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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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Massachusetts: Lynde v. Thompson,
2 All. 456.

isoRnowlton v. Mackay, 29 Up.
Can. C. P. 601.



802 LIQUIDATED DAMAGES § 418

In New York it is held that in ordinary contracts for the
sale of land the amount of loss is easily ascertained, and that
therefore the stipulated sum will not be allowed as liquidated
damages unless there is some other ground for so considering it.
This is held both in cases of exchange ^^^ and of sale^^'- of land.
But if the parties clearly intended the sum to be paid as com-
pensation, it will be allowed as liquidated damages if it is reason-
able in amount, ^^^ but not otherwise. ^-^^ In Kentucky an agree-
ment that in case of eviction from the granted premises the
grantor should refund the consideration with interest was held
to make that sum liquidated damages. ^^^ When the sum agreed
upon represents a bona fide valuation of property for the pur-
poses of the contract, no reason is perceived why it should be
construed to be a penalty. In The Sun Printing and Publish-
ing Association v. Moore ^''^ the suit was for the total loss of a
yacht, valued in the charter at $75,000, and the Supreme Court
of the United States, on an elaborate review of the authorities,
held the valuation binding.

In case of breach by the buyer the principle is the same : and
a liquidation of damages otherwise uncertain will be allowed.^"

§ 418. Of agreement not to carry on business.

Where a party binds himself in a sum named not to carry on
any particular trade, business, or profession, within certain limits,
or within a specified period of time, the sum mentioned will be

151 Noycs V. Phillips, 60 N. Y. 408. '" Dennis v. Cummins, 3 Johns.

1" Richards v. Edick, 17 Barb. 260; Cas. 297.

Laurea v. Bernauer, 33 Hun, 307. '** Bradshaw v. Craycraft, 3 J. J.

153 Arkansas: Wcstbay v. Terrj', 83 Marsh. 77.

Ark. 144, 103 S. W. 160. "*« 183 U. S. 642, 46 L. cd. 366, 22

Indiana: Howard i'. Adkins, 167 Sup. Ct. 240.

Ind. 184, 78 N. E. 665. '" Arkansas: Tidwell v. Southern E.

Missouri: Mores v. Rathburn, 42 & B. Works, 87 Ark. 52, 112 S. W. 152

Mo. 594, 97 Am. Dec. 359. (machinery).

N'ew York: Slosson v. Beadle, 7 Iowa: Selby v. Matson, 137 la. 97,

Johns. 72; Hasbrouck v. Tappen, 15 114 N. W. 609, 14 L. R. A. (N. S.) 1210

Johns. 200; Knapp v. Maltby, 13 (land).

Wend. 587. Texas: Cowart v. Walter Connally

Oklahoma: Gavin v. Ball, 110 Pac. Co. (Tex. Civ. App.), 108 S. W. 973

1067. (machinery).

Washington: Madler v. Silverytone,
55 Wash. 159, 104 Pac. 165.



§418



OF AGREEMENT NOT TO CARRY ON BUSINESS



803



regarded as liquidated damages and not a penalty. ^'"^ It is some-
times said that agreements of this sort are alternative in char-
acter; but in Stewart v. Bedell ^'"^ the Supreme Court of Pennsyl-
vania decided that this is not the case. In Sparrow v. Paris ^^°
the defendant had guaranteed the plaintiff, a shipper, that no
more than one ship should sail for Havana before that contain-
ing his goods, under penalty of forfeiting one-half the freight of
the goods. Although the word "penalty" was used, this was
held to be liquidated damages, on the ground that the sum was to
be paid on one event, and was not a security for the performance
of several matters. An attempt was made in this case to argue
that several events were secured, viz., that the ship should not
be the second, nor third, nor fourth, etc. But the court (Bram-



15* Alabama: McCurry v. Gibson,
108 Ala. 451, 18 So. 806, 54 Am. St.
Rep. 177.

California: California S. N. Co. v.
Wright, 6 Cal. 2.58; Streeter v. Rush,
25 Cal. 67; Potter v. Ahrens, 110 Cal.
674, 43 Pac. 388; Shafer v. Sloan, 85
Pac. 162, 3 Cal. App. 325.

