liable to pay to the plaintiff the said sum of 500l. as and for liquidated damages, in manner and form as in the declaration alleged.

Fourth plea, to the plaintiff's claim of 500l. as and for liquidated damages, that the plaintiff, at the commencement of this suit, was and still is indebted to the defendant in an amount equal to the plaintiff's said claim, for money payable by the plaintiff to the defendant under and by virtue of the said agreements in the declaration respectively mentioned, as and for liquidated damages for and by reason of divers breaches of the said agreements respectively committed by the plaintiff, and for the non-performance by the plaintiff of divers terms and conditions in the said agreements respectively contained on his part to be performed, and for not continually supplying the defendant with photographic portraits or pictures to be retouched and perfected under the plaintiff's direction by the defendant in pursuance of the said agreements, and for neglecting and omitting so to do, contrary to the tenor and effect, true intent, and meaning of the said agreements respectively, and for money found to be due from the plaintiff to the defendant on accounts stated between them; which amount the defendant was willing to set off against the plaintiff's said claim.

The plaintiff demurred to the third plea,-the grounds of demurrer stated in the margin being "that the third plea is bad in substance, upon the following grounds, amongst others, that is to say, that it is a plea to *110] damages merely; that it admits all the breaches, and *that the plaintiff had a cause of action in respect of each and every of them sufficient to entitle him to nominal damages at all events; and that it is a plea to a mere conclusion of law deduced from the agreement set out in the declaration, which may be struck out as surplusage, and the declaration would if the same were struck out still show a good and sufficient cause of action in respect of which the jury might award any amount of damages within the limit of the sum claimed."

He also demurred to the fourth plea, except as to so much thereof as related to the account stated,-the grounds of demurrer stated in the margin, being "that it appears on the pleadings that the sum of 500%. mentioned in the agreement was not a subject of set-off."

The defendant joined in demurrer.

Phipson, in support of the demurrer.(a)-The 5007. mentioned in the two agreements, are clearly not liquidated damages, but a penalty; and the defendant was not justified by the plaintiff's introduction of an *111] *allegation so idle into his declaration, in pleading to the damages in the way he has done. In Kemble v. Farren, 6 Bingh. 141 (E. C. L. R. vol. 19), 3 M. & P. 425, it was expressly held that liquidated

(a) The points marked for argument on the part of the plaintiff, were as follows:"That the third plea is a plea to damages merely; that it admits all the breaches alleged in the declaration, but shows no excuse for them; that, upon the said plea and declaration, it sufficiently appears that the plaintiff is entitled to recover some damages against the defendant in respect of every breach, and to have the same assessed by a jury; that the plea is pleaded to a mere conclusion of law adduced from the terms of the agreement set out in the declaration, which conclusion of law, if erroneous, may be struck out as surplusage, without prejudicing the plaintiff's right, as shown in the declaration, to recover any amount of damages, within the stipulated sum, for the breaches of agreement alleged in the declaration, and admitted by the plea; and that, for the reasons aforesaid, the plea is bad in substance."

And, as to the fourth plea, " that it sufficiently appears in the pleadings, that the sum of 5002. attempted to be set off, is not a subject of set-off, and that so much of the plea consequently is bad in substance."

