Werner v. Finley

NIXON, P. J.

I. Appellant has assigned as error that the stipulation or contract for services sued upon should not be held to be one for liquidated damages because the damages fixed in said contract are unreasonable and the real damages easily ascertainable.

We find that, all the circumstances considered, the damages are not unreasonable; nor are the real damages easily ascertainable. To say that the damages are unreasonable, the court must be able to say that they are grossly and clearly disproportionate to the actual damage. It is quite evident that this cannot be done in the present case. Here, an unusually large salary— sixty dollars per week — was paid a salesman. It is quite apparent that the sixty dollars was not compensation for ordinary services. The fact that the contract was made for one hundred and sixty weeks, or over three years, also clearly indicates that the plaintiffs attached considerable weight and importance to the services of the defendant and were willing to pay liberally for them.

So far as the ascertainment of the actual damages is concerned, it must be evident that that would be a *560 matter of extreme difficulty. The damage would consist in the excess of the value of his services to the employer over the contract price, and the injury to the business if a competent man could not be found to fill his place. If he received greater compensation after the termination of the contract, that would be one consideration, but he might not take new employment, or for the time being intentionally contract for less wages than he could get. Moreover, that would not be the only consideration. The loss of patronage which might follow the withdrawal of appellant from the business, the • need of the old establishment for his services, the peculiar value of his services arising therefrom, the harm that he could do by entering the employ of a rival concern, all these are elements which should be considered, either as a matter of course, or because they were within the contemplation of the parties, it being clear that damages within the contemplation of the parties as a result of the breach of the contract may be recovered for the breach. The further provision in the contract by which the appellant agreed to not even solicit employment with any other concern during the term of this contract shows the importance attached by the parties to his services.

Giving due regard to'the language of the contract, the intention of the parties as gathered from the .contract provisions, the subject of the contract and its surroundings, the difficulty of measuring the damages for its breach, and the sum stipulated, the contract in suit was properly considered by the trial court as one for liquidated damages, and not for a penalty. “The true question is whether, in view of the actual breach complained of, the sum nominated in the contract is to be fairly regarded as a penalty, or as a fair measure of the real damage in the estimation of the parties most familiar with the probable effects of its breach.” [May v. Crawford, 142 Mo. 390, 402 , 44 S. W. 250 .] Cer *561 tainly, the contract states as clearly as words can, that it was the intention of the parties that this should be. a contract for liquidated damages. There is no ambiguity about it; there was no fraud, no unfair or improper dealings. It is a clear case of business men of equal standing and ability and possessed of full knowledge of the situation dealing with each other on terms of equality, providing as best they could against the contingencies and uncertainties of the future. Under such circumstances, there is no reason why they should not be permitted to make their own contracts; and when they are so made, it is the province of a court of law to enforce them, not to alter them. [May v. Crawford, supra; May v. Crawford, 150 Mo. 504 , 51 S. W. 693 ; Sun v. Moore, 183 U. S. 642 ; Glynn v. Moran, 174 Mass. 233 ; Keeble v. Keeble, 85 Ala. 552 ; Walsh v. Douglas, 102 Wis. 174 ; Richardson v. Woehler, 26 Mich. 90 ; Clement v. Cash, 21 N. Y. 253 .]

II. It is contended that the contract sued upon involved several covenants, and that the covenant for liquidated damages, being applicable to all these covenants alike, such" a contract will not be enforced by the court. The breach here assigned for which action was brought was in respect to matters which were regarded by the parties as of sufficient magnitude to be enumerated and guarded against. The law undoubtedly is that before any liability to pay liquidated damages can attach to the party in default, he must have been guilty of a substantial breach of his agreement, a breach which has resulted in more than mere nominal damage to the other party. “This rule is so manifestly just that no discussion of it is necessary.” [Hathaway v. Lynn, 6 L. R. A. 1. c. 553.]

But the law does not declare that because a contract contains several covenants, some important and some trivial, and which attaches the same penalty to *562 a breach of any one of them, snch contract is therefore void. Snch fact is merely one of the facts to be considered in reaching the true intent of the parties. The stipulation for liquidated damages in the contract in question is attached to one provision only; that provision is that respondents might terminate such contract and that the damages should attach to such termination. The covenant breached by the appellant was not a trivial or insignificant one, but of the greatest importance, as it concerned the most vital provision of the whole contract. The appellant entered into the contract sued on in November, 1905. In May, 1906, he secretly entered into another contract with another concern by which he agreed that his services should commence under the latter contract the following September; and in the following September, he left the employ of the respondents to keep the latter contract, concealing the true reason and assigning as a pretext an alleged disturbance at his home on the night previous (with whom he does not say, nor does it appear that the plaintiffs had any connection therewith, nor even that there was any foundation for the pretense). This was not only a willful breach, but also one for which there is no palliation of excuse.

III. Appellant further assigns as error the refusal of the trial court to admit evidence to the effect that his position with the respondents was unbearable, contending that the contract implies an undertaking on the part of the respondents to so conduct themselves as go not make his position unbearable.

It is to be noted in this regard that there- was no exception taken to the exclusion of this evidence at the time it was offered. This is fatal.' It is also shown that appellant had contracted his services to another party before his position became unbearable as he claimed. Hence the evidence was immaterial as the trial court properly held. And, it might be suggested that the *563 evidence excluded did not tend to prove any issue raised by the appellant’s answer. This was an affirmative defense, which, if relied on, should have been specially pleaded. [Hammer v. Breidenbach, 31 Mo. 49 .]

IY. Appellant insists that the cause of action sued upon by respondents had been assigned to the corporation, Werner Bros. Mercantile Company, and consequently the respondents could not maintain the action.

The evidence does not justify this contention. This suit was commenced on the 10th day of October, 1906. The assets of the partnership of Werner Bros, remained the property of that firm until October 25, 1906, so that at the time this action was commenced, Werner Bros. Mercantile Company, the corporation, did not own the claim of Werner Bros., the partnership, against this appellant. Besides this, the evidence fails to show that this claim was ever assigned to the corporation. While it is true that there is evidence of an intention to transfer the assets of the partnership in order to pay up the capital stock of the corporation, there is no evidence that such intention to transfer was actually consummated and'consequently no evidence that the legal title to the present claim was ever vested in such corporation.

V. Appellant further claims that respondents ought not recover because the corporation in which respondents became stockholders never offered the appellant employment as a salesman.

The record shows that the defendant himself testified that when he left Werner Bros., he went at once to the Werner & Werner Clothing and Furnishing Goods Company under his contract of May 2, 1906 , and that he thereafter remained in the employ of that company. And it was further admitted by all parties that appellant left the employ of respondents on September 9th *564 or 10th, 1906, and never thereafter returned. The contract of the appellant being* breached while the appellant was in the employ of the plaintiff partnership, the cause of action accrued at that time and nothing more was needed to complete it. By terminating the contract contrary to its terms, the appellant became indebted to the respondents in the sum of ten dollars for each and every week of the unexpired time of the period for which the contract was to run, that is to say, ten dollars for each week between the date of such termination and the date of the expiration of the aforesaid one hundred and sixty weeks for which the contract was made. The terms of the contract did not contemplate that after he had violated its terms and been discharged for misconduct, that he might return and re-enter the employ of the partnership, or that the respondents, in such contingency, if he desired, were to furnish him with further employment.

Finding no error in the trial of the case, the judgment is affirmed.

All concur.