Daily capital journal. (Salem, Oregon) 1903-1919, 1911-10-25

by the complaint, is one he had a
right to make. He could, If he chose,
lawfully agree to buy the land at
s24 100000 or any other greater or less
amount. He could also lawfully agree
to the alternative Of cancellation and
surrender Of the note and mortgage.
Neither of these stipulations is against
public policy or a violation Of any
public law. Except for fraud, accident,
surprise, mistake, undue influence or
some other such reason of equitable
cOgnizance, courts OF equity, the same
as courts of law, will hold competent
contracting parties to their engage
ments We cannot refuse to enforce
the contracts of the parties as they
make them, albeit they are IMPROVE
dent, neither can we make a new con-
tract for them and substitute it for
the old one.
The defendant, Angus, has not
bound himself by the flexible cord of
a penalty, entailing upon him only
such actual damages as might be as
sessed by the verdict of jury. He
has agreed to the strict and immoy-
able standard of liquidated damages
according to the language of his con-
tract. He has chosen to agree in the
alternative either to buy the land or
to cancel the note. Can he be relieved
under any phase of equitable jurisdic-
tion? The question of a fixed sum
as liquidated damages came before
this court most prominently in the
early case of Wilhelm V. Eaves, 21
Ore. 1874. The contract in question
there contains some sixteen different
stipulations of varying degrees of i'm
pOrtance, the damages for a breach of
some of which would be easily ascer-
tainable while there were others not
so clear as to the amount Of damages
applicable, but there was only one
sum of money provided as an omnibus
standard by which to measure the
damages of any one of those different
stipulations and the court held that
owing to the unconscionable effect the
parties could not be supposed to have
intended that construction of their
agreement, and so denied recovery of
that specific sum of money as a COM
pensation for the breach of the con-
tract. AiM
The net case where the question of
liquidated damages came into promi-
nent notice was that of Salem V. An
son, 40 Ore. 339. The defendant An
son had entered into a bond with the
City of Salem to establish in that city
an electric light plant in thirty days
or pay the city $5,00000. He failed
to establish the plant at all and the
city sued on his bond to recover the
full sum mentioned. The court, by
Justice Bean, in discussing the ques-
tion now under consideration, laid
down two rules which though not nee
essarily controlling in all cases, are
regarded as affording a general guide
by which controversies relating there
to may be determined; /. Where the
contract is conditioned for the per-
Torrance of some collateral agree
ment the sum mentioned therein will
be presumed to be a penalty and it
is incumbent upon the party desiring
to recover the sum named as liqui-
dated damages to show that it was so
intended by the contracting parties"
The case in hand evidently does not
come within this rule, because there
is no collateral agreement. The en-
gagements of the parties are in the
alternative and each is a part of the
same agreement. Strictly speaking
one cannot be considered as a secur-
ity for the performance of the other.
The two are of equal dignity and force
and merely present two alternatives,
the performance Of either of which
would be considered the performance
of the entire contract on the part of
the defendant. The second rule is
thus stated in Salem V. Anson, supra:
p, When the actual damages in case
of breach of the contract must nee
essarily be speculative, uncertain and
incapable of definite ascertainment,
the stipulated sum will be regarded
as liquidated damages, and may be
recovered as such without proof of
actual damages, unless the language
OF the contract shows, or the circum-
stances under which it was made in
dicate a contrary intention of the par
ties, or it so manifestly exceeds the
actual injury suffered as to be un-
considerable"
In the case of Sun Printing & Pub
fishing Association V. Moore, 1873 L. S.
642, Justice White, speaking for that
court, says: The decisions of this
court on the doctrine of liQuidated
| damages and penalties lend no support