ment. The plaintiff was to make large advances for the transportation and supply of the company, of which De Forest (for whom the defendant was surety) was one. The success of the adventure depended on a strict and faithful performance of the contract by those who were engaged in it. The loss occasioned by the desertion or disobedience of any one of the company could not be supplied without great expense and delay, if at all. Great gains were undoubtedly expected by all parties from the enterprise; and great loss to the plaintiff was certain from its failure. United action, subordination and obedience were indispensable to its success. The temptations to desertion and disobedience in California were many and strong. We know from the history of the country that military and naval subordination were broken up by those temptations. Without stern and stringent provisions in the articles which bound the company, no reasonable expectation could be entertained that they would remain united. It was necessary for the interest of each that all should be bound by such provisions. From the nature and object of the adventure, the amount of gain by a strict performance of the contract could not be foretold, and the amount of loss by a breach could not be ascertained by proof; and if it had been susceptible of proof in that country, the expense and difficulty of obtaining it here would have rendered a contract to pay unliquidated damages of no value. The liquidation of the damages by contract between the parties was therefore prudent and reasonable on all sides. Without such a provision the plaintiff would have had no real or substantial security for his advances; and without it the contract would probably never have been made. There is nothing in the case to authorize us to say that the .probable damages were unreasonably estimated at $500. It is probably less than all parties expected the plaintiff would gain by the adventure from the services of each individual, provided the enterprise was faithfully prosecuted by all; and whether the payment of this sum by each delinquent of the company will indemnify him for his loss, we have no means of ascertaining from the case. Under these circumstances, it seems to me that the intention of the parties to the bond was to bind themselves to the payment of the sum mentioned in its condition in case of a breach of the agreement. But it is contended that because the contract referred to in the bond bound the defendant to do several things of different degrees of importance, and the sum of $500 was made payable for the nonperformance of any or either, it must be a penalty, and not liquidated damages. This doctrine, in the cases in which it is asserted, is traced to the cases of Astley v. Weldon, 2 Bos. & Pul. 346, and Kemble v. Farren, 6 Bing. 141. But I do not understand either of these cases as establishing any such rule. The principle to be deduced from them is that, where a party agrees to do several things, one of which is to pay a sum of money, and in case of a failure to perform any or either of the stipulations, agrees to pay a larger sum as liquidated damages, the larger sum is to be regarded in the nature of a penalty; and, being a penalty in regard to one of the stipulations to be performed, is a penalty as to all. In Kemble v. Farren, Tindal, C. J., says, that if the clause fixing the sum for liquidated damages "had been limited to breaches which were of an uncertain nature and amount, we should have thought it would have the effect of ascertaining the damages upon any such breach," thus rejecting the doctrine contended for by the defendant's counsel in the present case. It is true that the doctrine thus contended for has been adopted in some English and in several American cases, hastily, I should think and without a careful examination of the cases from which it is supposed to be derived. But if it should be considered as having any solid foundation in principle, it should be applied only in subordination to the general rule, which requires the courts in these, as in all other cases, to carry into effect the true intent of the parties. It should never be applied to cases like the present, where the amount of damages is uncertain from the nature of the subject itself; and incapable of proof, not only from that uncertainty, but from the circumstances of the case already stated, and where for these reasons there was a necessity for ascertaining them by estimate, by the parties in their contract. The only plausible ground for withholding the doctrine in any case is, that the party might be made responsible for the whole amount of damages grossly disproportionate to the injury sustained by the other party. Without undertaking to deny that this rule may be properly applied to some cases, I cannot think it ought to be applied to the present. The injustice which it professes to avoid is no greater than that which is tolerated in many other cases for the purpose of enforcing a faithful performance of contracts. A laborer, for instance, who agrees to work by the month or by the year, his wages to be paid at the end of the term, loses by our law the fruits of his toil, if he fails in his last day's work; and a farmer who contracts to deliver to a merchant one hundred tons of hay, for which he is to be paid when the whole is delivered, and delivers ninety-nine tons, but fails in delivering the last load, to make up the quantity, can recover no part of what he has delivered. If the rigor and severity of this rule can be justified, we shall have no difficulty in reconciling our minds to the propriety of holding that the surety for De Forest is responsible in the specified amount of damages for the nonperformance of his contract, and in declining to relieve him from the consequences of a breach to which he made himself liable by his bond. Again, this is an action upon a bond in the penalty of $1,000, conditioned to pay $500 in a certain event therein mentioned. In Fletcher v. Dyche, 