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In actions brought for the breach of covenants and agreements, there has sometimes been a difficulty in distinguishing between penalties and liquidated damages. The fair result of the cases seems to be this

1. Where a sum of money, whether in the name of a penalty or otherwise, is introduced in a covenant or agreement, merely to secure the enjoyment of a collateral object, the enjoyment of the objest is considered as the principal intent of the deed or contract, and the penalty only as accessary, and therefore only to secure the damage really incurred. This rule has long been established in courts of equity, and the statute 8 and 9 Wm. 3. has introduced this practice, and affords the same benefits to defendants at common law; for it is no longer now matter of election in the plaintiff to proceed under this statute: the provisions

are compulsory, and must be
pursued.

2. Where a deed contains
covenants, or an agreement
contains provisions, for the per-
formance of several things, and

then a large sum is stated at
the end, to be paid upon the
breach of performance, that
must be considered as a pe-
nalty.

3. Where the payment of a
smaller sum is secured by a
larger.

4. Where the word penalty is specifically used it is merely as a security.

5. A court of equity will relieve against a penalty, upon a compensation; and a court of law will not enforce it beyond the actual damage sustained; but where there is a covenant in a deed to pay a particular liquidated sum, neither a court of equity nor a court of law can make a new covenant for a man; nor is there any room for compensation or relief; as in leases, containing covenants for ploughing up a meadow. If the covenant be "not to plough," and there be a penalty, a court of equity will relieve against the pe nalty, and direct an issue of quantum damnificatus. And in an action of covenant at common law, a breach must be assigned, and the extent of

1815.

BARTON

v.

GLOVER.

1815.

BARTON

v.

GLOVER.

the injury will be the measure of damages which the plaintiff will recover. But if it be worded to pay 5l. an acre for every acre ploughed up; there is no alternative; no room for any relief against it; no compensation; it is the substance of the agreement.

6. Where the precise sum, therefore, is not of the essence of the agreement, the quantum of damages may be assessed by a Jury; but where the precise sum has been fixed and agreed upon by the parties, that very sum is the ascertained and liquidated damage; the Jury are confined to it, and the plaintiff cannot reeover beyond it. For example, where a stipulated sum has been claimed for breach of a marriage contract; in which case it might not be possible to ascertain precisely what damages the person, in respect to whom the contract is broken, has sustained; and therefore the contracting parties agree to pay a stipulated sum: in such case, the sum stipulated is, by the convention of the parties, the real debt, and becomes due, in integro, on a breach of the contract.

7. But in all articles guarded by penalties, there are two remedies to be pursued at the option of the party injured:

he may, as often as the articles are broken, have, toties quoties, an equitable relief, upon the footing of the articles themselves, for a partial breach of contract, or he may take the penalty. That is to say, where there is a penalty and covenant in the same deed, the party has his election either to bring debt for the penalty, or an action on the covenant for damages. In the former case, the contract is rescinded, and the penalty becomes the debt in law; subject of course to relief in equity, and to the restrictions by the mode of proceeding under the 8 and 9 Wm. 3d, in a court of law; and if the penalty be paid, according to the stipulation. of the articles, or be recovered as the debt in law, the party cannot resort back to his covenant or action for the breach of the contract. But he may elect to bring his action on the contract, and, according to the nature of the case, may recover even beyond the amount of the penalty in damages.

Ponsonby v. Adam, 6 Br. Parl. Cas. 418. Harrison v. Wright, 13 East, 343. Rolfe v. Peterson, 6 Br. Parl. Cas. 470. Sloman v. Walter, 1 Brown. Cas. in Chanc. 418. Hardy v. Martin, ibid. 419.

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THI

DE MEDINA v. POLSON.

June 28.

Though an agreement for

use and occupation is void

HIS was an action for use and occupation.The plaintiff claimed a quarter's rent. The defendant entered into a verbal agreement with an agent of the plaintiff for the occupation of a house of frauds, ne

by the statute

vertheless, if

take posses

premises under

a tenant at

had to the ori

ment to cal

amount of

in Burton-street at the rent of 70l. per annum. the tenant The agreement was made on Friday, 7th of Oc- sion of the tober, 1814, to take the house for three years; it, he becomes possession to be given on the following Monday, will, and rebut the defendant was not to pay rent, or com- course may be mence tenant, until certain alterations were made, ginal agreewhich had been pointed out by the defendant, and culate the agreed to by the plaintiff. On Saturday the de- rent. fendant ordered some coals to be sent into the house before Tuesday. On the Monday the defendant gave notice to the plaintiff that he retracted the agreement. The coal-merchant, by mistake, delivered the coals on Monday. On the Tuesday, the defendant sent for them, and they were re-delivered to him.

For the defendant, it was contended, that this agreement, not being in writing, was void by the

1815.

statute of frauds. It was not a lease in possession, but in reversion, and therefore not within the exDE MEDINA ception in the statute.

v.

POLSON.

The Solicitor General, for the plaintiff.-Admitting the lease to be void, it would have the effect of a tenancy at will; the defendant has taken possession by sending in the coals, and the plaintiff is entitled to a quarter's rent.

Lens, contrà. The action of use and occupation can only be founded upon the relation of landlord and tenant. Can it be insisted that the actual taking possession of the premises is sufficient, though the taking be void by the statute of frauds? The law annuls all contracts like the present; you cannot claim any portion of rent, because you cannot receive evidence of any ingredient of a contract which the law has declared to be void. The putting in the coals is no possession; it might be a trespass, or the subject of another action; but it will not support an action for use and occupation.

GIBBS, C. J.-The agreement is void by the statute of frauds; but I am of opinion that you may still resort to it to calculate the amount of rent. In case the tenant under such an agreement. should take possession, he would be a tenant at will, and might determine his tenancy at whatever time he pleased. The coals appear to have been sent in by mistake; the occupation, therefore, does not seem to have commenced. I shall direct the Jury, if they think with me upon the

coals, to find a verdict for the defendant, and shall give the plaintiff liberty to move upon the point of law which I have ruled against him.

Verdict for the defendant.

Solicitor General, and Abbott, for the plaintiff.

Lens, serjeant, and Gifford, for the defendant.

[Attornies, Alliston and Co. and Law.]

1815.

DE MEDINA

2.

POLSON.

GERNON and Another . The Corporation of the
ROYAL EXCHANGE ASSURANCE.

June 30.

ACTION on a policy of insurance, on sugar, by bad weather

the Mary, from Liverpool to Calais. plaintiffs claimed a total loss by perils of the Defence, that it was a partial loss, and 8857.

into court.

The be compelled sea. her loading paid port, and upon

to put back to

examination of her cargo, it is found

not to be in a fit state to send

forward to its

original desti

nation, and al

suited to the

together un

sea-damage,

The policy was dated 21st November, 1814. The vessel took in her cargo on the 1st of December, and sailed from Liverpool on the 2d; she encountered very severe weather, struck on a bank, market from and was compelled to return to Liverpool on the the insured is 20th of December. The agents for the ship at abandon. Liverpool gave immediate notice to the plaintiffs held by the in London. The cargo was taken out, and several Court, that he

entitled to

Afterwards

was entitled to a reasonable

time for examining the state of the cargo before he made his election to abandon. VOL. I.

E

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