The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1890-08-14

lieu of strict performance of the con-
tract.
OPINION OF THE COURT BY JUDD, c. J.
Bill in equity filed Oath February,
1890, to restrain defendant from en-
gaging in or carrying on or conduct
ing any mercantile business within a
radius of five miles from the store
sold by him to E. A. Bielenberg in |
Wailuku, Maui, until the expiration |
of five years from the date of the |
bill Of sale, to wit. until July 22d,
1892;
On the 22d of July, 1887, the de-
PENDANT w. FL. Daniels with w. II.
Cummings then doing business in
Waikiki, Maui. under the firm name
of Daniels & Cummings" sold
their goods and merchandise to-
gether with the good will of the
business and the lease of the store
to one E. A. Bielenberg. The fol-
lowing covenant was included in the
bill of sale: "And for the consider
alton aforesaid, the parties of the
first part do hereby assign, transfer
and set over to the party of the Sec
ond part, their goodwill in said
business for the term of five years
from the date thereof within radius
of five miles from said store, and
covenant that they will not during
such time or in said area engage in,
or interest themselves in carrying
on or conducting a mercantile bust
ness, and that if they or either of
them shall so engage in mercantile
business they or he shall thereupon
forfeit and pay to the said party of
the second part and his executors,
administrators and assigns, one
thousand dollars"
The bill alleges assignment of the
rights of Bielenberg under said cove
want and all causes of action to
accrue under the same to the plain
tiffs, and a violation of the covenant
on the part of w. H. Daniels by his
carrying on and conducting a mer-
camille business in Waikiki within
five miles from said store since April,
1890.
The bill is demurred to and the
case turns upon the construction to
be given to the covenant above re-
cited.
Following Colby VS.. Bailey, S
Haw'n. 1853, we are of opinion that
the sum of one thousand dollars
mentioned in the covenant is liqui-
dated damages and the plaintiffs
could recover this sum in an action
Of debt for breach thereof and
would not be obliged to show the
specific damages sustained.
But there is nothing in the agree
ment to show that the payment Of
this sum was an alternative which
the vendor in the bill of sale had the
option to adopt and the payment, if
made, stands in lieu of the strict
performance of the agreement.
The cases usually cited in support
of this proposition. that where the
sums mentioned appear to be liqui-
dated damages, the payment of them
will absolve the covenantor from
fulfilling his agreement are, like
Woodward vs.. Gyles, 2 Yer. 119,
where the defendant agreed not to
pillow any part of the land demised.
and if he did, to pay twenty shil-
lings per acre; and it was held that
he had the privilege to pillow on pay
ing the additional rent, and the
Court refused to restrain him from
doing that which the contract pro-
vided he might do.
The better and more modern doc
trine is, not that equity will not in
terfere to prevent party from doing
what he has agreed not to do when
liquidated damages are provided in
case he does the act, but that, as laid
down in Ropes VS.. Upton, l25 Mass.
260, " if the substance of the agree
ment is that the party shall not do a
particular act, and that is the evil
dent object and purpose of the
agreement, and it is provided that,
if there is breach of the agreement,
the party shall pay stated sum
which does not clearly appear to be
an alternative which he has the right
to adopt instead of performing his
contract" equity will restrain him
from doing the act.
We adopt the arguments and con-
illusions of Ropes VS.. Upton, com
mending themselves as they do to
our reason. The Court in the case
say: Naming sum to be paid as
liquidated damages does not in it
self conclusively establish that the
parties contemplated the right to do
the act upon payment of the com
pensation, and make an alternative
agreement for the benefit of the
party who has done what be has
agreed not to do"
We think the decree of Mr.. JUS
tice McCully, overruling the de-
murrer, should be affirmed, and 1t is
done accordingly.
F. NJ. Hatch for plaintiffs; Nv. G.
| Smith for defendant
n