Poppers v. Meagher

Mr. Justice Phillips delivered the opinion of the Court: The lease determined the expiration of the term, and by its provisions, at its termination, by lapse of time or otherwise, it was the duty of the tenant to yield up possession to the landlord. That duty was not dependent on a demand for possession, or any proceedings to be taken or done by the landlord. A demand for possession would be necessary as a condition precedent to the right of recovery in forcible detainer, but not necessary to determine the term of a lease for a fixed period. By the covenant in his lease appellant agreed to deliver possession on its termination, and failing to do so, further covenanted that he would pay, as liquidated damages for the whole time such possession was withheld, the sum of $30 per day. That the appellant held over after the termination of the lease is not a controverted fact. The length of time of such holding over was a question of fact, which was determined by the trial court to be for a period of one hundred and five days. That finding of fact was affirmed by the Appellate Court, and we are therefore precluded from examining the record as to that question. The time appellant retained possession after the expiration of his lease according to its terms, must, for all purposes in this court, be taken as one hundred and five days. The negotiations between the Grand Bapids Furniture Company and appellee were never consummated. The lease prepared by appellee’s agent, and taken for examination to the attorney of the corporation, was not signed by appellee, and the only money paid to her or her agent was the $416.66 evidenced by the receipt. The proceedings of the board of directors of that corporation show the contract of leasing was not completed, and show the abandonment of all negotiations for the leasing. The evidence in the record shows the negotiations never reached a final conclusion,—that the corporation never acquired any right over the premises. The money paid, however it may be named in the receipt, can, from all the facts appearing in the record, only be regarded as a deposit looking to the consummation of the contract, which, if completed, was to be credited as rent, but otherwise to be returned, and which was returned when the negotiations were finally abandoned. The evidence is contradictory as to whether the agents of appellee informed appellant that the premises were leased to the corporation, but from,all the facts we are led to the belief that no such conversation took place, and no such information was conveyed to appellant by appellee or her agents. The corporation never having acquired any interest in the premises, had no power to lease the same or consent to appellant holding over. The testimony of appellant is, that he did not believe he could procure an extension of his lease, and the evidence shows that he was objected to as a tenant by appellee. The lease proposed to be made, and as drawn, in the negotiations between appellee and the Grand Rapids Furniture Company, covenanted against sub-letting, against assignment of term, and, against allowing occupancy by any other person. We do not deem it important to discuss the question as to the extent a sub-tenant is bound to inquire, and is chargeable with notice, as to his landlord’s lease, as it must be held, from the facts appearing in this record, the Grand Rapids Furniture Company never acquired any right in the premises, as tenant or otherwise, and appellant could acquire no rights by reason of any contract with that corporation,—that no estoppel resulted, as against appellee, from the negotiations between herself and the corporation. This discussion of the evidence is had to determine the correctness of the rulings in refusing propositions asked by defendant. The first proposition asked by appellant proceeded upon the theory that notice of the negotiations, and the payment evidenced by the receipt, and the subsequent payment of rent to the corporation by appellant, and the consent of the company to his remaining in possession, would defeat plaintiff’s right of recovery. The corporation having acquired no rights by concluding the contract, could neither accept rent nor consent to defendant’s remaining in possession to the prejudice of plaintiff’s rights, and any notice of the negotiations or the payment mentioned in the receipt would not be sufficient to authorize the defendant to assume a leasing. He could easily have inquired as to whether a lease had been made, and learned the truth as to that question. He could acquire no rights by reason of mistake or credulity. It was not error to refuse the first proposition asked by defendant. The second proposition asked by the defendant proceeds upon the same theory as the first, with the additional statement therein, that if the defendant, having notice of the negotiations, by an arrangement between himself and the corporation agreed to sell his stock of furniture to that company, which consented that he should remain in possession and pay rent to it, the plaintiff would not be entitled to recover. This proposition' is objectionable for all the reasons made to the first, and has no additional force by reason of any proposed transaction between appellant and the corporation, and it was not error to refuse to hold the same as law. It is then urged that the provision in the lease for the payment of $30 per day for the time that appellant held over was a provision for a penalty, only, and appellant should not be permitted to recover more than actual damages, which, it is claimed, is not more than the rental value for the time withheld. Counsel rely upon Bryton v. Marston, 33 Ill. App. 211, Tiernan v. Hinman, 16 Ill. 400, Scofield v. Tompkins, 95 id. 190, Klingle v. Ritter, 54 id. 140, and Otto v. Jackson, 35 id. 349, as sustaining that contention. Bryton v. Marston, supra, was a case where a certain drama was copyrighted by Marston, and he sold his interest therein to Salisbury and Bryton for the sum of $3000, upon the condition that on the delivery of the manuscript and acting parts of the play the purchasers were to pay the author §200', and the further sum of §10 per night for each and every actual performance of said play in any theater, and $5 for each afternoon or matinee performance, until said sum should aggregate the sum of §3000, when the absolute right to such copyrighted drama should be in the purchaser. There were other conditions to the contract, and it was then provided that “in any case of failure to perform any of the agreements of said sale, the parties bind, each unto the other, in the sum of §5000 as fixed and settled damages, to be paid by the failing party or parties.” Suit was brought on this last clause, and it was held that the clause as to settled damages was to be construed as a penalty, as it was a provision for the payment of a greater sum upon default in the payment of a lesser sum. The real gist of the contract in that case was the sale of a copyrighted drama for a consideration of $3000, which was to be paid in a specified way and on certain conditions, and when that sum was paid the seller had no further right or interest, pecuniarily, in