Lee, Wyly & Co. v. Silas Overstreet's Administrator

McCay, Judge. Our Code, section 2890, declares that “ penalties in bonds are not liquidated damages, and even if called such, if it appear unreasonable, and not so actually intended by the parties, the law will give only the actual damages. And in all cases, if the damages are capable of computation, and is not uncertain in its character, such stipulations will not be declared penalties.” The breach alleged here is a failure to take and pay for two lots of this turpentine. The damages can easily be ascertained. The difference between the price agreed upon and the worth of the article, at the time, in the market, is, prima fade, the measure of damages. The thing bargained about is an article of merchandise. It has always [509] a market value, and the case comes exactly within the provision of the Code, which we have quoted. If such a contract as this is not a penalty, we see no limitation at all to the stipulation which parties may make, however onerous and unconscionable. Why, if this is not a penalty, may not one bind himself in a penalty of, say $1,000 00, to pay twenty cents per pound for all the cotton one may make, on a particular place, during any one year, and yet this is just the sort of ease that begot the first interference, by Courts of equity, with such agreements. We think this was clearly a penalty, and not liquidated damages. Judgment reversed.