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we repeat, there must be some point at which discretion ceases and obligation takes its place. That point is defined in the Garfielde Case, and that the definition is applicable to the case at bar is illustrated by the findings of the Court of Claims. Upon the invitation, in accordance with law, of Postmaster General Gary, the Envelope Company and 11 others submitted bids. The Envelope Company was the lowest bidder and after the company had been found upon investigation to be financially responsible its bid was accepted by entry of a formal order. The company was then directed by the department to execute the necessary contract in quadruplicate, which it did, and returned the contract to the department with a surety whose responsibility was not questioned at any time nor was other security demanded, as it might have been. Postmaster General Gary went out of office, and his successor, either by inducement or upon his own resolution, revoked the contract and entered into a contract with other companies.

The record furnishes no justification of such action. There is no charge of default against the Envelope Company, no charge of inability to perform its contract, except in a particular which we shall hereafter mention. There is, it is true, a finding that Postmaster General Smith caused an investigation to be made of the financial standing of the Envelope Company and that the report thereunder was unfavorable to it. This is made a great deal of, and the fact that the contract was not signed nor the bond of the Envelope Company approved.

tween the cost to the Envelope Company of materials and the manufacture and delivery of the envelopes and wrappers in accordance with the terms of its contract and what it would have made if it had been allowed to perform the contract. For this the court cited and relied upon Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953. It is there decided that the positive refusal to perform a contract is a breach of it, though the time for pèrformance has not arrived, and that liability for the breach at once occurs. And it is further decided that the measure of damages is the difference between the contract price and the cost of performance. The case was replete in its review of prior cases. We may refer, however, to United States v. Speed, 8 Wall. 77, 85, 19 L. Ed. 449; United States v. Behan, 110 U. S. 338, 4 Sup. Ct. 81, 28 L. Ed. 168; Hinckley v. Pittsburgh Steel Co., 121 U. S. 264, 7 Sup. Ct. 875, 30 L. Ed. 967.

The government does not attack the ruling, but contends that it was not properly applied by the Court of Claims. The contention is rested on the following finding:

"Claimant, contemplating making the envelopes under its said contract on the Wickham envelope machines, entered into negotiations with Horace J. Wickham whereby he prom*ised to furnish claimant with a sufficient number of said machines on which to perform said (envelope) contract, and to have some of them October 1, 1898." ready before the beginning of the contract term,

The government says of the Wickham machine that it made the envelope in one operation and that there is nothing to show that the Court of Claims, "as an incident to the cost of performance of the contract, considered the cost of the Wickham machine to appellee although evidence of the same was submitted to it." And further, "if the court did find this item and did consider it in arriving at the judgment, appellant is entitled to know this." Again, the government contends that "so far as the findings are concerned it does not appear that the court allowed a reasonable deduction from the amount of the judgment by reason of appellee's release from care, trouble, risk and responsibility attending the performance of the contract."

It makes no difference that the contract was not formally signed or the bond formally approved, as counsel for the government contends they should have been, both by the terms of the contract and by a statute of the United States. Act Aug. 13, 1894, c. 282, 28 Stat. 279 (Comp. St. §§ 3293-3300). Their formal execution, as we have seen, was not essential to the consummation of the contract. That was accomplished, as was decided in the *Garfielde Case, by the acceptance of the bid of the Envelope Company and the entry of the order awarding the contract to it. Therefore, we do not follow with minute attention the argument of the government in asserting the power of Postmaster General Smith to review and annul [3] To the contentions there may be off set his predecessor's decision and that directed the decision of the Court of Claims. The against the financial standing of the Enve- court in its opinion expressly declares that lope Company or the deception the govern- the findings showed that the Envelope Comment asserts was practiced on Postmaster pany had fulfilled all the requirements of General Gary, which are made the subject the Postmaster General and was ready and of a request for findings. We may assume willing to furnish the envelopes and wrapthat the Court of Claims considered such pers and recognized, we may assume, as charges and all other elements before con- grounds to be considered the elements the cluding that the Envelope Company was en- government urges, so far as the court deemtitled to recover. And we pass to the ques-ed them relevant or as having any probative tion of damages.

