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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.
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.
The subject of the interpretation of provisions for liquidated damages in contracts, as contradistinguished from such as provide for penalties, was elaborately and comprehenThe Court of Claims dismissed the petition sively considered by this court in Sun Printand the case is here on appeal.
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
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:
"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.
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
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.
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
[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Addition; Amendment.]
Appeal from the Court of Claims.
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.
The parties to the contract, with full understanding of the results of delay and be fore differences or interested views had arisen 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.
The judgment of the Court of Claims must be
(249 U. S. 323)
O'PRY et al. v. UNITED STATES.
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.
*Messrs. George A. King and William B. King, both of Washington, D. C., and Alexander M. Garber, of Birmingham, Ala., for 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."
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
UNITED STATES 103- CLAIMS FOR ABAN-
Claims and for grounds thereof set forth the following facts:
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.
Act July 2, 1864, providing for the purchase by common agents of property in the insurrectionary districts at three-fourths of the market value, was in "addition" to the Abandoned PropOn that date-June 6, 1865-the act of erty Act of March 3, 1863, not an "amend- Congress of July 2, 1864 (13 Stat. 375, c. 225), ment," since its provisions are independent of was in force, section 8 of which made it lawthe original act, whereas in an amendment there ful for the Secretary of the Treasury, with is a change; and Judicial Code, § 162 (Comp. St. § 1153), giving the Court of Claims jurisdic- the approval of the President, to authorize tion to determine claims for the proceeds of agents to purchase for the United States property seized under act of 1863 and acts products of states declared in insurrection amendatory thereof does not authorize recovery | at designated places at such prices as might of one-fourth of the value of the property tak- be agreed on with the seller, not exceeding
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 39 SUP.CT.-20
three-fourths of the market value at the latest 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.
So. 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."
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."
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 market 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
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 condition and intercourse was forbidden 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"
"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
between them and other states and parts of the United States. On April 12, 1862, the city of New Orleans, however, was occupied by the national forces and from that date was excepted from the operation of the Nonintercourse Act.
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 the President's proclamation of June 24,
1865, removed all restrictions as well from [ captured property in any state or territory in products of territory west of the Mississippi insurrection, with an exception not material. river. To this it was replied that upon the Section 2 provides that the property so rearrival of the cotton in New Orleans the ceived or collected may be put to public use rights of the government to it became fixed or sold at public auction and the proceeds and that at such time "one-fourth its value thereof put into the Treasury of the United was as much the property of the government States. By section 3 a bond may be required as the other three-fourths were the property of the agent or agents, who may be required of the defendants in error [the Kounses]. to keep a book or books of accounts showing No proclamation of the President could trans- those from whom the property was received, fer the property of the government to them." the cost of transportation and proceeds of It was hence decided that Cutler "had author- sale. It is further provided that the owner ity under the law and regulations of the of the property may at any time within two Treasury Department to exact the money" years prefer a claim for the proceeds therewhich the suit was brought to recover. The of and upon proof of loyalty receive the resdefense of the statute of limitations was also idue of the proceeds. sustained.
It will be observed that the act had a spe cial purpose and was directed to the receipt and collection of property in a particular condition, either abandoned or captured, recognizing however, that there might be a just claim to it, but limiting the assertion of the claim to two years after the suppression of the rebellion.
The act of July 2, 1864 (13 Stat. 375), describes itself to be "An act in addition to the several acts concerning commercial intercourse between loyal and insurrectionary states, and to provide for the collection of captured and abandoned property, and the prevention of frauds in states declared in insurrection." The act, therefore, is declared to be an "addition" to preceding legislation, not an amendment to it. same as an amendment? We are informed by the dictionaries that in addition the added parts remain independent and by amendment there is change and, it may be improvement. The words and the processes they respectively describe may, however, be regarded as
Is an addition the
It is now asserted that notwithstanding such decision a claim has accrued to appellants by virtue of section 162 of the Judicial Code upon which they are entitled to recover. It will be observed by reference to that section that the Court of Claims is given jurisdiction of claims of those whose property was taken subsequent to June 1, 1865, under the provisions of the act of March 3, 1863, "and acts amendatory thereof," where the property was sold and its net proceeds were placed in the Treasury of the United States, and they are directed to be returned upon judgment rendered for the claimant. Appellants invoke the relief of these provisions by the contention that the cotton was taken under the provisions of the act of March 3, 1863, because the act of July 2, 1864, was an amendment to it, and that therefore the provision of section 162 of the Judicial Code is completely satisfied; in other words, that the money exacted was taken under the *act of March 3, 1863 "and acts amendatory thereof." It is further contended that the conditions roughly or even accurately interchangeable of section 162 being thus satisfied it is no an- and in investigating the meaning of legislaswer to say that the seizure of the cotton tion we must regard that possibility and rewas legal, it being the intention of Congress solve a doubt in the words by the purpose of to declare that even in such case "the pro- the legislation. In other words, whatever ceeds should be returned to the owners." the relation of the statutes, their purpose And this contention counsel offers as an an- must be looked to to determine the applicaswer to Cutler v. Kouns, supra, and that Con- tion to them of section 162. So looked to, we gress having by section 162 opened the doors agree with the government that the purpose of the Court of Claims “to claimants whose of the act of July 2, 1864, demonstrates the property was seized after June 1, 1865, they contrary of the contention of appellants, and can no longer be met with the defense that that the act was strictly in addition to prior because the seizure was lawful when made, acts and not an amendment of the act of there can be no recovery on account of it. March 3, 1863 in the sense asserted. The latTo sustain such a defense would be 'to keep ter act applied to a different situation. The the word of promise to the ear and break cotton collected under it and to which its it to the hope.'" The government opposes provisions applied might be the property of the contentions. those innocent of disloyalty, but victims of the disorder and violence of the times, and the government constituted itself a trustee for them and gave them the opportunity, at any time within two years after the suppression of the rebellion, to establish their right to the proceeds, requiring of them nothing but proof of loyalty and ownership. United States *v. Anderson, 9 Wall. 56, 65, 19 L. Ed.
