Damages, Liquidated. Practice, Civil, Auditor's report, Conduct of trial, Judge's charge, New trial. Evidence, Presumptions and burden of proof.
A landowner, who was constructing a building on his land for the purpose of letting stores and tenements, after a contractor who had agreed to finish the building by August 1 had failed, undertook to finish the building himself. When the building was ready for the doors, he made a contract with a manufacturer for certain numbers of doors, windows, sashes and blinds, to be finished within certain numbers of days named varying from one to twenty. At the time of making the contract, which was dated August 26, the landowner informed the manufacturer that he was in a great hurry to receive the doors in order that they might be put in at once as they were received and that it was important for purposes of letting that the whole building should be ready for the fall season. Thereafter there was inserted in the contract the following clause: "In case of any failure on his part to perform this agreement within the time specified according to the tenor thereof said R. agrees to pay said M. the sum of $10 per day until he shall have fully performed said agreement, as damages." The contract called for eighty cypress doors to be delivered in eight days. The cypress doors were to be used in the tenements. Twenty-eight of these doors were furnished by the manufacturer and were used to finish one tenement which was let to a tenant early in October. In some of the other tenements tenants moved in paying less than the full rent until the doors were finished. In an action by the landowner against the manufacturer for a breach of the contract, it was held, that the provision of the contract above quoted must be interpreted in view of the circumstances under which it was adopted and as relating to a substantial and not to a trifling or unimportant breach of the contract, and so interpreted it should be enforced as an agreement for liquidated damages; also, that the fact that the plaintiff let a part of the premises and used a part of the doors did not affect his right to recover the stipulated damages, as the provision that in case of failure of performance within the time specified the defendant should pay the sum of $10 per day "until he shall have fully performed said agreement" covered a partial breach as well as an entire one.
In the trial of an action of contract before a jury where there is an auditor's report in which he finds for the plaintiff, and there also is oral evidence, the auditor's report, although it is prima facie evidence, does not affect the burden of proof, which always remains on the plaintiff to satisfy the jury by a preponderance of the evidence, upon a consideration of the auditor's report and all that is contained in it together with the other evidence, that he is entitled to damages.
Where a presiding judge in his charge to the jury has made use of expressions which taken by themselves are objectionable, but at the close of the charge, on his attention being drawn to the matter by counsel, in the presence and hearing of the jury, assents to a correct statement of the law and adopts it, there is no ground for exception.
Where in an action of contract the plaintiff obtains a verdict but excepts to the rulings of the presiding judge as to the assessment of damages, and his exceptions are sustained, he may retain the advantage of his verdict on the question of liability, and the new trial granted to him will be confined to the question of damages.
MORTON, J.
These are cross actions of contract growing out of the same written agreement. The cases are here on exceptions by both parties: by Morrison to the refusal of the judge to rule and instruct the jury that the damages were liquidated, the effect being as he contends to reduce the damages to which he was entitled, and by Richardson to the refusal of the judge to give certain instructions that were asked for and to certain instructions that were given in regard to the auditor's report. There was a verdict for Morrison in each case.
We take up first Morrison's exceptions. The agreement provided for certain doors, sashes, windows and blinds, to be furnished by Richardson within certain specified times varying from one to twenty days, for a building belonging to Morrison, and contained the following stipulation: "In case of any failure on his part to perform this agreement within the time specified according to the tenor thereof said Richardson agrees to pay said Morrison the sum of ten dollars per day until he shall have fully performed said agreement, as damages." At the time when the agreement was entered into Morrison was in possession of the building. A previous contractor had failed, and Morrison was finishing the building himself. There was testimony tending to show, amongst other things, that Morrison called the attention of Richardson to the facts that it was very important that, for the purpose of letting, the building should be ready for the fall season, that he was in a great hurry for the doors which he should put in as received, that he would suffer if he did not get the doors in time, and that he did not wish him to take the contract unless he could comply with its terms, and that thereafter the clause in question was inserted in the agreement and the agreement was signed by both parties.
