Baird v. Tolliver , 25 Tenn. 186 ( 1845 )

Reese, J.

delivered the opinion of the court.

This case comes before us, by an appeal in error, on both sides, from the judgment of the circuit court.

The plaintiff’s cause of action is stated in the declaration to. be a covenant, in which the defendant, acknowledging that he.had received from the plaintiff, on loan, four five per cent. State bonds, for one thousand dollars each, stipulates, that, within twelve months, he. would return to the plaintiff the :said bonds, or pay four thousand dollars. At the date of the covenant, and at the expiration of twelve months, and in the intermediate period, the market value of such bonds had been from six to eight hundred dollars. The main question discussed, both in the circuit court and here, was, whether the-four thousand dollars was to be regarded as a penalty to enforce the return of the. bonds, or to be recovered as liquidated damages. We are of opinion, upon principle, and the authority of the cases referred to, that the sum' mentioned is to be regarded as a penalty; because the bonds have an ascertainable market value; because that value was, during the whole period of the loan, greatly below the sum of four thousand' dollars; because that is an aggregate sum in gross, compelling the return of all four. bonds, arid not permitting the return of one, two, or even three of them; because, to hold, in such case, that the sum stated is liquidated damages, would furnish an easy device to evade the usury laws; because, finally, when there is any doubt, whether the stipulated sum be a penalty or liquidated damages, the legal principle is, for courts to incline to hold it to the former.

The other question discussed, is, whether the court erred in refusing to the defendant a new trial, upon the ground that the jury placed a higher value upon the bonds than the proof would warrant. We would have been satisfied with a smaller verdict; but we cannot say that there is not proof in the record upon which the verdict of the jury can rest and be sustained. This being so, and the circuit court having refused a new trial, the judgment will not be disturbed.