Georgia: Newman v. Wolfson, 69
Ga. 764.

Illinois: Boyce v. Watson, 52 111.
App. 361.

Indiana: Duffy v. Shockey, 11 Ind.
70; Spicer v. Hoop, 51 Ind. 365; John-
eon V. Gwinn, 100 Ind. 466.

Iowa: Stafford v. Shortreed, 62
Iowa, 524, 17 N. W. 756.

Kentucky: Applegate v. Jacoby, 9
Dana, 206.

Maine: Holbrook v. Tobey, 66 Me.
410; Laundry Co. v. Debow, 98 Me.
496, 57 Atl. 845.

Massachusetts: Pierce v. Fuller, 8
Mass. 223; Gushing t-. Drew, 97 Mass.
445.

Michigan: Jaquith v. Hudson, 5
Mich. 123; Geiger v. Cawley, 146
Mich. 550, 109 N. W. 1064.

Missouri: Wills v. Forester, 140 Mo.
App. 321, 124 S. W. 1090.

New Hampshire: Clark v. Brit I on, 79
Atl. 494.

New Jersey: Cheddick v. Marsh, 21



N. J. L. 463; Hoagland v. Segur, 38
N. J. L. 230.

New York: Nobles v. Bates, 7 Cow.
307; Smith v. Smith, 4 Wend. 468;
Dakin v. Williams, 17 Wend. 447, 22
Wend. 201; Dunlop v. Gregory, 10
N. Y. 241; Tode v. Gross, 127 N. Y.
480, 28 N. E. 469; Breck v. Ringler,
13 N. Y. Supp. 501; Mott v. Mott, 11
Barb. 127.

Ohio: Lange v. Werk, 2 Oh. St. 519;
Grasselli v. Lowden, 11 Oh. St. 349.

Pennsylvania: Kelso v. Reid, 145 Pa.
606, 33 Atl. 323, 27 Am. St. Rep. 716;
Stover f. Spielman, 1 Pa. Super. Ct.526.

Tennessee: Muse v. Swayne, 2 Lea,
251.

Texas: Rucker v. Campbell, 35 Tex.
Civ. App. 178, 79 S. W. 627.

Vermont: Barry v. Harris, 49 Vt. 392.

Washington: Canady v. Knox, 43
Wash. 567, 86 Pac. 930.

England: National Provincial Bank
of England v. Marshall, 40 Ch. Div.
112; Reynolds v. Bridge, 6 E. & B. 528
Sainter v. Ferguson, 7 C. B. 716
Leighton v. Wales, 3 M. & W. 545
Crisdee v. Bolton, 3 C. & P. 240.

Contra, Perkins v. Lyman, 11 Mass.
76; Smith v. Wainwright, 24 Vt. 97,
overruled.

'•" 79 Pa. 336.

'60 7 H. & N. 594.



804 LIQUIDATED DAMAGES § 418

well, B.) said: "If this argument availed, it would equally have
availed in those cases where liquidated damages have been held
recoverable for carrying on trade within limited distances."

Where the defendant on retiring from business had cove-
nanted that he would not reside within the distance of two and a
half miles from his then residence, and that if he did, he would
pay £1,000, as liquidated damages, and not as penalty; and he
fixed his new residence a few feet within the distance, it was held
that the whole sum was recoverable; Parke, B., saying that
Kemble v. Farren was ''somewhat stretched," and that "if a
party agrees to pay £1,000 on several events, all of which are
capable of accurate valuation, the sum must be construed as a
penalty, and not as liquidated damages. But if there be a con-
tract consisting of one or more stipulations, the breach of which
cannot be measured, then the parties must be taken to have
meant that the sum agreed on was to be liquidated damages
and not a penalty."^"

So, again, where the defendant had contracted not to practice
as a performer within a certain district, he bound himself to the
plaintiff in the sum of £5,000, "as and byway of liquidated dam-
ages, and not of penalty;" the authority of Kemble v. Farren
was invoked for the defendant ; but the court said :

