Theodore Sedgwick.

A treatise on the measure of damages, or, An inquiry into the principles which govern the amount of pecuniary compensation awarded by courts of justice (Volume 1) online

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§ 387. Relations of court and jury in awarding exemplary

Whether there is any evidence to justify the assessment
of exemplary damages is a question for the court, and if there
is none, it is error to submit the question of exemplary dam-
ages to the jury.'^^ Where there is evidence of circumstances
sufficient to uphold a verdict for exemplary damages, the
question whether they shall be given or not is one for the
jury; -^^ and it is error to instruct the jury to give exemplary
damages, for the plaintiff can never claim them as a matter
of law.^^^ It is error, when the facts are in dispute, to instruct


28' Alabama: Louisville & N. R. R. v.
Hall, 87 Ala. 708, 6 So. 277.

California: Selden v. Cashman, 20
Cal. 56.

Colorado: Eisenhart v. Ordean, 3
Colo. App. 162, 32 Pac. 495.

Kansas: Chicago, K. & W. R. R. v.
O'Connell, 46 Kan. 581, 26 Pac. 947.

Kentucky: Lexington Ry. v. Fain, 80
S. W. 463, 25 Ky. L. Rep. 2243; Louis-
ville & N. R. R. V. Berry, 33 Ky. L.
Rep. 850, ins. W. 370.

Maryland: Smith v. Phila., W. & B.
R. R., 87 Md. 48, 38 Atl. 1072.

Mississippi: Chicago, S. L. & N. O.
R. R. V. Scurr, 59 Miss. 456.

New Jersey: Bullock v. Delaware, L.
& W. R. R., 61 N. J. L. 550, 40 Atl. 650.

North Carolina: Waters v. Greenleaf-
Johnson Lumber Co., 115 N. C. 648, 20
S. E. 718.

Pennsylvania: Rose i;. Story, 1 Pa.
190; Amer v. Longstreth, 10 Pa. 145;
Pittsburgh S. Ry. v. Taylor, 104 Pa.
306; Phila. Traction Co. v. Orbann, 119
Pa. 37, 12 Atl. 816.

South Dakota: Baxter v. Campbell, 17
S. D. 475, 97 N. W. 386.

Texas: Bradshaw v. Buchanan, 50
Tex. 492.

Virginia: Norfolk & W. R. R. v.
Neely, 91 Va. 539, 22 S. E. 367, 44 Am.
St. Rep. 884.

If in spite of an instruction not to
allow exemplary damages the jury al-
lows them, the verdict will be set aside.


Anderson v. Western U. T. Co., 85
S. C. 252, 67 S. E. 232, 477.

^ AlabaTna: Gambill v. Cargo, 151
Ala. 421, 43 So. 866; Alabama G. S. R.
R. V. Arrington, 56 So. 78.

Connecticut: Pratt v. Pond, 42 Conn.

Georgia: Dye v. Denham, 54 Ga. 224.

Maine: Johnson v. Smith, 64 Me. 553.

Maryland: Smith v. Thompson, 55
Md. 5.

Minnesota: Sneve v. Lunder, 100
Minn. 5, 110 N. W. 99.

Mississippi: Chicago, S. L. & N. O.
R. R. V. Scurr, 59 Miss. 456; Bums v.
Alabama & V. R. R., 93 Miss. 816, 47
So. 640.

Missouri: Graham v. Pacific R. R.,
66 Mo. 536; Nicholson v. Rogers, 129
Mo. 136, 31 S. W. 260; Bosch v. Miller,
136 Mo. App. 482, 118 S. W. 506.

Pennsylvania: Nagle v. MuUison, 34
Pa. 48; Blair Iron & Coal Co. v. Lloyd,
1 Walk. 158.

Rhode Island: Kenyon v. Cameron,
17 R. L 122, 20 Atl. 233.

'^^^ Alabama: Louisville & N. R. R.
V. Bizzell, 131 Ala. 429, 437, 30 So. 777.

California: Davis v. Hearst, 116 Pac.

Illinois: Hawk v. Ridgway, 33 111.
473; Wabash, St. L. & P. Ry. v. Rector,
104 111. 296; Consolidated Coal Co. v.
Haenni, 146 111. 614, 35 N. E. 162;
Brown v. Jones, 52 111. App. 597.

