Donaldson v. Josephson

228 P.2d 941, 71 Idaho 207, 1951 Ida. LEXIS 266
CourtIdaho Supreme Court
DecidedMarch 13, 1951
Docket7564
StatusPublished
Cited by9 cases

This text of 228 P.2d 941 (Donaldson v. Josephson) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donaldson v. Josephson, 228 P.2d 941, 71 Idaho 207, 1951 Ida. LEXIS 266 (Idaho 1951).

Opinion

*209 PORTER, Justice.

. Under date of December 13, 1941, appellant leased to respondents by written lease, 80 acres of land in Canyon County. The lease was for the term beginning December 13, 1941 and ending October 31, 1942. Respondents went into possession of the premises and held possession thereof until March 13, 1943. The lease provided for the payment of crop rental; and the harvesting of the crops was not completed until in January, 1943. No final settlement was made between the parties on their several claims against each other arising out of the terms of the lease.

On November 22, 1946, appellant brought this action, praying for an accounting between the parties and particularly for the division of certain beet checks made payable to both parties, some of which were held by appellant and some of which were held by respondents. Appellant listed his several claims against respondents in an exhibit attached to the complaint. By their answer, respondents denied generally the claims of appellant; set up certain claims of their own by way of counterclaim; and prayed for an accounting and division of the beet checks. Upon the issues thus formed, a trial was had to the court, sitting without a jury. Thereafter, the court entered judgment in favor of appellant on the general account in the sum of $450.29 and for one-half the beet checks in the sum of $817.50; and provided that respondents should receive one-half the beet checks less the $450.29 and costs of suit. From such judgment, appellant has duly appealed to this court.

On this appeal, appellant has limited his claims of error to the actions of the trial court in refusing to allow or only allowing in part, three specific items for which appellant claimed credit. The remainder of the judgment is not challenged.

Appellant first contends that the trial court erred in refusing to allow appellant credit in full for $5 per day for the 133 days respondents held over after the expiration of the lease. The lease provides that the tenant will yield up possession of the property without further demand or notice at the expiration of the lease and that “the second party agrees, failing thus to deliver up said premises, to pay to the first party Five Dollars ($5.00) per day for all the time he may continue in possession of said premises after the expiration of this lease.” On this item the court allowed in its findings of fact, $2.50 per day for 107 days in the sum of $267.50. On November 16, 1942, appellant wrote to respondents demanding possession of the premises by November 25, 1942, with the right reserved to respondents to return to harvest the crops. It is apparently from *210 this latter date that the court computed the number of days.

Appellant urges that the provision in the lease for the payment of $5 per day for holding over, was an agreement to pay liquidated damages and that such item should have been allowed in full. • Respondents contend that the provisions of the lease are ambiguous, that the $5.00 per day provision should be construed as a penalty and that the court was justified in refusing to enforce same. In 15 Am.Jur. 672, par. 241, it is said: “It has been said that the distinction between a penalty and liquidated damages is’ that the one is a surety for, and the other is to be paid in the event of nonperformance of, the act to be done. The parties are bound by a stipulation for liquidated damages. The amount is fixed and is not subject to change. But if the stipulation is regarded as a penalty, the defaulting party may be relieved of it. The courts will inquire into it to see whether it is unconscionable or excessive.”

In construing provisions of this character, the general rule is that the intention of the parties as to whether the agreement is for a penalty or for liquidated damages must prevail. Weiser River Fruit Ass’n v. Feltham, 31 Idaho 633, 175 P. 583; 15 Am.Jur. 674, par. 243. The intention of the parties is to be determined by the court by a construction of the contract as. of the time of its making. The language in the lease in question is not ambiguous although the lease does not in terms designate the $5 per day as either liquidated damages or as a penalty. While the reasonable value of the occupation of the farm lands and buildings during the winter months is problematical, the $5 per day provision for holding over does not appear inherently excessive or out of all proportion to such reasonable value. There is no proof in the record whatever as to the reasonable value of the use of the premises during the time in question except the value placed thereon by the parties themselves at the time of entering into the lease. We conclude that the provision for the payment of $5.00 per day for holding over after the expiration of the lease was a provision for liquidated damages and enforceable as such. Poppers v. Meager, 148 Ill. 192, 35 N.E. 805; Detroit Free Press v. Miller, 223 Mich. 333, 193 N.W. 779; Lewis v. Welch Wholesale Flour & Feed Co., 96 W.Va. 694, 123 S.E. 801, 39 A.L.R. 386.

In this case the evidence does not show and the court did not find that respondents were induced by appellant to hold over after the expiration of the lease as was the situation in the cited case of Kenwood Hotel Co. v. Hiland, 153 Ill.App. 108, Note, 71 A.L.R. 1448, wherein the court refused to allow a claim for liquidated damages beyond the reasonable rental value of the premises. There is no evidence appearing in the record upon which the trial court could base his allowance of ■ $2.50 per day as the reasonable value for the occupation of the premises. It was *211 error for the trial court to refuse to allow as liquidated damages the full sum of $5 per day.

By his complaint, appellant prayed for interest from January 31, 1943, on the balance he claimed to be due him. The court did not allow interest prior to judgment and appellant contends that this was error. Section 27-1904, I.C., provides as follows:

“When there is no express contract in writing fixing a different rate of interest, interest is allowed at the rate of six cents on the hundred by the year on:
“1. Money due by express contract.
“2. Money after the same becomes due.
“3. Money lent.
“4. Money due on the judgment of any competent court or tribunal.
“5. Money received to the use of another and retained beyond a reasonable time without the owner’s consent, express • or implied.
“6: Money due on the settlement of mutual accounts from the date the balance is ascertained.
“7. Money due upon open accounts after three months from the date of the last item.”

While the appellant now argues that he was entitled to the allowance of interest from January 31, 1943, by virtue of paragraph 2 of Section 27-1904, I.C., it seems apparent that his complaint was drawn on the theory that he was entitled to interest under the provisions of paragraph 7 of said section. Appellant cites Hendrix v. Gold Ridge Mines, Inc., 56 Idaho 326, 54 P.2d 254, in support of his position.

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Bluebook (online)
228 P.2d 941, 71 Idaho 207, 1951 Ida. LEXIS 266, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donaldson-v-josephson-idaho-1951.