"Where the deed contains several stipulations of various
degrees of importance, as to some of which the damages might
be considered liquidated whilst for others they might be
deemed unliquidated, and a sum of money is made payable
upon a breach of any of them, the courts have held it to be a
penalty only, and not liquidated damages. But where the
damage is altogether uncertain, and yet a definite sum of money
is expressly made payable in respect of it by way of liquidated
damages, those words must be read in the ordinary sense, and
cannot be construed to import a penalty."'^-

Where suit was brought on an agreement made between two
coach proprietors, that, in consideration of a certain sum of
money, the defendant would withdraw his stagecoach, and not
concern himself in driving any other coach on that road; and
the agreement contained a clause that for its due and punctual

'"AtkynB v. Kinnier, 4 Ex. 776; '« Green v. Price, 13 M. & W. 695;

ace, Galsworthy v. Strutt, 1 Ex. 659. Price v. Green, 16 M. & W. 346.



§ 418 OF AGREEMENT NOT TO CARRY ON BUSINESS 805

performance, each of the parties bound himself to the other " in
the sum of £500, to be considered and taken as hquidated dam-
ages, or sum of money forfeited or due from the one party to
the other, who shall neglect or refuse to perform his part of the
agreement;" it was held not a penalty, but liquidated damages,
from which the court would not depart. ^^^ And the same point
was decided in a very analogous case at an early day ^^^ by the
Supreme Court of Massachusetts, where the opinion was deliv-
ered by Mr. Justice Sedgwick.

So where one sued the owner of a laboratory in the neigh-
borhood for damages to his real estate from the operations of
a laboratory, and the parties, pending the suit, entered into an
agreement by which the plaintiff discontinued it, and the de-
fendant agreed to stop the laboratory business within five years,
or pay $3,000 as liquidated damages, and the defendant did not
close the business within the time, the court held that the $3,000
were liquidated damages, refusing to consider the fact alleged
by the defendant, that the mode of conducting the business had
been so changed that it was thereby rendered entirely harmless
and unobjectionable, as affecting the question. ^^^ But where
the parties mutually bound themselves in the sum of $300, one
to pay $150 for a certain business, and the other to refrain from
competition, it was held, in an action by the purchaser, that the
sum stipulated would be regarded as a penalty. ^^^ The court
was influenced by the fact that the sum secured the plaintiff's
payment of a less sum of money ; and there is no doubt that as to
him the amount is a penalty. But there seems to be no reason
why a stipulated sum, though a penalty so far as regards one
of the parties, should not be regarded as liquidated damages
when the other party is defendant.

Here, as elsewhere, the intention of the parties to liquidate the
damage must be found, ^" and if the sum named is unreasonably
large, the liquidation will not be allowed, no matter what the
parties intended. ^^^

i"Bartoni;. Glover, 1 Holt, N. p. 43. ^^^ New Mexico: Thomas v. Gavin,

«4 Pierce v. Fuller, 8 Mass. 223. 110 Pac. 841.

"^Grasselli?;. Lowden, 11 Oh.St.349. Pennsylvania: Wilkinson v. Colley,

«« Moore v. Colt, 127 Pa. 289. 164 Pa. 35, 30 Atl. 286, 14 Am. St.

1" Smith V. Brown, 164 Mass. 584, Rep. 845 (penalty twice the considera-

42 N. E. 101. tion of the sale).



806



LIQUIDATED DAMAGES



§419



§ 419. For delay in completing performance.

Parties may usually liquidate damages for delay in the perform-
ance of a contract. This is one of the commonest instances of
stipulated damages. When it is provided in a building con-
tract that the work shall be completed on a certain day, and
that the builder shall " forfeit" or " allow" a stipulated sum for
every day or week the completion of the work is delayed beyond
that time, the stipulated sum, if a reasonable one, may be re-
covered as liquidated damages for the delay. '"^ But if the work,



In the absence of evidence on the
question of reasonableness the sum
named was held a penalty in Disoway
V. Edwards, 134 N. C. 254, 46 S. E. 501.

16' United States: Chapman Dec.
Co. V. Security Mut. L. Ins. Co., 149
Fed. 189, 79 C. C. A. 137.