Kentucky: Louisville & N. R. R. v.




the jury that "this is one of the cases where they may give
exemplary damages," -^^ or to leave the question to the jury
without instructing them that the facts will warrant exem-
plary damages. -'-^^ It is, however, held in Iowa that the Civil
Damage Act gives the plaintiff a right to exemplary damages,
and the court should therefore, in a proper case, instruct the
jury to give them.-^- And in South Carolina and Texas, under
the statutes, the plaintiff has a right to exemplary damages if
the circumstances permit their allowance. ^^'

In Wisconsin, in a case of assault and battery, an instruction
to the jury that "if the assault was committed in an insulting
manner, wilfully and maliciously, with an intent to injure the
plaintiff's feelings, and disgrace him in the estimation of the
public," they ought to give punitory damages, was held not
to be error. -^^ On the other hand, the jury must not be re-
stricted by a direction not to give exemplary damages, if they
believe from the evidence that the defendant's trespass was
malicious. -^^

Brooks, 83 Ky. 129; Ryan v. Quinn,
24 Ky. L. Rep. 1513, 71 S. W. 872;
Chesapeake & O. Ry. v. Conley, 136
Ky. 601, 124 S. W. 861.

Mississippi: Southern R. R. v. Ken-
drick, 40 Miss. 374; N. O., St. L. & C.
R. R. V. Burke, 53 Miss. 200.

Missouri: Nicholson v. Rogers, 120
Mo. 136, 31 S. W. 260; Carson v. Smith,
133 Mo. 606, 34 S. W. 855.

New York: Jacobs v. Sire, 4 N. Y.
Misc. 398, 23 N. Y. Supp 1063; Eupes
V. Nephue, 120 App. Div. 621, 105 N.
Y. Supp. 542.

Pennsylvania: Neeb v. Hope, 111 Pa.
145, 2 Atl. 568.

Vertnont: Jerome v. Smith, 48 Vt.
230; Boardman v. Goldsmith, 48 Vt.
403; Snow v. Carpenter, 49 Vt. 426.

West Virginia: Fink v. Thomas, 66
W. Va. 487, 66 S. E. 650; Carpenter v.
Hyman, 67 W. Va. 4, 66 S. E. 1078.

Wisconsin: Robinson v. Superior
Rapid Transit Ry., 94 Wis. 345, 68
N. W. 961, 59 Am. St. Rep. 896, 34 L.
R. A. 205; Haberman v. Gasser, 104
Wis. 98, 80 N. W. 105; Thomas v.

Williams, 139 Wis. 467, 121 N. W.
148; Tilton v. James L. Gates Land
Co., 140 Wis. 197, 121 N. W. 331.

And therefore the court will not re-
verse if the jury, under proper instruc-
tions, fails to allow them. Simpson i>.
Mark wood, 6 Baxt. (Tenn.) 340.

'»» Pickett V. Crook, 20 Wis. 358.

^^ New York: Kutner v. Fargo, 45
N. Y. Supp. 753.

North Dakota: Lindblorn v. Sonstelie,
10 N. Dak. 140, 86 N. W. 357.

Wisconsin: Haberman v. Gasser, 104
Wis. 98, 80 N. W. 105.

=92 Fox V. Wunderlich, 64 la. 187;
Thill V. Pohlman, 76 la. 638.

2«3 United States: Morgan v. Barnhill,
118 Fed. 24 (Texas statute).

South Carolina: Beaudrot v. South-
ern Ry., 69 S. C. 160, 48 S. E. 106.

Texas: Galveston, H. & S. A. R. R.
V. Dunlavy, 56 Tex. 256; Mayer v.
Duke, 72 Tex. 445, 10 S. W. 565; Nolan
V. Mendere, 6 Tex. Civ. App. 203, 25
S. W. 28.

•^'^ Hooker v. Newton, 24 Wis. 292.

295 Devaughn v. Heath, 37 Ala. 595.


Where the case is tried by the court, not by a jury, the al-
lowance of exemplary damages is discretionary with the court. -^^

§ 388. Power of the jury over the amount of exemplary dam-
ages — Power of the court.

