for the benefit of the mortgagor is valid, and will be allowed to be enforced."*

It may, we think, be gathered from the above quotation that Mr. Joshua Williams does not regard this distinction with any favour, and probably respect for the Bench would not have deterred him from expressing a decided opinion on the matter had he not felt convinced that any comment would be superfluous.

We now propose to take a comprehensive view of the equitable doctrines of Relief against Penalties and Forfeitures, and in the course of the survey we shall point out some other legal "curiosities" not unworthy of comment.

Perhaps the most astonishing "curiosity" connected with this doctrine is the circumstance that first led to the interference of Equity.

One of the grounds on which Equity professes to exercise its jurisdiction (notably in the case of bonds and mortgages) rests on the assumption, which, if it were not true, would be utterly incredible, that persons are in the habit of putting their hands to documents which do not express their real intention. Equity claims to construe written agreements not according to the plain meaning of the words, but according to what it conceives ought to have been the intention of the parties. The respective parties may have declared their meaning in writing as distinctly as possible, but nevertheless Equity, in the exercise of its discretion, will not only declare that the parties must have meant something quite different, but will carry its declaration into effect by obliging them to act as if they had, in fact, put their hands to such an agreement as it considers they ought to have entered into. This is the Equitable doctrine with regard to mortgages. A mortgage is a document in which an agreement is purported to be entered into between mortgagor and mortgagee which neither of them intends shall be carried into

* Lord Northington, in Stanhope v. Manners, 2 Eden, 199, says: heard or could myself discover the sense of this distinction."

I never

effect. In this state of things Equity steps in and says to them, "It is clear neither of you intended to enter into any such agreement as is exppressed in this document; you meant to enter into quite a different agreement, and you shall be held to have executed that agreement instead of the one you did in fact execute." In the case of mortgages the assumption of Equity was no more than the truth. It is notoriously the fact that in every mortgage the parties purport to enter into an agreement different from the one they intend to be bound by, and such being the case, Equity had a good excuse for coming to the rescue. The assumption of a power to override the express provisions of written documents, and of the faculty of arriving at the real intention of contracting parties not by a perusal of their written declarations, but by the exercise of a refined instinct of justice, was, however, fraught with much danger; and the success of the experiment as to one class of contracts provided a precedent that led to serious difficulty. It is true that the Judges have from time to time, under the pressure of circumstances, given various reasons for relief against penalties; but according to Lord Macclesfield, "the true ground of relief is from the original intent of the case, where the penalty is designed only to secure money, and the Court gives him all that he expected or desired," and this view of the law, transmitted in Tudor's Leading Cases, continues to be put forward as the pretext for interference, though it has not escaped severe judicial

criticism.

The absurdity of the proposition that where a person bargains for a penalty on the non-payment of a stipulated sum at a stipulated time he gets all that he expected or desired, if after an indefinite lapse of time he obtains the sum without the penalty, has been more than once forcibly exposed by Lord Eldon. In Hill v. Barclay (18 Ves. 60) he says: "The Court has certainly affected to justify that right which it has assumed to set aside the legal contracts

of men, dispensing with the actual specific performance upon the notion that it places them, as near as can be, in the same situation as if the contract had been with the utmost precision specifically performed; yet the result of experience is that where a man, having contracted to sell his estate, is placed in this situation, that he cannot know whether he is to receive the price when it ought to be paid, the very circumstance that the condition is not performed at the time stipulated may prove his ruin, notwithstanding all the Court can offer as compensation." Here Lord Eldon puts the matter in its true light; the real reason why indiscriminate relief should not be granted against penalties for the non-payment of money at a stipulated time is that by relieving against the penalty you take away all inducement to punctual payment, so that if the principle enunciated by Lord Macclesfield were to be carried out to its logical conclusion, no one would know when he could get in his debts, and all credit would be destroyed. Just as we hang a murderer, not because he has committed a murder, but in order that murders may not in future be committed, in the same way penalties should be enforced, not in order to wreak vengeance on the defaulter, but in order to deter others from making default.

Although the Chancery Judges did not entertain so great a regard for logic as to feel compelled to make it their business to see that no one was obliged to pay his debts till it should be quite convenient for him to do so, still they carried their benevolence with regard to debtors to such an inconvenient extent in decreeing relief against forfeitures of leases for non-payment of rent at any indefinite time after the rent had become payable, that the Legislature had to interfere and obviate what was acknowledged to be a palpable injustice by putting a limit to the time within which relief might be claimed. The admission that a palpable injustice had been inflicted by following out the proposition laid down by Lord Macclesfield, that a contract to pay a

certain sum on a certain day was sufficiently performed "according to the original intent of the case" by paying the money with interest at any future time, ought in common sense to have resulted in the overthrow of the proposition. As a matter of fact, although "the original intent of the case" may at first have furnished the only pretext for interference, for a long time past this ground of jurisdiction has exercised little, if any, effect on the decisions. It should be borne in mind that Lord Macclesfield, in the leading case of Peachy v. Duke of Somerset (1 Stra. 447), expressly limited the right to relief in Equity to those cases "where the penalty is designed only to secure money ; but in course of time this limitation came to be disregarded, and relief was given not only where the penalty was designed to secure money, but also where it was designed to secure the performance of any contract for the non-performance of which pecuniary compensation could be made, the penalty being in Equity regarded merely as a security for the damage really incurred.

The argument for this extension of jurisdiction would seem to run thus: Where a penalty is designed only to secure money, Equity relieves; damages for the nonperformance of a contract, for which pecuniary compensation can be made, may be reduced to a sum of money; Equity regards a penalty for the non-performance of such a contract as designed merely to secure that sum of money; therefore, the penalty being, if you look into it, designed in point of fact only to secure money, will be relieved against. Once grant the premises, and it is not easy to avoid the conclusion. It does not at present concern us to inquire into the abstract merits of this extension of Equitable jurisdiction. Let it be granted that there are grounds on which it may be justified, but if the "original intent of the case" is all that is to be looked to, it is surely carrying astuteness to the verge of absurdity for the Court to discover within the four corners of a document whereby A.

agrees to buy B.'s house for £1,000, on pain of forfeiting £100 to B. if he fails to carry the agreement into effect, that the real intention of the parties was not that A., on refusing to complete his purchase, should pay B. £100, but that B. should merely have the right to recover from A. such damages for breach of contract as the Court or a jury might be disposed to award; a right which B. would have enjoyed none the less if no penalty had been stipulated for, though in that case he might have run more risk of not getting his money. But we are by no means prepared to assert with confidence that such a construction would not recommend itself to the Judicial intellect. Indeed, it would appear from the Reports that long after the full-blown doctrine came into operation the Judges continued to "lay the flattering unction to their souls" that they were effectuating the true intention of the parties.

That this should be so is, after all, scarcely a matter for surprise, for when we reflect on the somewhat analogous doctrine of conditions in terrorem, we appreciate the difficulty of assigning any limit whatever to the ingenuity of the Judges in the construction of the English language. Persons capable of deciding that a testator who gives £100 a-year to his widow, to cease on her marriage, does not really mean the annuity to cease, but only that his widow should think so, and thereby be intimidated into remaining faithful to his memory, clearly do not hold themselves bound by any of the ordinary canons of construction; and surely it by no means exceeds the bounds of possibility that such persons should hold the insertion of a penalty for the non-performance of a contract to be intended merely as a means of frightening a contracting party into performing his agreement, on the chance that he might suppose (contrary to the fact) that it was really intended to enforce the penalty in the event of his failing to fulfil his obligation.

But whatever the precise line of argument may have been by which the Judges justified themselves in supposing that