Alabama: O'Brien v. Anniston Pipe
Works, 93 Ala. 582, 9 So. 415; Stratton
V. Fike, 166 Ala. 203, 51 So. 874.

Arkansas: Lincoln v. Little Rock
Granite Co., 56 Ark. 405, 19 S. W. 1056.

Illinois: Mueller v. Kleine, 27 111.
App. 473.

Indiana: Barber A. P. Co. v. Wabash,
43 Ind. App. 167, 86 N. E. 1034.

Iowa: Kelly v. Fejervarj', 111 la.
693, 83 N. W. 791.

Kansas: St. Louis & S. F. R. R. v.
Gaba, 78 Kan. 432, 97 Pac. 435.

Kentucky: Illinois Surety Co. v.
Garrard Hotel Co., 118 S. W. 967, 34
Ky. L. Rep.

Louisiana: Hebert v. Weil, 115 La.
424, 39 So. 389.

Massachusetts: Curtis v. Brewer, 17
Pick. 513; Folsom v. McDonough, 6
Cush. 208; Hall v. Crowley, 5 All. 304,
81 Am. Dec. 745; Morrison v. Rich-
ardson, 194 Mass. 370, 80 N. E. 468;
Norcross Bros. Co. v. Vose, 199 Mass. 8,
85 N. E. 468.

Michigan: Western Gas Const. Co.
V. Dowagiac Gas 6z Fuel Co., 146 Mich.
119, 109 N. W. 29, 13 Detroit Leg. N.
689; Germain v. Union School Dist.,
158 Mich. 214, 123 N. W. 789, 16 De-
troit Leg. N. 834.



New Jersey: Monmouth Park Ass'n
V. Wallis Iron Works, 55 N. J. Law,
132, 26 Atl. 140, 19 L. R. A. 456, 39
Am. St. Rep. 626.

New York: Curtis v. Van Bergh, 161
N. Y. 47, 55 N. E. 398; Mosler Safe
Co. V. Maiden Lane S. D. Co., 190 N.
Y. 479, 93 N. E. 81; Bridges v. Hyatt,
2 Abb. Pr. 449; O'Donnell v. Rosen-
berg, 14 Abb. (N. S.) 59; Farnham v.
Ross, 2 Hall, 167; Weeks «^. Little, 47
N. Y. Super. Ct. 1.

South Carolina: Worrell v. McClin-
aghan, 5 Strobh. 115.

Tennessee: Railroad Co. v. Cabinet
Co., 104 Tenn. 568, 58 S. W. 303, 50
L. R. A. 729, 78 Am. St. Rep. 933.

Virginia: Welch v. McDonald, 35
Va. 500.

England: Fletcher v. Dyche, 2 T. R.
32; Legge v. Harlock, 12 Q. B. 1015;
Crux V. Aldred, 14 W. R. 656.

Canada: Jones v. Queen, 7 Can. 570;
Gilmour v. Hall, 10 Up. Can. Q. B. 309;
McPhee v. Wilson, 25 Up. Can. Q. B.
169; Scott V. Dent, 38 Up. Can. Q. B.
30; Gaskin v. Wales, 9 Up. Can. C. P.
314; Chatterton v. Crothers, 9 Ont. 683;
Horton v. Tobin, 20 N. S. 169; Lefurgy
V. McGregor, 1 Pr. Ed. Isl. 72.

Contra, Wilcus v. Kling, 87 111. 107,
where no actual damage was shown;
Patent Brick Co. v. Moore, 75 Cal. 205,
and Seim v. Krause, 13 S. Dak. 530, 83
N. W. 583, according to the code, which
allows liquidated damages only when
it would be impracticable or extremely
difficult to fix the actual damage;



§419



FOR DELAY IN COMPLETING PERFORMANCE



807



instead of being delayed, is abandoned in an unfinished state
by the defendant, it is evident that the stipulated sum cannot
be recovered for an indefinite time ; ^^° it would be grossly oppres-
sive to make the plaintiff "a pensioner upon the defendant ad
infinitum.'' Whether the courts would allow the plaintiff a
reasonable time to complete the work himself, or whether they
would refuse altogether to enforce the stipulation, has not been
decided. In the former case we should have another illustration
of the application of the rule of avoidable consequences, else-
where discussed, and a consequence of this would be that the
party injured would be allowed the stipulated damages for a
reasonable period, after which, his natural course to cause the
contract to be performed himself would interrupt further re-
covery of them. A large sum agreed to be paid at once if per-
formance is delayed beyond a certain date is not allowed as
liquidated damages, ^^^ unless it is reasonable in amount."^

