Opinion
January Term, 1897.
C.C. Van Kirk, for the appellants.
C.H. Sturges, for the respondent.
It will be observed from the foregoing statement of facts that the referee not only allowed the liquidated damages provided for in the contract, but also other damages alleged to have been suffered by the plaintiff by reason of its non-fulfillment.
Ordinarily, where there is a stipulation and agreement in a contract as to the amount of damages that are to be paid by either party for a breach of such contract, no question of fact can arise except as to the breach of the contract; that being found, the stipulation for liquidated damages fixes the amount of recovery.
There are cases, however, holding that, where there has been any fraud perpetrated in the making of the contract, such fraud vitiates and renders null and void the stipulation as to the amount of damages to be paid upon its breach, and that the party suing for such breach is not confined to the amount agreed upon as liquidated damages, but may recover the amount of damages actually suffered by him by reason of such breach. The plaintiff apparently proceeded upon that theory, for he alleges in his complaint that Doty had knowledge of the imperfections in his title, which he knowingly and intentionally concealed from him, and permitted him to proceeded in making improvements and expending money upon the farm to an amount in excess of the sum agreed upon as liquidated damages; and the referee has found that Doty, at the time he made the contract, knew that the said property was not free and clear from all incumbrances and that he did not act in good faith.
Assuming that Doty was guilty of such bad faith as would vitiate the contract, and that, therefore, the plaintiff is not confined to the amount agreed upon as fixed and liquidated damages, it is perfectly clear, it seems to me, that the plaintiff cannot recover both the actual damages alleged to have been suffered by him by reason of the breach of contract and the amount fixed and agreed upon between the parties as liquidated damages for the breach thereof. The plaintiff cannot have both; if he is entitled to one, he is not entitled to the other, and, for the error of the referee in allowing both, the judgment should be reversed.
Having arrived at that conclusion, it is unnecessary to discuss the other questions in the case. It may not be amiss, however, to say that, in determining which party is in fault in not performing a contract, if it appears that the time originally fixed for its performance has been indefinitely extended by mutual consent, neither party can at any time place the other in default by demanding an immediate performance, but must fix a reasonable, definite, time in the future for such performance. ( Schiffer v. Dietz, 83 N.Y. 300, and cases cited.)
The testimony of the plaintiff, that the defendant Cornell told him that the scrivener, Merrill, told him, Cornell, that Doty told him, Merrill, certain things in relation to the title of the real estate in question, was hearsay and incompetent.
In determining as to whether the alleged representation of Doty to the plaintiff at the time of making the contract, that the premises were free and clear of all incumbrances, was such a false representation as to warrant a finding of bad faith, it is well to consider that, although there appears upon the records apparent liens or incumbrances by judgment, mortgage or otherwise, yet, if the party has in fact paid them, although he has not placed the evidence thereof upon the records, his statement that there were no incumbrances would not, under such circumstances, be a false representation, the incumbrance being only an apparent, not a real one, and the party having it in his power to clear the record. Upon the question of good faith, the fact that the deed was to be given five years after the execution of the contract, affording ample time to clear the record, and that it was to be a warranty deed, covenanting against all liens and incumbrances, should also be taken into consideration.
The questions as to who committed the first breach of the contract in question, as to whether Doty acted in bad faith, and as to whether the defendants have tendered a good and sufficient deed under the contract, are all contested questions in this case, and, not desiring to embarrass the trial court upon a new trial in its findings of fact in relation thereto, I refrain from further consideration of them, but, for the error of the referee first discussed, the judgment should be reversed, the referee discharged and a new trial granted, costs to abide the event.
All concurred.
Judgment reversed, referee discharged and a new trial granted, costs to abide the event.