held that there could be no forfeiture of a deposit. Smith v. Independent School Dist. No. 12, 108 Minn. 322, 122 N. W. 173. And where a bidder for the construction of a municipal sewerage plant named his price for the entire plant, and in his proposal stated the price per unit, which price per unit totaled less than the sum for which he offered to contract for the entire plant at the prices named for each unit, it was held that the deposit of the bidder could not be forfeited for a refusal to execute the contract. Dawson Springs v. Miller Coal, etc. Co. 155 Ky. 763, 160 S. W. 495, wherein the court said: "It is also made quite plain from the evidence that the sewerage commission contemplated in the specifications and the instructions that the contractor should be paid so much for each unit of work and not a sum total for the whole work. In other words, the idea of the sewerage commission was that the bidders should specify the price at which they would do the earth excavation per cubic yard on estimates furnished by the sewage engineer and be paid this specified price for each cubic yard of excavation, whether it was more or less than the estimate, and so with the other items constitut

ing the work. It is also quite plain from the evidence that the appellee company, while it specified in its proposal the price it would charge for each unit, understood that its bid was the total sum at which it proposed to do the work. Evidently the parties to this controversy did not understand each other when the offer was made and accepted. There was no meeting of minds. Under the circumstances we think the lower court correctly solved the difficulty by requiring the city to return the deposit of $500, thus putting the parties where they started." But see Turner v. Fremont, 170 Fed. 259, 95 C. C. A. 455, wherein a deposit was forfeited for failing to enter into a contract after an award, and in an action to recover the same on the ground that the tendered contract was different from the proposal, it was held that the statement in the contractor's bid that he proposed to use "capital" brick did not relieve him from a forfeiture on his refusal to make a contract to furnish brick according to the specifications.

3. DEPOSIT AS LIQUIDATED DAMAGES.

Where it is expressly agreed by the parties that the deposit shall be considered as liquidated damages, in case there is a refusal to perform after a favorable award, the decisions are uniform that the deposit will be so treated as liquidated damages and not as a penalty, whether the actual damages are more or less than the amount of the

deposit. Turner v. Fremont, 170 Fed. 259, 95 C. C. A. 455, affirming 159 Fed. 221; Robinson v. Board of Education, 98 Ill. App. 100; Wheaton Bldg. etc. Co. v. Boston, 204 Mass. 218, 90 N. E. 598; Coonan v. Cape Girardeau, 149 Mo. App. 609, 129 S. W. 745; Davin v. Syracuse, 69 Misc. 285, 126 N. Y. S. 1002, affirmed in 145 App. Div. 904, 129 N. Y. S. 1119; New York v. SeelyTaylor Co. 149 App. Div. 98, 133 N. Y. S. 808.

In Coonan v. Cape Girardeau, supra, the court said: "By the very words of plaintiff's bid the amount deposited by him became stipulated damages, to be forfeited to the city if, in the event the contract was awarded him, he failed to execute the bond called for by the contract within twenty days after the award and begin actual work within thirty days. As to whether the one thousand dollars was to be penalty or liquidated damages, we have no doubt the intention was to agree on the damages; what the city would lose by plaintiff's failure to sign the bond and contract and enter on the execution of the work could not be readily measured and the amount to be forfeited was not unreasonable. Those facts justify the ruling that the amount was stipulated damages." And in Wheaton Bldg. etc. Co. v. Boston, 204 Mass. 218, 90 N. E. 598, the court said: "The final contention of the plaintiff is that the deposit was a penalty, and hence cannot be enforced. The terms of the agreement indicate an intent to treat the deposit as liquidated damages, and this appears to be the purpose of the statute. The amount of the check must be regarded as liquidated damages. It was in fact much smaller than the loss sustained by the city, for by the failure of the plaintiff to take the contract it was awarded to another bidder for a sum about twenty-four thousand dollars larger. The plaintiff refused to sign the contract except for an additional price of twenty-one thousand dollars. Therefore no reason appears why the intent of the parties as manifested by their written communication and the purpose of the statute should not be carried out."

