Edelstein v. Spielberger

Page, J.: The complaint alleges that the plaintiff and defendant entered into an agreement in writing on January 5, 1920, wherein the defendant agreed to purchase from the plaintiff fifty shares of the capital stock of a corporation known as Greenfield Cohen, Inc., then in possession of the plaintiff, [263] and fifty shares of the stock of the same company contracted for by the plaintiff but which had not been at that time delivered to him, in consideration of the sum of $10,750 to be paid $1,000 on January 5, 1920; $4,000 on or before January 15, 1920; $5,000 on or before February 15, 1920; and $750 by delivering a promissory note payable on or before March 15, 1920. By the terms of the agreement which is annexed to the complaint and made a part thereof, it was provided as follows: “ Second. It is agreed that until final payments are made in pursuance to the terms of this contract, that the certificate of stock for fifty (50) shares of stock now owned by the party of the first part shall be deposited with Nathan Friedman, of 309 Broadway, New York City, endorsed in blank, to be held by the said Nathan Friedman until the final payments are made by cash and note, at which time, upon such final payments, the said stock shall be turned over to the party of the second part, and at which time, the party of the first part will execute an assignment of his claim to the other fifty (50) shares of stock above mentioned, to the said party of the second part.” “Fifth. It is agreed that in the event of the failure of the party of the second part to make any of the payments .provided for herein, then and in that event, the monies already paid on account shall be retained by the party of the first part, as and for liquidated damages, and the stock owned by him shall continue to be his sole property and the party of the first part may enforce any and all rights which he has under and in pursuance to the agreement of April 19th, 1919.” The complaint then alleges that the plaintiff received on account of the purchase price of said shares the sum of $5,000, and that the defendant failed and refused to pay $5,750 although duly demanded and although the said stock was duly tendered, together with an assignment of the plaintiff’s rights to the fifty shares of stock not yet owned by him, and that plaintiff otherwise duly performed all the terms, covenants and conditions of the agreement on his part to be performed;' and that shortly after the 15th day of February, 1920, a petition in bankruptcy was filed against said Greenfield Cohen, Inc., and thereafter the assets of said corporation were sold [264] to satisfy the claims of creditors, and the stock became totally worthless. Judgment is demanded for $5,750. The defendant demurred to the complaint on the ground of insufficiency. The claim of the defendant is that under the 5 th paragraph of the agreement above set forth, upon the failure of' the defendant to perform the contract on his part by making the payments in accordance with the contract, the plaintiff is entitled to retain any moneys paid as liquidated damages, and that, therefore, it appears upon the face of the complaint that the plaintiff has no cause of action to recover the balance duel It is true that the agreement so provides, but the parties to a contract can only provide for the liquidation of damages in case the damages are uncertain, speculative or difficult of computation; and where the contract calls for the sale of personal property, payment to be made in installments, and certain installments are paid on account, and the defendant defaults on subsequent payments, the damages are certain and liquidated by law. It is not necessary or proper for the parties to provide for the forfeiture of the amount already paid as liquidated damages. The damages in this case are certain and capable of exact computation and are not speculative. The order should be affirmed, with ten dollars costs and disbursements. Dowling and Merrell, JJ., concur; Laughlin and Greenbaum, JJ., dissent.