they were carrying the intention of the parties into effect: by decreeing that penalties ought to be considered merely in the light of a security for the payment of any damages that might be assessed, it is abundantly clear that the doctrine professed to be based exclusively on the "original intent of the case;" and, as we have seen, that continues, according to the best authorities, as expounded in Tudor's Leading Cases, to be the only ostensible ground on which relief is given. Nevertheless, of late years it has been repeatedly held that the only question to be decided is whether the sum to be paid on the non-performance of an agreement can, in point of fact, be regarded as liquidated damages, or whether it comes under the head of a penalty, and if the latter construction is adopted relief is given as a matter of course, so that in effect the Judges now act on the principle that relief against penalties will always be given. Now the bare proposition that Equity relieves against penalties is somewhat broader than that laid down by Lord Macclesfield; his proposition is that Equity relieves against penalties which were not originally intended to be enforced, an important qualification, of late entirely ignored. If relief against penalties is not given on grounds of public policy, but only because of the assumed intention of the parties, there can be no reason why the parties should not declare how their contract should be read, and if they choose to declare that what the Court would otherwise deem to be a penalty shall be considered as liquidated damages agreed upon between them, then, according to Lord Macclesfield and the earlier cases, Equity would have no ground for interference. This would seem to be the view taken by Lord Eldon, who says (Shackle v. Baker, 14 Ves. 469) that under a covenant upon sale of good-will not to carry on the same business as the purchaser, the parties may proceed to ascertain for themselves what shall be the damages for the breach of it, "and unless they are so awkward as to put that in the shape of penalty instead of

liquidated damages, there is a perfect and absolute remedy." Still more to the point are the observations of Chief Justice Gibbs in Barton v. Glover (Holt, N. P. 43), who, after observing that in Astley v. Weldon, 2 B. and P. 346 (sometimes cited in favour of the view that declarations of intention are not conclusive), there was no stipulation that the damages should be liquidated, said with regard to a clause providing that a sum named to be paid on breach of covenant should be considered as liquidated damages, “In the present case, unless the damages are to be considered as liquidated, and definitely ascertained by the parties themselves, the clause in the agreement means nothing."

It would appear then that in the year 1816, when this judgment was pronounced, the authorities favoured the view that although, in the absence of any express declaration by the parties, the Court would look at the whole agreement and collect therefrom whether a sum to be paid on the non-performance of it should be regarded as a penalty or as liquidated damages, nevertheless the express declaration of the parties should always be conclusive. If the "original intent of the case" is all that is to be looked to, surely it follows, as a matter of course, that this should be so. What the Judges have to decide, according to their own showing, is not whether a certain sum which A. has engaged in certain events to pay to B. is or is not, as a matter of fact, in the nature of a penalty, but whether A. and B. really intended payment of it to be enforced, and an express declaration by them that the sum in question shall be considered as liquidated damages is surely quite conclusive on this head, whatever in point of fact may be the real nature of the payment. The only possible object of christening a penal sum by the name of liquidated damages is to rebut the assumption on the part of the Court of Chancery that penalties are not intended to be enforced. A. and B. enter into an agreement; neither Law nor Equity forbid them from putting any price they please on the non

observance of any part of it, although the price agreed upon may be clearly in the nature of a penalty (e.g., where it is agreed to pay hundreds of pounds in case of a breach that a few shillings would put to rights), provided only that they succeed in making their intention sufficiently plain. Since Equity assumes that penalties are not intended to be enforced, clearly the only way of expressing that Equity is in their case mistaken in its assumption, is to call what is, in fact, a penalty by the name of liquidated damages, and, in accordance with this view, the Judges have over and over again declared that where the parties have put their own price upon any particular breach of any agreement, the whole amount may be recovered as liquidated damages, notwithstanding that the breach might be set right by the payment of a much smaller sum, except, perhaps, where it consists merely in the non-payment of a definite sum of money (see Kemble v. Farren, 6 Bing. 141) so as to bring the case within the statute of Anne against enforcing the penalty on money bonds.

