Condon v. Kemper

• Citation: 27 P. 829,47 Kan. 126
• Parties: C. M. CONDON v. L. H. KEMPER
• Decision Date: 10 October 1891
• Court: United States State Supreme Court of Kansas

27 P. 829

47 Kan. 126

C. M. CONDON v. L. H. KEMPER

Supreme Court of Kansas

October 10, 1891

Error from Labette District Court.

THIS was an action brought in the district court of Labette county by L. H. Kemper against C. M. Condon, to recover $ 500 as liquidated damages for the alleged breach of the following written contract, to wit:

"This agreement, between L. H. Kemper and C. M. Condon, witnesseth That whereas, the said Kemper has sold to said Condon lot 7 block 38, in Oswego, Kan., said Condon, as a part of the consideration therefor, agrees to erect thereon a two-story stone or brick building, not less than 100 feet deep, within six months, and to give use of the north wall thereof to said Kemper; or else remove the house now on lot 6, in said block 38, three feet north of where it now stands, as said Condon shall elect to do, and put said building in as good condition as it is in its present location. It is mutually agreed between said parties that a failure on the part of said Condon to perform these obligations shall entitle said Kemper to recover from him the sum of $ 500 as liquidated and ascertained damages for the breach of this contract. C. M CONDON.

"OSWEGO KAS., March 11, 1887."

The defendant answered as follows:

"Said defendant admits the execution and delivery of the writing marked 'Exhibit A,' attached to and made part of plaintiff's petition, but he alleges the fact to be that said writing was executed and delivered under a misapprehension and a mistake of the facts in reference to the subject-matter of the transaction therein referred to as they actually existed, and that but for such mistake such writing would not have been executed. Defendant alleges that plaintiff was the owner of lots 6 and 7, in block 38, in the city of Oswego, Kan.; that the frame house mentioned in said writing belonged to plaintiff, and was appurtenant to said lot 6; that defendant negotiated for and purchased from plaintiff said lot 7 with a view of erecting thereon a stone or brick building; that at the time of purchasing said lot 7 and of executing and delivering said writing, both plaintiff and defendant understood and believed that said frame house, mentioned in said writing, and which belonged on and was appurtenant to said lot 6, stood on the line between said lots 6 and 7, the main part of it being, as said parties supposed, on lot 6 and about two or three feet in width of it standing on said lot 7; that to permit defendant to build on his said lot 7 would necessitate the removal of said house, as said parties believed, some three feet to the north; that plaintiff sold and defendant bought said lot under such belief; that plaintiff, in negotiating for the sale of said lot 7, objected to being put to the expense of removing said house so that it would all stand on his own lot 6, or insisted if he were put to such expense he should be compensated therefor, and to this defendant assented, and agreed that he would, at his own expense, remove said frame house so that it should entirely stand on said lot 6, and far enough across the line between said lots 6 and 7 not to interfere with the erection of a wall on said line, and put it in as good condition as it then was where it then stood, or if he should so elect, instead of removing and repairing said house as aforesaid, he might erect on said lot 7 a brick or stone building not less than 100 feet deep and give plaintiff the use of the north wall thereof, as compensation for his moving and repairing said house as aforesaid; that it was to meet such contingency and secure such end that said writing was executed and delivered; that thereafter this defendant elected not to erect said stone or brick building on said lot 7 and not to furnish plaintiff the use of the north wall thereof; that by agreement between said plaintiff and defendant, said block was afterward surveyed, and the fact was then ascertained that said frame building did not stand, as both of said parties had supposed it did, across the line between said lots 6 and 7, a part on 6 and a part on 7, but that it all then stood on said lot 6 and so far from the line between lots 6 and 7 as not to interfere with the erection of a wall thereon, and therefore a removal of said frame building was unnecessary and would be of no advantage whatever to plaintiff.

"Defendant alleges that the only purpose on the part of plaintiff or defendant in the execution and delivery of said writing was to indemnify plaintiff against cost and expense in the removal and repair of said house as aforesaid, and that had plaintiff desired its removal after the fact in reference to its true location was ascertained, he could have had it removed three feet north of where it then stood, and put in as good condition as it was where it then stood, at a cost and expense of not to exceed $ 100; that said house could, at the time of the execution of said writing, or at any time since then, have been removed three feet north of where it then stood and now stands, and put in as good condition as it then was in its then location, at a cost of not to exceed $ 100; that in no event could plaintiff's damage, had he desired to have had said house removed, exceed $ 100; that to indemnify against such possible damage was the only object in giving said writing. Defendant alleges that plaintiff has not removed said house, and has in no way been to any cost or expense on account of the removal of said house or for any other purpose referred to in any way in said writing. Defendant denies that plaintiff has suffered any damage on his account and denies any liability to him in any respect.

