COOK, J.
This was an action brought by the appellant-plaintiff against the appellee by a complaint in four paragraphs.
Paragraph I prayed judgment for unpaid salaries and expenses plus other damages alleged to have been suffered as a result of appellee’s breach of a written contract executed by the parties. Paragraph II and Paragraph III were actions on promissory notes given by appellee to appellant pursuant to the terms of the written contract, and Paragraph IV was an action to enforce appellant’s rights as a shareholder in appellee corporation.
Appellee filed an answer in six paragraphs, the first four of which were admission and denial. Paragraph 5 was an affirmative answer, alleging a violation of the .contract by appellant and a forfeiture of the promissory notes as liquidated damages. Paragraph 6 was a cross-complaint alleging [609]*609a breach of said contract by appellant and praying damages in the amount of $50,000.
Appellee correctly states the issues as, “an action in equity between the Appellant and the Appellee to determine their rights under a written agreement.”
The cause was submitted to the court for trial without a jury and the court’s judgment was as follows:
“The Court having heretofore taken this matter under advisement and having heard the evidence and being duly advised in the premises now finds for the plaintiff upon his amended first paragraph of complaint and that the plaintiff is entitled to recover from the defendant upon said amended first paragraph of complaint the sum of $1,690.00
“The Court further finds against the plaintiff on his additional second, third and fourth paragraphs of complaint and that he take nothing thereby.
“The Court further finds for the defendant upon its fifth affirmative paragraph of answer and against the defendant upon its sixth affirmative paragraph of answer.
“IT IS THEREFORE CONSIDERED, ADJUDGED, DECREED AND ORDERED that the Plaintiff have and recover judgment against the defendant in the sum of $1,690.00 and that the defendant shall pay the costs made and taxed herein in the amount of $-.”
The appellant then filed his timely motion for new trial, which included the following specifications:
“1. Error in the assessment of the amount of recovery, in this, that the amount is too small.
“2. The decision of the Court is not sustained by sufficient evidence.
“3. The decision of the Court is contrary to law.
“4. The Plaintiff was awarded substantially less recovery than the facts in evidence show his actual pecuniary loss to be.”
The motion for a new trial was overruled by the trial court, and this appeal follows.
The sole assignment of error is the overruling of appellant’s motion for a new trial. Although all of the specifications in-[610]*610eluded in the motion for new trial are urged on this appeal, the appellant has consolidated all of the causes into one argument, and we will treat them in the same manner.
Appellant maintains that, as a matter of law, he was entitled to judgment upon his second and third paragraphs of complaint. These were actions upon two separate promissory-notes executed by appellee to appellant.
The two notes were executed by appellee and given to appellant pursuant to the written contract of the parties. In order to gain a better understanding of the issues involved, we set out the applicable portions of this contract.
“This agreement is to be between Herbert A. Clemens, Seller and James J. Melfi buyer. Mr. Melfi will represent a group of (3) three buyers including himself.
This Group hereinafter will be refered (sic) to as buyers. The buyers are interested in buying the Capital Stock of the Griser (sic) Industries owned by Herbert A. Clem-ans, the seller under the following terms:
1. The buyers agree to buy 80 shares (40%) of the Griser (sic) Industries Stock for the sum of $10,000.00 Cash.
2. The buyers agree to loan Griser (sic) Industries $10,000 as working capital as follows — $4000 down covered by a promissory note, and/or $6000 to be paid within 60 days from date of contract, to be covered by a promissary (sic) note.
3. Mr. Melfi is to be employed as Vice President and General Manager for the Griscer Industries at a Salary of $10,000 per year payable as follows at $833.33 per month on the 15th and the 30th of each month, payable semimonthly at $400.00 with the balance of $16.67 or $33.33 per month to be credited to a back salary account.
5. Mr. Melfi is to diligent (sic) persue (sic) and obtain an additional profitable business for the Griser (sic) Industries amounting to no less than $2000 per month with in approximately eight weeks from the starting date of his full time of active employment.
6. Whenever all old trade creditors are paid in full on or a current 30 day basis and all notes or (sic) satisfied [611]*611without the signature and securities of Herbert A. Clemens then Mr. Clemens will sell the remander (sic) 120 shares of authorized capital common stock.
11. In the event the foregoing conditions are not met by the buyers this contract shall be null and void and the money deposited with the seller shall be retained as liquidated damages.”
In answer to the second and third paragraphs of appellant’s complaint appellee filed its affirmative defense alleging a breach of the contract by appellant and setting out that portion of the contract reading:
“In the event the foregoing conditions are not met by the buyers, this contract shall be void and the money deposited with the seller shall be retained as liquidated damages.”
Further, appellee alleged that the promissory notes sued upon represented the money deposited.
Appellant contends that the above quoted provision provides for a forfeiture or penalty, and that accordingly the provision should be declared void as against public policy.
