United States of America v. Peerless Casualty Company, Appellant, 360 F.2d 210 (3d Cir. 1966)

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US Court of Appeals for the Third Circuit - 360 F.2d 210 (3d Cir. 1966) Argued May 16, 1966
Decided May 24, 1966

Appeal from the United States District Court for the District of New Jersey; Reynier J. Wortendyke, Jr., Judge.

Ralph G. Mesce, Newark, N. J. (William Abruzzese, Newark, N. J., Murray Brensilber, New York City, of counsel, on the brief) for appellant.

David M. Satz, Jr., U. S. Atty., Newark, N. J. (Martin Tuman, Asst. U. S. Atty., Newark, N. J., on the brief), for appellee.

Before STALEY, Chief Judge, and McLAUGHLIN and SMITH, Circuit Judges.


This action was commenced by the United States to recover for the breach of an appearance bond executed by the Peerless Casualty Company. After Peerless had conceded that the bond had been breached, the district court concluded that the provision in the bond for the payment of five thousand dollars in the event of breach "was, in [its] opinion, a reasonable forecast of just compensation * * *" and granted the government's motion for summary judgment.

Though Peerless raises several issues before us, the essential question is whether the district court erred in concluding as a matter of law that the provision was not penal, and therefore, enforcible. We think that the district court committed no error in holding that five thousand dollars properly constituted liquidated damages. See 5 Corbin, Contracts § 1062 at 355-356; 3 Williston, Contracts §§ 775 et seq.

The judgment of the district court will be affirmed.