Sutton v. Epperson

We granted permission, pursuant to Rule 5, Ala.R.App.P., to appeal from a partial summary judgment entered for the defendant sellers in an action based on a contract for the sale of corporate stock. The judgment held that, as a matter of law, a liquidated damages clause in the agreement was a penalty and therefore void as against public policy. We reverse and remand.

The material facts are not disputed. Harold S. Sutton, M.D., and Roy T. Epperson, Sr., were the largest stockholders of Old Southern Life Insurance Company. Mr. Epperson Sr. was the chairman and chief executive officer of Old…