proceed to examine it; and, in passing, it may be remarked that there were no preliminary negotiations or attending circumstances that are relevant to its interpretation.

The contract does not in express terms provide either for a penalty or for liquidated damages. It...