1927 Present: Dalton and Lyall Grant JJ.

WIJEWARDENE v. NOORBHAI.

334-D. C. Colombo, 18,402.

Liquidated damages-Contract for advertisement-Termination infare expiration of period-Higher rates-Penalty.

Where the defendant entered into a contract with plaintiff for the insertion of advertisements in a newspaper during the course of one year at a fixed rate, and where it was further stipulated that if the defendant terminated the contract before the expiration of the period, the plaintiff was at liberty to charge for the advertisements at casual rates.

Held, that the stipulation to charge tie defendant at the higher rate was merely a penalty, and that the plaintiff was entitled to claim only the actual damage sustained.

PLAINTIFF, who is a newspaper proprietor, sued the defendant, who was the owner of a theatre to recover damages for breach of contract. Two contracts were entered into between the parties whereby the plaintiff undertook to publish advertisements of the theatre in his two newspapers for a period of one year from May 4, 1924, at rates set out in the contracts. In the event of the contract being terminated before the expiration of the period through any default of the defendant, it was provided by clause  of the condition that the plaintiff should be at liberty to charge for all the advertisements published under the contract at the casual rates, which should not exceed Rs. 2.50 per column inch. About the end of January, 1925, defendant transferred his theatre and after that sent no more advertisements for insertion in the plaintiff's newspapers. Plaintiff claimed in the action for payment of the advertisements actually inserted at the casual rates. The learned District Judge gave judgment for the plaintiff.

Garvin, for defendant, appellant.

H. H. Bartholomeusz, for plaintiff, respondent.

February 10, 1927. DALTON J.-

Plaintiff is a newspaper proprietor and defendant is or was the owner of a theatre. Two contracts were entered into between the parties whereby the plaintiff was to publish advertisements of the theatre in his two newspapers for a period of one year at rates set out in the contracts. In the first contract plaintiff's quotation of 80 cents per inch per insertion for the first month, and Re. 1 per inch thereafter, three inches single column advertisement daily,

in his English newspaper was accepted by defendant for one year from May 28, 1924. In the second contract, for insertion in a Sinhalese newspaper, the price was 65 cents per inch, for three inches single column advertisement daily for a period of one year  from June 3, 1924. In the event of the contracts being terminated before the expiration of the contract period through any default of the advertiser, it was provided by clause 6 of the conditions that the newspaper proprietor should be at liberty to charge for all advertisements published under the contract at the casual rates which should not exceed Rs. 2.50 per column inch.

About the end of January, 1925, defendant transferred his theatre business by lease to one Fernando, but nothing appears to have been arranged between them about the advertisement contracts. After that lease defendant sent no more advertisements for insertion in plaintiff's papers, but Fernando entered into two contracts with plaintiff in February (P 5 and P 6) to advertise the theatre in the two newspapers for a period of three months. The evidence does not show when those advertisements began, but there is no doubt that the three months were part of the twelve months during which defendant's contract was to run.

Plaintiff's claim in this action is against the defendant for payment of the actual advertisements made by the defendant, in the English paper between May 28, 1924, and February 3, 1925, and in the Sinhalese paper between June 30, 1924, and January 31, 1925, at the casual rates, which are claimed to be 50 cents and Re. 1 respecti