Holbrook v. Tobey

Walton, J.

The defendant bound himself in the sum of $500, to close his house as a public house, and not to allow his house or his stables to be used for the accommodation of the traveling public for the next five years; and the only question is whether the sum mentioned shall be considered as liquidated damages or a penalty.

We think it must be regarded as liquidated damages. The authorities run in nearly an unbroken current to the effect that, where a party binds himself in a sum named not to carry on any particular trade, business, or profession, within certain limits, or within a specified period of time, the sum mentioned will be regarded as liquidated damages, and not a penalty.

In Leighton v. Wales, 3 Mee. & W. 545, where the defendant bound himself not to run a coach over a certain road, at any time within one hour before or after certain specified hours of the day, under a penalty of £40: held, that the £40 must be construed as liquidated damages, and not as a penalty.

In Crisdee v. Bolton, 3 Car. & P. 240, where, in an agreement for the sale of a public house, the seller agreed not to be concerned in carrying on the business of a publican within a mile of the house he had sold, under the penal sum of £500, it was held that the whole sum was recoverable as stipulated damages.

In Rawlinson v. Clarke, 14 Mee. & W. 187, where an apothecary sold out his business, and agreed not to carry on the business within three miles of the then place of business, and for a breach of the agreement, to pay £500, it was held that the measure of damages was the full sum named.

In Price v. Green, 16 M. & W. 346, where the defendant bound himself in the sum of £5000, not to engage in the business of a perfumer in London or Westminster, it was held that for a breach of the agreement the plaintiff was entitled to recover the whole sum of £5000.

In Galsworthy v. Strutt, 1 Exch. 659, where an attorney agreed that' he would not within the next seven years engage directly nor indirectly, in the business of an attorney or solicitor, within fifty miles of a place named, and, if he should violate his agreement, that he would pay the plaintiff £1000, it was held that the sum named must be considered liquidated damages, and not a penalty.

In Sainter v. Ferguson, 7 C. B. 716, where a surgeon agreed that he would not practice within seven miles of a place named, under a penalty of £500, it was held that the £500 was not a penalty, but liquidated damages.

In Atkyns v. Kinnier, 4 Exch. 776, where a surgeon agreed that be would not practice within certain limits named, and, for a breach of the agreement, would pay £1000, it was held that the £1000 was liquidated damages, and not a penalty.

In Pierce v. Fuller, 8 Mass. 223, where the defendant agreed not to run a stage on a certain road, under the penalty of $290, it was held that the sum named must be regarded as liquidated damages.

In Dakin v. Williams, 17 Wend. 447, S. C. 22 Wend. 201, whore the defendant sold a newspaper establishment, and bound himself in the-sum of $3000, not to publish a rival paper, the sum named was held to be liquidated damages.

In Mott v. Mott, 11 Barb. 127, where the defendant bound himself in the sum of $500 not to practice medicine within a certain town named, for five years, it was held that the $500 must be regarded as liquidated damages, and-not as a penalty. In this case the court recognize the principle that where a certain sum has been agreed upon as damages for the violation of an agreement restraining a party from the use of a trade or profession, the sum named will, in general, be considered as liquidated damages.

In Streeter v. Rush, 25 Cal. 67, a butcher sold out, and bound himself in the sum of $400 not to go into business again in the same place, without the plaintiff’s consent; and in Duffy v. Shocky, 11 Ind. 70, the defendant agreed not to have a marble shop within certain territory under a penalty named ; and in Gresselli v. Lowden, 11 Ohio St. 349, that he would not work a laboratory, claimed to be a nuisance to the plaintiff’s premises, and if he did, to pay $3000 ; and in Jaquith v. Hudson, 5 Mich. 123, a retiring partner agreed to forfeit $1000 if he went into business again in the same place within a certain time; and in Cushing v. Drew, 97 Mass. 445, the defendant sold out an express business, and agreed not to engage in the same business again in the same place so long as the plaintiff should continue in it; and in all these cases the sums named were held to be liquidated damages, and not penalties.

We think the case now before us falls clearly within the principle of these decisions, namely, that where a party binds himself in a sum certain not to carry on, or allow to be carried on, any particular kind of business, within certain territory, or within a certain time named, the sum mentioned will, in general, be regarded as liquidated damages, and not as a penalty. Of course, if the sum named should be out of all proportion to any possible damage which the plaintiff could sustain, the court would hold otherwise, upon the very reasonable presumption that the parties never could have intended that the sum named should be regarded as liquidated damages. But in all ordinary cases, where there is no such disproportion, we think the sum agreed upon should be the amount recoverable. In this case there is no such disproportion, and our conclusion is that the defendant must abide by the agreement which he thought proper to make.

Judgment for plaintiff for $500.

Appleton, C. J., Daneorth, Virgin, Peters and Libbey, J J., concurred.