The finding of the trial court that appellant did in fact breach the contract is a finding of fact, and this court will accept the trial Court’s findings if there is any substantial evidence that the judge could have relied upon. In this case there is an abundance of evidence to this effect, none of which we deem it necessary to discuss in this opinion.
Therefore, we need only determine if the sum provided was in the nature of liquidated damages or a forfeiture, and the consequences thereof.
In determining whether a stipulated sum payable on the breach of a contract is liquidated damages or a penalty, the facts, the intention of the parties and the reasonableness of the stipulation under the circumstances of the case are all to be considered. Merica v. Burget (1905), [612]*61236 Ind. App. 453, 75 N. E. 1083; Burley Tobacco Society v. Gillaspy (1912), 51 Ind. App. 583, 100 N. E. 89.
Free access — add to your briefcase to read the full text and ask questions with AI
COOK, J.
This was an action brought by the appellant-plaintiff against the appellee by a complaint in four paragraphs.
Paragraph I prayed judgment for unpaid salaries and expenses plus other damages alleged to have been suffered as a result of appellee’s breach of a written contract executed by the parties. Paragraph II and Paragraph III were actions on promissory notes given by appellee to appellant pursuant to the terms of the written contract, and Paragraph IV was an action to enforce appellant’s rights as a shareholder in appellee corporation.
Appellee filed an answer in six paragraphs, the first four of which were admission and denial. Paragraph 5 was an affirmative answer, alleging a violation of the .contract by appellant and a forfeiture of the promissory notes as liquidated damages. Paragraph 6 was a cross-complaint alleging [609]*609a breach of said contract by appellant and praying damages in the amount of $50,000.
Appellee correctly states the issues as, “an action in equity between the Appellant and the Appellee to determine their rights under a written agreement.”
The cause was submitted to the court for trial without a jury and the court’s judgment was as follows:
“The Court having heretofore taken this matter under advisement and having heard the evidence and being duly advised in the premises now finds for the plaintiff upon his amended first paragraph of complaint and that the plaintiff is entitled to recover from the defendant upon said amended first paragraph of complaint the sum of $1,690.00
“The Court further finds against the plaintiff on his additional second, third and fourth paragraphs of complaint and that he take nothing thereby.
“The Court further finds for the defendant upon its fifth affirmative paragraph of answer and against the defendant upon its sixth affirmative paragraph of answer.
“IT IS THEREFORE CONSIDERED, ADJUDGED, DECREED AND ORDERED that the Plaintiff have and recover judgment against the defendant in the sum of $1,690.00 and that the defendant shall pay the costs made and taxed herein in the amount of $-.”
The appellant then filed his timely motion for new trial, which included the following specifications:
“1. Error in the assessment of the amount of recovery, in this, that the amount is too small.
“2. The decision of the Court is not sustained by sufficient evidence.
“3. The decision of the Court is contrary to law.
“4. The Plaintiff was awarded substantially less recovery than the facts in evidence show his actual pecuniary loss to be.”
The motion for a new trial was overruled by the trial court, and this appeal follows.
The sole assignment of error is the overruling of appellant’s motion for a new trial. Although all of the specifications in-[610]*610eluded in the motion for new trial are urged on this appeal, the appellant has consolidated all of the causes into one argument, and we will treat them in the same manner.
Appellant maintains that, as a matter of law, he was entitled to judgment upon his second and third paragraphs of complaint. These were actions upon two separate promissory-notes executed by appellee to appellant.
The two notes were executed by appellee and given to appellant pursuant to the written contract of the parties. In order to gain a better understanding of the issues involved, we set out the applicable portions of this contract.
“This agreement is to be between Herbert A. Clemens, Seller and James J. Melfi buyer. Mr. Melfi will represent a group of (3) three buyers including himself.
This Group hereinafter will be refered (sic) to as buyers. The buyers are interested in buying the Capital Stock of the Griser (sic) Industries owned by Herbert A. Clem-ans, the seller under the following terms:
1. The buyers agree to buy 80 shares (40%) of the Griser (sic) Industries Stock for the sum of $10,000.00 Cash.
2. The buyers agree to loan Griser (sic) Industries $10,000 as working capital as follows — $4000 down covered by a promissory note, and/or $6000 to be paid within 60 days from date of contract, to be covered by a promissary (sic) note.
3. Mr. Melfi is to be employed as Vice President and General Manager for the Griscer Industries at a Salary of $10,000 per year payable as follows at $833.33 per month on the 15th and the 30th of each month, payable semimonthly at $400.00 with the balance of $16.67 or $33.33 per month to be credited to a back salary account.
5. Mr. Melfi is to diligent (sic) persue (sic) and obtain an additional profitable business for the Griser (sic) Industries amounting to no less than $2000 per month with in approximately eight weeks from the starting date of his full time of active employment.
