LIQUIDATED DAMAGES. In Prac tice. Damages whose amount has been de termined by anticipatory agreement betvveen the parties.
Where there is an agreement between parties for the doing or not doing particular acts, the parties may, if they please, estimate beforehand the dam ages to result from a breach of the agreement, and prescribe in the agreement itself the sum to be paid by either hy way of damages for such hreach. See H. Blackst. 232; 2 Bos. P. 335, 350; 2 Brown, Parl. Cas. 431; 4 Burr. 2225; 2 Term. 32. The civil law appears to recognize such stipulations. Inst. 3. 16. 7; Toullier, 1. 3, no. 809; La. Civ. Code, art. 1928, n. 5; Code Civile, 1152, 1153. Such a stipulation on the subject of damages differs from a penalty in this, that the parties are holden by it; whereas a penalty is regarded as a forfeiture, from which the defaulting party can he relieved.
2. The sum named in an agreement as damages to be paid in case of a breach will, in general, be considered as liquidated dam ages, or as a penalty, according to the intent of the parties; and the mere use of the words "penalty" or "liquidated damages" will not be decisive of the question, if on the whole the instrument discloses a, different intent. Story, Eq. Jur. 1318; 6 Barnew. & C. 224; 6 Bingh. 141 ; 6 Ired. No. C. 186 ; 15 Me. 273 ; 2 Ara. N. s. 425 ; 8 Mo. 467.
Such a stipulation in an agreement will be considered as a penalty merely, and not as liquidated damages, in the following cases: 3. Where the parties in the agreement have expressly declared it or described it as a "penalty," and no other intent is clearly to be deduced from the instrument. 2 Bos.
this is called the paternal line. Another line will be found to ascend from the same person to his mother, his maternal grandmother, and so from mother to mother : this is the mater nal line. These lines, however, do not take in all the ascendants: there are many others who must be imagined. The number of ascendants is double at each degree, as is shown by the following diagram : & P. 340, 350, 630; 1 II. Blackst. 227 ; 1 Campb. 78 ; 7 Wheat. 14 ; 1 McMull. So. C. 106; 2 Ala. w. s. 425 ; 5 Metc. Mass. 61 : 1 Pick. Mass. 451 : 4 id. 179 ; 3 Johns. Cas. N. Y. 297 ; 17 Barb. N. Y. 260 ; 24 Vt. 97.
Where it is doubtful on the language of the instrument whether the stipulation was intended as a penalty or as liquidated dam ages. 3 Carr. & P. 240 ; 6 Hurnphr. Tenn.
186 ; 5 Sandf. N. Y. 192 ; 24 Vt. 97; 16 Ill. 475.
- 4. Where the agreement was evidently made for the attainment of another object or purpose, to which the stipulation is wholly collateral. 11 Mass. 488 ; 15 id.488 ; 1 Brown, Ch. 418.
Where the agreement imposes several dis tinct duties, or obligations of different de grees of importance, and yet the same sum is named as damages for a breach of either indifferently. 6 Bingh. 141 ; 5 Bingh. N. c. 390 ; 7 Scott, 364; 5 Sandf. N. Y. 192. But see 7 Johns. N. Y. 72 ; 15 id. 200 ; 9 N. Y. 551.
Where the agreement is not under seal, and the damages are capable of being cer tainly known and estimated. 2 Barnew.,& Ald. 704 ; 6 Barnew. & C. 216 ; 1 Mood. X M. 41; 4 Dall. Penn. 150; 5 Cow. N. Y. 144.
5. Where the instrument pmvides that a larger sum shall be paid upon default to pay a lesser sum in the manner prescribed. 5 Sandf. N. Y. 192, 640 ; 16 Ill. 400 ; 14 Ark. 329.
The stipulation will be sustained as liqui dated damages in the following cases: Where the agreement is of such a nature that the damages are uncertain, and are not capable of being ascertained by any satis factory and known rule. 2 Term, 32; 1 Alc. & N. Ir. 389; 2 Burr. 2225 ; 10 Ves. Ch. 429; 3 Mees. & W, Exch. 535 ; 3 Carr. & P. 240 ; 8 Mass. 223 ; 7 Cow. N. Y. 307; 4 Wend. N.
Y. 468 ; 5 Sandf. N. Y. 192 ; 12 Barb. N. Y. 137, 366 ; 18 id. 336 ; 14 Ark. 315 ; 2 Ohio St. 519.
Where, from the tenor of the agreement or from the nature of the case, it appears that the parties have ascertained the amount of damages by fair calculation and adjustment. 2 Story, Eq. Jur. 1318 ; 2 Greenleaf, Ev. 259 ; 1 Bingh. 302 ; 7 Conn. 291 ; 11 N. H. 234; 6 Blackf. Ind. 206; 13 Wend. N. Y. 507; 17 id. 447; 22 id. 201 ; 26 id. 630 ; 10 Mass. 459 ; 7 Mete. Mass. 583 ; 2 Ala. N. s. 425 ; 14 Me. 250.
See 2 W. Blakkst. 1190; Cooper, Just. 606; 1 Chitty, Pract. 872; 2 Atk. 194; Finch. 117; Chanc. Pree. 102 ; 2 Brown, Parl. Cas. 436 ; Fonblanque, 151, 152, note ; Chitty, Contr. 336 ; 11 N. II. 234 ; 11 Tex. 273 ; 14 Ark. 315 ; 37 Eng. L. & Eq. 122 ; 2 Abb. Pract. 449 ; Sedgwiek, Dam. 3d ed. 417, 442, and cases cited.