10.4.4.1 Kemble v. Farren | 6 Bing 141 | July 06, 1829 | Kessler, Gilmore & Kronman

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10.4.4.1 Kemble v. Farren

by Kessler, Gilmore & Kronman
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6 Bing. 141

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KEMBLE
v.
FARREN.

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Court of Common Pleas.
July 6, 1829.

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ASSUMPSIT by the manager of Covent Garden Liquidated damages for the violation of an engagement to perform served on at Covent Garden for four seasons.

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By an agreement between the Plaintiff and Defendant, the Defendant had engaged himself to act as a principal comedian at Covent Garden Theatre for four seasons, commencing with October 1828, and in all things to conform to the regulations of the theatre. The Plaintiff agreed to pay the Defendant £3. 6s. 8d. every night on which the theatre should be open for theatrical performances during the ensuing four seasons; and that the Defendant should be allowed one benefit  night during each season, on certain terms therein  specified. And the agreement contained a clause, that if either of the parties should neglect or refuse to fulfil the said agreement, or any part thereof, or any stipulation therein contained, such party should pay to the other the sum of £1000, to which sum it was thereby agreed that the damages sustained by any such omission, neglect, or refusal should amount; and which sum was thereby declared by the said parties to be liquidated and ascertained damages, and not a penalty or penal sum, or in the nature thereof.

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The breach alleged was, that the Defendant refused to act during the second season; and at the trial the jury gave a verdict for the Plaintiff for £750 damages, subject to a motion for increasing them to £1000, if the Court should be of opinion that, upon this agreement, [142] the Plaintiff was entitled to the whole sum claimed as liquidated damages.

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Wilde Serjt. having accordingly obtained a rule nisi to that effect,

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Spankie Serjt. shewed cause. Upon this agreement the Plaintiff is not entitled to recover £1000 for liquidated damages, but only such compensation as a jury shall think fit. The rule is, that where an agreement contains several stipulations, some of them touching matters of great importance to the parties, and others, matters of little or no importance, a covenant for liquidated damages, generally, upon any violation of the agreement, shall not be carried into effect, however strong the language may be. But if the agreement consist only of a single stipulation, or the covenant for liquidated damages be confined to any specified breach or breaches where the agreement contains more than one stipulation, such covenant is valid, and may be enforced. And this is no violation of the rule, that written instruments shall be construed according to the intention of the parties; for the parties must be taken to have overlooked the effect of their words, when by a general covenant for liquidated damages, they propose such an absurdity as the payment of a sum disproportionately heavy for an omission to observe the most unimportant part of an agreement.

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For instance, it might probably have been intended between the parties in this case, that the Defendant should forfeit £1000 if he quitted Cement Garden Theatre, and joined a rival establishment; but it never could have been in the contemplation of the parties, that he should forfeit £1000 if he neglected to attend a single rehearsal, or that the Plaintiff should forfeit £1000  if he omitted to pay the Defendant the salary for one night, [143] £3. 6s. 8d. But as the stipulation for liquidated damages is general, and applies in terms equally to the minutest as well as the most important violations of the agreement, the Court has no means of determining to which breach the parties meant it should be actually applied, and must, therefore, leave it to a jury, to ascertain the probable amount of damage. The leading case on the subject is Astley v. Weldon[1], where the manager of a theatre sued an actress on the breach of an agreement to perform. That agreement also contained a general stipulation for liquidated damages in terms as strong as the present, and Heath J. said, "Where articles contain covenants for the performance of several things, and then one large sum is stated at the end to be paid upon breach of performance, that must be considered as a penalty. But where it is agreed that if a party do such a particular thing, such a sum shall be paid by him, there the sum stated may be treated as liquidated damages." Chambre J. said, "There is one case in which the sum agreed for must always be considered as a penalty, and that is, where the payment of a smaller sum is secured by a larger. In this case it is impossible to garble the covenants, and to hold that in one case the plaintiff shall recover only for the damages sustained, and in another that he shall recover the penalty. The concluding clause applies equally to all the covenants. "And per Eldon C.J." There are many instances of the defendant's misconduct which are made the subject of specific fines by the laws of the theatre. Are we, then, to hold that, if the defendant happens to offend in a case which has been so provided for by those laws, she shall pay only 2s. 6d. or 5s.; but if she offend in a case which has not been so provided for, she shall pay £200?"