The amount of exemplary damages is generally said to be
entirely within the discretion of the jury.^^^ But this discretion
is subject to review by the court. -^^ So where the highest
value of a house torn down and removed by the defendant,
testified to by any witness, was $250, and the court instructed
the jury that, if they found it a case for exemplary damages,
they might find a verdict for any amount not exceeding the
sum laid in the declaration, which was $2,000, and the jury
found a verdict for $567, it was set aside on the ground that
this instruction might have wrongly influenced them as to
the amount of damages, as a verdict for the amount laid in
the declaration would have warranted the inference of prejudice,
partiality, or corruption on their part.-^^ An instruction that
they might give such damages as would satisfy the highly
excited feelings of the plaintiff was held erroneous. ^°°

The verdict can be set aside by the court only when it is
grossly excessive, or evidently actuated by passion, prejudice,
or undue influence. ^°^ The case of New Orleans, J. & G.

^^ Carter v. 111. Cent. R. R., 17 Ky. Texas: Willis v. McNeill, 57 Tex.

L. Rep. 1352, 34 S. W. 907. 465.

2'^ Kentucky: Major v. Pulliam, 3 ^ Jones v. Turpin, 6 Heisk. (Tenn.)

Dana, 582; Louisville & N. R. R. v. 181.

Donaldson, 13 Ky. L. Rep. 1384, 43 '" Colorado: Page v. Yool, 28 Colo.

S. W. 439. 464, 65 Pac. 636.

Mississippi: C. R. R. v. Scurr, 59 District of Columbia: Flannery v.

Miss. 456. Baltimore & O. R. R., 4 Mack.

New Jersey: Allen v. Craig, 1 J. S. 111.

Green, 294. Illinois: Cutler v. Smith, 57 111. 252;

New York: Weed v. Brush, 89 Hun Farwell v. Warren, 70 III. 28.

62, 34 N. Y. Supp. 1025. Iowa: Collins v. Council Bluffs, 35

Virginia: Borland v. Barrett, 76 Va. la. 432; Saunders?;. Mullen, 66 la. 728,

128. 24 N. W. 529.

^'* Alabama: Cox v. Birmingham Kentucky: Louisville Southern R. R.

Ry. L. & P. Co., 163 Ala. 170, 50 So. t-. Minoguc, 90 Ky. 369, 14 S. W. 357,

975. 12 Ky. L. Rep. 378, 29 Am. St. Rep.

Kentucky: Louisville & N. R. R. r. 378.

Roth, 130 Ky. 759, 114 S. W. 264. Missouri: Goetz v. Ambs, 27 Mo.

299 Georgia: Bryan v. Accc, 27 Ga. 87. 28.


N. R. R. V. Hurst ^°' would seem to carry the principle of
exemplary damages to its extreme limit. The jury having,
in that case, found a verdict of $4,500 against a railroad
company for the misconduct of a conductor in carrjdng the
plaintiff four hundred yards beyond the station, and refusing
to return, so that, to avoid being taken to the next station,
he had to walk back, carrying his valise, the court, while
regretting the rigor of the jury, refused to set aside the ver-
dict, saying that the law in such cases furnished ''no legal
measurement save their discretion." In this case, we think,
with deference, that the verdict might with great propriety
have been set aside. The amount warranted the presumption
of undue bias.

In Louisiana, in cases proper for exemplary damages, the
jury are still under the control of the court in regard to the
extent to which they may go, and, in an action for malicious
arrest and imprisonment, the court said: ''Exemplary damages
should nevertheless be commensurate to the nature of the of-
fence, and when extravagant damages are allowed, they will
be reduced to their proper standard." ^"^ The damages should
be in some degree proportioned to the amount of actual dam-

g^ggg 304

The power of the court to set aside a verdict for exemplary
damages is the same power, and is exercised upon the same
principle, as in any case of excessive verdict. ^°^ Its effect
upon the allowance of exemplary damages is to prevent the
severe and arbitrary consequences that might otherwise result
from the doctrine, and so to meet the principal objection to
the allowance of exemplary damages: namely, that it gives
the jury an arbitrary and unrestricted power over the property
of defendants.

