Another test which has been suggested is, whether the amount stipulated for is greatly in excess of the actual damages or not. Where this test is applied, it is held that if the amount stipulated for is no greater than the actual damages,1 or if in excess of actual damages such excess is moderate, the stipulation is for liquidated damages. Thus an agreement to pay for the use of a button-sewing machine at a certain rate per thousand buttons, and if the lessee does not keep account of the number of buttons sewed, the lessor to have the option to charge five dollars a day for its use, is held to be a rough estimate of the value of the machine and not a penalty.2 If the amount stipulated for is excessive, the stipulation is for a penalty.3 Thus a provision for paying in case of breach of a contract for work and labor a sum greatly in excess of the cost of completing the contract,4 or for paying a fine for wrongful use of electrotypes "equal to tenfold the price of the wrongfully used electrotypes,"5 or for paying in case of breach "five hundred dollars besides all damages,"6 have each been held to be agreements for penalties. Where this test is applied, it is the facts as they exist when the contract is made, and not those in existence when the contract was broken, which determine whether the amount stipulated for is reasonable or unreasonable.7

1 Standard Button-Fastening Co. V. Breed, 163 Mass. 10; 39 N. E. 346; Monmouth Park Association v. Iron Works. 55 N. J. L. 132; 39 Am. St. Rep. 626; 19 L. R. A. 456; 26 Atl. 140; Lansing v. Dodd, 45 N. J. L. 525; Hoagland v. Segur, 38 N. J. L. 230; Whitfield v. Levy, 35 N. J. L. 149; Illinois Central Ry. v. Cabinet Co., 104 Tenn. 568; 78 Am. St. Rep. 933; 50 L. R. A. 729; 58 S. W. 303.

2 Standard Button-Fastening Co. v. Breed, 163 Mass. 10; 39 N. E. 346.

3 Gay Mfg. Co. v. Camp. 65 Fed. 794; 13 C. C. A. 137; Glasscock v. Rosengrant, 55 Ark. 376; 18 S. W. 379; Heisen v. West fall. 86 111. App. 576: Condon v. Kemper, 47 Kan. 126: 13 L. R. A. 671; 27 Pac. 829; Meyer v. Estes, 164 Mass. 457; 32

L. R. A. 283; 41 X. E. 683; Carter v. Strom, 41 Minn. 522; 43 N. W. 394; Wheedon v. Trust Co., 128 N. C. 69; 38 S. E. 255; Clements v. Ry., 132 Pa. St. 445; 19 Atl. 274, 276; Baird v. Tolliver, 6 Humph. (Tenn.) 186; 44 Am. Dec. 298; Mcintosh v. Johnson, 8 Jiah 359: 31 Pac. 450; J. G. Wagner Co. v Cawker, 112 Wis. 532; 88 N. W. 599; Gates v. Parmly, 93 Wis. 294; 66 N. W. 253; affirmed on rehearing, 93 Wis. 321; 67 X. W. 739.

4 Heisen v. Westfall, 86 111. App. 576; Condon v. Kemper, 47 Kan. 126; 13 L.R. A. 671; 27 Pac. 829. (Cost of work $100, amount to be paid $500.)

5 Meyer v. Estes, 164 Mass. 457; 32 L. R. A. 283; 41 N. E. 683.

6 Foote & Davies Co. v. Malony, 115 Ga. 985; 42 S. E. 413.