the drama. For a non-compliance with the terms of sale thus made, a gross sum of $5000 was fixed as settled damages. Under this state of facts it may well be held that such greater sum,—so much greater than the price to be paid,—was a penalty, recoverable as the damages might be shown by the evidence. Tiernan v. Hinman, supra, was a case where a mortgage was made to secure notes payable at different times, covering a period of several years, and without interest, and the mortgage provided for a right to declare the whole sum due on a failure to pay any one of the installments on the day it became due. One installment became due and a sale was advertised, when the debtor tendered the amount of the installment, with interest and costs then accrued. That sum was accepted, with the stipulation that its acceptance should not prejudice the creditor in any rights by reason of non-payment when due, The court held the proviso in the mortgage, that the whole sum should become due upon failure to pay any one of the installments on the day when due, was in the nature of a penalty, and announced the rule, that “when, by the terms of a contract, a greater sum of money is to be paid upon default in the payment of a lesser sum at a given time, both courts of law and equity will hold the provision for the payment of the greater sum to be a penalty. And even where the parties stipulate for the payment of a sum certain on default of performance of an agreement, such stipulation will be treated as a penalty, if the damages are not difficult of ascertainment.” In Scofield v. Tompkins et al. supra, the appellant had sold appellees certain lands at an agreed price of $22,770, to be paid within one year, and on default in making such payment the seller might declare the contract null and void, and have the right to retain any money paid, and might sue for and recover the purchase price unpaid as liquidated damages, and brought suit to recover the whole price of the land. On this state of facts it was held: “Appellant has the land, and .by this action seeks to recover its full price and also retain the land. It is manifest that his actual loss can not be equal to the value of the land. If it .was worth nothing, then appellees agreed to pay this large sum for what was of- no value. If it was worth that sum, then appellant has land of that value, unless its market price has depreciated, and if depreciated,' then his loss is only commensurate with the depreciation. It is therefore clear that his loss is not equal to the sum named as liquidated damages. The fact that the parties fixed a sum to be paid, and called it liquidated damages, does not always control the question, as to the measure of the recovery for a breach of the contract. Courts will look to see the nature and purpose of fixing the amount of damages to be paid, and if the clause fixing the amount of the damages appears to have been inserted to secure prompt performance of the agreement, it will be treated as a penalty, and no more than the actual damages proved can be recovered.” It is further said in that ease: “It is true, ttie parties are authorized to agree upon any sum as compensation for a breach of the contract which does not manifestly exceed the amount of the injury suffered. This is believed to be the doctrine of the courts, and to be well sustained by authority. ” But it was held in that case that the sum fixed was greatly above all damages that could have been sustained by a breach of the contract. Klingle v. Ritter, supra, was a leasing of certain premises for four months, from the first of March, 1867, at a rental of $50 per month, and the lessee to have the use of a beer cave, ice cellar and stable until the first of October, with the necessary use of engine, boiler, etc., not later than the middle of September, and the lessee covenanted to pay $50 per day as stipulated damages for every day he should hold over after the termination of his lease, and appellee became security for the performance of the lessee’s covenants. Suit was brought on the lease, and a demurrer interposed to the declaration. The court held the provision as to damages was so highly penal as to seem unconscionable, and it was susceptible of two constructions : one, that the lease would terminate on the first of July; and the other, on the first of October; and the lease did not advert to the fact that the right of occupancy would expire at different dates as to different portions of the premises, and held the demurrer was properly sustained. Otto v. Jackson, supra, did not provide in the lease for liquidated damages, but held where there was a holding over, the action being brought against a guarantor of the lessee, that he would perform his covenant and deliver possession at the end of his term, the measure of damages during the term the lessor is kept out of possession is, presumptively, the amount of rent stipulated in the lease, computed according to the time of holding over. The rules deducible from these eases may be stated: First, where, by the terms of a contract, a greater sum of money is to be paid upon default in the payment of a lesser sum at a given time, the provision for the payment of the greater sum will be held a penalty; second, where, by the terms of a contract, the damages are not difficult of ascertainment according to the ternas of the contract, and the stipulated damages are unconscionable, the stipulated damages will be regarded as a penalty; third, within these two rules parties may agree upon any sum as compensation for a breach of contract. The evidence in this ease shows the premises occupied by appellant were occupied at a rental of $500 per month, on a contract made long before that time. The testimony of the witness who was looking after the business of appellee, states the property was worth $7000 per annum. As a general rule, it is only at particular seasons that property is in frequent demand for rent, and where property situated in a city is not rented at a season when there is a demand, it may for a long time remain idle. Hence it is important that the time when the landlord may deliver possession to another tenant may be certain. It is within the province of the parties to determine 'the amount of compensation as stipulated damages for holding over beyond the term of the lease. The amount fixed in this ease is not unconscionable, and is reasonable, under the evidence. The damages assessed by the trial court were not excessive, and it was not error to refuse to hold the third proposition asked to be held by appellant. The questions asked the witness Warner on cross-examination were on a subject matter not brought out on examination in chief, and it was not error to sustain the objection to those questions. It appears, however, that when that witness was called in rebuttal the entire matter was inquired about, except as to rental to be paid by the corporation. The rental value fixed in the lease to the corporation was not evidence to fix the rental value to determine damages in holding over under this lease, with liquidated damages. We find no error in the record,, and the judgment' of the Appellate Court is affirmed. Judgment affirmed.