Disosway v. Edwards

• Decision Date: 23 February 1904
• Court: North Carolina Supreme Court
• Parties: DISOSWAY. v. EDWARDS.

46 S.E. 501

134 N.C. 254

DISOSWAY.

v.EDWARDS.

Supreme Court of North Carolina.

Feb. 23, 1904.

BONDS — PENALTY — LIQUIDATED DAMAGES — CONSTRUCTION — BREACH — JUDGMENT FOR DAMAGES—ABSENCE OF PROOF.

1. An allegation, after averring a breach of a bond, that plaintiff is "endamaged to the amount of one thousand dollars, " although it is not such a specific allegation of fact as to he deemed admitted by demurrer, is sufficient to entitle plaintiff to an inquiry as to his actual damages, where the cause of action is admitted by demurrer.

2. Courts incline to construe a bond as penal in character, unless such a construction would tend to defeat its essential object, even where it is expressly stated that the amount of the bond is intended as stipulated damages.

¶2. See Damages, vol. 15, Cent. Dig. §§ 155, 167.

3. In an action on a bond conditioned for the performance of an agreement not to engage in a certain business, it was error to enter judgment for the full amount of the bond, on overruling a demurrer to the complaint, where there were no specific allegations as to the damage suffered, or showing that the amount of the bond was not unreasonable, and no proof was taken on the subject.

Appeal from Superior Court, Craven County; Moore, Judge.

Action by Mark Disosway against A. M. Edwards. From a judgment for plaintiff, defendant appeals. Reversed.

This is an action upon a bond executed by the defendant in the following words: "Know all men by these presents that I, A. M. Edwards of Craven County, N. C. acknowledge myself indebted to Mark Disosway in the sum of One Thousand Dollars. The condition of this bond is such that if the said A. M. Edwards shall at any time, within the next twenty years from date hereof, engage in the sale of spirituous liquors either directly or indirectly within the limits of the city of New Berne, N. C, then this bond to be in full force and effect, and the said Mark Disosway, his heirs or assigns, in that case, is fully authorized hereby to at once take steps for the enforcement of this obligation, otherwise this bond to become null and void. A M. Edwards. [Seal.] Witness, R. B. Nixon." The complaint alleges a breach of the bond, inasmuch as the defendant continues to engage in the sale of spirituous liquors in said city of New Berne, and further alleges, in separate paragraphs, that he is thereby "endamaged to the amount of one thousand dollars, " and that "the defendant is indebted to him in the sum of one thousand dollars." The defendant demurred upon the following grounds: "(1) That the bond set out in the fourth paragraph of the complaint is in restraint of trade, tending to create a monopoly, contrary to public policy, null, and void. (2) For that in any event such a bond could only be good to the extent of securing actual damage sustained, and the complaint does not set forth any fact from which the court can see that the plaintiff has sustained any damage whatever." Whereupon judgment was rendered as follows: "This cause coming on to be heard upon the complaint of plaintiff, and demurrer thereto filed by the defendant, and upon argument of counsel said demurrer being overruled, and the defendant allowed to answer over, but, declining to answer, excepts to the order of the court overruling said demurrer, and appeals to the Supreme Court, it is thereupon ordered and adjudged that the plaintiff recover of the defendant the sum of one thousand dollars upon the verified complaint of the plaintiff—no answer being filed by the defendant—with interest until paid, and the costs of action."

W. D. McIver, for appellant O. H. Guion, for appellee.

DOUGLAS, J. (after stating the case). We think the demurrer was properly overruled on both grounds, but that there is error in the judgment in allowing the full amount of the bond, in the absence of sufficient allegations in the complaint to enable the court to hold, as matter of law, that the penalty of the bond is in the nature of stipulated or liquidated damages. The plaintiff alleges that he is "endamaged in the sum of one thousand dollars, " and, while this is not such a specific allegation of...