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[144] That case has been recognized in Street v. Rigby.[2] In Lowe v. Peers[3] the contract had but a single object, that the defendant should marry the plaintiff, who, therefore, recovered the liquidated damages provided by the contract. And in Reiley v. Jones[4] the whole object of the agreement was, that the defendant should transfer to the plaintiff his interest in a public-house. Park J. put the judgment of the Court upon this footing. In Barton v. Glover[5], Farrant v. Olmius[6], and Crisdee v. Bolton[7], the agreements for liquidated damages were all confined to some specific breach. The Court has no power to select one out of the various stipulations contained in this agreement, and apply the liquidated damages to that. The whole agreement must be taken together. In Davies v. Penion[8], Bayley J. said, "We must look at all parts of the instrument, in order to ascertain whether it was the intention of the parties that the sum of £500 should be a penalty or liquidated damages. Now, where the sum which is to be the security for the performance of an agreement to do several acts will, in cases of breaches of the agreement, be in some instances too large, and in others too small a compensation for the injury thereby occasioned, that sum is to be considered a penalty." Holroyd. J. " We must look to the nature of the agreement, and of the sum to be paid, in order to ascertain whether the sum which was to secure the performance of the agreement was intended to be a penalty or liquidated damages." Littledale J. “Since the statute 8 & 9 W. 3. parties in framing agreements have frequently changed the word penalty for liquidated damages; but the mere [145] alteration of the term cannot alter the nature of the thing; and if the Court see, upon the whole agreement, that the parties intended the sum to be a penalty, they ought not to allow one party to deprive the other of the benefit to be derived from the statute." And in Randal v. Everest[9], where an agreement not under seal, for the lease of a public house, contained a clause that the party neglecting to comply with his part of the agreement should pay the sum of £100 mutually agreed upon to be the damages ascertained and fixed on breach thereof, it was held, that the party making a default was not liable beyond the damages actually sustained. Lord Tenterden laid it down, that "whether the term penalty or liquidated damages be used in the agreement, a party who claims compensation for default shall only be allowed to recover what damage he has really sustained." The exaction of liquidated damages would be the more severe in the present instance, as the Plaintiff has had the benefit of the Defendant's services for a considerable proportion of the time agreed on; and it is contrary to every principle of contracts, that a party should have performance pro tanto, and a penalty too. Pothier[10] says, "I cannot receive the whole of the penalty, and enjoy in part the benefit of my right of servitude : I cannot, at the same time, have the one and the other."

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Wilde Serjt. contra. In all cases the rule is, to collect the intention of the parties from the language of the agreement, and not to decide what is reasonable or unreasonable, for on that no two persons would be found to agree. On the contrary, if a contract be never so unreasonable, the Court will sustain it, provided it appears clearly to have been the intention of the parties [146] to carry it into effect. In Astley v. Weldon, the Court treated the question of liquidated damages purely as a question of intention ; and Lord Eldon said, " If a party choose to stipulate for £5 or £50, additional rent, upon every acre of furze broken up, or for any given sum of money upon every load of wood cut and stubbed up, I see nothing irrational in such a contract; and it appears to me extremely difficult to apply with propriety the word excessive to the terms in which parties choose to contract with each other." Although the sum fixed in the present instance may appear somewhat exorbitant, when applied to slight violations of the contract, the parties probably fixed it on the whole agreement, on account of the difficulty of ascertaining the damages in matters regarding theatrical performance. It would be difficult, if not impossible, to prove the precise sum the Plaintiff would lose by the Defendant's neglecting to attend rehearsals, and so, performing imperfectly the parts allotted to him, or by his transferring his services to a rival establishment. In Reiley v. Jones, the Court decided on the ground that the parties had one paramount object in the agreement, and that the defendant had violated the agreement in respect of that object. The paramount object between these parties was, that the Plaintiff should retain the Defendant in his theatre, and that the Defendant should not transfer his services to a rival establishment; the Defendant has violated the agreement in that respect. The language in which the liquidated damages are agreed to be paid is the strongest that can be employed; it manifests the clearest intention that the parties shall abide by it; and if it be not sufficient to secure the payment, there is no language and no contract by which they can be secured. Davies v. Penton turned on the circumstance, that the defendant had waived his right to insist on liquidated damages.

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Cur. adv. vult.

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[147] TINDAL C. J. This is a rule which calls upon the Defendant to shew cause why the verdict, which has been entered for the Plaintiff for £750, should not be increased to £1000.

