Bagley v. . Peddie and Another.

Summary

The New York Court of Appeals held that the $3,000 stipulated in the bond was liquidated damages, not a penalty, because the damages from breach of the employment covenants were uncertain and could only be proved by evidence outside the instrument. Accordingly, the Court reversed the lower court's judgment and ordered a new trial. Justice Bowen dissented, arguing that the damages were certain and the sum should be treated as a penalty, and that the judgment should be affirmed.