Case Name: Solomon Owens vs. Samuel Hodges
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1841-02
Citations: 1 McMul. 106
Docket Number: 
Parties: Solomon Owens vs. Samuel Hodges.
Judges: The whole Court concurred.
Reporter: South Carolina Law Reports
Volume: 26
Pages: 71–77

Head Matter:
Solomon Owens vs. Samuel Hodges.
Where a party to a contract stipulates to perform one or more things, and in the event of non performance of any or all of them, agrees to pay a certain sum, the sum agreed to be paid will be regarded as a penalty, and not as liquidated damages.
For the non-performance of a contract, the party failing shall pay the other for any loss ho may have sustained, and this loss is the measure of damages. If this loss has been ascertained by the agreement of the parties, such agreement shall be carried into effect, otherwise the jury will assess the damages from a full view of the facts and circumstances of the case.
Before Evans, J., at Marion, Spring Term, 1840.
This was an action of debt on a bond for the performance of an award, and will be sufficiently understood from the report of his Honor, the presiding Judge, and the bond, award, and precedent agreements between the parties, copies of which are subjoined to the report:
This case depends much upon written contracts between the parties, which are herewith annexed. The facts were these: The defendant was the owner of a mill near to the plaintiff’s fields. The fields were reclaimed marsh land, a part of the swamp on which the mill was erected ; and in order to prevent the overflow of the fields by the water from the mill, in December, 1834, an agreement was entered into ^between the parties, by which the defendant was to construct a dam, to be completed by the 1st January, 1831. The dam was not finished, and a controversy arising about it, the matter was agreed to be left to the arbitrament of Brown and Wheeler, and a bond entered into, to perform the award. By the award, the work was to be completed by the 1st January, 1839, according to the original contract; and on failure to complete it, the defendant was to pay $5000. The only alteration in the original agreement made by the award, was this extension of the time, and the hands which the defendant was to furnish to work on the dam.
The action was to recover damages for not completing the work according to the original agreement, as modified by the award. The plaintiff contended, that he was entitled to recover $5000, as stipulated damages. I did not think so. 1st. Because there were many things to be done, and it was unreasonable to suppose the parties intended that this large sum should be paid for the slightest failure to complete the same in any minute particular, according to the contract. 2d. That that sum was more than five times the value of the land, when the dam was finished.
By the award, Owens was to furnish so many hands, and Hodges so many. There was some proof that Hodges did not at all times, have as many hands at work as he was to furnish. I did not consider this as material : because, if he had finished the dam by the 1st January, 1839, there would have been no breach of his agreement. The plaintiff, Owens, having performed his part, was entitled to recover full damages for the breach on the part of defendant. The object of the parties was, the completion of the dam by the time stimulated ; and Hodges was bound to furnish the necessary laborers, to do this within the time. There were various breaches assigned. Some were proved, and some not. The jury gave a verdict, I think for about four hundred dollars, from which the plaintiff appeals.
AGREEMENT OF 1834.
South Carolina, Marion District:
An agreement is hereby made, between Solomon Owens, on the one part, and Samuel Hodges, on the other part, to wit: The said Owens doth agree to furnish ^our §ood -tlancls> ancl provisions and tools for said hands : the said Hodges doth agree to furnish four good hands, and two others, and provisions and tools for said hands, to out a canal, and make a dam sufficiently strong and high to prevent said Hodges’ mill water from going into said Owens’ fields, from an old dam known and called David Owens’ machine dam, to a point of land extending from the hill where James Alwood lived, by the upper end of Price’s marsh; said canal and dam to be made by the directions of said Owens. It is also agreed upon between the parties, that the aforesaid canal and dam shall be completed on or before the first day of January, A. D. one thousand eight hundred and thirty-six. In confirmation of this, our agreement, we do hereunto set our hands and seals. December 13th, 1834.
SOLOMON OWENS, [l. s.]
