Salzer v. Sheffield Farms Slawson Decker Co.

The plaintiff brought this action to recover the sum of $100 that had been deposited by him under a written contract of employment with the defendant, and the defendant interposed an offer of judgment for $75, counterclaiming the sum of $25 as liquid-dated damages for a breach of the contract of employment by the plaintiff, who, without two weeks’ notice required by the terms of the contract, left his employment. The trial justice rendered judgment in favor of the plaintiff for the full amount of his claim.

This was error, as the apparent intention of the parties must control in determining whether the sum Of $25, to be deducted, upon certain contingencies, from the sum deposited, as provided in the contract herein, is to be regarded as "penalty” or as “liquidated damage” ; and, “where" the language used is clear and explicit to that effect, the amount is to be deemed liquidated damages when the actual damages contemplated at the time the agreement was made ‘are in their nature uncertain and unascertainable with exactness, and may be dependent upon extrinsic consideration and circumstances, and the amount is not, on the face of the contract, out of all proportion to the probable loss.’ ” Curtis v. Van Bergh, 161 N. Y. 47 , 52, 55 N. E. 398 . The contract herein, so tested, both upon its face, in its entirety, and upon extrinsic conditions, as well as upon the authority of Rozen v. Dry Dock, etc., R. R. Co., 7 Misc. Rep. 130 , 27 N. Y. Supp.