Lindsay v. Anesley, 28 N.C. 186, 6 Ired. 186 (1845)

Dec. 1845 · Supreme Court of North Carolina
28 N.C. 186, 6 Ired. 186


The omiasion of the word “ penal,” in stating the damages which either party might recover for the breach of a covenant, as for instance a covenant for conveying title, does not necessarily make the sum mentioned, liquidated damages.

Whether the sum mentioned, be merely a penalty or liquidated damages, must depend upon the circumstances and nature of each case.

The quantum of damages, in an action of eovenant, may be assessed by the jury, when the precise sum is not the essence or substance of the agreement.

Appeal from the Superior Court of Law of Washington County, at the Fall Term, 1845, his Honor Judge Manly presiding.

This, was an action of debt for one thousand dollars, upon the following instrument, to-wit:

“ Know all men by these presents that I, Asa Anesley, do contract and agree to and with Jonathan J. Lindsay, that I will execute to the said Jonathan J. Lindsay, his heirs or assigns, a deed of bargain and sale for a tract of. land, lying in Washington County, containing by estimation one hundred and sixty-five acres, more or less, it being a tract of land recently conveyed by me to Thomas B. Myers for tbe sum of six hundred and fifty-one dollars, the said Thomas B. Myers having executed to-me, the *187said Asa Anesley, a contract to re-convey the said land to the said Anesley, whenever he, the said Anesley, should pay back to the said Myers the said sum of six hundred and fifty-one dollars: ‘now when the said Jonathan J. Lindsay shall furnish the said Anesley with the said sum of six hundred and fifty-one dollars, with which the said AnesJy is to pay the said Myers and redeem the said land, bargain and sale by him the said Anesley to him the said Myers, then the said Anesley doth contract and agree with the said Lindsay, that he, the said. Anesley, will execute to the said Lindsay a firm deed of bargain and sale in fee simple for the aforesaid premises — the said Lindsay agreeing to pay the said Anesley the sum of nine hundred and fifty dollars for the said land; and it is agreed by and between the parties, that the following shall be the ■ modes of payment; that the said Lindsay, after furnishing the said Anesley the aforesaid sum of six hundred and fifty-one dollars, to redeem the said land, shall be permitted to pay the balance in good notes, (that is -to say, notes of hand, which the said Lindsay agrees to guarantee) and, for the faithful performance of the covenants contained- in this, agreement, the parties to this agreement do bind themselves in the sum of one thousand dollars, to-be collected out of cither party refusing to comply with the terms of this agreement.” (Signed and sealed by the parties.)

A breach of the agreement on the part of the defendant, having been proved, the sole question presented to the Court was, whether the damages for the non-fulfilment of the obligation were liquidated or otherwise. The Court held they were not liquidated, the $1000 mentioned in the instrument being in the nature of a penalty; and instructed the jury to assess the actual damages. The jury returned a verdict in favor of the plaintiff for the sum of $87 27 cents. The Court, refused, on motion of the plaintiff, to grant a new trial, and, judgment being rendered according to the verdict, the plaintiff appealed.

*188Heath, for the plaintiff.

A. Moore, for tlie defendant.

Daniel, J.