SAMUEL HODGES, [l. s.]
Upon the due and deliberate reflection of the time given for the completion of the within stipulated work, we mutually agree to extend the time from the first day of January, A. D. 1836, mentioned within, until the first day of January, A. D. 1837. Witness our hands, the 16th day of December, A. D. 1835.
SOLOMON OWENS,
SAMUEL HODGES.
REFERENCE AND AWARD OF 1837.
State of South Carolina, Marion District:
Know all men by these presents, that Samuel Hodges and Solomon Owens are held and firmly bound one to the other, in the sum of one thousand dollars, for the payment of which sum well and truly to be made, we, the said Hodges and Owens, bind ourselves, our heirs, executors, and administrators, and assigns, firmly by these presents, sealed with our seals, and dated the 9th day of February, A. D. 1837, if either one shall fail in the condition underwritten. The condition of the above obligation is such, that if the above bound Hodges and ^Owens, their heirs, executors, administrators, and every of them, shall and do in all things, well and truly stand to, abide and perform the award, order and arbitration of William Brown and Edward B. Wheeler, arbitrators, indifferently named and selected by the said Hodges and Owens, to determine all matters and things in controversy, concerning a contract between them ; provided the award of the said arbitrators be made, and reduced to writing, ready to be delivered to the said parties, on or before the first Monday in March next; and if said arbitrators should disagree, they shall call in an umpire, who shall decide in writing, which shall be considered binding and final; then the above obligation to be void, else remain in full force and virtue. This the 9th February, 1837.
SAMUEL HODGES, [l. s.]
SOLOMON OWENS, [l. s.]
Witness, Silas Rogers.
We choose the following persons to arbitrate the matters stated in the within bond : William Brown and E. B. Wheeler. 9th February, 1837.
SOLOMON OWENS,
SAMUEL HODGES.
Witness, Silas Rogers.
This, the 3d day of March, 1837, we, William Brown and Edward B. Wheeler, the arbitrators chosen as above, have this day met to decide upon the matters and things submitted to us, to wit: an agreement made and entered into by Samuel Hodges and Solomon Owens, dated 13th December, 1834; a deed from Solomon Owens to Samuel Hodges, dated 13th December, 1834; also a deed from Samuel Hodges, dated 13th December, 1834. From the terms of the agreement and deeds of conveyance, above recited, we are decidedly of opinion, that the consideration, as explained by Major Legget, rendered it obligatory on Dr. Hodges to complete the canal and dam, or bank, sufficiently high and strong to protect the fields of Solomon Owens from the mill waters of said Hodges, commencing at an old dam known as David Owens’ machine dam, to a point of land extending from the high hill where James Alwood lived, by the upper end of Price’s marsh. The time has elapsed by which the work was to be completed. *We are further of opinion, that the said Samuel Hodges has made default in not completing the canal at the time stipulated, thereby hazarding damage to the crops of said Owens, by the overflow of the fields aforesaid. We accordingly came to the following decision : that Samuel Hodges do complete the work mentioned in said agreement, on or before the 1st day of January, 1839, (eighteen hundred and thirty-nine ;) that during the time allowed for completing the said work, the said Samuel Hodges shall pay to the said Owens all damages which may occur to his fields, from the overflow of the waters aforesaid, the damages to be estimated by three disinterested persons, chosen by said Owens and Hodges ; said Hodges to furnish a competent overseer to superintend the work, paying for the hire of the same; and in the event of the failure of said Hodges to complete the work within the time above specified, he shall pay to said Owens, or to his heirs and assigns, the sum of five thousand dollars. We declare, also, that said Owens sliall furnish four hands to said Hodges, to work on said canal, whenever said Hodges shall notify him that they are wanted ; and upon the refusal of said Owens to furnish said hands to said Hodges, he shall forfeit the sum of one thousand dollars. We further decree, that said Owens shall he permitted to use the canal or hank for a fence, or any other purpose, except stopping up the channel of said canal. We further decree, that as this work, when completed, is for the purpose of draining, we consider that said Hodges is equally hound to the heirs and representatives of said Owens, as to himself now living. And we further award, that the said Solomon Owens, and the said Solomon Hodges, shall each execute a bond in the sum of ten thousand dollars, the one to the other, to stand to this, our award, and to fulfill the same. Witness our hands, the day and date above written.