Thus it has been held that where a deposit amounted to thirty-seven hundred dollars and the actual loss by the bidder's failure to perform was but twenty-five hundred dollars, the entire deposit was nevertheless forfeited. Turner v. Fremont, 170 Fed. 259, 95 C. C. A. 455. And where it was provided that in case the bidder failed to perform after being awarded the contract, his deposit should be forfeited as liquidated damages, it was held that there could be no recovery of actual damages in excess of the amount of the deposit. New York v. Seely-Taylor Co. 149 App. Div. 98, 133 N. Y. S. 808, where

in the court said: "If it be assumed that the Seely-Taylor Company's bid were a valid and binding one, notwithstanding the mistake alleged, it could thereafter refuse to enter into a contract, and if it did so the only damage to which it was subjected was that provided in the section of the charter referred to. Its refusal forfeited to the city the amount of the deposit as liquidated damages.' Where a statute provides for liquidated damages, or where there is a stipulation in a contract as to the amount of damages that is to be paid to either party for a breach, then, in the absence of fraud or mistake, the only question which arises is as to the breach. In that case the actual damage is not involved. One cannot recover both. The recovery of one precludes the recovery of the other. To permit a recovery of actual damage, where liquidated damages have been provided for, is to nullify the statute or destroy a contract with reference thereto. The sole purpose of providing for liquidated damages is to prevent, in case of a breach, any question being raised as to the amount that shall be paid or recovered therefor. The city, when it advertised for bids, informed prospective bidders that they would have to deliver, at the time bids were submitted, a check or money, as provided in section 420 of the charter. The purpose of requiring such deposit to be made was not only to insure good faith on the part of bidders, but to indemnify the city against the expense of readvertising.

and

also to notify bidders if the contract were awarded to them and they refused to enter into it the precise amount of damage they would have to pay. If this be so, then the only damage to which the Seely-Taylor Company could be subjected for refusing to execute the contract after the same had been awarded to it was the forfeiture of its deposit."

On the other hand, where there is no express agreement that the deposit shall be treated as liquidated damages in case of forfeiture it has been held that the deposit will be treated as a penalty and the forfeiture limited to the damages sustained. Wilson v. Baltimore, 83 Md. 203, 34 Atl. 774, 55 Am. St. Rep. 339; Lindsey v. Rockwall County, 10 Tex. Civ. App. 225, 30 S. W. 380. Compare the reported case wherein there was an express stipulation that the deposit should be treated as liquidated damages. In Lindsey v. Rockwall County, supra, the court said: "On the trial, the court left it to the jury to determine whether or not the check for five hundred dollars was intended as a penalty or as liquidated damages in event there was a failure to enter into contract and bond on the part of plaintiffs, and the jury held, in effect, by their Ann. Cas. 1916C.-28.

verdict, that plaintiffs had forfeited the whole amount. This was error. The only agreement by which plaintiffs were bound was an implied one created by the filing of their bid and check, as required by the ad vertisement. By the terms of that contract the plaintiffs did not absolutely forfeit the amount of the check upon failure to enter into contract and bond, but by such failure they only became liable for such actual damages as the county sustained by reason of their failure. The actual damages sustained by the county, as shown by the evidence, does not amount to near as much as the amount of the check; and the judgment, therefore, is not supported by the evidence; and the same is reversed and the cause remanded."

III. Interest on Deposit.

Where the facts justify a return of the deposit to the bidder, it has been held that interest is allowable thereon from the time of the bidder's demand for a return. Erving v. New York, 60 Super Ct. 48, 16 N. Y. S. 612, 42 N. Y. St. Rep. 707, affirmed in 131 N. Y. 133, 29 N. E. 1011. But the contrary was held in Denver v. Hayes 28 Colo. 110, 63 Pac. 311, wherein the successful bidders for municipal bonds, although entitled to the return of their deposit on proof of the illegality of the bond issue, were held not to be entitled to interest on their deposit.

HUTTON

V.

WATTERS ET AL.

Tennessee Supreme Court-September 29,

1915.

132 Tenn. 527; 179 S. W. 134.

Forts

Lawful Act Committed with Malicious Motive.

