Knox Rock Blasting Co. v. Grafton Stone Co.
Knox Rock Blasting Co. v. Grafton Stone Co.
Opinion of the Court
The case below was brought by the Knox Rock Blasting Company against the Grafton Stone Company on a contract by the terms of which the latter company was to pay to the former certain license fees for the use of certain tools and methods in blasting rock, covered by certain letters-patent owned by the plaintiff. The contract bore date May 22, 1888, and was to continue in force for the term of one year from that date, the Stone Company paying to the Blasting Company the sum of $250 for the use of the tools and method. It also provided that the Stone Company should have the privilege of an extension of the term of the license for the period of five years from May 21, 1889, at the same rate per annum. At the termination of the first year of the contract the defendant availed itself of
“It is further mutually understood and agreed that, in case the party of the second part shall, at any time after the termination of this license, as set forth in any previous paragraph hereof, use or apply any of the tools or methods protected by the letters-patent referred to above, without having first obtained a new license from the party of the first part, then and in that case the license fees shall be double the sum specified in this license for at least the term of one year, and thereafter from year to year at the increased rate so long as any use shall be made of said tools or methods, not exceeding, however, the life of the patents ”
The principal issue of fact made in the case by the answer of the defendant was whether the tools and method covered by the license were used in its quarries after May 21, 1894. On this the jury rendered a special verdict in answer to certain questions propounded to them by the court. It found that they were used in the year from the 22nd day of May, 1894, to the 21st day of May, 1895; that they were not used in the next year, but were used in the year between the 22nd day of May, 1895, and May 21, 1896. There was also an issue of fact as to whether this was authorized by the company. The evidence is not incorporated in the printed record, nor does the defendant prosecute error, and these questions must, therefore, be taken as settled by the verdict; that is,
• The only question then of law presented by the record, except one as to the validity of the contract which we shall consider later, is whether what was to be paid in case the defendant should use the method and tools after May 21, 1894, without license, was in the nature of a penalty, or, of liquidated damages. We think it was of the latter character, or, more properly, an agreement by which the defendant might continue the use of the patent after that time without license by annually paying $500.
In the view we take of this case there is room for doubt whether it presents the question, whether the stipulation is in the nature of a penalty, or, of liquidated damages. It seems, as we have indicated, to
“The law relative to liquidated damages has always been in a state of great uncertainty. This has been occasioned by judges endeavoring to make better contracts for parties than they have made for themselves. I think that the parties to contracts from knowing exactly their own situations and objects can better appreciate the consequence of their failing to obtain these objects than either judges or juries. Whether a contract be under seal or not, if it clearly states whai; shall be paid by the party who breaks it, to the party to whose prejudice it is broken, the verdict in an action for breach of it should be for the stipulated sum. A court of justice has no more authority to put a different construction on the part of an instrument ascertaining the amount of damages, than it has to decide contrary to any of its other clauses. Our office is to ascertain the intent of the parties, and if not contrary to law, to carry their intent into execution.”
In the well considered case of Dwinel v. Brown, 54 Me., 468, which was a suit to recover the stipulated damages for the breach of an agreement to put teams on the plaintiff’s land and carry on a lumbering operation and pay an agreed amount for stumpage, the court said:
“The parties themselves best know what their expectations are in regard to the advantages of their undertaking and the damages attendant on its failure, and when they have mutually agreed on the amount of such damages in good faith and without illegality, it is as much the duty of the court to enforce that agreement as it is the other provisions of the contract. In construing the other parts of the con*368 tract, so in giving construction to the stipulation concerning the damages, the intention of the parties governs.”
The court added the following sensible comment:
“It is the province of the court to uphold' existing contracts, not to make new ones. It is not for the court to sit in judgment upon the wisdom or folly of the parties in making the contract, when their intention is clearly expressed and there is no fraud or' illegality. No judges, however eminent, can place themselves in the place or position of the parties when the contract was made, scan the motives and weigh the considerations which influenced them in the transaction, so as to determine what would have been best for them to do, who was least sagacious or who drove the best bargain. * * * The interests of the public are quite as likely to be subserved in maintaining the inviolability of contracts as they are in contriving ways and means to make a contract mean what is not apparent on the face of it to save a party from some conjectural inequity growing out of the supposed inadvertence or improvidence.”
So that if we treat the case before us as one in which the parties stipulated what the damages should be for a breach of the contract, rather than as an agreement as to the license fee to be paid should the defendant continue the use of the patent after a certain term, the result must be the same; the actual damages were uncertain and incapable of calculation, so that the sum agreed on must be regarded as liquidated damages.
Judgment vacated, and judgment for the plaintiff in error in the sum of $1,000.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.