Perzell v. Shook — 53 N.Y. Super. Ct. 501

Majority

p. 501

WILLIAM PERZELL, Respondent, v. SHERIDAN SHOOK, et al., Appellants.

Headnote

Contract.—Lease.—Liquidated damages.

A contract for the letting of a theater for three weeks, provided that the lessee should pay to the lessor on the execution thereof, the sum of §1,000, to be applied to the payment of the rent for the last week, but in case of the failure of the lessee to fully perform any of the conditions of the agreement, said sum was not to be applied towards the payment of any rent, but was to be forfeited to the lessor for his own use and benefit, and taken and considered as liquidated damages paid by the lessee to the lessor. The only condition on the part of the lessee stipulated for by the lease, was the payment of a stipulated weekly rent. At the expiration of the first week, which was paid for, the lessee ceased to use the theater and paid no more rent.

Held, that the §1,000 paid on the execution of the contract, is to bo regarded as liquidated damages, and as covering all claims against the lessee by reason of the breach of the contract, including breach of the covenant to pay rent.

Further, held, that the contract not being ambiguous, severe or inequitable,

p. 502

parol evidence of the intent of the parties, as to the clause relating to the payment of $1,000 was inadmissible.

Before Sedgwick, Cli. J. and O’G-orman, J.

Decided July 6, 1886.

Appeal from a judgment in favor of the plaintiff for $141, entered on a verdict under direction of the court.

In March, 1883, the plaintiff' entered into a written agreement with Albert M. Palmer, for the lease by him to the plaintiff of the “Union Square Theatre,” of which agreement the following is a copy :

“First.—That the party of the first part (Palmer) hereby agrees and covenants to furnish for the term of three weeks, commencing August 20, 1883, to the party of the second part (the plaintiff), the Union Square Theater in the City of New York, cleaned and lighted for the production of and representation therein of a certain play known as or entitled “ Vera,” and other plays if necessary, and also covenants and agrees to furnish the necessary stage hands, the usual orchestra of the theater, property men, gas men, the ushers, the ticket sellers and ticket takers, at said performances.

“ Second.—The party of the second part hereby agrees to pay the party of the first part for the weeks commencing August 20, 1883, and August 27, 1883, the sum of $1,650 for each of said weeks, and $1,800 for the week commencing September 3, 1883.

“ Third.—The party of the second part agrees to pay now to the party of the first part the sum of $1,000, which said $1,000 shall be applied toward the payment of the last week referred to in the second paragraph.

“Fourth.—Each payment for the weeks referred to in the second paragraph shall be made on the Monday of each of the above-mentioned weeks in advance, viz., on Monday, August 20, $1,650 ; on Monday, August 27, $1,650; on Monday, September 3, $800, and the $1,000 above mentioned to be applied towards the balance of the rental aforesaid for the weeks as stated aforesaid.

p. 503

“Fifth.—If there should be a failure of the party of the second part to fully perform any of the foregoing paragraphs or any part of this agreement, the said $1,000 shall not be applied toward the payment of any rent, but the same shah be forfeited to the party of the first part for his own use and benefit, and shall be taken and considered as and for liquidated damages paid by the party of the second part to the party of the first part.”

This money ($1,000) was actually paid by the plaintiff to Palmer on the execution of the contract. Soon after-wards the defendants succeeded to the rights and obligations of Palmer under the contract. On Monday, August 20, the rent for the first week was duly paid in advance, and plaintiff proceeded to give representations in the theater. The enterprise was not successful; the business was very bad, and money came in slowly. The employee of the defendant who was in charge of the box office and received money for tickets sold, retained and refused to pay over to the agent of the plaintiff the money received for the performances of Friday night, Saturday matinee and Saturday night, amounting to $326; and when plaintiff applied to defendants for the money on Saturday night, the defendants refused to pay it over to the plaintiff, and said “ they meant to keep it.” Plaintiff thereupon said : “You have broken your contract,” and that if he did not get his money from them he would not give any more performances in the theater. In the conversation-with them at that interview, he also said that he was not immediately prepared to pay, and he submitted to the defendants a written memorandum of a new agreement, which he desired them to execute. They never did execute this proposed agreement. The plaintiff did not pay the rent payable in advance on the following Monday, or any further rent, and he ceased to use the theater.

A. J. Ditterihoefer, for appellants.

Stafford <& Graff, for respondent.

p. 504

By the Court.

—[After stating the facts.]—On these facts, the plaintiff claims that the defendants’ refusal to pay over to him the proceeds of the three performances, before any rent was due by him, amounted to an eviction or a breach of the contract, giving him the right to recover the money so retained by defendants, together with the $1,000 deposited by him, on the execution of the contract, amounting in all to $1,326.

The defendants, on the other hand, claim that the contract was first violated by the plaintiff in his failure to pay his rent, due in advance on Monday, August 27, and that they are entitled to retain the $1,000, and also to have judgment against the plaintiff for $3,729.22 being the amount which would. have accrued under the contract, for the second and third weeks’ rent, together with the amount of certain claims for services admitted to be due by plaintiff, and assigned to defendants.

The trial judge, in directing a verdict for the plaintiff for $141, being the money of the plaintiff retained by defendants, less the amount of said claims, was, no doubt, of opinion that the contract was first violated by the plaintiff, in his failure to pay rent accruing due in advance under the contract, and that the $1,000 deposited should be regarded as liquidated damages, and as covering all claims against the plaintiff by reason of the breach of ■the contract. In this opinion I think he was correct.

The retention ■ by defendants of the money of the plaintiff received by them, was, no doubt without authority or justification in law, but it did not constitute either an eviction or a breach of the contract.

Exceptions were taken by the learned counsel for the defendants to the exclusion of various questions, which he claims were put, for the purpose, among others, of showing that the parties to the contract never intended that the $1,000 should be considered to be liquidated'damages. Some of these questions were answered at other stages of the trial. None seem to me material or relevant

p. 505

on the question of the intent of the parties when they executed the contract. On that subject the contract must first speak for itself.

In cases where contracts are ambiguous or contain severe and inequitable provisions, embarrassment has been no doubt experienced, in the effort to reconcile the principles of justices with the well settled rule that every person has the right to make such a contract as he chooses, and that courts are bound to enforce it. In such cases the actual intention of the parties may be ascertained from the language of the entire contract itself, and also from the surrounding circumstances, as far as that can be reasonably done (Little v. Banks, 85 N. Y. 258 ; Kemp v. Knickerbocker Co., 69 Ib. 45).

In the case at bar, the language of the contract itself is not ambiguous, and is susceptible of no interpretation other than that given to it by the learned trial judge. The circumstances of the parties, when the contract was made, were before the court and it would be dangerous and improper to allow either of the parties ¡themselves, after a breach of the contract had taken place, to give his own interpretation of its meaning and intention.

The judgment appealed from should be affirmed, with costs and the order appealed from should be affirmed.

Sedgwick, Oh. J., concurred.

Cases cited

Little v. Banks 85 N. Y. 258 N.Y. 1881-05-03 p. 505