114 F. 297 | 8th Cir. | 1902
after stating the case as above, delivered the opinion of the court.
Waiving any consideration of the question of equitable jurisdiction, concerning which there may be some doubt, owing to the equitable character of the plaintiff’s alleged claim to the fund, we will proceed to dispose of the case on its merits.
By the express terms of the contract, if the 150 arc lights were not put up and in operation within the time limited, the company was to forfeit and pay to the city, “as liquidated damages, and not as a penalty, the sum of ten thousand dollars now on deposit with the city treasurer of the city of Wichita.” Cases of penal bonds between private persons, where the damages resulting from a breach are readily ascertainable, have no application-to this case. A city is a public corporation designed for local government. It is an agency of the state to assist in the civil government of the territory and people of the state embraced within its limits. It has no private interests. It is a public agency, and acts for the public; and when it contracts for the
The law on the subject of liquidated damages and penalties has recently received great consideration at the hands of the supreme court, in the case of Association v. Moore (Oct. term, 1901) 22 Sup. Ct. 240,
“The decisions of this court on the doctrine of liquidated damages and penalties lend no support to the contention that parties may not, bona fide, in a case where the damages are of an uncertain nature, estimate and agree upon the measure of damages which may be sustained from the breach of an agreement. On the contrary, this court has consistently maintained the principle that the intention of the parties is to be arrived at by a proper construction of the agreement made between them, and that whether a particular stipulation to pay a sum of money is to be treated as a penalty, or as an agreed ascertainment of damages, is to be determined by the contract, fairly construed; it being the duty of the court, always, where the damages are uncertain and have been liquidated by an agreement, to enforce the contract”
And the court quotes approvingly from the case of Bagley v. Peddie, 16 N. Y. 469, 471, 69 Am. Dec. 713, these two rules :
“Sixth. If, independently of the stipulated damages, the damages would be wholly uncertain, and incapable of being ascertained except by conjecture, in such case the damages will be considered liquidated if they are so denominated in the instrument. Seventh. If the language of the parties evinces a clear and undoubted intention to fix the sum mentioned as liquidated damages in case of default of performance of some act agreed to be done, then the court will enforce the contract, if legal in other respects.”
The case at bar falls directly within the doctrine of the supreme court in this case, and is, moreover, in principle, on all fours with the case of Clark v. Barnard, supra.
It is needless to say that a court of equity, no more than a court of law, can relieve a party from his obligation to pay liquidated damages. When it is once settled that the damages are liquidated, it is then settled that they are not a penalty. A court of equity can no more relieve from the obligation to pay liquidated damages than it can relieve from the obligation to pay a promissory note executed upon sufficient consideration.
The decree in the case should be that the plaintiff’s bill be dismissed for want of equity, and, as thus modified, the decree of the circuit court is affirmed.