6. Whenever all old trade creditors are paid in full on or a current 30 day basis and all notes or (sic) satisfied [611]*611without the signature and securities of Herbert A. Clemens then Mr. Clemens will sell the remander (sic) 120 shares of authorized capital common stock.
11. In the event the foregoing conditions are not met by the buyers this contract shall be null and void and the money deposited with the seller shall be retained as liquidated damages.”
In answer to the second and third paragraphs of appellant’s complaint appellee filed its affirmative defense alleging a breach of the contract by appellant and setting out that portion of the contract reading:
“In the event the foregoing conditions are not met by the buyers, this contract shall be void and the money deposited with the seller shall be retained as liquidated damages.”
Further, appellee alleged that the promissory notes sued upon represented the money deposited.
Appellant contends that the above quoted provision provides for a forfeiture or penalty, and that accordingly the provision should be declared void as against public policy.
The finding of the trial court that appellant did in fact breach the contract is a finding of fact, and this court will accept the trial Court’s findings if there is any substantial evidence that the judge could have relied upon. In this case there is an abundance of evidence to this effect, none of which we deem it necessary to discuss in this opinion.
Therefore, we need only determine if the sum provided was in the nature of liquidated damages or a forfeiture, and the consequences thereof.
In determining whether a stipulated sum payable on the breach of a contract is liquidated damages or a penalty, the facts, the intention of the parties and the reasonableness of the stipulation under the circumstances of the case are all to be considered. Merica v. Burget (1905), [612]*61236 Ind. App. 453, 75 N. E. 1083; Burley Tobacco Society v. Gillaspy (1912), 51 Ind. App. 583, 100 N. E. 89.
We believe it is well settled that “where the sum named is declared to be fixed as liquidated damages, is not greatly disproportionate to the loss that may result from a breach, and the damages are not measurable by an exact pecuniary standard, the sum designated will be deemed to be stipulated damages.” Jaqua v. Headington, et al. (1888), 114 Ind. 309, 310, 16 N. E. 527. See also: Beiser v. Kerr (1939), 107 Ind. App. 1, 20 N. E. 2d 666.
The actual damages suffered by the appellee as a result of appellant’s breach of the contract would be extremely hard to determine with any degree of preciseness. Yet, it cannot be said that the sum of $10,000 as provided in the contract, is unreasonable. In fact, there is direct evidence in the record to indicate that over $9,000 loss suffered by appellee was directly attributable to the conduct of appellant.
Further, the designation by the parties that the sum was to be considered liquidated damages is evidence properly considered in determining the intent of the parties. Beiser v. Kerr, supra.
We must necessarily conclude that the damages specified in the contract were liquidated damages and not a penalty, and should, therefore, be given the meaning and effect contemplated by the parties.
Under the terms of the contract appellant was to “obtain additional profitable business for Griscer Industries amounting to no less than $2000 a month within approximately 8 weeks from the starting date of his full time active employment” and $10,000 working capital was to be loaned by appellant to appellee “within 60 days from date of contract, to be covered by a promissory note.”
Appellant deposited the money required under the contract 90 and 122 days after the contract was executed, and appellee [613]*613returned promissory notes to Mm on those dates. Upon these facts, appellant contends that by executing the notes after the eight weeks within which appellant was charged with bringing in the additional business, appellee waived any prior conditions, and the previous transactions of the parties were merged into the notes sued upon.
We find this position untenable. The fact that appellant was late in depositing the money should not excuse him from performing the duties imposed upon him in the contract. To do so would be to allow him to benefit by his own breach of the contract. There is no evidence that appellee intended to waive the conditions of the contract, and appellant is estopped from taking advantage of Ms own wrong to accomplish this purpose.
In support of his position, appellant relies on Swank v. Nichols’ Administrator (1865), 24 Ind. 199. Swank is distinguishable from this case in that in Swank the terms of the original written contract were changed by subsequent oral agreement of the parties, while in the present case, we can find no evidence that appellee assented, either specifically or impliedly, to what the appellant terms a waiver of the condition precedent.
Finally, appellant maintains that the finding and judgment of the trial court is inconsistent.
The appellant was successful on his first paragraph of complaint, only to the extent of expenses legitimately incurred while an employee of appellee for which he was not reimbursed, plus salary accrued and not paid before the date of his discharge. Further, appellee was denied recovery on its cross-complaint of any sum in excess of the amount specified in the contract as liquidated damages. It is difficult for us to see in what manner this renders the judgment inconsistent. It is our opinion that the judgment is consistent within itself, and is sustained by sufficient evidence in the record.
[614]*614Finding no error in the proceedings below, the judgment is affirmed.
Judgment Affirmed.
Pfaff, C. J. and Smith, J. concur.
Bierly, J., dissents with opinion.