Grand Union Laundry Co. v. Carney

153 P. 5, 88 Wash. 327, 1915 Wash. LEXIS 1120
CourtWashington Supreme Court
DecidedNovember 29, 1915
DocketNo. 12755
StatusPublished
Cited by6 cases

This text of 153 P. 5 (Grand Union Laundry Co. v. Carney) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grand Union Laundry Co. v. Carney, 153 P. 5, 88 Wash. 327, 1915 Wash. LEXIS 1120 (Wash. 1915).

Opinion

Bausman, J.

This is an action at law tried without jury. Appellant Carney, who previously had been a contract- or, entered into a special partnership with defendant Heady (who has not joined in this appeal) to operate a Turkish bath. Heady had for some years been a barber [328]*328next door, and Harry Okamura, in business as the Eagle Laundry, had long been doing Heady’s laundry work. Carney had no interest in the barber shop. His sole partnership with Heady was in the bath house business. After the latter had existed two or three months, Heady informed Carney that they could get from Okamura a rate of fifty-five cents per hundred on the bath house laundry if they would give him a three-year contract. Carney told Heady to do what was best in the matter. Okamura’s lawyer then drew up a contract which is the subject of this law suit, and this was afterwards signed by Carney, apparently without his" reading it. In this contract Carney and Heady, doing business as Heady’s Turkish Baths, were named as first parties, and Okamura as the second. The contract, naming a price of fifty-five cents per hundred on the bath house work, contained the following stipulation in which we have italicized features now pertinent:

“The said parties of the first part hereby guarantee to the said parties of the second part sufficient laundry work of the classes herein described to the sum of' eighteen hundred dollars per year for the term of this agreement, and in case of their failure so to do, the difference between the amount actually furnished each year and the said sum, of eighteen hundred dollars, shall be the measure of damages accruing to said party of the second part and' is hereby agreed to as liquidated damages.”

The contract had also a provision of twenty-five cents per hundred on Heady’s separate barber shop work, which price was later raised ten cents a hundred on oral and private agreement between Heady and Okamura. But upon the request of Heady that he do so and say nothing to Carney about it, the bills for this work were rendered separately to Heady. The plaintiff, successor in interest of Okamura, asked for judgment, not only for the liquidated damages which we shall hereafter refer to, but for $600 unpaid balance on this last mentioned work. This was denied plaintiff [329]*329by the lower court, though it found in its favor on the principal point. The plaintiff, in consequence, has prosecuted a cross-appeal in this action.

Before considering Carney’s appeal, we may at once eliminate the cross-appeal of the laundry company. That arising entirely upon questions of fact found adversely to plaintiff, the action of the lower court in reforming the contract so as to exclude Carney from liability on the barber shop laundry bill appears to us correct, and judgment is affirmed on the cross-appeal.

We resume now the appeal of Carney, against whom the lower court rendered judgment for $738.98. This constitutes the difference between the stipulated $1,800 and $1,061.02, which latter was the laundry price for the total work furnished during the final year. That Carney and Heady furnished the laundry the required work during each of the first two years is conceded, but it is also conceded that they failed’to do so in the third year beyond the sum mentioned. The degree of their failure is the judgment against them, for the lower court interpreted “liquidated damages” as liquidated damages and not as a penalty. The case comes to us, then, upon that question of law. Now, neither the plaintiff nor the defendant put in any evidence to show what the status of the laundry company was in respect to either profits or loss through performance or breach of the contract by Carney and Heady in the third or any of the years, so we are invited to constnie “liquidated damages” as a mere penalty on the face of the instrument itself, and the admitted sort of business involved.

It must ever be the policy of the courts to hold to their expressed bargain minds competent to contract. Every excursion from intelligible language of parties is as liable to defeat as to promote justice. Particularly true is this in contracts prescribing “liquidated damages.” Indulgence there must, in the nature of things, give a certain advantage [330]*330to one side, because the party claiming that it is a fixed amount is never, if it be construed as only a penalty, allowed to escape his limited sum and show damages beyond it. The bars, thrown down to the other party, are kept up as to him. To take the present instance, no matter what losses the laundry company or Okamura may have had beyond the liquidated sum, they are utterly lost. Call the term a mere penalty, and the laundry company is held to its maximum, while the other side are set free from their minimum. It is a doubtful undertaking to call that not fixed which business men, in the exchange of promises, agreed was fixed. Nevertheless, courts having found it unavoidable at times to relieve parties from their own strict language pronouncing liquidated sums, it becomes necessary to discuss this provision.

Some contracts there are for liquidated damages that upon their face may be pronounced as imposing only a penalty. Certainly, without further evidence, some clauses of that sort appear so little in accord with the almost manifest intentions of the parties that a court may construe them as penalties, until the party claiming damage has offered evidence from the circumstances or discussions of the contracting parties that they meant just what they said when they said it. However that may be, we are satisfied that this contract is not one of these. On the contrary, we are satisfied that this contract on its face is a proper one for liquidated damages.

The burden of proof accordingly was upon the defendants below. Upon them devolved a showing, if any such could be made, that would furnish the court the situation of the parties as to profit or damage, so that the court, putting itself in the position of the contracting parties at the time of the bargain, could adjudge whether it was probable that they meant more by this term than a penalty clause.

One argument commonly invoked to convert liquidated damages into penalty is that in the given case the damages were quickly ascertainable. Supposing that rule, the reason for [331]*331it does not exist in this record. Who can say that, when the laundryman made his bargain and added this work to his business, he did not have to make additional arrangements to carry out this added work? Presumably he would have to increase his force of men to fetch the linen, to count it, and to clean it. For aught that appears, he may have had to enlarge his shop and pay more rent, or he may have had to give up other work more profitable. Who shall say but that, on the falling off of work during the last year, the laundryman was in a position of uncertainty during a considerable period as to how rapidly he should diminish his force of workmen or his supplies? In fine, we do not agree with counsel for appellant in saying that his damages through the breach of this contract by Heady and Carney were a mere matter of bookkeeping to compute.

Each case in liquidated damages must be determined upon its own facts. A case not greatly dissimilar is Yatsuyanagi v. Shimamura, 59 Wash. 24, 109 Pac. 282, which involved a contract of equal partnership between four workmen tailors who had imposed upon themselves a forfeiture of $1,000 should any one withdraw from the partnership.

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Cite This Page — Counsel Stack

Bluebook (online)
153 P. 5, 88 Wash. 327, 1915 Wash. LEXIS 1120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grand-union-laundry-co-v-carney-wash-1915.