noxious to the objection of giving the same damage for a small breach as for a large one, and should not be allowed,90 unless any delay whatever is totally destructive of the value of the performance.

§ 786. Stipulation for attorney's fees.

It is a common provision in promissory notes and an occasional provision in other contracts, especially mortgages, that in case of breach the promisor will pay an attorney's fee (the amount of which is sometimes stated) for enforcing the obligation. There seems no occasion to distinguish between mortgages and other contracts with reference to the provision. If it is penal or the reverse in one it is in the other.91 It was much litigated prior to the passage of the Negotiable Instruments

Law, whether such a provision did not destroy negotiability of a bill or note.92 By that statute, however,93 which has now been generally adopted, it is provided that an instrument is not rendered non-negotiable by such a stipulation. This statutory provision is in accordance with the weight of authority prior to its enactment; and its almost universal enactment renders a discussion of the effect of the provision on the negotiability of a note, academic. The statute, however, does not affect the question whether such a provision is penal.94 The contract sometimes makes no provision concerning the amount of the stipulated fee; sometimes fixes a sum, either by stating a percentage (usually five or ten per cent) of the principal debt or by stating a lump sum. Any jurisdiction which permits a recovery of the fee where the amount is stated would undoubtedly allow a recovery of a reasonable fee where no sum is named in the contract.95 Most jurisdictions enforce a provision fixing the amount, if its reasonableness is not justifiably attacked." But if the amount is penal, either because of its size, or because the creditor was not compelled to pay an attorney the stipulated fee, the provision will be held to entitle the creditor only to a reasonable fee actually paid by him.97 And in some 92 See Daniel, Negotiable Instruments, § 62a.

93 Sec. 2 (5); infra, § 1137.

94 Miller v. Kyle, 85 Ohio St. 186, 97 N. E. 372; Raleigh County Bank v. Poteet, 74 W. Va. 511, 82 S. E. 332, L. R. A. 1915, B. 928.

95 See Potts v. Crudup (Okl.), 150 Pac. 170; McCornick v. Swem, 36 Utah, 6, 102 Pac. 626.

96 Re Keeton, 126 Fed. 426; Re Roche, 101 Fed. 956, 42 C. C. A. 115; Whaley v. American Freehold Land Mtge. Co., 74 Fed. 73, 42 U. S. App. 90, 20 C. C. A. 306, aff'g. 63 Fed. 743; Langley v. Andrews, 142 Ala. 665, 38 So. 238; Mason v. Luce, 116 Cal. 232, 48 Pac. 72; Carhart v. Allen, 56 Fla. 763, 48 So. 47; Broadbent v. Brumback, 2 Idaho, 366, 16 Pac. 555; Baker v. Jacobson, 183 Ill. 171, 55 N. E. 724; Keenan v. Blue, 240 Ill. 177, 88 N. E. 553; Smiley v. Meir, 47 Ind. 559;

Sharp v. Barker, 11 Kan. 381; Hansen v. Creditors, 49 La. Ann. 1731, 22 So. 923; Mjones v. Yellow Medicine County Bank, 45 Minn. 335, 47 N. W. 1072; Duncan Bank v. Brittain, 92 Miss. 545, 46 So. 163; First Nat. Bank v. Stam, 186 Mo. App. 439, 171 S. W. 567; Exchange Bank v. Tuttle, 5 N. M. 427, 7 L. R. A. 445, 23 Pac. 241; Howey v. Gessler, 16 N. M. 319, 117 Pac. 734; Cooper v. Bank of Indian Territory, 4 Okla. 632, 46 Pac. 475; Equitable Bldg. & L. Asso. v. Hoffman, 50 S. C. 303, 27 S. E. 692; Daly v. Sumpter Drug Co., 127 Tenn. 412, 155 S. W. 167; Miller v. Gaar-Scott & Co. (Tex. Civ. App.), 141 S. W. 1053; Morrill v. Hoyt, 83 Tex. 59, 18 S. W. 424, 29 Am. St. Rep. 630; First Nat. Bank v. Larsen, 60 Wis. 206, 19 N. W. 67, 50 Am. Rep. 365.

97 Montgomery v. Crossthwait, 90 Ala. 553, 8 So. 498, 12 L. R. A. 140, 24

States, the courts regard such a stipulation as necessarily penal or as opposed to the policy of the law, without reference to the amount of the fee.98 In such States it is immaterial that the contract was made or performable in another State where the stipulation was enforceable.99

§787. Other illustrations.