"Wherefore defendant asks that this cause be dismissed and that he recover his costs herein."

The plaintiff replied, denying every allegation of the answer inconsistent with the allegations of his petition. At the February term, 1889, when the case was called for trial, the plaintiff moved for judgment upon the pleadings, and the court sustained the motion and rendered judgment accordingly, in favor of the plaintiff and against the defendant, for $ 500, with interest and costs. The defendant excepted, and afterward, as plaintiff in error, brought the case to this court for review.

Judgment reversed, and cause remanded for further proceedings.

Case & Glasse, for plaintiff in error.

J. H. Morrison, for defendant in error.

VALENTINE J. All the Justices concurring.

OPINION

VALENTINE, J.:

The substantial question involved in this controversy is, whether the plaintiff below, L. H. Kemper, may recover from the defendant below, C. M. Condon, the sum of $ 500 as agreed and liquidated damages, or whether he can recover only the amount of his actual loss or damage resulting from the breach of the contract sued on, which amount, according to the facts of the case as presented to us, cannot exceed $ 100. The contract upon which Kemper seeks to recover contains the following among other stipulations:

"It is mutually agreed between said parties that a failure on the part of said Condon to perform these obligations shall entitle said Kemper to recover from him the sum of $ 500 as liquidated and ascertained damages for the breach of this contract."

It will be seen that the parties themselves have used the words "liquidated and ascertained damages," but nearly all the authorities agree that neither these words nor any other words of similar import are conclusive, but that the amount named, notwithstanding the use of such words, may nevertheless be nothing more than a penalty. Some of such authorities are the following:

Lampman v. Cochran, 16 N.Y. 275; Ayres v. Pease, 12 Wend. 393; Hoag v. McGinnis, 22 id. 163; Beale v. Hayes, 5 Sandf. 640; Gray v. Crosby, 18 Johns. 219; Jackson v. Baker, 2 Edw. Ch. 471; Shreve v. Brereton, 51 Pa. 175; Fitzpatrick v. Cottingham, 14 Wis. 219; Fisk v. Gray, 11 Allen 132; Wallis v. Carpenter, 13 id. 19; Ex parte Pollard, 19 F. Cas. 942, 2 Low. 411, 17 N.B.R. 228; Basye v. Ambrose, 28 Mo. 39; Carter v. Strom, 41 Minn. 522; same case, 43 N.W. 394; Schrimpf v. Mfg. Co. 86 Tenn. 219, 6 S.W. 131; Haldeman v. Jennings, 14 Ark. 329; Davis v. Freeman, 10 Mich. 188; Hahn v. Horstman, 12 Bush 249; Low v. Nolte, 16 Ill. 475; Kemble v. Farren, 6 Bing. 141; Davies v. Penton, 6 Barn. & C. 216; Horner v. Flintoff, 9 Mees. & W. 678; Newman v. Capper, 4 Ch. Div. 724.

Of course, the words of the parties with respect to damages losses, penalties, forfeitures, or any sum of money to be paid, received or recovered, must be given due consideration; and, in the absence of anything to the contrary, must be held to have controlling force; but when it may be seen from the entire contract, and the circumstances under which the contract was made, that the parties did not have in contemplation actual damages or actual compensation, and did not attempt to stipulate with reference to the payment or recovery of actual damages or actual compensation, then the amount stipulated to be paid on the one side, or to be received or recovered on the other side, cannot be considered as liquidated damages, but must be considered in the nature of a penalty, and this even if the parties should name such amount "liquidated damages." The following text-books upon this subject may be examined with much profit: 1 Sedg. Dam. (8th ed.), ch. 12, §§ 389-427; 1 Suth. Dam., ch. 7, § 6, pp. 475-530; 13 Am. & Eng. Encyc. of Law, pp. 857-868; 1 Pom. Eq. Jur., §§ 440-447; 3 Pars. Cont., § 2, pp. 156-163. The text-books upon this subject unite in saying that the tendency and preference of the law is to regard a stated sum as a penalty instead of liquidated damages, because actual damages can then be recovered, and the recovery be limited to such damages. (1 Suth. Dam., p. 490; 13 Am. & Eng....