damages cannot be reserved on an agreement containing various stipulations, of different degrees of importance, unless the instrument specifies the particular stipulation or stipulations to which the liquidated damages are to be confined. And that is confirmed by Galsworthy v. Strutt, 1 Exch. 659,† where Parke, B., says: "The rule is correctly laid down. in Kemble v. Farren: and I said in the cases of Horner v. Flintoff, 9 M. & W. 678,† and Beckham v. Drake, 8 M. & W. 846,† that we were bound by that decision. In the more recent case of Green v. Price, 13 M. & W. 695,† I said, 'The principle is, that, although the parties may have used the term liquidated damages, yet, if the court can see, upon the whole of the instrument taken together, that there was no intention that the entire sum should be paid absolutely on non-performance of any of the stipulations of the deed, they will reject the words, and consider it as being in the nature of a penalty only! And my Brother Alderson there said,' But, where the damage is altogether uncertain, and yet a definite sum of money is expressly made payable in respect of it, by way of liquidated damages, those words must be read in their ordinary sense, and cannot be construed to import a penalty!' The law is correctly laid down in that case." The defendant had no right to plead to an immaterial averment: if he chooses to pick it out and plead idle pleas, he must abide the consequences. [WILLES, J., referred to Lush v. Russell, 4 Exch. 637,† 5 Exch. 203.† The plaintiff has been guilty of the first fault, by including in his declaration a breach which gives him no cause of action.] It is not a breach: it is a mere erroneous per quod, or an erroneous inference of law. If the defendant found himself embarrassed by this claim, he might have gone before a

judge at Chambers to get it struck out. As to the distinction [*112

between a penalty and liquidated damages, see the authorities collected in the notes to Gainsford v. Griffith, 1 Wms. Saund. 586, 58c.

John Gray (with whom was W. R. Cole), contrà.(a)—* Upon this declaration, the 500l. must be treated as liquidated damages.

[*113

(a) The points marked for argument on the part of the defendant, were as follows:"As to the third plea,-That the plea shows a good and sufficient answer to that part of the claim to which it is pleaded:

"That the declaration is so framed, that, if the plaintiff be not entitled to recover '5007. as and for liquidated damages,' he is not entitled to recover anything:

"That the plaintiff might have declared for general damages, but he has elected to sue for the forfeiture as and for liquidated damages; and the only breach alleged as a cause of action, is, the non-payment of such forfeiture,-Lowe v. Peers, 4 Burr. 2228; Hurst v. Hurst, 4 Exch. 571, 579: That the plaintiff must recover, if at all, secundum allegata et probata: that under this declaration, he would be entitled to recover the whole 5001. or nothing,-Farrant v. Olmius, 3 B. & Ad. 692 (E. C. L. R. vol. 23); Fletcher v. Dyche, 2 T. R. 37; per Buller, J., in Astley v. Weldon, 2 Bos. & P. 353.

"That, if the plaintiff might claim liquidated damages and also general damages in the same count (which he has not done), it would be impossible for the defendant to plead to it, because almost any plea would be bad either as to the one claim or the other; and that if the plaintiff had newly assigned to the third plea, that he seeks to recover general damages, and not liquidated damages, that would have been a departure.*

"That the plaintiff is not entitled to recover the 5007. as and for liquidated damages, because the 5007. mentioned in the contract is in the nature of a penalty, and not liquidated damages,— Kemble v. Farren, 6 Bingh. 141 (E. C. L. R. vol. 19), 3 M. & P. 425; Beckham v. Drake, 8 M. & W. 835; Galsworthy v. Strutt, 1 Exch. 666:† that it never could have been the intention of the parties that the plaintiff should actually pay the defendant 500l. as and for liquidated damages, if he neglected to pay him any one of the small sums mentioned in the table of prices Which, since the Common Law Procedure Act, 1852, is no ground of demurrer.