[2] The Court of Claims decided that the measure of damages was the difference be

strength, and its appreciation of them was obtained after protracted litigation involving two complete trials. We are not, therefore,

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disposed, on assertions so elusive or disput- [ submitted should be considered on the merable of estimation as those of the govern- its. Again considering the motion and the ment, to reverse or modify the judgment. case as it has been developed by argument of counsel, we think the motion should not be granted. The judgment of the Court of Claims is Affirmed.

1919.) No. 214.

2. DAMAGES

85-LIQUIDATED-ENFORCE

MENT OF PROVISION.

There are other contentions of the government which we may pass without comment except one which it submits upon a supplemental brief. It is addressed to the rule of damages adopted by the Court of Claims and urges that it was erroneous, based on the theory, as it is asserted, that the Envelope Company "had a contract which entitled it to furnish all the stamped envelopes and wrappers of the sizes mentioned in the specification, which the Post Office Department should need [italics counsel's] during the four years contract." This is denied, and it is said, quoting the contract, that the En-(Argued March 11, 1919. Decided March 31, velope Company was only to "furnish and deliver promptly and in quantities as ordered," the envelopes and wrappers "that it may be called upon by the Post Office Department to furnish during the four years." It is difficult to treat the contention seriously. There is something surprising in the declaration that a contract to supply a great department of the government with envelopes and newspaper wrappers which it might need for a period of four years at a cost of nearly two and one-half million dollars bore but Intention to provide for liquidated damages scant obligation upon the part of the gov-appearing from writing, effect will be given the ernment, or, to be precise and in the lan- provision as freely as to any other, where damguage of counsel, that the Envelope Com- ages are uncertain in nature or amount, or are pany "could not have forced the giving of difficult of ascertainment, or the amount stipuorders [by the government] in excess of fif- lated is not so disproportionate as to show that teen days' supply," and that this was the compensation was not the object, or to imply extent of the government's obligation. And fraud, mistake, circumvention, or oppression. the further contention is, that the obligation 3. DAMAGES 78(4) — LIQUIDATED being thus limited the damages the Envelope SION OF BUILDING CONTRACT. Company was entitled to were, at most, "the expenses, incurred in getting ready to perform the contract, and the profits it would have derived from the manufacture and sale" of such fifteen days' supply-that all else was expectation and cannot be capitalized by the Envelope Company and made the basis of profits and the responsibility of the government. If the contention be more than dialectical we may express wonder that it was not given prominence in the Court of Claims and that in this court it was reserved for the afterthought of a supplemental brief. The further answer may be made that the contract of the Envelope Company was not so dependent as urged, and that its expectation was substantial is evidenced by the haste of the department, after the revocation of the contract *with the company, to declare an emergency in its need and enter into a contract with other companies.

Mr. Justice McREYNOLDS took no part in the consideration and decision of this case.

(249 U. S. 361) WISE. UNITED STATES.

1. DAMAGES 77-LIQUIDATED-CONSTRUCTION OF PROVISION.

Relative to whether a provision of a contract is for liquidated damages or penalty, intention will be sought by construction precisely as in other respects.

PROVI

Provision of contract for erecting for $1,200,000 two laboratory buildings for Department of Agriculture, that if buildings are not completed in 30 months government shall be entitled to $200 as liquidated damages, "computed, estimated, and agreed on" for each day's delay, is not to be considered as one for penalty, because making no distinction whether de lay be in completion of one or both buildings.

Appeal from the Court of Claims.

Suit by Henry A. Wise, trustee in bankruptcy of Ambrose B. Stannard, against the United States. Petition dismissed (52 Ct. Cl. 400), and claimant appeals. Affirmed.

Messrs. Wm. B. King and George A. King, both of Washington, D. C., for appellant. Mr. Assistant Attorney General Brown, for the United States.

*Mr. Justice CLARKE delivered the opinion of the Court.

On January 13th the government made a motion to remand the case to the Court of In December, 1904, Stannard, represented Claims for additional findings. It was de- in this case by his trustee in bankruptcy, connied, but the right reserved to make such tracted with the United States to erect two order if we should be so advised. Our at- laboratory buildings for the Department of tention is directed to the motion, which it is | Agriculture, in the city of Washington, D. C.,

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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for $1,171,000. The buildings were both to be completed in 30 months and for a delay of 101 days beyond the contract period the government deducted from the contract price $200 a day, the amount stipulated in the contract as liquidated damages, a total of $20,200, and the claim made in this court is for the recovery of that amount.