2 Term R. 32, Buller, J., says: "Where there is a penalty in a bond, it is strange that the sum mentioned in the condition should be called a penalty." And Lord Eldon, in Astley v. Weldon, says it would have been absurd to say that the sum mentioned in the condition of a bond and secured by a penalty should itself be regarded as a penal sum. See Smith v. Smith, 4 Wend. 468. Whether we look to the form of the defendant's contract, to the nature of his engagement, or to the circumstances in relation to which it was made, we find the intention of the parties was that the sum expressed in the condition of the bond should be paid for a breach of De Forest's contract. The jury having found it broken, we think judgment of the court below should be affirmed. ALLEN, J., concurred in the above opinion, but thought a new trial should be granted, on the ground that the court below erred in holding that the breach was admitted. All the other judges concurring. II. Forfeitures CRAIG v. HUKILL et al. (Supreme Court of Appeals of West Virginia, 1892. 37 W. Va. 520, 16 S. E. 363.) Bill by Joseph W. Craig against E. M. Hukill & Co. and others for partition of land. There was a decree for partition. Defendant E. M. Hukill appeals. BRANNON, J. W. M. Davis executed to David Kennedy a lease of a tract of land for a term of years, for the purpose of drilling for petroleum oil, which lease has come by assignment to E. M. Hukill. The deed of lease contains a covenant on the part of the lessee to commence operations for oil development within nine months, or for payment of a certain sum of money per month until commencement of work, with a provision that a failure to do one or the other should work an absolute forfeiture of the lease. Afterwards Davis executed an instrument by which he agreed to sell to H. P. Griffith all the oil and gas under the said tract, and Griffith transferred all his right in said tract to Joseph W. Craig. Davis had a life estate in said tract, with remainder in fee to his children; and, by the death of one of them, he inherited an undivided one-fifth share therein. Hukill, claiming under the first-mentioned lease, as also under a lease from the guardian of the surviving children, bored for and produced oil on the premises. Craig brought a suit in equity in the circuit court of Monongalia county against Hukill, Davis, and others, praying that the tract be partitioned, and one-fifth assigned as the share of Davis in fee, and that all the oil and gas under it be assigned to the plaintiff, Craig. The theory of Craig for relief is that by reason of failure to commence operations, or to pay money in lieu thereof, as provided in the lease to Kennedy, it had become forfeited, and he had, by the said agreement between Davis and Griffith, become entitled, in exclusion of all rights 8 For discussion of principles; see Eaton on Equity (2d Ed.) §§ 33, 34. THROCKM.EQ.JUR. (2D ED.)—7 under the Kennedy lease, to all oil which Davis could convey. Obviously, Craig can get relief only through an enforcement of the forfeiture of the Kennedy lease. Thus, at the threshold of the case, we are met with the question whether a court of equity will enforce this alleged forfeiture. Affirmative relief against penalties and forfeitures was one of the springs or fountains of equity jurisdiction, and the jurisdiction was very early exercised; and it would be going in the very opposite direction, and acting contrary to its essential principles, to affirmatively enforce a forfeiture. The elementary books on equity jurisprudence state the rule as almost an axiom, that equity never enforces a penalty or forfeiture. 2 Story, Eq. Jur. § 1319; 1 Pom. Eq. Jur. § 459; Bisp. Eq. § 181; Beach, Mod. Eq. Jur. § 1013. Mr. Pomeroy, in 1 Pom. Eq. Jur. § 460, says that rule is without exception; and I confess my search has led me to the same conclusion. This doctrine is supported in America by decisions of the highest authority, coming from jurists of the most eminent name,—among them, Kent and Marshall; and there seems to be no change or qualification in later decisions. Livingston v. Tompkins, 4 Johns. Ch. (N. Y.) 415, 8 Am. Dec. 598; Horsburg v. Baker, 1 Pet. 232, 7 L. Ed. 125; Marshall v. Vicksburg, 15 Wall. 146, 21 L. Ed. 121. The estate under the Kennedy lease certainly vested; and the plaintiff seeks, by a suit in equity, to divest it, which he can only do by declaring and enforcing the forfeiture of that lease, for the plaintiff's right must depend for its birth and existence on that forfeiture. In Livingston v. Tompkins, supra, it was held that "equity will not assist the recovery of a penalty or forfeiture, or anything in the nature of a forfeiture," and "will not lend its aid to divest an estate for the breach of a condition subsequent." McKim v. Mason, 2 Md. Ch. 510; Warner v. Bennett, 31 Conn. 468; Smith v. Jewett, 40 N. H. 530. In Oil Creek R. Co. v. Atlantic & G. W. R. Co., 57 Pa. 65, a bill was filed to enforce a forfeiture of a lease because of failure to build a road according to the express provisions of the lease; and the court refused, on the ground that equity never lends its aid in enforcement of a forfeiture, but will leave the parties to their legal remedies. Many cases cited in the text-books above cited sustain this principle. Though equity has jurisdiction in partition, yet it will not exercise it when it can be done only by enforcing a forfeiture, when the plaintiff's tight grows only out of a forfeiture. As equity has no jurisdiction, we cannot decide the merits of the case, and therefore reverse the decree and dismiss the bill, without prejudice to the plaintiff to seek to assert his rights by any appropriate legal remedy. PRIORITIES AND NOTICE PRIORITIES AND NOTICE I. Equal Equities 1 99 MUIR v. SCHENCK. (Supreme Court of New York, 1842. 3 Hill, 228, 38 Am. Dec. 633.) A bond and mortgage were given by defendant to the plaintiff in the 1 For discussion of principles, see Eaton on Equity (2d Ed.) §§ 38, 39. вчите |