The act of March 3, 1863 (12 Stat. 820), is entitled "An act to provide for the collection of abandoned property and for the prevention of frauds in insurrectionary districts within the United States." Its first section empowers the Secretary of the Treasury to appoint a special agent or special agents to collect and receive all abandoned or
615; United States v. Padelford, 9 Wall. 14. MINES AND MINERALS 36-OIL LANDS531, 19 L. Ed. 788; United States v. Klein, 13 Wall. 128, 20 L. Ed. 519.
The cotton in the present case, unlike that to which the act of March 3 applied, was the subject of a business enterprise and taken to a market opened by the United States forces upon the conditions expressed in the act of July 2, 1864-that is, that its owners should turn over to the government onefourth of the cotton, or its money equivalent, which would immediately become the property of the United States. Cutler v. Kouns, supra. The conditions in the two situations, therefore, are in broad contrast and it could
not have been the intention of section 162 to
confound the conditions. The section did no more than remove the bar of limitation of time to sue that was given by the act of March 3, 1863. It did not intend to transfer property that had become that of the United States.
(249 U. S. 337)
UNION OIL CO. OF CALIFORNIA v.
The proviso of Act Feb. 12, 1903 (Comp. St. § 4636), that anunal assessment labor for a group of contiguous claims done on one of
them must tend to the development or determination of the oil-bearing character of the several claims, does not enlarge the effect of the statute, so as to permit, before discovery, a location which can be maintained by performing work on the contiguous claim.
In Error to the Supreme Court of the State of California.
Action by S. R. Smith against the Union Oil Company of California to determine adverse claims to an oil claim. Judgment for plaintiff was affirmed by the Supreme Court of California (166 Cal. 217, 135 Pac. 966), and defendant brings error. Affirmed.
Messrs. Lewis W. Andrews and Thomas O. Toland, both of Los Angeles, Cal., for plaintiff in error.
*Mr. Justice PITNEY delivered the opinion of the Court.
This case presents, for the first time in this court, the question of the meaning and effect of an act of Congress approved February 12, 1903 (32 Stat. 825, c. 548 [Comp. St.
(Submitted Nov. 13, 1918. Decided March 31, § 4636]), which reads as follows:
1919.) No. 8.
1. MINES AND MINERALS 29(6) PUBLIC MINERAL LANDS-RIGHTS BEFORE DISCOV
One exploring public lands for minerals under the permission given by Rev. St. § 2319 (Comp. St. § 4614), but before making the discovery necessary to locate a claim under section 2320 (section 4615) has a right of possession good against forcible, fraudulent, or clandestine intrusions, but which continues only during actual occupation and persistent and diligent prospecting.
2. MINES AND MINERALS 29(3) PUBLIC MINERAL LANDS-LOCATION RIGHTS ACQUIRED.
One who, after discovery of mineral on a claim as required by Rev. St. § 2320 (Comp. St. § 4615), locates the claim in accordance with section 2324 (section 4620), has, under section 2322 (section 4618), a possessory right, capable of transfer and independent of continuous possession, which can be forfeited only by failure to do the annual work required by section 2324. 3. MINES AND MINERALS 36-OIL LANDS"ASSESSMENT LABOR."
The term "assessment labor," in Act Feb. 12, 1903 (Comp. St. § 4636), providing that such labor on oil claims may be done on one of a group of contiguous claims refers to the annual labor required of the locator of a mineral claim after discovery by Rev. St. § 2324 (Comp. St. § 4620), and not to work before discovery.
"An act defining what shall constitute and providing for assessments on oil mining claims. "Be it enacted, etc., that where oil lands are located under the provisions of title thirty-two, chapter six, Revised Statutes of the United States, as placer mining claims, the annual assessment labor upon such claims may be done upon any one of a group of claims lying contiguous and owned by the same person or corporation, not exceeding five claims in all: Provided, that said labor will tend to the development or to determine the oil bearing character of such contiguous claims."
Smith, now defendant in error, being in possession of a placer mining claim known as the "Schley claim," comprising a tract of 160 acres of land in the state of California, part of the public domain of the United States, under a location notice posted and recorded by himself and seven other qualified persons who afterwards conveyed their interests to him, and being engaged in the diligent prosecution of work for the purpose of finding oil upon the claim, brought an action in a California state court to determine adverse claims, making the Union Oil Company of California defendant.
Defendant asserted a superior right of possession under a mineral land location of the same ground under the name of the "Rawley claim," made by eight qualified associates in the year 1883, many years before plaintiff's location. No discovery of oil or other minerals had ever been made upon the ground
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