Banta v. Stamford Motor Co.

• Decision Date: 21 December 1914
• Citation: 89 Conn. 51,92 A. 665
• Court: Connecticut Supreme Court
• Parties: BANTA v. STAMFORD MOTOR CO.

92 A. 665

89 Conn. 51

BANTA

v. STAMFORD MOTOR CO.

Supreme Court of Errors of Connecticut.

Dec. 21, 1914.

Appeal from Superior Court, Fairfield County; William L. Bennett, Judge.

Action by Charles J. Banta against the Stamford Motor Company. Judgment for plaintiff, and defendant appeals. Affirmed.

On June 1, 1911, the defendant contracted with the plaintiff to build for him a gasoline power yacht for the purchase price, exclusive of machinery and equipment, of $5,500, the same to be paid in installments as the work of construction progressed. In the contract the defendant agreed to have the yacht complete and ready for delivery on or before September 1, 1911, save under exceptional conditions not present in this case. It was further agreed that for each day the boat was ready for delivery before that date the plaintiff should pay the defendant $5 per day in addition to the contract price, and that for each day of delay in delivery beyond that date the defendant should pay to the plaintiff $15. The boat was not completed and ready for delivery until November 25, 1911.

Payments on account of the purchase price were made as the work progressed. On November 25th, when the boat was completed, there remained unpaid of the contract price and for some extra work the sum of $1,126.24. The plaintiff claimed that there was then due to him under the provisions of the contract for delay the sum of $15 a day covering the period from September 1st to November 25th, making in all the sum of $1,275. This claim the defendant refused to admit. The parties thereupon met in an effort to adjust their differences, and entered into a written agreement pursuant to which the boat was delivered to the plaintiff and the plaintiff paid to the defendant the $1,126.24, less an allowance of $200 for delay, which allowance the defendant was willing to make. By the terms of this agreement the plaintiff was left free to sue the defendant to recover the balance claimed by the former for the delay in delivery. The present suit, which sought recovery of this balance, followed.

The boat was a pleasure craft, and was intended by the plaintiff for use by him in cruising in Chesapeake Bay during the months of October and November, and later for a pleasure trip in Florida waters. The defendant was aware of the plaintiff's purpose, and that he wanted the boat on the day of delivery in order that he might start South sufficiently early to carry out his plans. As a result of the delay in the completion of the boat, the plaintiff was unable to enjoy it as he had planned, and was compelled to give up his intended cruise in Chesapeake Bay. The rental value of such a boat is, and at the time of the execution of the contract was, $15 a day. The sum of $15 a day was a fair and reasonable one to be paid for delay in completion. The plaintiff did not rent another boat or incur any expense or make any disbursement occasioned by the delay in delivery. He had no intention of renting the boat, and would not have rented it, or obtained any revenue from it had it been delivered as agreed. The parties to the contract did not at any time discuss or calculate the amount of probable damage that would follow from failure to make delivery upon the date fixed in the contract.

Homer S. Cummings, of Stamford, for appellant.

Robert A. Fosdick, of Stamford, for appellee.

PRENTICE, C. J. (after stating the facts as above). The plaintiff sues to recover, as liquidated damages, the total of per diem sums stipulated in a contract for the construction of a pleasure boat to be paid by the defendant, the builder, in the event of delay in its completion as provided in the contract. The defendant contends that these sums, being in the nature of a penalty, and not, as the plaintiff asserts, of liquidated damages, are not recoverable. The defendant by his contract with the plaintiff agreed to pay these sums in the event named. He must abide by his bargain in this particular, unless his undertaking was one which the law will not permit to be enforced as involving the exaction of a penalty.

"As a general rule, parties are allowed to make such contracts as they please, including contracts to liquidate, and fix beforehand the amount to be paid as damages for a breach of such contracts; but the courts have always exercised a certain power of control over contracts to liquidate damages, so as to keep them in harmony with the fundamental general rule that compensation shall be commensurate with the extent of the injury. * * * When the nature of the engagement is such that, upon a breach of it, the amount of damages would be uncertain or difficult of proof, and the parties have beforehand expressly agreed upon the amount of damages, and that amount is not greatly disproportionate to the presumable loss, their expressed intent will he carried out." New Britain v. New Britain Telephone Co., 74 Conn. 326, 332, 333, 50 Atl. 881, 884.

In the recent cases of Associated Hat Manufacturers v. Baird-Unteidt Co., 88 Conn. 333, 91 Atl. 373, and Dean v. Connecticut Tobacco Corporation, 88 Conn. 619, 92 Atl. 408, we had our attention directed to this subject, and the doctrine of the earlier case was reaffirmed. These cases determined that, when certain conditions coexist, the provision for the payment of a stipulated sum in the event of a breach of contract will be regarded and enforced as one for liquidated damages. These conditions, clearly brought out in the opinions in these cases, are: (1) The damages to be anticipated as resulting from the breach must be uncertain in amount or difficult to prove; (2) there must have been an intent on the part of the parties to liquidate them in advance; and (3) the...