EDWARD B. WHEELER.
Witness, Levy Leggett,
BOND ON WHICH THE ACTION IS BROUGHT.
The State of South Carolina, Marion District.
Know all men by these presents, that I, Samuel Hodges, am held and firmly bound unto Solomon Owens, in the full *and jus? sum of ten thousand dollars, to he paid to the said Solomon Owens, his certain attorney, executors, administrators and assigns, for which payment well and truly to be made and done, I bind myself, my heirs, executors and administrators, firmly by these presents, sealed with my seal, and dated the sixth day of March, A. D. eighteen hundred and thirty-seven, if the said Samuel Hodges shall fail in the performance of the condition underwritten.
The condition of the above obligation is such, that if the said Samuel Hodges shall well and truly do, perform and observe, what is enjoined in the award and arbitrament of E. B. Wheeler and William Brown, for said Samuel Hodges to do, perform and observe, as stated in the award, which award is dated the 3d day of March, A. D. 1837; then the above obligation to be void, or else to remain in full force and virtue.
SAMUEL HODGES, [l. s.]
Signed, sealed and delivered in presence of
C. W. Dudley.
GROUNDS OF APPEAL.
1. That his Honor misdirected the jury upon the law, in charging them that the sum of $5000, specified in the condition of the bond, was not stipulated damages, but a mere penalty.
2. That his Honor further erred in instructing the jury, that upon the proper construction of the modification of the original contract, the defendant was not bound to furnish his hands, but that the plaintiff was bound to furnish for the whole time ; and that the defendant was only bound to do what the plaintiff’s hands could not accomplish within that time.
3. That various breaches of the award, and more especially the breach for which the damages of $5000 were stipulated, were fully proved, and that the plaintiff was therefore entitled to recover, at least, the full amount of the damages stipulated.
Mr. Attorney Gen. Bailey, for the motion, said, is a specified sum in award to be considered as a penalty or as liquidated damages ? He contended that it was liquidated damages ; and, in support of liis position, cited, 2 Bail. Rep. 293, Allen vs. Brazier & Randolph; 2 Bos. & Pul. 351, Astley vs. * Weldon; also, 2 Term Rep. 32; 4 Burrows, 2228; 3 Taunt. 469; 3 Barn & Ald. 692. He argued that it was necessary to look into the intention of the parties — that the sum of $5000 was to cover the value of the land, or secure the plaintiff for the amount that it would cost him to have the work completed. He said, the principle that the damages cannot exceed the value of the land, is a novel and erroneous one.
Harllee, contra,
cited, Bac. Abr. Tit. Con. letter F.; 2 B. &. P. 354; 6 Bing. 141, 242; 6 Barn. & Cress. 216; 13 Eng. Com. L. Rep. 10 J. 57; Bac. Abr. Tit. Admrs. and Arb. letter F.; 147, 3 J. N. Y. Rep. 297. It will be considered as a penalty when several things are to be done, and a large sum is specified.
Thompson, same side,
said, a contract to establish stipulated damages, ought to be strictly construed. The acts to be done were to be done by the plaintiff, as well as the defendant. The plaintiff only forfeits $1000, and by incurring it, he would make the defendant liable for $5000 : cited Chitty on Con. 337; 7 Wheat. 15. lie contended further, that a sum in gross, is rather to be considered as a penalty, than as stipulated damages. There is not a word in the award which would show that stipulated damages was to be paid.
