(f) In Davies v, Penton, 6 B. & C. 216, 224, Littledale, J., said: " Before the 8 & 9 Will III. the whole penalty might be recovered at law; and the party against whom it was recovered was driven to seek relief in a court of equity. The statute only contains the word 'penalty.' Since the statute, parties in framing agreements have frequently changed that word for liquidated damages; but the mere alteration of the term cannot alter the nature of the thing; and if the court see, upon the whole agreement, that the parties intended the sum to be a penalty, they ought not to allow one party to deprive the other of the benefit to be derived from the statute. In that case the parties were bound ' in the penal sum of £500, to be recoverable for breach of the said agreement in any court or courts of law, as and by way of liquidated damages.'" The £500 was held to be a penalty and not liquidated damages. See Hoag v. McGinnis, 22 Wend 163. The limitations of this principle appear to be well stated in Price v. Green, 16 M. & W. 346, 354. The defendant was bound in the sum of £5,000, by way of liquidated damages, and not of penalty, not to carry on his trade within certain limits. It was held, that the plaintiff could recover the £5,000 as liquidated damages. Patterson, J., said: " Where it is a sum named in respect of the breach of one covenant only, and the intention of the parties is clear and unequivocal, the courts have indeed held, that in some cases, the words ' liquidated damages ' are not to be taken according to their obvious meaning; but those cases are all where the doing or omitting to do several things of various degrees of importance is secured by the sum named, and, notwithstanding the language used, it is plain from the whole instrument that the real intention was different." Davis v. Freeman, 10 Mich. 188; Streeper v. Williams, 48 Pa. 450; Ryan v. Martin, 16 Wis. 57, Fiske v. Gray, 11 Allen, 132; Shreve v. Brereton, 51 Pa. 175.

(g) There has been much conflict in the decisions which have been made upon this class of contracts. While some of the courts have been disposed to apply to them the ordinary rules of construction, and to carry out the intention of the parties, as expressed in the instrument, without regard to its justice, others have been inclined, in almost all cases, to regard the ram fixed upon as a penalty, and to settle themselves, with the aid of a jury, the question of damages, notwithstanding the expressions used by the parties. But the law appears to be now settled, that the courts will apply to these contracts the ordinary rules of construction, and carry out the expressed intentions of the parties, unless one of the two rules laid down in the text is found to apply. The first rule, which appeals to have been confined to the case in which it is agreed to pay a larger sum of money as liquidated damages, on a failure to pay a smaller sum on a given contingency, was laid down in Orr v. Churchill, 1 H. Bl. 227. In that case a high rate of interest was to be paid "by way of penalty," upon a failure to pay over a sum of money at a fixed time. Lord Loughborough said: "Where the question is concerning the non-payment of money, in circumstances like the present, the law, having by positive rules fixed the rate of interest, has bounded the measure of damages; otherwise the law might be eluded by the parties. It may often, indeed, happen, that the damages sustained by the party contracting, by the non-payment of money at the time agreed on, may, by the particular arrangement of his affairs, be greater than the compensation recovered by computing the interest; but where money has a real rate of interest and value, the other party is not to be compelled to pay more than the law has declared to be such rate and value." The same rule was recognized in Astley v. Wel-don, 2 B. & P. 346, 354, where Chambre, J., said: "There is one case in which the sum agreed for must always be considered as a penalty; and that is, where the payment of a smaller sum is secured by a larger.'* Again, in Kemble v. Farren, 6 Bing. 141, 148, Tindal, C. J., said: "That a very large sum should become immediately payable, in consequence of the non-payment of a very small sum, and that the former should not be considered as a penalty, appears to be a contradiction in terras; the case being precisely that in which courts of equity have always relieved, and against which courts of law have, in modern times, endeavored to relieve, by directing juries to assess the real damages sustained by a breach of the agreement." But the very late English authorities have shown a decided inclination to disregard this rule, and to carry out the intentions of the parties as expressed in the agreement See Price v. Green, supra, n. (f). In Galsworthy v. Strutt, 1 Exch. 659, 665, Parke, B , with Astley v. Weldon, and Kemble v. Farren, before him, said: " I take it that it would be competent for the parties to make a stipulation for the payment of a certain sum on the non-performance of a covenant to pay a smaller sum; but they must do so in express terms; and if that be done, I do not see how the courts can avoid giving effect to such a contract." But in this country the rule, as stated in the text, and in the earlier cases, appears to be generally recognized. In Gray v. Crosby, 18 Johns. 219, 226, Woodworth, J., in remarking upon a case where a party covenanted on a certain contingency to pay a sum of

* all the possibilities of injury resulting from a breach of contract, it is impossible to select the certain or probable results, or to * define them with any precision by reference to a money standard, here the parties may agree beforehand what the injury shall be valued at, or what shall be taken for a compensation; for, if the court sets it aside, it can only do what it may be supposed the parties had a right to do and have done, and that is, arrive at a general probability, by a consideration of all the circumstances of the case. Such an agreement, therefore, the court will not set aside, unless for such obvious excess and disproportion to all rational expectation of injury, as make it certain that the principle of compensation was wholly disregarded.