And if the stipulated damages for dela}'^, though proportioned
to the time of delay, are greatly out of proportion to the actual
damage, they are not allowed. ^^^ Thus where damages for delay



Brennan v. Clark, 29 Neb. 385, 45 N. W.
472.

In Otis V. Cottage Grove Mfg. Co.,
121 111. App. 233, the contract, as con-
strued, did not provide for liquidated
damages, but only for the retention of
the amount as security for the pay-
ment of actual damages.

'™ California: Bacigalupi v. Phojnix
B. & C. Co., 11 Cal. App. 527, 112
Pac. 892.

Kentucky: Hahn v. Horstman, 12
Bush, 249.

New York: Greer v. Tweed, 13 Abb.
(N. S.) 427; Colwell v. Foulks, 36 How.
Pr. 306; Murphy v. U. S. F. & G. Co.,
100 App. Div. 93, 91 N. Y. Supp. 582.

But in Phaneuf v. Corey, 190 Mass.
237, 76 N. E. 718, where there was a
dispute as to the completion of the
building which lasted six months, the
liquidated damages were allowed for
the entire period.

"^ United States: Tayloe v. Sandi-
ford, 7 Wheat. 13, 5 L. ed. 384.



Georgia: S. & C. R. R. v. Callahan,
56 Ga. 331.

Kansas: Condon v. Kemper, 47
Kan. 126, 27 Pac. 829, 13 L. R. A. 671.

'^2 Meiv York: Ward v. Hudson River
Big. Co., 125 N. Y. 230, 26 N. E. 256.

South Carolina: Allen v. Brazier, 2
Bail. 293.

"^ The following damages were held
unreasonably large and the stipulation
was not allowed:

Iowa: Coen v. Birchard, 124 Iowa,
394, 100 N. W. 48 ($5 a day for house
of S25 per month rental value).

Michigan: Ross i^. Loescher, 152
Mich. 386, 116 N. W. 193 ($20 a day
on S825 porch) .

Missouri: Cochran v. People's Ry.,
113 Mo. 359, 21 S. W. 6 ($50 a day on
$17,785 building).

North Carolina: Weedon v. Ameri-
can B. & T. Co., 128 N. C. 69, 38 S. E.
255 ($10 a day on building of $30 per
month rental value).

Texas: Jennings v. Wilier (Tex. Civ.



808



LIQUIDATED DAMAGES



§419



in finishing a house, the rental value of which was $25 a month,
were stipulated at $150 a week, this was not allowed as liqui-
dated damages. ^^"^

In accordance with the general principle, where in case of the
non-delivery of negroes at a certain time damages were to be
paid at a stipulated rate per year, they were allowed at that
rate. ^'° A carrier agreed to deliver goods at a certain time, or to
deduct a stipulated amount from the freight for every day's
delay. This deduction was allowed. ^^'^ It was provided in a
lease that the lessee, on failure to surrender the premises at the
end of the term, should pay double rent. This was allowed as
liquidated damages. ^"^ In case of an agreement to furnish
goods at a certain time, or to pay a stipulated amount per day



App.), 32 S. W. 24 ($25 a day for house
of $150 per month rental value).

Wisconsin: J. G. Wagner Co. v.
Cawker, 112 Wis. 532, 88 N. W. 599
($50 a day on $16,458 contract).

The following damages were held
reasonable :

United Slates: Simpson Bros. Corp. v.
John R. White & Son, 187 Fed. 418
($300 a week for coal pocket costing
$29,000).

Colorado: Denver L. & S. Co. v.
Rosenfield Constr. Co., 19 Colo. 539,
36 Pac. 140 ($5 a day for nine houses).

