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99 Pa. 560

Mathews v. Sharp

Supreme Court of Pennsylvania

Decided February 27, 1882

Supreme Court of Pennsylvania · decided 1882-02-27

<p>1. In an action of covenant on an agreement under seal, an affidavit of defence making general allegations of undue influence in procuring the agreement is insufficient. The acts resulting in undue influence should be set out.</p> <p>2. The refusal of a vendor’s wife to join in the execution of a deed for the conveyance of real estate, will not .relieve the vendor from damages for breach of his contract to convey.</p> <p>3. In order to determine whether the sum named in a contract as a forfeiture for non-compliance, is intended as a penalty or as liquidated damages, it is necessary to look at the whole contract, its subject matter, the ease or difficulty in measuring the breach in damages, and the magnitude of the stipulated sum, not only as compared with the value of the subject of the contract, but in proportion to the probable consequence of the breach.</p> <p>4. A. agreed with B. by articles under seal to convey to him, twenty days from date, a farm of fourteen acres, at the rate of $450 per acre. B. thereupon paid to A. $500, which sum A. was to hold as a forfeit in case B. failed to comply with the contract. In case of failure on his part to so comply, A. covenanted to return said $500, “and also to forfeit the sum of $500 to the said B. in case of his negleot to convey the property as agreed.” Held, that the clause above cited was to be construed as providing for liquidated damages, and not for a penalty, and that, therefore, A. having failed to convey the property to B. he was bound not only to refund the $500 deposited with him, but to pay $500 additional.</p>

Good law ✅— No negative treatment on recordhow we know

Decided 1882-02-27

How this case has been cited

Cited by 9 later decisions — most recently March 1975

9 state decisions

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Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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Mr. Justice Trunkey

¶1delivered the opinion of the court, February 27th 1882.

¶2The alleged undue influence is not sustained by a statement of what Sharp said and did, nor is it averred that he even knew that Mathews was suffering the effects of intoxication. Nothing appears which could have imposed upon a nervous and excitable man. When a defence of this nature is set up, unless the facts upon which it is founded are given, the affidavit is insufficient. It is -as essential to show the acts resulting in undue influence as it would be, if fraud w$re alleged, to show in what it consisted.

¶3In the argument it was conceded that the refusal of a vendor’s wife to execute the deed would not relieve him from all damages for breach of his contract to convey. The question is, *564whether Mathews made a valid agreement for payment of liquidated damages in ease of his default.

¶4By the contract, within twenty days after its date, Mathews was to convey the land and Sharp was to pay the purchase money. Five hundred dollars were paid in hand, which Mathews was to hold as a forfeit in case Sharp failed to comply on his part. Mathews covenanted to return said five hundred dollars, “ and also to forfeit the sum of five hundred dollars to the said Joseph "W. Sharp, in case of his neglect to convey the property as agreed.” It is impossible to misunderstand just what the parties meant. They mutually agreed that if either should fail to beep his covenant, he should forfeit and pay to the other the sum of five hundred dollars. The very point was decided in Streeper v. Williams, 48 Pa. St. 450. There, the agreement was for sale of real estate and contained this stipulation : “ The parties to the above agreement doth severally agree to forfeit the sum of $500, say five hundred dollars, in case either party fail to comply with the terms of this agreement.” The word “ forfeit ” was held to mean “to pay” and although the jury found the actual damages were $50, one-tenth the stipulated sum, the court, upon the point reserved, “ whether the defendant was liable for the penalty or only for the actual damages,” rendered judgment for the penalty. In an elaborate opinion, it was ruled that to determine whether the sum named as a forfeiture for non-compliance is intended as a penalty, or as liquidated damages, it is necessary to look at the whole contract, its subject-matter, the ease or difficulty in measuring the breach in damages, and the magnitude of the stipulated sum, not only as compared with the value of the subject of the contract but in proportion to the probable consequences of the breach. This case differs in some minor details, but it would be difficult to find two cases with greater similarity in their main features. They are alike in that the stipulated sum to be paid in case of non-compliance is mutual, that with reference to the value of the land or amount of purchase money, said sum is too small to be minatory, and not so large, with reference to the probable consequences of breach, as to be unconscionable, and in the difficulty of proving actual damages. The court below followed the authority of Streeper v. Williams.

¶5Judgment affirmed.

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