Legally defined, a forfeiture is a loss suffered by way of penalty for some misconduct or negligence. The term, as used here, denotes the divesture of property without compensation to the owner in consequence of some default or act forbidden in the contract.10

Forfeitures and penalties are regarded with disfavor by courts everywhere, but the Supreme Court of Michigan has especially emphasized this disfavor from its earliest decisions down to the present time. The attitude of the Michigan Supreme Court towards penalties and forfeitures has been succinctly stated by Judge Christiancy in the early and leading case of Jaquith v. Hudson (5 Mich. 123). In construing the provisions of a contract to determine whether or not a provision requiring the payment of a given sum upon default in the contract was liquidated damages or a penalty, Judge Christiancy said, "It is the application in a court of law, of that principle long recognized in courts of equity, which, disregarding the penalty of the bond, gives only the damages actually sustained. This principle may be stated, in other words, to be that the courts of justice will not recognize or enforce a contract or any stipulation of a contract, clearly unjust and unconscionable; a principle of common sense and common honesty so obviously in accordance with the dictates of justice and sound policy, as to make it rather matter of surprise that courts of law had not always, and in all cases adopted it to the same extent as courts of equity." As to when the courts

9. See Specific Performance of Land Contracts (Chapters 7 and 8); Action in Ejectment by Vendor, Sec. 152 Post; Summary Proceedings by Vendor for Possession, Sec. 157; Relief from Forfeiture, Sec. 171 Post.

10. Dailey, et al. v. Litchfield, et al., 10 Mich. 38; Davis v. Freeman,

10 Mich. 191; Richmond v. Robinson, 12 Mich. 201; Jaquith v. Hudson, 5 Mich. 123; Myer v. Hart, 40 Mich. 523; Lamson v. City of Marshall, 133 Mich. 263; Tp. of Spring-wells v. Detroit, Etc., Ry.. 140 Mich. 279; Powell v. Dwyer, 149 Mich 146; Rose v. Loescher. 152 Mich. 385; Miner v. Husted, 191 Mich 41; Decker v. Pierce, 191 Mich. 71 will apply this principle, Judge Christiancy further says, "But the court will apply this principle, and disregard the express stipulation of parties, only in those cases where it is obvious from the contract before them, and the whole subject matter, that the principle of compensation has been disregarded, and that to carry out the express stipulation of the parties would violate this principle, which alone the court recognizes as the law of the contract." In conformity with the doctrine expressed in Jaquith v. Hudson, the courts of Michigan have in a great variety of cases refused to allow the damages stipulated in the contract, and held the parties to actual damages.11

Thus, in harmony with this principle, the courts have refused to enforce the provisions of promissory notes providing for attorney fees, and have held as unconstitutional the statute expressly authorizing the collection of such attorney fees, holding that it was against the well-settled policy of Michigan to enforce penalties of that character.12

For the same reason, provisions in mortgages for attorney fees in excess of the statutory rates, have been held invalid and against the public policy.13

As a further example of this principle, where a piano was sold on a conditional contract of sale and was afterwards taken

11. 19 Cyc. 1357; Maryland v. Baltimore & Ohio R. R. Co., 44 U. S. (3 How.) 534, 11 L. Ed. 714; Words and Phrases, Page 611.

In the following cases the court disregarded the express agreement of the parties and held them to only actual damages: Trustee of Church v. Walrath, 27 Mich. 234; Meyer v. Hart, 40 Mich. 523; Daily v. Litchfield, 10 Mich. 188; Condon v. Kemper, 13 L. R. A. 671; Ross v. Leecher, 152 Mich. 589.

12. A provision in a promissory note providing for the payment of an attorney fee is void because as a measure of damages it disregards any theory or principle of compensation. Bullock v. Taylor, 39 Mich. 137; Trustee v. Walrath, 27 Mich. 232; Jaquith v. Hudson, 5 Mich. 123; Davis v. Freeman, 10 Mich. 188: Myer v. Hart, 40 Mich. 523; Louder v. Burch, 47 Mich. Ill; Millard v. Truax, 47 Mich. 252; Wright v Traver, 73 Mich. 495; Crump v. Berdan, 97 Mich. 295; Kittermaster, Executor, Etc., v. Hubert Brossard and Annie Brossard, 105 Mich. 220; Green v. Grant, 134 Mich. 466.

13. Where a trust deed stipulated that upon foreclosure a solicitor should have a fee of $100.00, such a provision was held to be contrary to public policy and therefore, unenforceable. Curtis v. Miller, 184 Mich. 151.

back by the vendor, the court required him to account to the vendee for the money paid under such contract.14

While these decisions do not relate to land contracts, the principles announced in such decisions should be kept in mind by the members of the profession in examining propositions of law relating to the enforcement of forfeitures in contracts for the sale of real estate.