The subject of the interpretation of provisions for liquidated damages in contracts, as contradistinguished from such as provide for penalties, was elaborately and comprehen

The Court of Claims dismissed the petition sively considered by this court in Sun Printand the case is here on appeal. ing & Publishing Association v. Moore, 183 U. S. 642, 22 Sup. Ct. 240, 46 L. Ed. 366, applied in United States v. Bethlehem Steel Co., 205 U. S. 105, 27 Sup. Ct. 450, 51 L. Ed. 731, and the result of the modern decisions was

determined to be that in such cases courts will endeavor, by a construction of the agreement which the parties have made, to ascertain what their intention was when they inserted such a stipulation for payment, of a designated sum or upon a designated basis, for a breach of a covenant of their contract, precisely as they seek for the intention of the parties in other respects. When that intention is clearly ascertainable from the writing, effect will be given to the provision, as freely as to any other, where the damages are uncertain in nature or amount or are difficult

The provision of the contract upon the sub- of ascertainment or where the amount stipuject is: lated for is not so extravagant, or disproportionate to the amount of property loss, as to show that compensation was not the object aimed at or as to imply fraud, mistake, circumvention or oppression. There is no sound reason why persons competent and free to contract may not agree upon this subject as fully as upon any other, or why their agreement, when fairly and understandingly entered into with a view to just compensation for the anticipated loss, should not be enforced.

The contract was in writing and the specifications, which the contractor had before him when bidding, were made a part of it. These specifications contain the following:

"11. Each bidder must submit his proposal with the distinct understanding that, in case of its acceptance, time for the completion of the work shall be considered as *of the essence of the contract, and that for the cost of all extra inspection and for all amounts paid for rents, salaries and other expenses entailed upon the United States by delay in completing the contract, the United States shall be entitled to the fixed sum of $200, as liquidated damages, computed, estimated, and agreed upon, for each and every day's delay not caused by the United

States."

"3. To complete the said work in all its parts within 30 months from the date of the receipt

of the notice referred to in subdivision 2 hereof. Time is to be considered as of the essence of the contract, and in case the completion of said work shall be delayed beyond said period, the party of the second part may, in view of the difficulty of estimating with exactness the damages which will result, deduct as liquidated damages, and not as a penalty, the sum of two hundred dollars ($200.00) for each and every day during the continuance of such delay and until such work shall be completed, and such deductions may be made from time to time from any payments due hereunder."

[1-3] There is no dispute as to the extent of the delay and the sole contention of the appellant is that, because a single sum in damages is stipulated for, without regard to whether the completion of one or both buildings should be delayed, and because the damage to the government would probably be less in amount if one were completed on time and the other not, than if the completion of both were delayed, the provision of the contract with respect to liquidated damages cannot be considered the result of a genuine pre-estimate of the loss which would be caused by the delay but must be regarded as a penalty which requires proof of damage in any amount to be deducted.

state of facts than that before it for the purpose of obtaining a basis for modifying a written agreement, which evidently was entered into with great deliberation.

If it were not for the earnestness with which this claim is presented we should content ourselves with the observation that as there was delay in the completion of both buildings, the case falls literally within the terms of the contract of the parties and that a court will refuse to imagine a different

There are, no doubt, decided cases which tend to support *the contention advanced by appellant, but these decisions were, for the most part, rendered at a time when courts were disposed to look upon such provisions in contracts with disfavor and to construe them strictly, if not astutely, in order that damages, even though termed liquidated, might be treated as penalties, so that only such loss as could be definitely proved could be recovered. The later rule, however, is to look with candor, if not with favor, upon such provisions in contracts when deliberately entered into between parties who have equality of opportunity for understanding and insisting upon their rights, as promoting prompt performance of contracts and because adjusting in advance, and amicably, matters the settlement of which through courts would often involve difficulty, uncertainty, delay and expense.

