Opinion
DECEMBER TERM, 1796.
The case was argued by E. Tilghman and Ingersoll, for the plaintiff, on the position, that unless a certain sum is agreed by the parties to be paid and received, at all events, as the measure of damages, the plaintiff may waive the penalty of the agreement, and proceed for damages according to the actual injury. 4 Burr. 2228. 2 Atk. 371. 1 H. Black. 232. 1 Bl. Rep. 395. 373. 2 Atk. 190.
Lewis and Rawle, for the defendant, insisted, that the contract ought not to be enforced beyond the meaning and understanding of the parties; which was, obviously, to fix a sum, as the extent of the defendant's responsibility, in case of a non-compliance with his engagement. 16 Vin. Abr. 301. " Penalty." pl. 3. 5. 10.
THIS was an action on the case for damages, which were laid at 10,000 l. in the declaration, founded upon the following agreement, signed by the defendant:
"I do certify, that I have bought of William Graham "17,344 76/100 dollars, six per cents of the United States, to be "delivered to me on the 1st of July next, on my paying to "him, on or before transferring the same, the sum of 22,318 49/100 "dollars in specie. And for the faithful performance of the "above agreement, I bind myself, my heirs, and executors, in "the sum of 1000 l. lawful money of Pennsylvania, to be paid to "said Graham, or his order, in case the same is not fully complied "with by me. Philadelphia, 17th January 1792."
On the trial of the cause, a verdict was given, in favour of the plaintiff, for 1798 l. 17 s. 7 d., subject to the opinion of the Court, on the question, whether the plaintiff could recover more than 1000 l. in an action upon this agreement?
The substance of the agreement between the parties was, to buy and sell stock. The penalty was merely superadded as a security for performance; and not as a sum to be paid and received absolutely in lieu of performance. The plaintiff is entitled (notwithstanding the penalty) to recover damages, commensurate with the injury suffered by a non-performance. The judgment must, therefore, be rendered in his favour, for the full amount of the verdict.