Whether stipulation to pay sum of money is penalty or liquidated damages is to be determined by contract,

Approved in United States Engineering etc. Co., 234 U. S. 241, 58 L. Ed. 1297, 34 Sup. Ct. 843, while reasonable contract, for liquidated damages for delay is not to be regarded as penalty and may be enforced, government by preventing performance waives such liquidated damages; United States v. Bethlehem Steel Co., 205 U. S. 119, 51 L. Ed. 737, 27 Sup. Ct. 450, construing contract for construction of gun carriages and holding stipulated deduction for delay is liquidated damages not penalty; In re Ashland Emery & Corundum Co., 229 Fed. 832, statute of New Jersey requiring payment of interest at rate of one per cent per month on unpaid franchise tax is penalty as in excess of amount required to make good loss to State, and excess, is not entitled to priority of payment in bankruptcy; Board of Commerce of Ann Arbor v. Security Trust Co., 225 Fed. 460, 466, 140 C. C. A. 486, where board of commerce of Ann Arbor contracted with manufacturing company to furnish it free site and defray cost of moving to such city, stipulation for penalty of ten thousand dollars for failure of company to maintain payroll in specified amounts is recoverable as liquidated damages; Hahlo v. Benedict, 216 Fed. 307, 132 C. C. A. 447, provision in time charter of yacht to pay demurrage for failure to redeliver at expiration of time is valid; Bankers' Surety Co. v. Elkhorn River Drainage Dist., 214 Fed. 348, 130 C. C. A. 650, stipulation in agreement for extension of time for liquidated damages in sum of thirty dollars per day for failure to complete certain work for drainage district within extended time is valid; Bedford v. J. Henry Miller, 212 Fed. 371, 129 C. C. A. 44, where builder, having contracted to construct Federal building, contracts with plaintiff to do stonework, stipulation for fifty dollars damages for each day's delay in furnishing material and labor is for liquidated damages, not penalty, and is valid; Union Pac. R. Co. v. Mitchell-Crittenden Tie Co., 190 Fed. 545, 111 C. C. A. 368, in contract to sell and deliver four hundred thousand cross-ties, provision to retain ten per sent of value of ties as liquidated damages for failure to deliver ties is merely to secure payment of vendee's actual damage, and whole amount is not forfeited upon failure to deliver twenty-one thousand ties in time; Simpson Bros. Corp. v. John R. White & Son, 187 Fed. 425, stipulation in contract for construction of reinforced concrete coalpocket requiring contractor to pay stated sum per day after time fixed by contract for completion of structure is for liquidated damages, not penalty, and is enforceable; Turner v. City of Fremont, 170 Fed. 265, 95 C. C. A. 455, agreement between city and bidder for paving work that deposit of five per cent of amount of bid shall be considered as liquidated damages and forfeited if he fails to enter into contract is valid and enforceable; Blodget v. Columbia Live Stock Co., 164 Fed. 306, 307, 90 C. C. A. 237, provision in oil and gas lease requiring lessee to pay stated sum as liquidated damages for failure to drill well is valid; Gammino v. Inhabitants of Town of Dedham, 164 Fed. 597, 90 C. C. A. 465, provision


SUN PRINTING ETC. ASSN. v. MOORE. 183 U. S. 642-674

in contract for construction of sewer for forfeiture ten dollars per day for delay did not apply to delay caused by excess rock excavation, whether provision is construed as agreement for liquidated damages or as forfeiture; L. Bucki & Son Lumber Co. v. Atlantic Lumber Co., 121 Fed. 247, 57 C. C. A. 469, holding effect of stipulation for liquidated damages, as determining right of attachment, not passed on; International Trust Co. v. Weeks, 116 Fed. 899, holding demurrable defense on lease tuat responsible parties were refused premises at higher rent without showing parties responsible nor willingness to abide by lease; Brooks v. Wichita, 114 Fed. 299, 52 C. C. A. 209, holding stipulation for forfeiture of sum deposited as liquidated damages for delay in furnishing electric lights, actual damages being hard to fix; Sherman v. American Congregational Assn., 113 Fed. 613, 51 C. C. A. 329, holding enumeration of powers in charter does not prevent religious association from incidentally complying with terms of legacy requiring payment of annuity; Blackwood v. Liebke, 87 Ark. 553, 113 S. W. 213, provision in contract of sale of ash trees to be cut clean, not leaving isolated trees, for payment of one dollar per tree left, is enforceable as one for liquidated damages; Jonesboro etc. R. Co. v. Crigger, 83 Ark. 367, 103 S. W. 1154, contract of railroad to build depot or to pay six hundred dollars is agreement to pay liquidated damages; Dean v. Connecticut etc. Corporation, 86 Conn. 625, 92 Atl. 410, provision of building contract for forfeiture of twenty-five dollars for each day's delay in completing work is for liquidated damages; Simmons v. Jaselli, 38 App. D. C. 250, in action of assumpsit on written contract, evidence that defendant is entitled to liquidated damages under provision of contract is inadmissible under plea of general issue; District of Columbia v. Harlan etc. Co., 30 App. D. C. 277, stipulation in contract between shipbuilding company and municipality for construction of fire-boat for payment of twenty-five dollars liquidated damages for each day's default, is valid; Evans v. Moseley, 84 Kan. 325, 326, 50 L. R. A. (N. S.) 889, 114 Pac. 376, holding stipulation in contract for purchase of stock for forty thousand dollars providing for forfeiture of advance payment of three thousand dollars upon default of vendee is penalty and allowing damages in sum of forty-two hundred and forty-eight dollars for refusal to receive stock; Gropp v. Perkins, 148 Ky. 186, 146 S. W. 390, stipulation by seller of shoe business for liquidated damages for re-engaging in business within specified time may be enforced; Baltimore Bridge Co. v. United Rys. & Elec. Co., 125 Md. 213, 93 Atl. 422, stipulation for payment of twenty-five dollars for each day's delay in completing viaduct for street railway is for liquidated damages, not penalty; United Surety Co. v. Summers, 110 Md. 119, 72 Atl. 784, in contract for construction of building, stipulation for payment of fifty dollars for each day's delay in completion of building is valid; John Soley & Sons v. Jones, 208 Mass. 567, 95 N. E. 95, holding contracts liable on promise to pay subcontractor and fact that original contract to construct tunnel was canceled by commission was no defense, where it was not stipulated that subcontract was