To any but a lawyer it must seem a strange thing that two persons wishing to bind one another to a perfectly legal agreement should have no other way of carrying their wishes into effect except to declare that they desire the Court to put an unreasonable construction on their agreement. If, however, by any contrivance, no matter how childish, it were possible for persons to reckon with reasonable certainty on being able to frame a perfectly legal agreement so that it could be enforced, there would be comparatively little to complain of. If the Judges had had the courage to adhere without flinching to the rule that whenever the contracting parties called a penalty by the name of liquidated damages, it should be deemed that they intended that penalty to be enforced, then a clear and definite rule would have been established, so that persons, with the aid of a competent lawyer, might effectually have prevented the Court from interfering with their wishes.

Unfortunately, the Judges, while still professing to be guided entirely by the intention of the parties, and recognising in many cases the abstract right to recover penalties however extortionate, provided only they are called liquidated damages, have adopted a course which often amounts in practice to a denial of that right of free contract which in theory they profess to respect. Where an agreement is capable of several breaches of different degrees of magnitude, it is practically impossible to frame a clause of forfeiture which can be enforced. It will not do to stipulate that if the agreement is infringed in any particular a specified sum shall be payable as liquidated damages, "for," as Baron Parke observed in Horner v. Flintoff (9 M. and W. 678), "where parties say that the same ascertained sum shall be paid for the breach of every article of an agreement, however minute and unimportant, they must be considered as not meaning exactly what they say;"* so that what has been declared to be liquidated damages will be construed as a penalty, which will not be enforced, no matter how gross the breach may have been. The Law on this subject has been stated by the Privy Council (Dimech v. Corlett, 12 Moo. P.C., p. 229) as follows:"The Law of this country on the question of penalty, or liquidated damages, may be considered, after a great number of decisions-not, perhaps, all of them strictly reconcilable with each other-to be, however, at length satisfactorily settled, and the hinge on which the decision in every particular case turns, is the intention of the parties, to be collected from the language they have used. The mere use of the term 'penalty,' or the term 'liquidated damages,' does not determine that intention, but like any other question of construction, it is to be determined from the nature of the provisions and the language of the whole instrument. One circumstance, however, is of great im

Really, one would think the Judges had never heard of such a thing as a fiction before,

portance towards the arriving at a conclusion; if the instrument contains many stipulations of varying importance, or relating to objects of small value calculable in money, there is the strongest ground for supposing that a stipulation,. applying generally to the breach of all, or any of them, was intended to be a penalty, and not in the way of liquidated damages."

Baron Alderson, indeed, in the above-mentioned case of Horner v. Flintoff, suggests that "where some breaches relate to important, and others to unimportant, matters, parties ought to annex a specific penalty to each breach." This suggestion clearly fails to meet the difficulty, and its inadequacy is well illustrated by the very agreement that called it forth.

By that agreement the Defendant promised to buy the good-will, stock-in-trade, and tenant-right of the Plaintiff, who was an innkeeper and farmer. The Plaintiff promised to give the Defendant possession of certain premises together with furniture, farming stock, etc., and in the mean time to pay rates, taxes, etc., and indemnify the Defendant from all costs and expenses by reason of the non-payment of the same. The Defendant promised to pay £100 for the tenant-right, to take the furniture, plate, etc., and to pay the amount of the valuation, and all rents, rates, and taxes, and to indemnify the Plaintiff from the same. Surely, it would have puzzled the learned Baron himself to draw a schedule of liquidated damages for every possible infringement of an agreement like this. If any such attempt should ever be made there will indeed be plenty of work for the lawyers. What delightfully perplexing questions might arise out of every item in such a schedule! Testators who make their own wills (including even ex-Chancellors) are well known to be a godsend to the lawyers; how much more the parties who should endeavour to schedule every possible infringement of their agreement. Practically, then, the performance of agreements, of which there may be