The bond he alleged, was void, from uncertainty. Time, he urged, where it enters into a contract, and a certain specified sum is named, it is to be regarded as stipulated damages. Mr, T, here referred to and commented at length on the authorities cited by his colleague, Mr. Ilarllee. — Reporter.
Bailey, in reply,
said, the word penalty was frequently construed to mean liquidated damages, and hence the only way to arrive at a correct interpretation of the matter was to take the intention of the parties.

Opinion:
Curia, per
Evans, J.
This was an action of debt on a bond, for the performance of an award. From the evidence, it appeared that the plaintiff was the owner of some reclaimed land in a swamp, on which the defendant had erected a mill. The plaintiff's land was inundated by the water discharged from the mill pond. To obviate this, an agreement *was entered into, by which the defendant agreed to construct a dam, from a place called David Owens'machine dam, to another . point described in the agreement, each of the parties to furnish a certain number of hands, and the work to be executed under Owens' direction. The agreement is dated in December, 1834, and the work was to be finished by the 1st January, 1837. The work was not finished, and in February, 1837, the parties agreed to refer the matter to the arbitrament of Wheeler and Brown, and entered into a penal bond to each other, in the sum of one thousand dollars, to perform the award. In March the arbitrators made their award by which Hodges was directed to finish the work by the 1st Jauuary, 1839. Some slight modifications were made in the original contract, but none material to this case. The award concludes as follows : " And in the event of the failure of the said Hodges to complete the work within the time specified, he shall pay to the said Owens the sum of five thousand dollars," and " upon the refusal of the said Owens to furnish his hands to the said Hodges, he shall forfeit the sum of one thousand dollars and " we further award that the said Owens and Hodges shall each execute a bond in the sum of ten thousand dollars, the one to the other, to stand to this our award, and to fulfill the same." This bond was executed, and upon it this action was brought, setting out four breaches of the condition. 1st. That the dam was not extended to David Owens' machine dam. 2nd. That it was insufficient, it leaked and was not high enough 3rd. It was not made according to Owen's direction. 4th. Defendant did not furnish as many hands as he was bound to do according to the contract.
A great deal of evidence on the trial was given on all these points. The defendant had made a dam within the time, as he contended, accord ing to the contract. The plaintiff contended that if he proved a breach of the condition of the bond, he was entitled to recover the sum of five thousand dollars, as stated or assessed damages. The case was tried before me at Marion, and I charged the jury that the sum of five thousand dollars, which the arbitrators had awarded to be paid, on the failure of the defendant to finish the work within the time stated, was but a penalty, and that they should assess for the plaintiff only such damages as were equivalent to the injury which he had sustained. The verdict was in conformity with the charge, and a motion* has been made in this Court for a new trial, on the ground of misdirection in the particular above stated. In cases where a party to a contract stipulates for the performance of one or more things, and in the event of the non-performance, agrees to pay a certain sum, it is, in most cases, exceedingly difficult to determine whether the sum be in the nature of a penalty, or damages liquidated or ascertained by the parties. By penalty, I understand a forfeiture for non-performance. Formerly, the verdict at Law was for the penalty, and the party had no relief except in Equity. But now, under the statute, where any thing but the payment of money is to be done, the plaintiff must submit the condition of his bond, or covenant, to a jury, who are to assess the damages, at the value of the injury actually sustained. In cases where damages are said to be liquidated, the province of the jury to inquire and assess, has been superseded by the parties, who had themselves ascertained and assessed the damages. To distinguish between these two classes of cases, has always been found exceedingly difficult, and I do not find, in looking through the cases, that any clear and definite line can be drawn between them. In most of the cases, as in Allen vs. Brazer, et al., and in Lowe vs. Pierce, (2 Bail. 293; 4 Bur. 2225,) where a single act was to be done, as the delivery of a negro, or to pay so much if the defendant married any other than the plaintiff, the sum has been regarded as damages assessed by the parties; yet