Smith v. Bergengren

10 L.R.A. 768, 26 N.E. 690, 153 Mass. 236, 1891 Mass. LEXIS 252

• Court: Massachusetts Supreme Judicial Court
• Decided: February 24, 1891
• Status: Published

Opinion

Holmes, J.

The defendant covenanted never to practise his profession in Gloucester so long as the plaintiff should be in practice there, provided, however, that he should have the right to do so at any time after five years, by paying the plaintiff two thousand dollars, “but not otherwise.” This sum of two thousand dollars was not liquidated damages, still less was it a penalty. It was not a sum to be paid in case the defendant broke his contract, and did what he had agreed not to do. It was a price fixed for what the contract permitted him to do if he paid. The defendant expressly covenanted not to return to practice in Gloucester unless he paid this price. It would be against common sense to say that he could avoid the effect of thus having named the sum by simply returning to practice without paying, and could escape for a less sum if the jury thought the damage done the plaintiff by his competition was less than two thousand dollars. The express covenant imported the further agreement, that if the defendant did return to practice he would pay the price. No technical words are necessary if the intent is fairly to be gathered from the instrument. See Pearson v. Williams, 24 Wend. 244, and 26 Wend. 630; Stevinson's case, 1 Leon. 324; St. Albans v. Ellis, 16 East, 352; Deverill v. Burnell, L. R. 8 C. P. 475; National Provincial Bank of England v. Marshall, 40 Ch. D. 112.

If the sum had been fixed as liquidated damages, the defendant would have been bound to pay it. Cushing v. Drew, 97 Mass. 445. Lynde v. Thompson, 2 Allen, 456. Holbrook v. Tobey, 66 Maine, 410. But this case falls within the language of Lord Mansfield in Lowe v. Peers, 4 Burr. 2225, 2229, that if there is a covenant not to plough with a penalty in a lease, a cojirt of equity will relieve against the penalty, “ but if it is worded ‘ to pay £5 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.” See also Ropes v. Upton, 125 Mass. 258, 260. The ruling excepted to did the defendant no wrong. In the Opinion of a majority of the court, the exceptions must be overruled. Exceptions overruled.