dependent on original contract; Morrison v. Richardson, 194 Mass. 377, 80 N. E. 469, stipulation, in contract of manufacturer to furnish materials for construction of building within specified times, for liquidated damages of ten dollars for each day's delay, is valid; Dyer v. Cowden, 168 Mo. App. 666, 154 S. W. 161, stipulation to pay three hundred dollars liquidated damages for failure to perform contract to buy stock of goods on basis of invoice price, is valid; Werner v. Finley, 144 Mo. App. 561, 129 S. W. 75, contract for employment of salesman for one hundred and sixty weeks giving employers right to terminate it for breach of condition by employee and to receive sum of ten dollars per week for unexpired term, is for liquidated damages; Doan v. Rogan, 79 Ohio St. 388, 87 N. E. 266, stipulation for one thousand dollars liquidated damages by person in default under contract to form partnership is enforceable; Strode v. Smith, 66 Or. 177, 131 Pac. 1036, bond executed in connection with lease providing for future execution by lessee to lessor of fifty thousand dollars bond for erection of one hundred thousand dollar building on lot, and providing for four thousand dollars liquidated damages for failure to execute fifty thousand dollar bond, is valid; Hull v. Angus, 60 Or. 106, 118 Pac. 288, where contract of conveyance of property for cash and note secured by mortgage with option to vendee to pay note or require vendor to repurchase contains stipulation for liquidated damages for failure to repurchase, such stipulation may be enforced in action by vendee for cancellation of note and mortgage; Cavanaugh v. Conway, 36 R. I. 579, 90 Atl. 1083, stipulation in contract for sale of realty that purchaser's payment of one hundred dollars should be forfeited for failure to perform was for liquidated damages, and no contract of sale having been completed, broker could not recover commission; Elmore v. Rugely, 48 Tex. Civ. 465, 107 S. W. 156, provision in note for payment of attorney's fees is contract of indemnity and not for liquidated damages; Crawford v. Heatwole, 110 Va. 361, 362, 34 L. R. A. (N. S.) 587, 66 S. E. 47, 48, stipulation in contract for construction of five thousand four hundred dollar dwelling on sixteen hundred dollar lot for payment of ten dollars per day liquidated damages for failure to complete building by certain time is valid; Eilers Music House v. Oriental Co., 69 Wash. 625, 125 Pac. 1026, stipulation in contract for sale of musical instrument reserving title in seller that, upon default of buyer, payments made should be treated as liquidated damages, is valid.

Distinguished in The Colombia, 197 Fed 664, refusing to allow demurrage of one hundred dollars per day for twenty-nine and one-half days' delay in repairing ship, where vessel had no charter and did not obtain one until after repairs were completed; Chicago etc. R. Co. v. Dockery, 195 Fed. 223, 115 C. C. A. 173, construing stipulation in right of way deed for liquidated damages of five thousand dollars for failure to perform several agreements as penalty to cover damages grantee might sustain by breach of one of them; Caldwell v. Schmulbach, 175 Fed. 433, 434, refusing to apportion damages and denying

owner's claim, where delays in execution of building contract, providingfor payment of specified sum for each day's delay are due to defaults of both contractor and owner; McCall Co. v. Deuchler, 174 Fed. 134, 98 C. C. A. 169, provision in contract for sale and delivery of goods extending over period of five years stipulating for recovery of liquidated damages in sum to entire purchase price in case of breach is for penalty and not enforceable; Haffke v. Coffin, 89 Neb. 138, 130 N. W. 1046, in action upon indemnity bond to secure performance of contract, plaintiff must prove not only breach of contract, but actual damages.

