PENALTY. A clause in an agreement, by which the obligor agrees to pay a certain sum of money. if he shall fail to fulfil the contract contained in another clause of' the same agreement.
A penal obligation differs from an alternative obligation, for this is but one in its essence; while a. penalty always includes two distinct en gagementa, and when the first is fulfilled the second is void. When a breach ham taken place the obligor hag his option to require the fulfilment of the first obli gation, or the payment of the penalty, in those cases which cannot be relieved in equity, when the penalty is considered as liquidated damages. Dalloz, Diet. Obligation avec Clause penale.
A distinction is made in courts of equity between penalties and forfeitures. In cases of forfeiture for the breach of aoy covenant other than a cove nant to pay rent, relief will not be grouted ia equity, unless upon the ground of accident, fraud, miatake, or surprise, when the breach is capable of compensation. Eden, Inj. 22; 3 Ves. Ch. 692;
16 id. 403; 18 id. 58; 4 Bouvier, Inst. n. 3915.
For the distinction between a penalty and liquid ated damages, see LIQUIDATED DADIAGE13.
The penalty remains unaffected although tha condition may have been partially performed : as, in a case where the penalty was one theueand dollars, and the condition was to pay an annuity of one hundred dollars, which had heen paid for ten yeare, the penalty was still valid. 5 Vt. 355.
The punishment inflicted by law for- its violation. The term is mostly applied te a pecuniary punishment. See 6 Pet. 404; 7 Wheat. la; 10 id. 246 ; 1 Wash. C. C. 1 ; 2 id. 323 ; 1 Paine, C. C. 661 ; 1 Gall. C. C.26 ; 2 id. 515 ; 1 Mas. C. C. 243 ; 3 Johns. Cas. N. Y. 297 ; 7 Johns. N. Y. 72 ; 1 Pick. Mass. 451 ; 4 Mass. 433 8 id. 232 ; 15 id. 488; 8 Comyns, Dig. 84d; 16 Viner, Abr. 301 ; 1 Vern. Ch. 83, n. ; 1 Saund. 58, n. : 1 Swanst. Ch. 318. See, gen,erally, Bouvier, inst. Index,