Traut-Ditmar Construction Co. v. Hartman

The action is to foreclose a mechanic’s lien. On July 10, 1906, the plaintiff contracted in writing with Hartman & Horgan to excavate and remove the materials (including sewer trench) on certain lots at the southeast corner of 162d street and Ogden avenue, according to grades to be given by the engineer, at the following

The principal contention of the defendants is their right to “demur-rage” for 212 working days between September 6, 1906 (the date of the expiration of the 8 weeks), and May 17, 1907, when the last work was performed upon the contract. Although the defendants might protest against delay and still claim damages for the plaintiff’s breach of the contract in that regard, yet their payment as late as October 12, 1906, without a certificate, may well be urged in corroboration of plaintiff’s testimony excusing the delay. Further than this, it appears that, after a conference between the parties with a view of adjusting their differences, the plaintiff, about May 17, 1907, went upon the premises and performed certain minor work.

But, aside from the merits, the question of enforcing a clause in such a contract which provides for the payment of a certain sum or sums described therein as “a penalty to be paid as liquidated damages” is one of frequent presentation, upon which much has been written in text-books, law dictionaries, and judicial decisions. From an examination of the authorities I reach the conclusion that, without regard to the language of the contract, which may describe the amount agreed upon as either “penalty” or “liquidated damages,” or, like the present case, as a “penalty to be paid [or agreed upon, or regarded] as liquidated damages,” the test of the enforceability of such a provision is the actual intent of the parties, which may be ascertained from the instrument itself and all the evidence before the court with particular reference to the fundamental fairness of this clause of the contract. The amount agreed upon should not, either upon the face of the contract or from all the circumstances, appear disproportionate to the provable or probable actual loss sustained by the party,who seeks to enforce this clause.

In the case at bar no evidence of damage for delay was submitted, and the penalty of $5 per day for 212 working days from September 6, 1906, to May 17, 1907, or $1,060, is disallowed. The contract, as has been shown above, provided for the removal of the material, except such stone as might be desired for the building of foundations, quality and quantity to be determined by the engineer. Defendants claim that plaintiff left too much stone on the premises. Considerable testimony was taken on this subject, from all of which I conclude that the quantity and quality of stone not removed was authorized by defendants to be left on the premises. Defendants further claim that they were put to expense in removing rubbish or surplus materials. While the evidence is not definite, it seems to me that an allowance to the defendants of $100 on this claim would be equitable. Defendants also claim that plaintiff did not complete the excavation to grade. This is strongly negatived by the testimony of Mr. Sterling, an engineer, and also by the fact that in May, 1907, the plaintiff furnished labor for removing some “high points” in the excavation.

Plaintiff should have judgment for $1,458.20, less. $100, ■ allowed as above, $30, one-half engineer’s charges, and $45 expense of completing excavation of yard, leaving a balance of $1,283.20, with costs, but without interest. Settle findings and judgment on notice.