Illinois: Hennessy v. Metzger, 152
111. 505, 38 N. E. 1058, 43 Am. St.
Rep. 207 ($50 a day for $15,000 mill).

Iowa: DeGraff v. Wickliam, 89
Iowa, 720, 52 N. W. 503, 57 N. W.
420 ($10 a day for house).

Maryland: United Surety Co. v.
Summers, 110 Md. 95, 72 Atl. 775
($50 a day for $13,000 building; same
amount to contractor for each day
ahead of time).

Missouri: Thompson v. St. Charles
County, 227 Mo. 220, 12G S. W. 1044
($10 a day for $37,000 courthouse);
Ramlose v. Dollman, 100 Mo. Ai)p.
347, 73 S. W. 917 ($10 a day for build-
ing renting at $300 a month).

New York: Macey Co. v. New York,
129 N. Y. Supp. 241 (App. Div.)



($10 a day for exhibition cases costing
$7,245).

South Carolina: Carter v. Kaufman,
67 S. C. 456, 45 S. E. 1017 ($5 a day
for 10 days, then $10 a day for brick
storehouse renting for $35 a month).

Texas: Harris County v. Donaldson,
20 Tex. Civ. App. 9, 48 S. W. 791 ($10
a day for courthouse, rental value $200
to $300 a month); Brown Iron Co. v.
Norwood (Tex. Civ. App.), 69 S. W.
253 ($5 a day for $2,200 house); Neb-
lett V. McGraw, 41 Tex. Civ. App. 239,
91 S. W. 309 ($20 a day for store).

Virginia: Crawford v. Heatwole &
Hedrick, 110 Va. 358, 66 S. E. 46 ($10
a day for $7,000 house much needed).

Washington: Reichenbach v. Sage,
13 Wash. 364, 43 Pac. 354 ($10 a day
for a house); demons v. Gray's H. &
P. S. Ry. (Wash.), 114 Pac. 865 ($1,000
a day for a railroad crossing) .

Wisconsin: Davis v. La Crosse Hos-
pital Assoc, 121 Wis. 579, 99 N. W.
332 ($20 a day for $24,000 hospital).

1^^ Clements v. Schuylkill R. E. S.
R. R., 132 Pa. 445.

''^ Tardeveau v. Smith, Hardin, 175.

'^^ Harmony v. Bingham, 12 N. Y.
99.

'"Walker v. Engler, .30 Mo. 130;
ace, Poppers v. Meager, 148 111. 192, 35
N. E. 805.



§420



STIPULATIONS TO EVADE THE USURY LAWS



809



as damages for failure, the stipulated amount is enforced as
liquidated damages. ^"^ Ordinary clauses for demurrage in char-
ter parties are governed by the same general rule.^^^ And the
same principle applies to liquidated damages for delay in per-
forming other contracts. ^^°

§ 420. Stipulations to evade the usury laws.

* // the sum be evidently fixed to evade the usury laws or any
other statutory provisions, the courts will relieve by treating it as a
penalty. ^^^ So, in a case,^^^ where a bond was given that if cer-



'^* Bergheim v. Blaenavon Iron &
Steel Co., L. R. 10 Q. B. 319; Young
V. White, 5 Watts, 460.

'"9 Post, § 857.

180 Pqj- building a railroad:

United States: Fruin-Bambrick Con-
struction Co. V. Ft. Smith & W. R. R.,
140 Fed. 465 (Uquidated damages not
recoverable after the company takes
possession of the road before it is fully
completed and operates it).

Iowa: Wolf v. Des Moines & F. D.
Ry., 64 Iowa, 380, 20 N. W. 481.

Kentucky: Ford v. Ingles Coal Co.,
102 S. W. 332, 31 Ky. L. Rep. 382.

Pennsylvania: Faunce v. Burke, 16
Pa. 469, 55 Am. Dec. 519.

Constructing other works:

United States: Stephens v. Bridge
Co., 139 Fed. 248, 71 C. C. A. 374
(viaduct; .SlOO per day held a penalty).

Alabama: Hooper v. Savannah & M.
R. R., 69 Ala. 529 (streets).