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The action was brought upon an agreement made between the Plaintiff and the Defendant, whereby the Defendant agreed to act as a principal comedian at the Theatre Royal, Covent Garden, during the four then next seasons, commencing October 1828, and also to conform in all things to the usual regulations of the said Theatre Royal, Covent Garden; and the Plaintiff agreed to pay the Defendant £3. 6s. 8d. every night on which the theatre should be open for theatrical performances, during the next four seasons, and that the Defendant should be allowed one benefit night during each season, on certain terms therein specified. And the agreement contained a clause, that if either of the parties should neglect or refuse to fulfil the said agreement, or any part thereof, or any stipulation therein contained, such party should pay to the other the sum of £1000, to which sum it was thereby agreed that the damages sustained by any such omission, neglect, or refusal, should amount; and which sum was thereby declared by the said parties to be liquidated and ascertained damages, and not a penalty or penal sum, or in the nature thereof.

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The breach alleged in the declaration was, that the Defendant refused to act during the second season, for which breach, the jury, upon the trial, assessed the damages at £750; which damages the Plaintiff contends ought by the terms of the agreement to have been assessed at £1000.

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It is, undoubtedly, difficult to suppose any words more precise or explicit than those used in the agreement; the same declaring not only affirmatively that the sum of £1000 should be taken as liquidated damages, but [148] negatively also that it should not be considered as a penalty, or in the nature thereof. And if the clause had been limited to breaches which were of an uncertain nature and amount, we should have thought it would have had the effect of ascertaining the damages upon any such breach at £1000. For we see nothing illegal or unreasonable in the parties, by their mutual agreement, settling the amount of damages, uncertain in their nature, at any sum upon which they may agree. In many cases, such an agreement fixes that which is almost impossible to be accurately ascertained; and in all cases, it saves the expense and difficulty of bringing witnesses to that point. But in the present case, the clause is not so confined; it extends to the breach of any stipulation by either party. If, therefore, on the one hand, the Plaintiff had neglected to make a single payment of £3. 6s. 8d. per day, or on the other hand, the Defendant had refused to conform to any usual regulation of the theatre, however minute or unimportant, it must have been contended that the clause in question, in either case, would have given the stipulated damages of £1000. But that a very large sum should become immediately payable, in consequence of the nonpayment of a very small sum, and that the former should not be considered as a penalty, appears to be a contradiction in terms; the case being precisely that in which courts of equity have always relieved, and against which courts of law have, in modern times, endeavoured to relieve, by directing juries to assess the real damages sustained by the breach of the agreement. It has been argued at the bar, that the liquidated damages apply to those breaches of the agreement only which are in their nature uncertain, leaving those which are certain to a distinct remedy, by the verdict of a jury. But we can only say, if such is the intention of the parties, they have not expressed it; but have made the clause relate, by express [149] and positive terms, to all breaches of every kind. We cannot, therefore, distinguish this case, in principle, from that of Ashley v. Weldon, in which it was stipulated, that either of the parties neglecting to perform the agreement should pay to the other of them the full sum of £200  to be recovered in his Majesty's courts at Westminster. Here there was a distinct agreement, that the sum stipulated should be liquidated and ascertained damages: there were clauses in the agreement, some sounding in uncertain damages, others relating to certain pecuniary payments; the action was brought for the breach of a clause of an uncertain nature; and yet it was held by the Court, that for this very reason it would be absurd to construe the sum inserted in the agreement as liquidated damages, and it was held to be a penal sum only. As this case appears to us to be decided on a clear and intelligible principle, and to apply to that under consideration, we think it right to adhere to it, and this makes it unnecessary to consider the subsequent cases, which do not in any way break in upon it. The consequence is, we think the present verdict should stand, and the rule for increasing the damages be discharged.

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Rule discharged.

Notes:

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[1] 2 B & P. 346.

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[2] 6 Ves. 815. 

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[3] Burr. 2225.

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[4] 1 Bingh. 302.

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[5] Holt, N. P. C. 43.

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[6] 3 B. & A. 692.

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[7] 3 Carr. & P. 240.

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[8] 6 R. & C. 126.

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[9] 1 M.& M. 41.

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[10] Traites des Obligations, part 2. cap. 5. art. 3. pl. 351.

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Annotated Case Information

June 02, 2014

"Kemble v. Farren"

10.4.4.1 Kemble v. Farren

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