Virginia: Borland v. Barrett, 76 Va. ^* Illinois: Hildreth v. Hancock, 55

128. 111. App. 572.

Wisconsin: Rogers v. Henry, 32 Wis. Texas: Flanary v. Wood, 32 Te.x.

327. Civ. App. 250, 73 S. W. 1072.

302 36 Miss. 660. '"* See chapter upon Powers of Court

"•' Burkett v. Lanata, 15 La. Ann. and Jury.
337; ace, Fitzgerald v. Boulat, 13 La.
Ann. 116.





Amount of damages stipulated

of contract securing several

by the parties.



Refusal of courts to enforce a


Deposit and advance payments


to be forfeited on default.


Liquidated damages and pen-


Contracts performed in part.



Stipulated sum in liquidation


Classification of the subject.

of uncertain damage.


General observations.


Forfeiture to State or city to


Early English cases.

secure contract of public in-


Decisions in the Court of Chan-




Breach of contract of sale.


Lowe V. Peers.


Of agreement not to carry on


Fletcher v. Dyche.



Leading cases — Aetley v. Wel-


For delay in completing per-




Kemble v. Farren.


Stipulations to evade the usury


Early New York cases.



Dakin v. Williams.


Valuation and pre-ascertain-


Tayloe v. Sandiford.



Streeper v. Williams.


The canons of interpretation


Bagley v. Peddle.

in the light of recent cases.


General rule.


Stipulated damages and avoid-


Intent of the parties.

able consequences.


The hquidation must be rea-


Alternative contract. Rule of


least beneficial alternative.


Language not conclusive —


Deverill v. Burnell.

Rule in case of doubt.


Ordinary rule.


Breach of contract necessary.


Alternative contracts and liq-


Rules of interpretation.

uidated damages.


Penal sum collateral to object


General conclusions — The

of contract.

" Abnegated Option."


Stipulated sum for non-pay-


Stipulation of damages strict-

ment of smaller sum.

ly construed.


Stipulated sum obviously


Consequences of liquidating

greater than the damage.



Stipulated sum not propor-


Statutory regulations of liq-

tioned to injury.

uidated damages.


One sum stipulated for breach


Civil law.



§ 389. Amount of damages stipulated by the parties.

We now come to a cla.s.s of cases where the contracting par-
ties fix or liquidate the amount that shall furnish the measure
of compensation in case of non-fulfilment of the agreement,
either in the shape of a penalty or of stipulated damages.

§ 390.^ Refusal of courts to enforce a penalty.

Equity early relieved against forfeitures, and enjoined the
collection of mere penalties. Thus, courts of law were for-
bidden by the chancellor to exact the penalty of a bond,-
even though default had been made by the obligor; or to en-
force the forfeiture of land conveyed in mortgage after default
of the mortgagor. Courts of law themselves eventually came
to enforce the same doctrines; and if parties to a contract pro-
vided that a penalty should be exacted for non-performance
a court of law as well as a court of equity would refuse to give
judgment for the amount of the penalty.

§ 391.^ Liquidated damages and penalty.

* It is competent for parties entering upon an agreement
to avoid all future questions as to the amount of damages
which may result from the violation of the contract, and to
agree upon a definite sum, as that which shall be paid to the
party who alleges and establishes the violation of the agree-
ment.^ In this case the damages so fixed are termed liqui-
dated, stipulated, or stated damages. But even where this
course has been adopted, and a sum certain named in the
contract, difficulty has arisen as to whether it should be con-
sidered as such liquidated damages, or only as a penalty.^
It being settled by the courts, both of equity and law, that a
penalty was only intended as a security for the principal
sum due or the actual damages sustained, it became doubtful

' For § 390 of the eighth edition, * -phe word penally is in this contra-

see § 675a. distinction not very correct or signif-

2 See infra, chap. 32. icant; the word designates a sum abso-

' For § 391 of the 8th edition see lutely due in case of the non-perform-

§ 6756. ance of an agreement, quite as clearly

* A provision of this nature has been as the phrase liquidated damages. But
engrafted on charter-parties, and is the term has now acquired a fixed and
familiarly known as demurrage. See well-settled technical meaning.


even when a definite sum was named, whether the parties
intended it for that purpose, or whether it was meant as
Hquidated damages, behind which the courts could not go;
and on this subject various cases have been decided.**

If no actual damages have been sustained, a clause liquidat-
ing the damages will not avail the plaintiff: in such a case
only nominal damages are recoverable.^

§ 392.^ Classification of the subject.