Georgia: Washington v. Potomac
Eng. & Construction Co., 132 Ga. 849,
65 S. E. 80 (waterworks).

New York: McCann v. Albany, 11
App. Div. 378, 42 N. Y. Supp. 94
(sewer; $50 a day held a penalty).

Pennsijlvania: Malone v. Philadel-
phia, 147 Pa. 416, 28 Atl. 628 (bridge).

Delivering machinery:

Alabama: Cleveland C. & C. Co. v.
American C. I. P. Co. (Ala.), 53 So.
313 (electric crane).

Mississippi: Hardie-Tynes F. & M.



Co. V. Glen Allen Oil Mill, 84 Miss.
259, 36 So. 262.

West Virginia: WTieeling M. & F.
Co. V. Wheehng S. & I. Co., 58 W. Va.
62, 51 S. E. 129, 130.

Wisconsin: Manistee I. W. Co. v.
Shores Lumber Co., 92 Wis. 21, 65 N.
W. 863.

Delivering fire boat:

Dist. of Columbia v. Harlan & Hol-
lingsworth Co., 30 App. D. C. 270.

Furnishing steel work for roof:

Louisville Water Co. v. Youngstown
Bridge Co., 16 Ky. L. Rep. 350.

And so of a stipulated rate for keep-
ing animals:

Morris v. Wilson, 114 Fed. 74.

And of other contracts:

United Slates: U. S. v. Bethlehem
Steel Co., 205 U. S. 105, 27 S. Ct. 450,
51 L. ed. 731 (to supply gun carriages).

Indiana: Barber Asphalt Pav. Co. v.
City of Wabash, 86 N. E. 1034, 43 Ind.
App. 167 (to pave a street).

Missouri: House Wrecking Co. v.
Sonken, 152 Mo. App. 458, 133 S. W.
355 (to tear down buildings).

Washington: Erickson v. Green, 44
Wash. 613, 92 Pac. 449 (to remove soil
from a lot).

^^^ Georgia: Clark v. Kay, 26 Ga.
403.

Indiana: Brown v. Maulsby, 17 Ind.
10.

Kansas: Kurtz v. Sponable, 6 Kan.
395.



182 Orr V. Churchill, 1 H. Black. 227, 232.



810 LIQUIDATED DAMAGES § 420

tain bills were not accepted, the obligors would pay the amount
of them, with interest at ten per cent., by way of penalty, it
was insisted that the damages were liquidated. But Lord
Loughborough said : " There can only be an agreement for liqui-
dated damages where there is an engagement for the performance
of certain acts the not doing of which would be injurious to one
of the parties, or to guard against the performance of acts which
if done would also be injurious. But in cases like the present,
the law, having by positive rules fixed the rate of interest, has
bounded the measure of damages." And it was held that the
amount of the bills, with legal interest only, could be recovered.
And, in a similar case, this language was held by the Supreme
Court of New York: " Such facts constitute no right to recover
be3'ond the money actually due. Liquidated damages are not
applicable to such case. If they were, they might afford a sure
protection for usury, and countenance oppression under the
form of law."^^^ **

Probably, in some cases, agreements open to this objection
would be wholly void. This depends upon the local statutes
with regard to usury. It will be observed that whenever an
agreement for stipulated damages is treated as a cover for usury,
and therefore converted into a penalty, this is put on the ground
of the violation of the statute law. The intention of the parties
in cases of this sort may be, either to liquidate damages, or to
evade the statute. If it is the latter case, the agreement is a
nullity, as contrary to express law; if the former, intention is
not allowed to prevail. In a Kansas case of the sort under con-
sideration it was held that it must affirmatively appear that

Michigan: Davis v. Freeman, 10 i*^ Gray v. Crosby, 18 Johns. 219,

Mich. 188. 226. In Galsworthy v. Strutt, 1 Exch.

Ohio: State v. Taylor, 10 Oh. 378; 659, 665, Parke, B., is reported to

Shelton v. Gill, 11 Oh. 417. have said, with, perhaps, less than his

In Illinois, an agreement in a prom- usual care and discrimination: "I take

issory note made in good faith, without it that it would be competent for the



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 86 of 88)