The result of the application of the doctrine thus stated to the case before us cannot be doubtful. The character of the contract and the amount involved assures experience and large capacity in the contractor and the parties specifically state that the

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amount agreed upon as liquidated damages | en by a government agent under the act of had been "computed, estimated and agreed 1864. upon" between them. It is obvious that the extent of the loss which would result to the government from delay in performance must be uncertain and difficult to determine and it is clear that the amount stipulated for is not excessive, having regard, to the amount of money which the government would have invested in the buildings at the time when such delay would occur, to the expense of securing or continuing in other buildings during such delay, and to the confusion which must necessarily result in the important and extensive laboratory operations of the Department of Agriculture.

*Messrs. George A. King and William B. The parties to the contract, with full un- King, both of Washington, D. C., and Alexderstanding of the results of delay and beander M. Garber, of Birmingham, Ala., for fore differences or interested views had aris en between them, were much more com*petent to justly determine what the amount of damage would be, an amount necessarily largely conjectural and resting in estimate, than a court or jury would be, directed to a conclusion, as either must be, after the event, by views and testimony derived from witnesses who would be unusual to a degree if their conclusions were not, in a measure, colored and partisan.

There is nothing in the contract or in the record to indicate that the parties did not take into consideration, when estimating the amount of damage which would be caused by delay, the prospect of one building being delayed and the other not, and the amount of the damages stipulated, having regard to the circumstances of the case, may well have been adopted with reference to the probability of

such a result.

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The judgment of the Court of Claims must be Affirmed.

(249 U. S. 323)

O'PRY et al. v. UNITED STATES.

UNITED STATES 103-CLAIMS FOR ABAN-
DONED PROPERTY-STATUTE-"ADDITION"-

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Addition; Amendment.]

"AMENDMENT."

Act July 2, 1864, providing for the purchase by common agents of property in the insurrec tionary districts at three-fourths of the market value, was in "addition" to the Abandoned Property Act of March 3, 1863, not an "amendment," since its provisions are independent of the original act, whereas in an amendment there is a change; and Judicial Code, § 162 (Comp. St. § 1153), giving the Court of Claims jurisdiction to determine claims for the proceeds of property seized under act of 1863 and acts amendatory thereof does not authorize recovery of one-fourth of the value of the property tak

Appeal from the Court of Claims.

Claim by Isabel Kouns O'Pry, as sole descendant and heir of John Kouns, surviv ing partner of George L. Kouns and John Kouns, and another, against the United States. Judgment against the claimants (51 Ct. CL. 111), and claimants appeal. Afarmed.

To avail herself of that section Isabel Kouns O'Pry alleged herself to be the sole surviving descendant and sole heir of John

(Argued March 12, 1919. Decided March 31, Kouns and brought this suit in the Court of 1919.) Claims and for grounds thereof set forth the following facts: No. 216.

June 6, 1865, George L. Kouns and John Kouns were owners of 900 bales of cotton in two lots, of which 350 bales had been raised in Texas and 550 bales raised in Louisiana, and after the cessation of hostilities were brought to New Orleans, June 6, 1865. The cotton was worth the sum of $123,110.

On that date-June 6, 1865-the act of Congress of July 2, 1864 (13 Stat. 375, c. 225), was in force, section 8 of which made it lawful for the Secretary of the Treasury, with the approval of the President, to authorize agents to purchase for the United States products of states declared in insurrection at designated places at such prices as might be agreed on with the seller, not exceeding

appellants.

Mr. Assistant Attorney General Brown, for the United States.

Mr. Justice MCKENNA delivered the opinion of the Court.

Section 162 of the Judicial Code, enacted March 3, 1911 (36 Stat. 1139, c. 231 [Comp. St. § 1153]), provides as follows:

"The Court of Claims shall have jurisdiction to hear and determine the claims of those whose property was taken subsequent to June 1, 1865, under the provisions of the act of Congress approved March 12, 1863, entitled 'An act to provide for the collection of abandoned property and for the prevention of frauds in insurrectionary districts within the United States,' and acts amendatory thereof, where the property so taken was sold and the net proceeds thereof were placed in the Treasury of the United States; and the Secretary of the Treasury shall return said net proceeds to the owners thereof, on the judgment of said court, and full jurisdiction is given to said court to adjudge said claims, any statutes of limitations to the contrary notwithstanding."

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 39 SUP.CT.-20

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We do not think where one complies with the law in his transaction with the government in the sale of cotton and receives all that the law allows him he has any valid claim under section 162 of the Judicial Code."

three-fourths of the market value at the lat- [ so. est quotation in the city of New York.

