Gobble v. Linder

• Decision Date: 31 January 1875
• Citation: 1875 WL 8157,76 Ill. 157
• Parties: MARY J. GOBBLEv.JOHN M. LINDER.
• Court: Illinois Supreme Court

76 Ill. 157

1875 WL 8157 (Ill.)

MARY J. GOBBLE

v.JOHN M. LINDER.

Supreme Court of Illinois.

January Term, 1875.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Macoupin county; the Hon. CHARLES S. ZANE, Judge, presiding.

This was an action of debt, brought by Mary J. Gobble against John M. Linder, upon an agreement for the exchange of farms between the parties. The facts may be found in the opinion of the court.

Messrs. GWIN & HAMILTON, for the appellant.

Mr. D. M. WOODSON, and Mr. W. R. WELCH, for the appellee.

Mr. JUSTICE SCOTT delivered the opinion of the Court:

The written contract between the parties to this suit obligated them to exchange farms. It contained a provision, in case either one failed to make the deed in exchange at the appointed time, such party would “forfeit and pay as damages” to the other the sum of $1500. Plaintiff was ready, and offered to perform the agreement on her part, but defendant having failed to make a deed, as he had contracted to do, this suit was brought to recover the sum named in the contract.

The agreement is set out in the declaration in hæc verba, with all proper averments, to which defendant interposed a demurrer. It was agreed by the parties, the court might, on the demurrer, determine the legal construction to be placed upon the contract, whether the sum specified was liquidated damages, or in the nature of a penalty for the non-performance of the contract, and in the event the court should hold the sum was liquidated damages, judgment should be rendered for plaintiff for $1500; but should the sum be held as penalty, then, in that case, plaintiff agreed the actual damages suffered did not exceed $50, and judgment should be rendered for that amount. Construing the contract, the court held the sum named was penalty, and not liquidated damages. The correctness of that decision is the only point pressed on the attention of the court on this appeal.

No branch of the law is involved in more obscurity, by contradictory decisions, than whether the sum named in an agreement to secure performance will be treated as liquidated damages or as penalty. All authorities, however, agree the question is to be determined in accordance with the intentions of the contracting parties. Low v. Nolte, 16 Ill. 475; Peine v. Weber, 47 Ill. 41.

It is the difficulty in ascertaining what was meant, that has given rise to so many conflicting cases. Text writers have undertaken to deduce rules from the adjudged cases, by which the intention of the parties may be ascertained. But as each case must depend on its own peculiar and attendant circumstances, such rules are seldom of any practical utility. Some general principles, however, may be regarded as settled.

Where the parties to the agreement have expressly declared the sum to be intended as a forfeiture or penalty, and no other intent is to be collected from the instrument, it will generally be so treated, and the recovery will be limited to the damages sustained by the breach of the covenant it was to secure. On the other hand, it will be inferred the parties intended the sum named as liquidated damages where the damages arising from the breach are uncertain, and are not capable of being ascertained by any satisfactory and known rule, or where, from the nature of the case and the tenor of the agreement, it is apparent the damages have already been the subject of actual and fair calculation and adjustment. Of the latter sort, says Mr. Greenleaf, are agreements “to convey land, or, instead thereof, to pay a certain sum.” 2 Greenleaf on Ev. secs. 258, 259. On a review of the cases, Mr. Sedgwick, in his work on Damages, says certain principles seem deducible from them; among others, that where the agreement is in the alternative,...