The plaintiff takes upon himself to state the effect of the agreement; and he has chosen to claim the 500l. as liquidated damages. Suppose there is an agreement with such a stipulation as this, so expressed as to make it clear that the penal sum is to be paid in the event of any one breach of the agreement,-how is the plaintiff to declare on it? He may set it out in terms, so that the court may see what it is. But he may also set out the effect of it. [WILLIAMS, J.-He cannot state the legal effect of it; but he may state what the language amounts to, at his peril. Is not the effect of your argument this, that the third plea amounts to a special plea of non assumpsit?] No doubt. In Hurst v. Hurst, 4 Exch. 571,f the declaration stated that the defendants covenanted that they "would not lop or top any tree without the consent in writing of the plaintiff, under a penalty of 201. for each tree which should be so lopped or topped, over and above the actual value of the tree;" and alleged for breach that the defendants "lopped divers, to wit, twenty trees without the consent in writing of the plaintiff, which trees so lopped were of great value, to wit, of the value of 801., and thereupon and thereby the defendants then became liable to pay, and ought to have paid to the plaintiff, certain large sums of money, to wit, the sum of 801., being the value of the *said trees, and also the *114] further sum of 201. for each of the trees so lopped by the defendants, being the amount of penalties then incurred and forfeited by the defendants to the plaintiff for lopping the said trees:" and it was held, that, assuming the 207. penalty to be liquidated damage, the plaintiff could no trecover it on this breach, inasmuch as it did not allege that the penalty was not paid. That shows that the allegation that the defendant "has not paid the said 500l. or any part thereof," is not a mere conclusion of law, but a material averment. [WILLIAMS, J.—Put it as you will, the plea is nothing more than an informal non assumpsit. Mr. Phipson admits that the 500l. is a penalty, and that it is a misdescription of the agreement to say it is liquidated damages.] The distinction between a penalty and liquidated damages is well illustrated by the judgment in Lowe v. Peers, 4 Burr. 2225, 2228. [WILLIAMS, J.— The declaration introduces the agreement with the words, "it was witnessed."] It is not necessary to consider the effect of that: it is not so as to the part of the instrument in question; that commences with the words "and it was further mutually agreed," &c. [BYLES, J.— Does that mean anything more than that the agreement says so?] Lord Mansfield, in Lowe v. Peers, says: "There is a difference between covenants in general, and covenants secured by a penalty or forfeiture. In the latter case the obligee has his election. He may either bring an action of debt for the penalty, and recover the penalty (after which recovery of the penalty he cannot resort to the covenant, because the penalty is to be a satisfaction for the whole); or, if he does not choose to go for the penalty, he may proceed upon the covenant, and recover more or less than the penalty, toties quoties. And upon this distinction they proceed in courts of equity. They will relieve against a penalty, upon a

contained in the contract: and that, if this were not clearly apparent on the face of the declaration (which suppresses the table of prices, &c.), it is rendered perfectly evident by the third plea, which sets out the contract verbatim :

"That the plaintiff is not entitled to recover."

*compensation; but, where the covenant is, 'to pay a particular

liquidated sum,' a court of equity cannot make a new covenant [*115

for a man: nor is there any room for compensation or relief. As in leases containing a covenant against ploughing up meadow; if the covenant be not to plough,' and there be a penalty, a court of equity will relieve against the penalty, or will even go further than that (to preserve the substance of the agreement): but, if it is worded,—' to pay 5l. an acre for every acre ploughed up,'-there is no alternative, no room for any relief against it; no compensation: it is the substance of the agreement. Here, the specified sum of 1000l. is found in damages: it is the particular liquidated sum fixed and agreed upon between the parties, and is therefore the proper quantum of the damages." So, here, upon this declaration, the only damages a jury can give is 5007. The plaintiff having chosen to put this allegation into his declaration, and to allow it to come before the court on demurrer, is not at liberty now to turn round and say that the defendant has put in issue an immaterial allegation. [CROWDER, J.-You might have had it put right by going to a judge at Chambers.] Possibly: but our omission to adopt that course, does not absolve the court from the necessity of giving a legal judgment on the demurrer. Lush v. Russell, 4 Exch. 637,† applies to the fourth plea. There, the declaration stated an agreement whereby the defendant agreed to employ the plaintiff as a journeyman baker for four years, and to pay him certain weekly wages, and also certain additional sums in the three last years of the term; and alleged for breaches, that the defendant, before the expiration of the term, wrongfully discharged the plaintiff from his employ,-that the defendant did not pay the plaintiff the weekly wages *for the remainder of the term,—and that the [*116 defendant did not pay the plaintiff the additional sums which he would have been entitled to if he had continued in the employ of the defendant. The defendant demurred generally to the last two breaches, and the plaintiff joined in demurrer: and the court held that the proper course was, to have applied to a judge to strike out those breaches, and that, upon this record, they could not be treated as surplusage. Parke, B., giving the judgment of the court, says: "We think that, on this record, we are bound to treat these averments as breaches; and, it being agreed on both sides that they are bad as breaches, our judgment must be for the defendant. The proper course was, to have applied to a judge at Chambers to strike them out of the declaration as surplusage; and, in the event of the party being dissatisfied with the opinion of the judge, application should have been made to the court. By demurring generally, and joining in demurrer, it must be taken that both parties considered them as distinct breaches; and, being bad as breaches, the plaintiff cannot have judgment for contingent damages." If the 500l. is to be treated as liquidated damages, the fourth plea is clearly good