Damage provision in land contract as penalty or stipulated damages. Note, 34 L. R. A. (N. S.) 11.

Effect upon character of sum agreed upon, as penalty or liquidated damages, of single or multiple stipulations in contract. Note, L. R. A. 1915E, 375.

Stipulation in charter-party for liquidated damages is conclusive upon


Approved in United States v. McMullen, 222 U. S. 471, 56 L. Ed. 273, 32 Sup. Ct. 128, price of reletting contract after default is assumed to be reasonable where difference is less than sum stipulated for liquidated damage; Gillen v. Powe, 219 Fed. 552, 135 C. C. A. 321, where transaction by which ice plant was disposed of involved admission by defendant that it was worth one hundred thousand dollars, plaintiff need not aver and prove its value; Schmulbach v. Caldwell, 196 Fed. 26, 115 C. C. A. 650, provision in building contract requiring contractor to pay stated sum for delay beyond given date is valid, and delay caused by owner and contractor may be apportioned; Turner v. City of Fremont, 159 Fed. 227, deposit of three thousand seven hundred dollars by bidder for paving contract to secure entry into contract, where damage is uncertain, is to be treated as liquidated damages on his default, not as penalty, though subsequent events show actual damage to be about two thousand five hundred dollars; Mercantile Trust Co. v. Hensey, 27 App. D. C. 221, contractor and surety are bound to pay amount fixed by contract as liquidated damages without proof of actual loss; Ahlers v. Harrison, 131 Iowa, 290, 108 N. W. 331, provision for liquidated damages of one thousand dollars in contract for sale of land for six thousand four hundred dollars upon failure to resell land for purchaser within two years for same amount and interest, less rents, may be enforced without proof of actual damages.

Distinguished in General Electric Co. v. Westinghouse Electric Co., 151 Fed. 678, 680, holding provision for liquidated damages was not intended as substitute for performance, and complainant having incurred great expense to carry out contract was entitled to specific performance of defendant's negative covenant not to manufacture electric controllers.

Agreements purporting to liquidate damages. Note, 108 Am. St.
Rep. 47, 48, 50, 52.

Disproportion between stipulated sum and possible damages from breach of contract is simply an element determining intent of parties.

Approved in Wood v. Niagara Falls Paper Co., 121 Fed. 819, 58 C. C. A. 256, holding stipulation for liquidated damages of one hundred dollars per day for delay in completing turbines prevented showing that no actual loss occurred; General Elec. Co. v. Westinghouse Elec. & Mfg. Co., 144 Fed. 464, court will not enjoin performance of contract for manufacture and sale of electrical appliance where there is stipulation for fifty per cent of price as liquidated damage; Robinson v. Centenary Fund, 68 N. J. L. 726, 54 Atl. 417, holding stipulation against starting newspaper within certain limits within twenty-five years, on penalty of one thousand two hundred dollars, was for liquidated damages.

Courts of law of United States possess power under Judiciary Act of 1879 to give effect to intention of contracting parties.

Approved in In re Appel, 163 Fed. 1004, 20 L. R. A. (N. S.) 76, 90 C. C. A. 172, court of bankruptcy has power to chancer bond given for release of bankrupt when arrested under writ of ne exeat; Chapman Decorative Co. v. Security etc. Ins. Co., 149 Fed. 190, 79 C. C. A. 137, and Stephens v. Essex County etc. Commission, 143 Fed. 845, 75 C. C. A. 60, both holding upholding provision in building contract authorizing owner to deduct from amount due contractor twenty-five dollars per day as liquidated damages for delay in completion; United States v. Alcorn, 145 Fed. 999, bond given by bidder for mail contract conditioned on carrying mail is absolute undertaking as liquidated damage to amount named; Davis v. Alpha etc. Cement Co., 134 Fed. 281, giving effect to contract for cement to be delivered in lots during year, with stipulation for fifteen cents per barrel as liquidated damages for vendor's failure to deliver; Hanthorn v. Quinn, 42 Or. 14, 69 Pac. 821, holding fact that work of establishing fishery according to contract was more expensive than anticipated is no excuse for breaking same.

183 U. S. 675-690, 46 L. Ed. 383, 22 Sup. Ct. 232, SOUTHERN PACIFIC R. R. Co. v. BELL.

Company takes no title to indemnity lands until deficiency ascertained and selection approved.

Approved in Clark v. Herington, 186 U. S. 209, 46 L. Ed. 1130, 22 Sup. Ct. 874, holding approval by Land Department of selection as indemnity lands, sections open only to homestead and pre-emptors, vests no title in railway; Sage v. Maxwell, 91 Minn. 533, 99 N. W. 44, homesteader's patent secured between time of making indemnity grant and selection of such land by Secretary of Interior good against grantor.

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