*It is proper, however, before we examine these cases, to
notice a distinction as to the way in which the question presents
itself, growing out of the form of the contract, from want of
a constant attention to which part of the confusion has arisen.

First. The agreement may, in the first place, be to do or
refrain from doing some particular act, or in default thereof,
to pay a given sum of money; and this was well known to the
Roman law. So the imperial legislator advises his subjects
in making contracts for the doing of anything, to fix the
amount of damages by inserting a precise stipulation to that
effect: Non solum res in stipulationem deduci possunt, sed
etiam facta: ut si stipulemur aliquid fieri vel non fieri. Et in
hujusmodi stipulationibus optimum erit pcenam subjicere, ne
quantitas stipulationis in inccrto sit, ac necesse sit actori pro-
hnre quid ejus intersit. Itaque si quis, ut fiat aliquid, stipuletur
ita adjici poena debet: si ita factum non erit, tunc poence nomine
decem aureos dare spondes.^ This, as Lord Kaims clearly points
out ^ is properly an alternative obligation, and the sum stated
cannot be correctly termed a penalty.

Secondly, the agreement may assume the technical form of
the bond, containing a declaration of an absolute indebtedness
in a given sum, conditioned to become void on the payment
of a less sum, or the performance of some particular act.
Here there is no express promise or undertaking to do any-
thing. The indebtedness declared in the prior part of the

" McCann v. Albany, 158 N. Y. 634, the measure of damages, and its neccs-

53 N. E. 673. sary uncertainty in many cases: Est

' For § 392 of the eighth edition, vero id quod interest incerlum duplici

see § 675c. rntione, ab eventu ipsius ret, et a proba-

* Inst. Ub. iii, tit. xv, de Verb. ObHg., tioiie. Vinn. Comm., p. 606.

§ 7. Vinnius, in his commentary on '■' Kaims' Equity, book iii, ch. ii, p.
this section, discusses the subject of

j,i t ,


instrument is not intended to be binding. The promise relied
on is contained in or implied from the condition, and that is
sanctioned by the penalty.

Thirdly, the agreement may bind the party absolutely to
do, or refrain from doing, the particular act, and then proceed
to declare that if the promise is not performed, the party
stipulating shall pay a given sum of money as a penalty.

And lastly, the agreement may in all respects resemble the
last, except that the fixed sum may be declared payable as
liquidated or stated damages, or as a forfeiture.

§ 393.^° General observations.

Whenever questions of the nature we are now considering
present themselves, the attention of the courts is mainly fixed
on three different points: First, the language employed; second,
the subject-matter of the contract; and third, the intention of
the parties. These are, indeed, the great elements of interpre-
tation of all contracts. But in the case we are now examining,
the courts, especially in this country, have generally shown a
marked desire to lean toward that construction which excludes
the idea of liquidated damages, and permits the party to re-
cover only the damage which he has actually sustained. The
language of the contract is not controlling.

And such, it see'ms, was the disposition of the civil law in
the somewhat analogous case of the stipulatio duplex: Quce
scrupulositates et differenticB procedent propter odiositatem
strictamque naturam stipulationis duplcE, quce stricti juris est,
contra quam etiam in duhio fit interpretatio. Contra, vero, actio
ex empto honce fidei est, et etiam favorahilis, cum non competat
ad veram pcenam, sed suhsistere et probari oportet, verum et
justum interesse, merito in ea plenior fit interpretatio.^^

The subject-matter of the contract, and the intention of
the parties are the controlling guides. If, from the nature
of the agreement, it is clear that any attempt to get at the
actual damage would be difficult, if not vain, then the courts
will incline to give the relief which the parties have agreed on.
But if, on the other hand, the contract is such that the strict

'" For § 393 of the eighth edition, i' Dumoulin, de Eo quod Int.,

see § 675d. § 123.

