Penalty

1.

Punishment; especially a pecuniary fine, or mulct.

2.

Money recoverable by virtue of a statute imposing a pecuniary loss or payment by way of punishment.

3.

A sum named in a bond as the amount to be forfeited by the obligor, in case he does not comply with the conditions of the bond. In early common-law times, this penalty could be enforced by action in the law court's, if the condition was not punctually performed; but courts of equity early assumed jurisdiction to relieve obligors, and require bond creditors to be satisfied with so much of the penalty as would cover the debt and interest, with what would meet their just demand. Courts of law fell into the same practice; and it is now generally established. Hence the penalty, or penal sum of a bond, is, as respects amount, a nominal sum, — only a limit on the creditor's recovery. A penalty is an agreement to pay a greater sum, to secure the payment of a less sum. It is conditional, and can be avoided by the payment of the less sum before the contingency agreed upon shall happen. By what name it is called is immaterial.

Henry v. Thompson, Minor, 209, 227.

That penalty does not import punishment of the person, see Kinney v. Hosea, 3 Harr, (Del.) 77. The word penalty does not necessarily imply a j Bxed sum; any thing imposed as a punism Bgrrt, whether^,_S2ejafic or mej' ured Dy"tne^2:glue of theijitSIEat-afi StW by the act complained of Tinay be a penalty.

Merchants' Bank of N. H. v. BUss, 13 Aib. Pr. 225, 237.