227 F. 938 | E.D. Pa. | 1915
The beginnings of this controversy arc to be found in Immigration Law Feb. 20, 1907, c. 1134, 34 Stat. 898, as amended by Act Cong. March 26, 1910, c. 128, 36 Stat. 263. The facts of the case are these:
An intending immigrant was found by the special board of inquiry, upon certificate of the medical examiner, to be feeble-minded. There was no appeal from this finding. The alien is in consequence within the class absolutely excluded by the act of Congress. Ordinarily this would have been followed by an order of deportation. This would
The statement of claim avers'a breach of both conditions and demands judgment for $1;000, the amount of the bond. The affidavit of defense avers impossibility of the obligors committing the alien to a hospital for treatment, because the,fact was that after examination the alien was found not to be feeble-minded, and that no institution would receive him as such. The affidavit asserts the further equitable defense that the bond is one of indemnity only, and that the plaintiff had sustained no loss.
We have ignored the suggestion that the plaintiff is not entitled to judgment because a copy of the bond sued upon had not been made part of the statement of claim, because the averment upon which this part of the defense was based has been withdrawn, and we have been asked to limit the consideration of the defense to the averment of fact and the legal position first mentioned.
Under the system which pertains in Pennsylvania of administering equity through legal forms, equitable defenses are always admissible in actions of assumpsit. Indeed, to all intents and purposes an action in assumpsit is- a bill in equity. Inasmuch, however, as the United States is a party to this action, and as it arises out of an effort to enforce a law of the United States, the laws and established practice of Pennsylvania are those of a foreign jurisdiction.
The legality of the bond and its breach, and that any action upon it is open to the equitable defense here interposed, being found, we are brought face to face with its merits. Out of the declared policy of the law not to enforce gambling contracts, and out of the weakness to which mankind is prone to wager any amount on a future event, or the obligor’s ability to do a certain thing, has arisen the equitable doctrine of relief. A helpful guide to its application and to its limitations may be sought in almost innumerable cases. The expression which defines these limitations as accurately as any phrase can is that which is usually inserted in contracts where the purpose is to recompense by the payment of an agreed sum the party who suffers loss because of nonperformance. The phrase is, after stating a stipulated sum which the party agrees to pay, that it is to be paid “not as a penalty, but as damages fairly liquidated and agreed upon by the parties, and not to be relieved against.” The phrase recognizes the distinction in damage claims between cases in which the damage is capable of easy and accurate admeasurement, and any disproportion between the actual and the agreed damages may be readily discovered, and the other class of cases in which the damage is real and substantial, and yet its admeasurement is so difficult that an agreed sum is not only a fair adjustment of the amount, but practically necessary. In the latter class of cases equity leaves the parties to their legal rights unless the amount fixed is so disproportional to any consideration of real damage as to be unconscionable, and to justify a finding that there had been no real adjustment of the amount and that the formal agreement was a pretense, and' its real purpose to annul the equitable doctrine of relief. Obviously, equity can relieve the defendant from the legal obligation of the second agreement as readily as from the first contract.
The purpose of the condition of this bond is manifest. The United States wished protection, not only against the possibility of the expense
The rule is that, where the parties to a contract have agreed that a sum shall become payable on a single event, such sum may be regarded as liquidated damages, but where the sum is made payable to secure the performance of several stipulations of varying degrees of importance, it is clear the stipulated sum must be regarded as a penalty, and not as liquidated damages for a part default. Had the breach averred been in the performance of the only condition to be performed, the argument addressed to us would have force. As the fact is otherwise, the argument has no application.
The rule for judgment is discharged.
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