§§ 394, 395 DECISIONS in the court of chancery 761

construction of the phraseology would work absurdity or
oppression, the use of the term liquidated damages will not
prevent the courts from inquiring into the actual injury sus-
tained, and doing justice between the parties.^-**

§ 394.^^ Early English cases.

The earliest notice of the general subject appears to be in
Sir Baptiste Hixts' case,^^ which is as follows:

"In an action of covenant, if the plaintiff counts that in an
agreement for certain lands between plaintiff and defendant,
the defendant covenanted tljat if, on measurement, there was
not found as many acres as the defendant had stated to the
plaintiff at the time of sale, he would repay for each acre
wanting £11 per acre, and avers that, on measurement, as
many acres were wanting as would, at £11 per acre, amount
to £700; and issue being joined whether they were wanting,
and the jury find for the plaintiff, and give £400 damages,
this issue is well found for the plaintiff; for although it were
found that all the acres were wanting, still theij are chancel-
lors, and may give such damages as the case requires in equity,
inasmuch as the whole consists in giving damages."

To this decision we have already referred, as being strikingly
illustrative of the laxity of all the early cases on the subject
of compensation.^^

§ 395.^^ Decisions in the Court of Chancery.
In the next case in which the subject was discussed, ^^ the

'2 It is to be observed that the plain- field said: "As to the case mentioned

tiff, as well as the defendant, has the by Mr. Mansfield, from RoUe's Abr.,

right to show that the stipulated sum it is impossible to support it; for it

is a penalty, and to prove the actual cannot be that a man should be obUged

damages, though they are greater than to take less than the liquidated sum.

the penalty. In other words, when And the writ of error in that case was

the performance of a contract is se- plainly brought by the defendant,

cured by a penalty the amount of dam- Besides, the damages could never be

ages upon breach is not limited to the taken advantage of upon a writ of

penalty. Noyes v. Philhps, 60 N. Y. error. How could the quantum of

408. damages found by the jury be the sub-

" For § 394 of the eighth edition, ject of a writ of error?"

see §391. >« For §395 of the eighth edition,

" 2 RoUe Abr. 703, tit. Trial. see § 392.

" In a subsequent case, Lowe v. " Roy v. The Duke of Beaufort, 2

Peers, 4 Burr. 2225, 2229, Lord Mans- Atk. 190, decided in 1741. But on the


plaintiff had executed a bond in £100 penalty to the Duke of
Beaufort, that his son should not poach on the duke's grounds
without leave from the gamekeeper, or unless in company
\\dth a qualified person. The son afterward fished; the bond
was put in suit, the penalty of £100 recovered, and paid by
the plaintiff, with £40 costs of suit. This bill was filed for
relief. It was insisted that the bond was only given as a se-
curity that the son should not poach; but Lord Chancellor
Hardwicke said: ''It is most absurd to think that bonds of
this kind were intended merely as a security," and asked:
"In what respect is the gentlemati who has such a bond in a
better condition than he was before, if after obtaining judg-
ment at law, a court of equity will give him no other satis-
faction than the bare value of the price of the game that is

In a case before the same great judge, ^^ Aylet had charged
certain lands by his will with an amount of ten pounds for
the maintenance of a school-master, to be paid half-yearly;
and if in arrear forty-two days after due, 5s. per week were
allotted, nomine pcenoB. A commission of charitable uses issued
from chancery summoned the owner of the land, who was in
default, and awarded the arrears and the poena. Exception was
taken that, in a court of equity, the poena v/ould be relieved
against on payment of the actual arrears. Lord Chancellor
Hardwicke said that the poena should stand, according to the
intention of the parties, as a security for the legal interest. But he
went on to say, that where there is a " nomine poence " in a lease
to prevent the tenant from breaking up pasture ground, it is
otherwise; for the intention there is to give the landlord a com-
pensation for the damage sustained, and in such case the whole
poena shall be paid.

And so in a subsequent case,^^ where an increased rent was
declared payable, provided land should be plowed up, the
agreement was held conclusive on the quantum of damages. -°

Online LibraryTheodore SedgwickA treatise on the measure of damages, or, An inquiry into the principles which govern the amount of pecuniary compensation awarded by courts of justice (Volume 1) → online text (page 81 of 88)