A stipulated sum for breach of a contract not to compete by one who has sold the good will of a business has generally been enforced. It is obvious that the actual amount of damage in such a case is difficult to estimate even though it be considerable. On the other hand, the breach may be large or small, and stipulated damages of the same amount for a considerable breach, and for a small one are not usually permitted. Am. St. Rep. 832; Moran v. Gardemeyer, 82 Cal. 96, 23 Pac. 6; Florence Oil & Ref. Co. v. Hiawatha Gas, Oil & Ref. Co., 55 Colo. 378, 135 Pac. 454; Porter v. Title Guaranty & Surety Co., 17 Idaho, 364, 106 Pac. 299, 27 L. R. A. (N. S.) 111; Henke v. Gunzenhauser, 195 Ill. 130, 62 N. E. 896; Goss v. Bowen, 104 Ind. 207, 2 N. E. 704; White v. Lucas, 46 Iowa, 319; Campbell v. Worman, 58 Minn. 561, 60 N. W. 568; Warwick Iron Co. v. Morton, 148 Pa. 72, 23 Atl. 1065; Coley v. Coley, 94 S. C. 383, 77 S. E. 49; Holston Nat. Bank v. Wood, 125 Tenn. 6, 140 S. W. 31; First Nat. Bank v. Robinson, 104 Tex. 166, 135 8. W. 372; Miller v. Laughlin (Tex. Civ. App.), 147 S. W. 711; Utah Nat. Bank v. Nelson, 38 Utah, 169, 111 Pac. 907; First Nat. Bank v. Larsen, 60 Wis. 206, 19 N. W. 67, 50 Am. St. Rep. 365; Mechanics' American Nat. Bank v. Coleman, 204 Fed. 24, 122 C. C. A. 338.

"Boozer v. Anderson, 42 Ark. 167; Arden Lumber Co. v. Henderson, etc., Co., 83 Ark. 240, 103 S. W. 185; WhiteWilson-Drew Co. v. Egelhoff, 96 Ark. 105, 131 S. W. 208; Witherspoon v. Musselman, 14 Bush, 214, 29 Am. Rep. 404; Clark v. Tanner, 100 Ky. 275, 38

S. W. 11; Equitable, etc., Assoc. v. Smith, 23 Ky. L. Rep. 1567, 65 S. W. 609; Oman v. American Nat. Bank, 32 Ky. L. Rep. 502, 106 S. W. 277; Bullock v. Taylor, 39 Mich. 137, 33 Am. Rep. 356; Wright v. Travers, 73 Mich. 493, 41 N. W. 517; People v. Bennett, 122 Mich. 281, 81 N. W. 117; Kemp v. Claus, 8 Neb. 24; Dow v. Updike, 11 Neb. 95, 7 N. W. 857; National Bank v. Thompson, 90 Neb. 223, 33 N. W. 199; Howey v. Gessler, 16 N. Mex. 319, 117 Pac. 734; Tinsley v. Haskins, 111 N. C. 340, 16 S. E. 325, 32 Am. St. Rep. 801; Exchange Bank v. Apalachian, etc., Co., 128 N. C. 193, 38 S. E. 813; Miller v. Kyle, 85 Ohio St. 186, 97 N. E. 372; Ronald v. Bank, 90 Va. 813, 20 S. E. 780; Raleigh County Bank v. Poteet, 74 W. Va. 511, 82 S. E. 332, L. R. A. 1915, B. 928. In Nebraska and in North Carolina, a special provision is inserted in the Uniform Negotiable Instruments Act, to the effect that nothing therein shall authorize the inclusion of attorney's fees.

99 Clark v. Tanner, 100 Ky. 275, 38 S. W. 11; Carsey v. Swan, 150 Ky. 473, 150 S. W. 534; Hallam v. Telleren, 55 Neb. 255, 75 N. W. 560.

Nevertheless as has been said, such contracts are generally upheld.1

An agreement for a fixed amount of damages for failure to carry out a contract to buy or sell is good if the amount of damage actually suffered is not readily calculable. On the other hand, if similar property to that contracted for can readily be procured, and there is a market price ascertainable, a provision for fixed damages is penal, especially if unreasonable in amount.4

A provision is common in mortgage and other obligations that if the debtor fails to pay interest or to comply with some other obligations contained in the contract, the principal obligation shall at once become due, or shall so become due at the election of the creditor. Such provisions are enforceable." There is no forfeiture in such cases of anything but a right of credit created by the contract, and terminable according to its terms.6

§ 788. Whether the tendency of the court is to hold a doubtful provision a penalty or liquidated damages.

It has been habitually laid down and probably would still be laid down in most jurisdictions that in a doubtful case the court would lean towards holding a provision for fixed damages penal rather than liquidated damages. Especially, "Where the agreement has been partially performed it is the policy of the Courts to regard the damages as a penalty, and allow