Kelly v. McDonald

THOMPSON (R. L.), J.

This is an appeal from a judgment in favor of plaintiffs, terminating a lease of real property, but refusing to allow liquidated damages for failure on the part of the defendants to commence the sinking of an oil-well within a specified time. The appeal is from the judgment-roll alone. The evidence is not before this court.

May 24, 1926, the plaintiffs leased to the defendants 320 acres of land for the purpose of sinking oil-wells thereon. The lease contained a provision to the effect that if the lessees, failed to “begin actual operations toward the drilling of a well on or before the expiration of June 30, 1926, . . . he agrees to pay lessors as liquidated damages the sum of $1,000.” The court found that the lessees failed to commence the drilling of the oil-wells within the prescribed time, or. at all; that they were, therefore, guilty of a breach of the agreement and thereupon terminated the lease, but further found as a conclusion of law that the lessors were not entitled to any sum whatever as liquidated damages.

The pleadings fail to raise the issue of liquidated damages. It is true that the lease containing the provision respecting liquidated damages was made a part of the complaint as an exhibit thereto. There was, however, no allegation that it was “impracticable or extremely difficult to fix the actual damages,” nor was there a statement that any damages whatever resulted from the breach of the lease. The complaint merely recites the nonperformance of the lease, and that no part of the liquidated damages had been paid. The prayer merely demands judgment “for the sum of $1,000 and interest . . . from June 30, 1926.” A prayer for judgment in a specified sum is not equivalent to an allegation that damages were suffered.

(Bradbury

v.

Higginson, 162

Cal. 602, 610 [123 Pac. 797].) The mere use of the term “liquidated damages” does not necessarily characterize the detriment as such. Indeed, the pleadings in the present case indicate that the appellants considered the stipulated amount as a penalty rather than liquidated damages, for they seem to have assumed the amount would automatically become due as a necessary presumption that

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