as a set-off.

Phipson was heard in reply.

WILLIAMS, J.-It is much to be regretted that the improvements introduced by the Common Law Procedure Acts have not added more to the lucidity of proceedings. We are called upon here to decide a mere point of pleading. It appears to me that both pleas are bad, as being in substance pleaded to damages, only I cannot admit the correctness of the view presented by Mr. Gray, that the stipulation in question

must upon this declaration be taken to be liquidated *damages, *117] and that the declaration is answered by the plea bringing before the court other parts of the agreement showing that the plaintiff is mistaken in supposing that the 5007. is payable as liquidated damages for any breach thereof. That being so, there is a question behind upon which the court are not quite unanimous, viz., whether or not the pleas are good as amounting to special pleas of non assumpsit. It has been strongly urged by Mr. Gray that this case should be governed by Lush v. Russell, 4 Exch. 637,† 5 Exch. 203.† There, the declaration contained two bad breaches and one good one: the defendant demurred to the former; and, the plaintiff having joined in demurrer, the court held that the defendant was entitled to judgment. I can see no distinction between that case and the case of a declaration containing one good count and two bad ones: if the defendant demurs to the two bad counts, and the plaintiff joins in demurrer, the former is entitled to judgment, no cause of action being disclosed. I do not understand the third plea as being a plea to one of several claims: but it appears to me that the plea is bad, as putting in issue matter which is no answer to the action or to any part of the action, but only goes to the measure of damages. The fourth plea is bad on the same ground. Upon the whole, I am of opinion that the plaintiff is entitled to judgment.

CROWDER, J.-I am of the same opinion. As to the argument, founded upon the declaration, that there is apparently on the face of it an allegation that the 500l. were to be paid as liquidated damages, it seems to me, that, looking fairly at the declaration, no such result follows. The pleader sets out the agreement, beginning "it was witnessed,' &c. It is true that in the latter part the allegation is "And lastly it was thereby mutually agreed and declared," &c. But I think that *118] *must be taken substantially to refer to that which is stated in the agreement. The same language is used with respect to the second breach; the intention being, to set out the agreement, and not to make that an averment of an absolute stipulation that 5007. should be paid for every breach of the agreement. Strong language is necessary to bring about such a result. That being so, the averment at the end of the declaration,-that "by reason of the said several premises, the defendant forfeited and became liable, under and by virtue of the agreements aforesaid, to pay to the plaintiff the said sum of 500l. as liquidated damages," is an immaterial averment, and the plaintiff might recover any portion of the 500l. which the jury might think proper to give. I agree with my Brother Williams in thinking that Lush v. Russell has no bearing upon this case. I cannot look at this allegation as a separate breach, but merely as a statement of damages.

WILLES, J.-I own I should have been better satisfied if the rest of the court had arrived at the conclusion that the judgment should be in favour of the defendant. The plaintiff undoubtedly describes the sum due to him as liquidated damages: he states that the events have happened on which, if the 500l. were liquidated damages, it would be payable, and that it has not been paid. That that is in form an averment that the money is due and payable as liquidated damages, no lawyer who had not read the case of Kemble v. Farren, 6 Bingh. 141 (E. C. L. R. vol. 19), 3 M. & P. 425, could for a moment doubt. But, speaking in legal language, there is a colourable breach of the agreement