Plaintiff's petition alleged that she operated a boarding house near a school of which the defendant was president; that the defendant, having disagreed with one boarder at the plaintiff's house, demanded his ejection therefrom and was refused; that he, with others, than attempted to, and did, destroy the plaintiff's business, by threats against students who boarded with the plaintiff, by deterring new arrivals from going to the plaintiff's house, and by other means; that the plaintiff was of good character, and operated a reputable house; and that the defendants acted from ill-will, and not by rea

[529] NEIL, C. J.-The averments of the declaration are, in substance, as follows:

One of the defendants, the Hall-Moody Institute, is a chartered institution of learning at Martin, Tennessee. Defendant Watters is its president, and the ten other defendants are its "directors, trustees, teachers, and advisors." The school has a large out of town patronage, and it is essential that boarding houses be conducted to accommodate these students, as well as some of the teachers. Mrs. Hutton is a widow who makes a business of keeping boarders. In June, 1910, she opened a business of the kind in Martin. During that year one James Wilson became one of her customers. Some students did the same. Defendants offered no objection until after a personal difficulty had occurred between Wilson and defendant Watters. The latter then demanded that plaintiff dismiss Wilson. She refused. Because of this refusal Watters became her enemy, and the other defendants ranged themselves with him,

and all formed a conspiracy to drive her out of business. Thereupon, from time to time, during the years 1911, 1912, and 1913, as soon as plaintiff secured student boarders, or teacher boarders, the defendants, in prosecu tion of this purpose, caused these, plaintiff's customers, to leave her house, by threats to deprive them of the benefits of the school, or of their places, if they should refuse. By similar threats other persons were prevented from taking board with plaintiff; the defendants even going to the length of meeting trains and watching for new arrivals and deterring these from [530] patronizing her house. The plaintiff is a person of good moral character, stands well in the community, and has always conducted a reputable establishment. The defendants, in setting on foot and prosecuting the conspiracy referred to, were not influenced by any motive of business rivalry, or competition, but acted as they did merely because of a feeling of ill will induced by plaintiff's refusal to turn James Wilson out of her house, and her refusal to permit Watters to dictate the price which she charged her customers.

The conspiracy was successful, and destroyed, or practically destroyed, plaintiff's business.

The damages are laid at $5,000

The defendants interposed a demurrer purporting numerous grounds, but all resolvable into the single objection that the declaration stated no cause of action.

The trial judge sustained the demurrer, but the court of civil appeals reversed that judgment, and the case then came to this court under the writ of certiorari.

We think the declaration stated a good cause of action.

Every one has the right to establish and conduct a lawful business, and is entitled to the protection of organized society, through its courts, whenever that right is unlawfully invaded. Such right existing, the commission of an actionable wrong is established against any one who is shown to have intentionally interfered with it, without justifiable cause or excuse. To establish justification, it must be made to appear, [531] not only that the act complained of was otherwise lawful and performed in a lawful manner, but likewise that it had some real tendency to effect a reasonable advantage to the doer of it. Fut in order to determine the reasonableness of such act it must be considered from the standpoint of both parties, with a view to ascertaining whether the defendant has acted merely in the due exercise of his own right to carry on business for himself. If this be found in his favor, while he may have done the plaintiff harm, he cannot be adjudged to have done an injury in the legal sense;

that is, a wrongful act in violation of the iegal right of another. Whether the defendant was in the reasonable exercise of his own similar rights must, from the viewpoint stated, be determined by the court, or court and jury in each case as it arises, on the law and the evidence. A defendant cannot excuse himself by the mere fact that the means used were his own, his property, his servants. He cannot, with justification in law, use is property, or anything else that appertains to him, in such manner as to wantonly injure another. Still, it has been decided, by the weight of authority, that if the act complained of, being otherwise lawful in itself, had a reasonable tendency to promote ends advantageous to the defendant in the conduct of his own business, it cannot be correctly adjudged an illegal agency or operation by the fact that the doer of it was moved also by a feeling of ill will, or personal malice, towards the person against whom his act was directed (West Virginia Transp. Co. v. Standard Oil Co. 50 W. Va. 611, [532] 40 S. E. 591, 56 L.R.A. 804, 88 Am. St. Rep. 895; 62 L.R.A. 673, note; L.R.A. 1915B 1180, note); but if the act is otherwise wrongful, such personal malice may aggravate the damages. (Cooley on Torts [2d ed.], pp. 832, 836.)