(The other provisions of the statute are not necessary to quote.)

The act of July 2, 1864, was an amendment of the act of March 3, 1863, entitled "An act to provide for the collection of abandoned property and the prevention of frauds in insurrectionary districts within the United States." 12 Stat. 820, c. 120.

By order of the court the petition was amended and *Schneidau made a party claimant. The government's demurrer to the petition as amended was sustained.

In pursuance of the authority thus conferred the Secretary of the Treasury designated, among other cities, the city of New Orleans as a place of purchase and by a subse quent regulation directed that the agents appointed should receive all the cotton brought to the places designated as places The case is not in broad compass, involvof purchase and forthwith return to the selling as it does only the relation and construcer three-fourths of the cotton or sell the tion of statutes, but it is not easy to state same and retain out of the price thereof the it briefly. The petition recites, as we have difference between three-fourths of the marseen, that the Kounses in their lifetime ket price and the full price thereof in the brought suit against the agent of the governcity of New York. ment, Cutler, who had seized the cotton in New Orleans and exacted payment from them of one-fourth of its value, granting them, however, the indulgence of paying it in three installments, respectively, June 12, June 15, and June 20, 1865. They charged Cutler with an unlawful seizure of the cotton and an unlawful exaction of the money. They obtained judgment in the Circuit Court, but the judgment was reversed by this court (110 U. S. 720, 4 Sup. Ct. 274, 28 L. Ed. 305), and the following is, so far as material, a summary of the decision in the case:

The agent appointed at New Orleans was Otis N. Cutler, and, on the arrival of the Kouns cotton, Cutler, as such agent, took possession of it and refused to release the same or to allow the owners to have any custody of it until they paid him one-fourth of its inarket value, being the sum of $30,777.50. They paid the same under protest and it was placed in the Treasury of the United States, where it remains.

June 13, 1865, the President removed by proclamation *all restrictions upon intercourse and trade in products of states theretofore in insurrection and theretofore imposed in the territory east (italics ours) of the Mississippi river.

In consequence of the act of July 13, 1861 (12 Stat. 255, c. 3), it was lawful for the President to declare that the inhabitants of all states in rebellion against the United States were in a state of insurrection and that all commercial intercourse between them should cease and be unlawful so long as such condition of hostilities should continue. And August 16, 1861 (12 Stat. 1262) the states of Texas and Louisiana were declared to be in condition and intercourse was forbidden between them and other states and parts of On April 12, 1862, the the United States. city of New Orleans, however, was occupied by the national forces and from that date was excepted from the operation of the Nonintercourse Act.

To fulfill the conditions of necessary parties on account of a doubt expressed by the court, there was an intervening petition by Charles Schneidau, assignee in bankruptcy of George L. Kouns. He adopted the petition of Isabel Kouns O'Pry "and jointly with her claims as therein prayed."

Thereafter the Kounses brought suit in a New York court against Cutler, which was removed to the Circuit Court of the United States for the Southern District of New York. The ground of Cutler's liability was alleged to be that his retention of the cotton and the exaction of money from them was unwar-like ranted in law. They recovered judgment, but it was reversed by the Supreme Court of the United States (Cutler v. Kouns, 110 U. s. 720, 4 Sup. Ct. 274, 28 L. Ed. 305) and a new trial ordered. The suit was then dismissed.

The loyalty of the appellants is alleged. The Court of Claims dismissed the suit upon the demurrer of the government. The court expressed the opinion that the claim did not come either "within the letter or the spirit of section 162 and the correlative statutes" and said:

In this state of affairs Congress passed the act of July 2, 1864, referred to in the petition, section 8 of which authorized the purchase of products of states declared in insurrection, which included the cotton in suit, and it was seized by virtue of such authority and the payments mentioned *exacted. It was contended that the cotton was exempt from such action by proclamation of the President of June 13, 1865. The contention was rejected, the cotton not being, as it was said, the product of territory east of the Mississippi river. It was, however, further urged that

"At the time of this transaction the Kouns firm could not have made any disposal of the cotton in question had it not been for the provision of said section 8, it being insurrectionary territory. That section prescribed the method and the conditions upon which it might be sold to the government. The firm complied with those conditions and were doubtless glad to do the President's proclamation of June 24,

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