
    Richard Allen v. William Brazier and J. H. Randolph.
    The defendants covenanted to deliver to the plaintiff, on or before a day specified, a certain slave, which had been mortgaged to him, or in default of such delivery, to pay him one hundred dollars; and it was specified in the covenant, that the lien of plaintiff’s mortgage was not to be thereby impaired. Held to be liquidated damages, and not a penalty; and that plaintiff was intitled to recover on default made, without proof of special damage, although the slave was actually delivered to him shortly after the day.
    Tried before Mr. Justice Richardson, at Edgefield, Spring Term, 1831.
    This was an action of debt on the following writing obligatory : “ On or before the 1st day of March next, we, or either of us, promise to deliver to Joseph M'Clintock, as agent and attorney for Richard Allen of Augusta, Georgia, a certain negro fellow named John, which negro fellow was mortgaged to said Allen in 1824, or before that time, or in default of such delivery, we promise to pay to said M‘Clintock, the sum of one hundred dollars, on said 1st of March, 1828 ; this agreement in nowise to invalidate, or otherwise affect said mortgage; value received. Witness our hands and seals, this 19th March, 1827.”
    The defendants pleaded non est factum; but at the trial, the execution of the instrument was admitted. The slave John was not delivered on the 1st March, 1828, but was delivered to, and accepted by the plaintiff a few days after; and there was no p1>00f 0f aily ]ogg or jnjuly sustained by the delay. His Honor charged the jury, that they were at liberty to find for the plaintiff any sum, however small, less than the amount stipulated in the , , bond.
    The jury- found for the defendants; and the plaintiff now moved to set aside their verdict, and for a new trial, on the ground of misdirection, and that the verdict was contrary to law.
    Butler, for the motion.
    The execution of the bond having been admitted, and the default established, the plaintiff was in-titled to a verdict, however small, without proof of actual damage. The plaintiff, indeed, was intitled to recover the whole amount of the bond, without evidence of special damages. Such evidence would have been inadmissible: the parties had themselves liquidated the amonnt; and all evidence to enlarge or to restrict it, would have been irrelevant.
    Bauskett, contra.
    
    Contended that this was not a case of liquidated damages, but a penalty, and the jury were only bound to find such damages as the plaintiff had actually sustained: if he had sustained none, they could find none. There was no evidence of loss from the trifling delay, which had occurred in the delivery of the slave. There was not even a pretence of any; but the demand was without the smallest foundation, iniquitous, and oppressive. The plaintiff had been once non-suited ; and now the jury have said that he has no claim upon the defendants, and it is time they were dismissed.
    
      
      
        Vide, ante, p. 55.
    
   O’Neall, J.

delivered the opinion of the Court.

The difference between a penalty, and stated or liquidated damages, is not well ascertained; and, indeed, it is often difficult to distinguish between them. Where a less sum is secured to be paid by a greater; or a sum in gross is put down to cover smaller sums, or several things to be done; or where it is intended to secure a party against damages for a breach of covenant ; it is generally a penalty, and the jury may assess the actual damages of the party. But where it is intended to operate as a forfeiture, if the thing stipulated to be done is not done by the day fixed, or in the way agreed, it would generally be regarded .as stipulated damages, and the jury would be compelled to find the amount.

It is in vain, however, to undertake to define, with certainty and precision, what shall in all cases be regarded as a penalty, and what as stated damages. It will always depend on the intention of the contracting parties, to be gathered from the terms of the contract, construed in relation to its subject matter: For parties are competent to contract as they please, in relation to all matters neither mala in se, nor mala prohibita: and if they think proper, to stipulate to pay a particular sum on a given day, or if a specified thing is or is not done, it will be binding, and must be enforced. In some cases, it may operate hardly, as perhaps it will in the case before us ; but still if it does, it is the act of the parties, and of the law made by themselves.

The most we can do in such a case, is to point out some general rules, by which we may venture to say, when a sum stipulated to be paid shall be considered as stated damages. It appears to me that in general the three following rules will be suificient: 1st. If the principal sum, or the thing contracted about, is to be paid or enjoyed, and a sum is to be paid in addition, then this additional sum is stated damages. 2d. If the sum to be paid is less than the principal sum, or than the value of the thing contracted about, it would generally be regarded as stated damages. 3d. If a day is fixed for the performance of an act, and a postponement of it beyond that day could operate but little or no damage to the party, and still a sum is stipulated to be paid, if performance is not made, it must be considered as a sum to be forfeited in that event, and therefore, stated damages. These rules are very well sustained by the cases collected in Evans’ Appendix to Pothier on Obligations. 2 Evans’ Pothier, 93,-4-5-6-7-8. See also Pothier’s Treatise, part 2. ch. 3. art. 1. sec. 3. 1 Evans’ Pothier, 209.

The same principles are deducible from the case of Satterwhite v. M‘Kie. Harp. 397. In that case the defendant promised to pay a sum of money on a given day, and if not punctually paid, then that it should bear interest from the date. He failed to pay on the day, and it was held that the plaintiff was intitled to recover the interest from the date of the note. This was a sum agreed to be forfeited, if money was not paid at a day fixed; and although a forfeiture to secure punctuality, yet it was a contract made by parties competent to contract, and on a malter not prohibited by law, and therefore recoverable.

The sum agreed to be paid in the case before us, can be regarded in no other point of view than as stated damages: for the contract expressly provides, that it shall not impair the lien of the mortgage on the slave agreed to be delivered; and it is an unconditional undertaking to pay, if the slave is not delivered on or before a specified day. The charge of the presiding Judge was therefore erroneous in directing the jury, that they might find for the plaintiff a sum less than that agreed to be paid by the defendants.

Motion granted.  