this cannot be laid down as an inflexible rule, for it will readily occur to every one that if, in the case of Allen v. Brazer, the sum to be paid if the negro was not delivered, had been one thousand dollars instead of one hundred dollars, such sum must be construed a penalty. So, also, in most of all the cases where several things are to be done, and for the non-performance of any or all of them, a certain sum was to be paid, the sum of money has been regarded as a penalty. Such is the case of Astley vs. Weldon, (2 Bos. & Pul. 346,) where the defendant had stipulated to perform at the plaintiff's theatre— to attend rehearsals, &c., and in default to pay two hundred pounds. The same principle has been held in a great variety of cases, both English and American, which are to be found collected in Comyn on Contracts, 38, 47. Such a contract as that we are now considering, is to be interpreted like every other; and in that, as well as others, the true inquiry is, what did the parties intend ? *and where such intention can be ascertained, the Law will give it effect accordingly. Taking this as our guide, let us then inquire whether the sum of five thousand dollars is in the nature of a penalty, or liquidated damages ? By the contract Hodges was bound to do several things. He was to make a dam from Alwood's point, by Price's marsh, to Owens' machine dam. The dam was to be of sufficient height and tightness to protect Owens' field against the inundation of the water. It was to be made under Owens' direction. Hodges was to furnish an overseer, and a certain number of hands ; and lastly, the dam was to be finished by the 1st January, 1839. Now, according to the literal interpretation of this contract, the defendant was bound to pay the penalty, if he failed in the performance of any one of these undertakings. If he had made the dam in full performance of his agreement, in every particular, except that on the 1st January, 1839, a very small portion which would not cost ten dollars, remained unfinished, according to the plaintiff's demand he must pay five thousand dollars. If a small portion of it leaked, and the plaintiff by it was but little injured, or if be had made the dam perfect within the time, but yet had disobeyed the plaintiff's directions, or had ommitted for a single day to furnish his portion of hands to work, each of these would subject him to the payment of the whole sum, and for failure of all of them, he would incur no other or greater liability. It seems to me, it is only necessary to state the proposition, to determine at once that the sum of five thousand dollars could not have been the estimate which the parties themselves, or the arbitrators, had assessed, as the true damages which the plaintiff was to sustain. It may be that that sum was the estimate of Owens' loss, if the dam was not constructed at all, but they never could have intended the defendant should pay as much for failure in part, however inconsiderable, gs for default in the whole. I do not perceive that this case differs in the result from the other cases, by the circumstance that after the award, and in pursuance of it, a bond in ten thousand dollars was entered into to secure the performance of the award. It is said there are two sums, and therefore both cannot be penalties. Though it strikes me it cannot alter the case, it removes some of the difficulties in the way of construing the contract; as the plaintiff desires, the same absurdity of making the damages for a part, equal to the whole, still remains. I do not ^perceive the reason why this should have been done, or why, indeed, any second bond was necessary to secure the performance of this award, except that the first was in too small a sum, and as a second bond was necessary, they directed it to be in conformity with what is usual, in double sum.
See as to stipulated damages. Worrell vs. McClenaghan, 5 Strob. 115; Allen vs. Brazier, 2 Bail. 293. Salterwhite vs. McKee, Harp 397.
As to the quantum of damages. Miller vs. Hilliard & Wade, Chev. 152. An.
The general rule is, that for the non-performance of a contract, the party failing shall pay the other for any loss he may have sustained, and this loss is the true measure of damages. If this loss has been ascertained by the agreement of the parties, such agreement shall be carried into effect. If there be no such agreement, then the jury are to assess, upon a full view of the circumstances of the case. Justice requires a full indemnity, but nothing beyond ; and hence, in the latter cases, the inclination of the Courts is to consider the sum agreed to be paid, rather as a penalty, than as liquidated damages, unless the intent seems to be otherwise.
In this case we are of opinion the instruction of the Circuit Judge was right, and the motion is dismissed.
The whole Court concurred.