It seems to us plain that considering the circumstances under which the agreement was entered into the stipulation should be construed as being in fact what it purports to be in terms, namely, an agreement between the parties as to the measure of the damages which Morrison would sustain if Richardson did not perform his contract as he agreed to. The matter is one of construction of the written words, but the circumstances under which the contract was entered into, the subject matter and the situation of the parties may and should be taken into account in determining the sense in which the parties used them, and what their intention was. The contract itself shows from the promptness with which delivery was to be made that time was important. This also appears otherwise. Both parties recognized the necessity that there was for promptness of delivery and contracted with reference to it and to the damages which the plaintiff would sustain by delay. And in fixing a per diem compensation at the rate of $10 a day to be paid by the plaintiff as damages until he performed his contract the parties could, it seems to us, have had no other object in view than to estimate and agree beforehand upon what should be taken to be the plaintiff's loss if the defendant did not perform his contract substantially according to the agreement. There is no suggestion of a penalty, and the fact that the contract provided for the delivery of different things at different times does not, it seems to us, render it necessary to construe the stipulation as penal in its nature. It is true that the things to be delivered might vary with respect to their importance and to the damage resulting from failure to deliver at the times named. But the stipulation must be construed, we think, as relating to a substantial and not a trifling or unimportant breach. Hall v. Crowley, 5 Allen, 304, 306. So construed the rate of compensation cannot be said to be excessive, nor the stipulation to be unreasonable and unconscionable and therefore penal. From the nature of the case the damages would not be easy to determine and the parties well may have chosen to agree upon them beforehand. Neither do we think that the fact that Morrison rented a part of the premises and used a part of the doors affects his right to recover the stipulated damages. He was in possession of the premises when the contract was entered into, and it was contemplated, we think, that Morrison could use the articles as furnished, and that there might be a partial breach to which the liquidated damages would apply as well as to an entire breach. This is the only reasonable construction, it seems to us, of the words "until he shall have fully performed." Cases like Shute v. Taylor, 5 Met. 61, do not, therefore, apply. It follows that the instruction requested by Morrison that the sum of $10 per day is to be treated as liquidated damages and not as a penalty should have been given, and that his exceptions must be sustained. Lynde v. Thompson, 2 Allen, 456. Leary v. Laflin, 101 Mass. 334. Guerin v. Stacy, 175 Mass. 595. Garst v. Harris, 177 Mass. 72. Phaneuf v. Corey, 190 Mass. 237. Sun Printing Publishing Association v. Moore, 183 U.S. 642. Clydebank Engineering Co. v. Yzquierdo, A.C. 6. Wallis v. Smith, 21 Ch. D. 243.
Richardson's exceptions remain. The conclusion to which we have come in regard to the stipulation as to damages renders it unnecessary to consider any of them except that relating to what was said by the judge in his charge with reference to the effect to be given to the auditor's report. The sum agreed upon by the parties must be taken to cover and include all damages sustained by Morrison in consequence of Richardson's failure to perform his contract, and therefore the question raised by Richardson's exceptions as to the proper elements of such damage in the absence of such a stipulation cannot arise upon another trial.
There are no doubt some expressions in the charge in regard to the effect to be given to the auditor's report which, taken by themselves, are objectionable. But at the close of the charge the counsel for the defendant called the attention of the judge to the matter and stated in the presence and hearing of the jury what he understood the law to be with regard to the effect to be given to an auditor's report, and the judge assented to it as a correct statement, and, in the course of the colloquy, asked counsel whether he had not told the jury that in substance. We think that the jury must have understood from this that, whatever had been said before by the judge in his charge, the statement then made by the counsel for Richardson, and assented to by the judge as a correct statement of the law, was to be taken as his final word regarding the effect to be given by them to the auditor's report. In other words, we think that the jury must have understood that if there had been error in the charge, it was then corrected. Wyman v. Whicher, 179 Mass. 276.
The result is that Richardson's exceptions must be overruled and Morrison's sustained; but as Morrison's exceptions are only sustained in respect of the damages the new trial thus granted to him will be confined to damages only.
So ordered.