In short, if an act be hurtful to another, intentional, and without legal justification, it is malicious in the true legal sense (19 Am. & Eng. Enc. of Law [2d ed.] 623, note 4), therefore unlawful, and is actionable.

Of course it is wholly impossible to formulate a description which will cover all acts which are intentionally hurtful to another, and at the same time justifiable in law. As already said, each case, as it arises, must be determined on its own facts, and in the light of the principles stated. It is left in each case for the court, or the court and jury, according to the way in which the controversy is presented, to say whether the defendant's conduct complained of was, in view of all the circumstances, a reasonable and proper exercise of his right of self-protection, or self-advancement, both as to the substance of it, and the method of it. Huskie v. Griffin, 75 N. H. 345, 74 Atl. 595, 27 L.R.A. (N.S.) 966, 139 Am. St. Rep. 718; Dunshee v. Standard Oil Co. 152 Ia. 623, 132 N. W. 371, 36 L.R.A.(N.S.) 263; Gott v. Bearea College, 156 Ky. 376, 161 S. W. 204, 51 L.R.A. (N.S.) 17; Mogul Steamship Co. v. McGregor, 23 Q. B. D. (Eng.) 598; Mod. Am. Law, vol. 2, pp. 327-336.

[533] In the latter authority it is said, quoting 28 Law Quarterly Review, 67:

"The theory of justification consists in a proper adjustment and compromise between the two competing rights that are equally protected in law. It has been already observed that the enjoyment by a particular

individual of the right of freedom, as to how he should bestow his capital and labor, is not absolute, but qualified by the existence of equal rights in the other members, to such an extent as to be made compatible with an equally free enjoyment of these rights by the rest of the community. In fact, every case of justification reduces itself to the question how far the rights of an individual can be so circumscribed in accordance with a general law of freedom as to leave an equal scope for the free enjoyment of the competing rights of his fellow men."

"But," said Lord Justice Bowen, in Mogul Steamship Co. v. McGregor, supra, "such legal justification would not exist when the act was merely done with the intention of causing temporal harm, without reference to one's own lawful gain, or the lawful enjoyment of one's own right. The good sense of the tribunal which had to decide would have to analyze the circumstances and discover on which side of the line each case fell. But if the real object was to enjoy what was one's own, or to acquire for one's self some advantage in one's property or trade, and what was done was done honestly, peaceably, and without any of the illegal acts above referred to, it could not, in my opinion, properly be said that [534] it was done without just cause or excuse." Id. 618. 619.

Although, as indicated, the defense of justification arising in such controversies is a question for decision in each case, as concreted in its own peculiar facts, yet the precedents shed much light in the way of illustrating the principles involved.

In an early English case, decided during the reign of Queen Anne (Keeble v. Hickeringill, 11 East (Eng.) 574), reported in full as a note to Carrington v. Taylor, 11 East (Eng.) 571, 574, 577, it appeared that the plaintiff had prepared a decoy pond for the purpose of taking wild fowl. The defendant knowing this, and purposing to injure the plaintiff by frightening away the wild fowl accustomed to resort to the pond. discharged guns on his own land, and the wild fowl were thus driven away. It was held that an action on the case would lie for the damages thus occasioned. Holt, Chief Justice, said that if the defendant had set up another decoy on his own ground near the plaintiff's and that had spoiled the custom of the latter, no action would lie, because he had as much liberty to make and use a decoy as the plaintiff; but, when, without benefit to himself, real or intended, he successfully committed the act intending to accomplish the injury to the plaintiff, it was actionable.

In International, etc. R. Co. v. Greenwood, 2 Tex. Civ. App. 76, 21 S. W. 559, it was held that a railway company was liable to the proprietor of a boarding house for having de