Case Name: CITY OF EAST CLEVELAND v. FREE
Court: Ohio Court of Appeals
Jurisdiction: Ohio
Decision Date: 1923-01-15
Citations: 1 Ohio Law Abs. 219
Docket Number: No. 4110
Parties: CITY OF EAST CLEVELAND v. FREE
Judges: 
Reporter: The Ohio Law Abstract
Volume: 1
Pages: 219–219

Head Matter:
No. 173
CITY OF EAST CLEVELAND v. FREE
Ohio Court of Appeals, Cuyahoga County
No. 4110.
Jan. 15, 1923
CONTRACTS — Liquidated Damages — (1) Penalty construed as, in breach of contract — (2) Stipulated suiji as damages for breach of one of several stipulations in a contract is a penalty.
This opinion has appeared only in The Abstract.
Attorneys — E. A. Binyon, for the City; Calfee,, Fogg & White, for Free.
Error to Cuyahoga Common Pleas

Opinion:
VICKERY, J.:
Epitomized Opinion
The city, at the instigation of Free, passed an ordinance authorizing bids for the establishment of a street railway in East Cleveland and a bid made by Free to build said railroad was found to be the best bid received. Free deposited with the city a bond in the sum of $5,000 by the Royal Indemnity Co., also a defendant, conditioned to be void if Free should complete the construction of the railway, otherwise to remain in full force. The city claimed $5000 as liquidated damages although the only actual damage was four dollars spent in advertising the ordinance. The lower court decided in favor of the city and entered a judgment for it for four dollars. The city prosecuted error claiming the full $5000; Held by court of appeals:
.1. A fixed sum provided as payment in the case of forfeiture of rights under or breach of contract is a penalty rather than liquidated damages. A person injured by breach of contract can only recover actual damage suffered limited by the amount stipulated in the contract.
2. Where a contract contains a number of stipulations to be performed for the breach of some of which damages are ascertainable, while as to others they are not, a single sum stipulated as damages for breach will be treated as a penalty and only actual damages can be recovered.
Judgment affirmed.