The defendant was the owner of a tract of land, lying in the County of Washington, encumbered with a mortgage to one Myers for $851 ; he contracted, by the instrument of writing mentioned in the case, to sell it to th,e plaintiff for $950. And in the said deed, is this stipulation or condition : For the faithful performance of the covenant contained in this agreement, the parties to these presents, do bind themselves in the sum of one thousand dollars.” The defendant refused to convey, and the plaintiff brought this action of debt against him. And under the statute, he, in his declaration, assigned as a breach the refusal of the defendant to convey, after he had been requested to do ■so ; and stated his damages to be one thousand dollars. The defendant pleaded, “ Conditions performed,” and “ Conditions not broken.” On the trial, the plaintiff prayed the Court to charge the jury, that they should give him $1000 in damages, as he contended that the damages had been liquidated by the parties themselves. The Court refused to comply with this prayer ; and the jury gave damages to the amount only of $85 27 ; for which sum the Court gave judgment, and the plaintiff appealed. The word “penal,” is omitted m the sentence in the deed, next before the words, “ sum of one thousand dollars.” And, from that omission, the plaintiff now construes the instrument of writing to stipulate for liquidated damages. That word being left out of the deed, will not, it seems to us, make the sum of money inserted stand as liquidated damages, in case of a.breach of the covenants, by either of the parties to them. From a view of the whole instrument, the sum appears to have, been inserted, as for a penalty. Suppose that Anesley had tendered a deed of conveyance, and Lindsay had'refused to accept it and pay the purchase money; would it for a moment *189be supposed, that Anesley could have kept the land, and also recovered of Lindsay $1000, as liquidated damages'? Duch a construction would at once shock common sense. We see that each party to the instrument is bound in it under the identical same sum, ($ 1000,) to keep his covenants. And if it would not have done, to have enforced it against Lindsay as liquidated damages, in case he had failed to comply with his covenants, neither will it now be right to make such a construction against Anesley, on his failure to comply with his covenant. The quantum of damages, in an action of covenant, may be assessed by the jury, when the precise sum is not the essence or substance of the agTeement. The $1000 was not the essence of this contract; the substance of the agreement was, that one should convey the land, and the other should pay the stipulated purchase money. The $1000 was intexided to cover, as a penalty, all such actual damages as either party might sustain, in consequence of any breach of their respective covenants. We have examined the cases, cited by the plaintiff’s counsel, and they, by no means, (as we think,) establish the doctrine he contends for. In the case of Lowe v. Peers, (2 Burr. 2225,) Peers covenanted as follows: I do hereby promise Mrs. Catherine Lowe, that I will not marry with any other person beside herself: if 1 do, I agree to pay to the said Catherine Lowe, £1000, in three months next after 1 many any body else.” Peers afterwards married Elizabeth Gardner. The breach assigned upon the covenant was, in the non-payment of the £1000. The Court held, that the payment of this sum was the very substance of the agreement. There'was no other standard, by which the intention of the parties, as to the damages for a breach of the covenant, could be measured. So, if a lessee covenants with his landlord not to plough up meadow, and, if he does, lie will pay £5 an acre for every acre ploughed up ; this sum is liquidated damages — it is. the essence of the agreement. In Fletcher v. Dyche, (2 *190 Term, 32,) the covenantor agreed to repair a church for a certain sum of money ; and he furthermore agreed, to do and find all the necessary Smith’s-work and iron-monger’s work, in six weeks from the date of the covenant, for £118, 18s. And he agreed in the deed, that if the Smith’s and iron-monger’s work was not done within the time mentioned, he would pay to the covenantee the sum of £10 for every week after the expiration of the time agreed upon, until the said Smith and iron-monger’s work should he completely finished. The Court held, that such weekly payments were not in the nature of penalties, but weré liquidated damages : the object of the parties, in naming this weekly sum, was to prevent any altercation with respect to the question of damages; it would have been difficult for a jury to have ascertained what damages the covenantee had really sustained by the breach of the agreement; therefore, it was proper for the contracting parties to have ascertained it themselves by their agreement : it was like demurrage, so much specifically per week. Slosson v. Beadle, (7 Johns. Rep. 72,) was a covenant to convey land, “ or in lieu thereof, lo pay the plaintiff #800.” So in Tingley v. Culler, (7 Con. Rep. 291,) there the language was, “ If Elisha Cutler does not perform according to the within instrument, he shall pay the sum of #150 and this wasffield a case of liquidated damages. It is therefore seen, that, in all the cases brought to our notice, the defendants had agreed, in the «covenants, to pay a certain sum to the other party in •case of a breach' by them, as a compensation for the breach; a sum, bearing some proportion to that which a jury probably would have given, if it had been submitted to them. Pecuniary punishment for the breach is, in all the cases cited, out of the question. How stands the .case now before us ? Why, the jury have said, that the real damages which the plaintiff has sustained, are but #85 27; 'and yet the plaintiff insists, that because the adjective word u ■penal” happened to be omitted to be *191inserted in the written agreement, next before the words, “sum of one thousand dollars,” that he is entitled to $1000, as liquidated damages.

Not so, we think ; and the judgment must be affirmed.

Per Curiam. Judgment affirmed.