Yenner v. Hammond

Ryan, G. J. This case was very ably presented for the appellant, but it appears to us-to be a very plain one. The respondent’s conveyance to the appellant expresses the consideration to be $700. It is not necessary to the consideration of the case to pass upon the question, whether parol evidence was admissible to show, in reduction of damages, that the consideration was less than the sum stated in the deed. Such evidence does not appear to have been offered. Evidence was offered to show the value of the land at the time of the conveyance. Such-evidence, for such a purpose, is never admissible. The question is not one of the value of the land, but of the price at which the parties bought and sold it. ■ Certainly [281] the consideration expressed is prima facie evidence, and that is not rebutted in this record. It appears that in payment of the consideration of the respondent’s conveyance, the appellant gave the contract in suit for the conveyance of other land to the respondent, acknowledging payment of the consideration of $700. Here again the same question, above alluded to, might have arisen, but does not. Because we cannot think that it is properly raised by the question put to the appellant, or the offer following it. The question called for the whole transaction between the parties. An answer to that question would have gone to explain away the written contracts between the parties, and was too clearly inadmissible for discussion. The offer following it seems to be an explanation of the object of the question, and is very comprehensive and loose. It is substantially an offer to go into the actual transaction between the parties, without regard to the deed or contract, and rather in contradiction of them. The last clause in the offer, to show that the consideration was not $700, but was the difference between the value of the respondent’s land and the mortgages on it, is not free from ambiguity. Taken by itself, as a separate offer, j,t might be sufficient to raise the question of the admissibility of parol evidence to reduce the consideration stated, though even that admits of doubt. It is enough to say that the whole offer must be considered together, and that, so considered, it was an equivalent to the question put; both seeking to go outside of the written contracts, and ■ to prove the actnal transaction by parol. The appellant, failing to perform his contract, is liable to repay the consideration received from the respondent, unless there be something in the case to defeat the respondent’s right. There is a good deal of conflict in the books, in cases of contracts for the sale and purchase of land, where the vendee has paid the consideration and suffers damages over and above it by the failure of the vendor to convey, and where there is no [282] fraud, whether or not the vendee can recover such damages in addition to the consideration paid. Sedgwick’s Meas, of Dam. (6th ed.), 184, n. 4. But there appears to be no doubt, in reason or authority, that he may sue for the consideration paid, and recover it. But it is contended that the covenant of the appellant, in case of his failure to convey, to pay $700 as a penalty, takes this case out of the rule. We are not at all certain that the true construction of the contract is not, that the penalty is an independent one, having no relation to the consideration paid, and intended to provide for damages over and above it. But we need not consider this. The construction of the contract most favorable to the appellant, and which both parties appear to have adopted, is that the penalty and consideration are correlative. In that view, the question is, whether calling the consideration a penalty modifies the respondent’s right of recovery. It is undoubtedly a general rule, that the word “ penalty,” in a clause providing for breach of a contract, is to be held strictly such, under which the party must show his actual damage. But this rule has relation to clauses uncontrolled by the import of the whole contract. As the contract may show, by its nature and import, that the term “liquidated damages” means penalty, so the force of the term “penalty” may be overborne by the general purport of the contract. In this case, as to the right to recover the consideration, the covenant for the penalty was unnecessary. The respondent’s right to recover it is independent of the penalty, unless the covenant limits it. And we should be as reluctant to give such a covenant the effect of converting damages liquidated by law into a penalty, as to give such a covenant effect to convert a strict penalty into liquidated damages. Without entering into an elaborate consideration of the cases, we think that the current of authority fairly establishes the rule, that, whatever words are used in a covenant provid [283] ing a sum for damages upon breach, the mere words are not conclusive, and that courts ought, in the language of C. J. Abbott, to look into the whole of the agreement in order to ascertain whether the sum was intended to be a penalty or liquidated damages. Davies v. Penton, 6 Barn. & Cress, 216; Sedgwick, supra, 421, and cases cited. In this case, in any construction of the contract, we find no difficulty in holding that the respondent is entitled to recover the consideration paid. These views cover all the points made for the appellant on the argument. And it follows that the judgment of the court below must be affirmed. By the Court. — Judgment affirmed.