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97 Mass. 445

Cushing v. Drew

Massachusetts Supreme Judicial Court

Decided October 15, 1867

Massachusetts Supreme Judicial Court · decided 1867-10-15

Contract on a promissory note. The defendant filed a declaration in set-off founded on an alleged breach of the following written agreement signed by the plaintiff. “ October 2d, 1865.

Cited in Bouvier (1914)’s definition of “Liquidated Damages”

Good law ✅— No negative treatment on recordhow we know

Decided 1867-10-15

How this case has been cited

Cited by 26 later decisions — most recently May 1956 · most notably Hennessy v. Metzger (1894), de Cordova v. Weeks (1923)

2 federal appellate · 22 state decisions — followed in 12 states

601867187018801890190019101920193019401950decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

Chapman, J.

¶1The plaintiff agreed not to do any express business, nor cause any to be done, in East Weymouth, so long as the defendant should be doing business there, and for the violation of this agreement he agreed to pay the defendant the sum of nine hundred dollars. The question presented is whether this sum is to be treated as a penalty or as liquidated damages.

¶2*446The tendency and preference of the law is to regard a sum stated to be payable if a contract is not fulfilled, as a penalty, and not as liquidated damages. Shute v. Taylor, 5 Met. 61. Wallis v. Carpenter, 13 Allen, 19. Yet courts endeavor to learn from the subject matter of the contract, the nature of the stipulations, and the surrounding circumstances, what was the real intent of the parties; and are governed by such intent. Lynde v. Thompson, 2 Allen, 456. In that case the damages were held to be liquidated, in view of the fact that the contract was for doing a simple specific act, and that there were no adequate means furnished by the contract or otherwise for ascertaining the precise damage which might result from the breach of it.

¶3The same reasoning applies to this case. The stipulation is for a single thing, namely, to abstain from interference with the business which the plaintiff had sold to the defendant; and it is difficult to ascertain the damages that may result from the breach of such a contract. The language of the contract also imports a stipulated sum rather than a penalty; and this construction being confirmed by the nature of the stipulations, the court adopt it. The contract is, therefore, a proper subject of set-off. The case differs from that of Fisk v. Gray, 11 Allen 133. The instrument in that case was in form of a bond, and was given to secure the payment of several distinct sums.

¶4Exceptions sustained.

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