"The above-entitled suit by appellee against appellant was to recover $1,000 which appellee claimed he was entitled to as liquidated damages because of a breach by appellant (as found by the jury) of a contract between them as follows:
"`Greenville, Tex., February 12, 1920
"`This agreement made this the 12th day of February, 1920, by and between John P. Crumpler, of Greenville, Tex., and the Collins-Decker Company, of Greenville, Tex., to wit:
"`John P. Crumpler has this day sold to the Collins-Decker Company his stock of pianos, sheet music, talking machines, and records, record cabinets and player rolls, and all musical merchandise on the following terms:
"`Twelve straight second-hand pianos at one hundred dollars each ($100.00); one electrical piano for one hundred fifty dollars ($150.00), said electrical piano to be in good playing condition; also one studio model auto player for the sum of two hundred dollars ($200.00); all talking machines at wholesale cost; also all sheet music, phonograph records, player rolls, and music cabinets and small goods at wholesale cost.
"`It is agreed herein by and between both parties that John P. Crumpler will discontinue any further piano business or talking machine business in Greenville or Hunt county, for the consideration of this contract.
"`It is agreed by and between both parties that the Collins-Decker Company will upon completion of the inventory pay to John P. Crumpler cash in full.
"`[Signed] John P. Crumpler
"`The Collins-Decker (Co.)
"`By J. L. Collins
"`Witness: ______
"`______
"`All talking machines, records and player rolls to be forty per cent. off list last Sept. Said J. P. Crumpler is to retain the two desks, typewriter, and adding machine.'
"The breach of the contract by appellant consisted of its refusal to take and pay for the goods.
"It appeared from the testimony (1) that, after the parties executed the contract, appellant, in conformity to a verbal agreement it had with appellee, deposited its check for $1,000 with one James, and that appellee, in conformity to said verbal agreement, deposited his check for a like amount with said James; (2) that at the time appellee deposited his check as stated same would not have been paid had it been presented to the bank he drew it on, because he did not have money with it sufficient for the purpose; (3) that appellee, though solvent at the time he contracted to sell the goods to appellant, was indebted to various persons on account of the goods in sums aggregating more than their value, which was between $7,000 and $8,000; (4) that none of the requirements of the `Bulk Sales Law' (article 3971, Vernon's Statutes), if it applied to the transaction, were complied with; and (5) that appellant did not know when it agreed to purchase the goods that appellee owed for same as stated, and did not know at the time it made the agreement and deposited its check with James as stated that appellee did not have money in the bank sufficient to pay the check he deposited with James. The testimony indicated that the prices agreed upon for articles specified in the written contract represented the cash market value of the articles, and that the market value of the articles not so specified was their cost price. It appeared that appellant was appellee's only competitor in business in Greenville, and that pending the negotiations between them appellee gave appellant his cost mark, and that they, together, made an inventory of the stock of goods. Appellee sold the goods to other parties within 60 days after appellant refused to take them. He testified that the fact that appellant had obtained his cost mark and acted with him in making an inventory of the stock of goods `would damage' him, but it did not appear from his testimony that he sold the goods for less than the sum appellant contracted to pay him, nor that he was in fact damaged in any way by the failure of appellant to take the goods.
"With reference to the verbal agreement referred to above, the witness Collins, appellant's president, who, with the witness Decker, its secretary, acted for appellant, testified:
"`He (Crumpler) said, `I tell you fellows I want you to put up a forfeit on this,' and I said, `All right,' and asked him `How much,' and he said `A thousand dollars each,' and I told him, `All right, that would be satisfactory.' * * * We put up the checks at the bank with Mr. James with the understanding that, if we did not buy the property, Mr. James was to deliver the checks to Mr. Crumpler, and, if he failed to deliver the property to us, we would take the checks. If we failed to take and pay for the property, he was to take the checks.'
"The witness Decker, above referred to, testified:
"`At the time the contract was signed, or immediately after, there was something said about a forfeit. Mr. Crumpler raised the question of the forfeit. He said he wanted a forfeit put up, and Mr. Collins said that was all right. The amount was then agreed on, $1,000.'
"Appellee Crumpler testified:
"`We agreed to put up a forfeit, a check of $1,000 each with W. H. James, cashier of the Commercial National Bank. * * * As to who made the suggestion that the checks for $1,000 be put up to bind the trade, I don't know but what I did. * * * The agreement was that, if either party failed to comply with the contract, the checks were to be delivered to the other party. * * *
"`Q. It did not matter how much you were damaged or whether you were damaged at all, if either one broke the contract the other was to take the $1,000? A. Yes, sir.'
"Appellant insisted in the court below, and insists here, that on the facts and testimony stated it was not liable to appellee for damages in any sum, and it further insisted and insists, contrary to the holding of the trial court, that, if it was liable to appellee at all, it was only for the actual damages, if any, he
suffered, and not for the amount of the $1,000 check, because same was a penalty and not liquidated damages. The verdict and judgment were in appellee's favor for the $1,000 as liquidated damages. This court was of the opinion that the $1,000 represented by the checks was instead a penalty, and reversed the judgment in appellee's favor, and rendered judgment that he take nothing by his suit.
"The cause is still pending before us on a motion by appellee for a rehearing; and, because we deem it advisable to do so (article 1619, Vernon's Statutes), we hereby certify to you for decision questions as follows:
"Did this court err in holding on the facts stated that...
