Case ID: us-ct-cl_33/html/0453-01.html
Source: Caselaw Access Project
Author: {"author": "WeldoN, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JAMES B. HALIDAY ET AL. v. THE UNITED STATES.
    [No. 17652.
    Decided May 31, 1898.]
    
      On the Proofs.
    
    The claimants enter into several contracts with the defendants; one for the construction of a cavalry drill hall at Fort Myer; another to complete an animal house in the Zoological Park in Washington; another for the construction of officers’ quarters at Fort Myer; another to erect a flagstaff. The questions involved in the case relate to extra work and to penalty or liquidated damages where the work was not concluded at the agreed time.
    work was necessary and the officer in charge directed that it he done and the Government received the benefit of it, the combination of circumstances brings the claim for extras within the ease of Ford (17 C. Cls. B., 60).
    II.Where a contract provides that in case of neglect or failure to complete a house on or before a date agreed upon “ there'shall he deducted the sum of $%5 per day, in the discretion of the secretary of the Smithsonian Institution,” and the deduction made by him is not based upon actual damages, but in pursuance of an alleged right to enforce the forfeiture, it is a case of penalty and not of liquidated damages.
    III.Whether an amount named in a contract shall be taken as penalty or as liquidated damages depends upon the reasonableness of the transaction, and not upon the form of the agreement, or on the terms used by the parties, or even on their manifest intent, which will be carried out only so far as it is right and reasonable.
    
      The Reporters’ statement of the case:
    following are the facts as found by the court:
    B. Haliday and Samuel S. Richardson, were, at the time of the rendition of the services here-mentioned, partners ■ engaged in a general contracting and building business, under the firm name and style of Hali-day & Bichardson, iu the city of Washington, in the District of Columbia.
    II. On the 4th day of March, 1891, petitioners entered into a written contract with the United States “to furnish at their own risk and expense all the materials, labor, and other services necessary or required in the erection and construction of one cavalry, drill hall at Fort Myer, in the State of Virginia, and complete the same in accordance with the plans of said building furnished by the United States,” at and for the sum and price of $20,150.
    As shown by Exhibit A of the petition, the specification of the contract relating- to the work in controversy is as follows:
    
      “ Of materials and labor for a cavalry drill hall to be erected at Morí Myer, Virginia.
    
    “The work to be executed under the direction and to the satisfaction of the officer in charge, and in conformity with his instructions and such detail drawings as may be furnished from time to time during the progress of the work.
    “The contractor will furnish ing, fixtures, machinery, tools, etc., necessary for the complete and substantial execution of everthing described, shown, or reasonably implied in the specifications and drawings, without extra charge whatever.
    “The work is to be performed a manner, and all materials must be the best of their several kinds.
    “ Granolithic paving. — The space between platforms at main entrance to be paved with granolithic concrete.
    exact levels for the ends of trusses, properly build in all anchor bolts, 6' 1-f!-" from centers, for knee-guard framing, and prepare recesses for the clearance required for truss expansion.”
    The petitioners completed said building, and the same was thereafter accepted by the United States.
    III. In the course of the erection and construction of said building, as aforesaid, the petitioners were required by officers of the Government to' perform, and they did perform under such requirement, work thereon as follows:
    Change in plans of the main entrance doors north and south, -work
    and labor and materials worth.. ...$92.00
    
    Putting granolithic pavement at the south entrance worth. 10.00
    Brickwork between trusses worth.. 175.00
    Total
    277.00
    
      As to item 3, a dispute arose between claimants and their subcontractor for the brickwork. The claimants insisted it was the duty of the subcontractor to do the work under his agreement to do the brickwork; the defendants insisted that it came within the contract. The changes in the entrances were directed by the officer making the contract, and also the pavement.
    IY. On the 17th day of April, 1891, the petitioners entered into a written contract with the United States “to furnish the materials and labor required to complete an animal house in the National Zoological Park, at Washington, D. 0.,” at and for the sum and price of $3,481. as shown in Exhibit B. The specifications applicable to the claim i'dr extra work are as follows:
    “The animal house on which the work is to be done is situated in the National Zoological Park about one mile from the city boundary. The walls of this house are already constructed and the contractor is to build upon them.
    “The work is to be done in accordance with 'these specifications and with the accompanying plans, and no deviation therefrom will be permitted unless authority in writing shall be first obtained from the acting manager of the park.
    “ It will be conducted under the general direction ol the supervisor of buildings of filie park, and will be under the immediate supervision of an inspector whose duties will be to see that the requirements of these specifications are carried out.
    “The materials used are to be the best of the several kinds described, respectively, and the inspector shall have power to reject any or all materials or work not in conformity with the drawings and with these specifications.
    “The work throughout to be well prepared, accurately fitted and set, and firmly secured and finished in the best workmanlike manner, to the satisfaction of the inspector.
    “The drawings and specifications are the property of the park, and are to be returned at the completion of the work. Should any error occur in them the contractor is to refer it to the supervisor or inspector for correction. The contractor is to give 1ns personal superintendence to the work, and to furnish all transportation, labor, materials, apparatus, scaffolding, and utensils needful for performing the work in the best manner, according to the drawings and specifications.
    ■ “ Should the contractor introduce any material different from the sort and quality herein described, or meant to be implied, it shall be immediately removed at the contractor’s expense at any time during the progress of the work.
    “The specifications and drawings are intended to include everything requisite and necessary to the proper finishing of all the work, notwithstanding every item necessarily involved
    
      by the work is not particularly mentioned; and all the work, when finished, to be delivered up in a perfect and undamaged state, without exception.
    main roof as indicated on the plan and the post supporting the same from main floor are to be So. 1 all-heart Georgia pine, dressed four sides and chamfered as shown on detail plans. The sheathing is to be y x3" No. 1 Virginia wainscoting, well seasoned and kiln-dried. All of this exposed work is to be nicely smoothed off by hand before it is put up, the sheathing to be well driven up and well nailed in each and every rafter.
    
      2" x 8" Virginia, and all piates, &c., to be 3" x 8", not dressed, the sheathing to be ¶' match Virginia, not over 6" wide.
    patent skylights, six feet (6') and of the different widths as shown on plans with one-quarter {§>') inch ribbed glass.
    to express all that is necessary to enable the Government to acquire a piece of first-class work done throughout in a thorough manner; but if in the opinion of the supervisor or his representative anything necessary to such a complete and workmanlike job has not been furnished, even though not separately mentioned here, it shall be taken and held to be included in the contract price.
    V. In the course of the construction of said building the United States, through its officers, required the petitioners to perform work as follows, to wit, except as shown below:
    Truss rafter at east end of building, worth.$60.00
    Cost of increasing same
    Cost of rounding all corners, above same,
    Value.of two windows fendants. 6.00
    Item 1, necessary in order to complete the work on that part of the building; no agreement as to being extra. Item 2, not requested to put in; post condemned for use in other part of building. Defendants permitted it to be used. Item 3, before bids opened statement made that all corners to be rounded; this change put on drawings after bids opened; the plan was changed to round corners. The corners were made substantially round. Bidders agreed before bids opened to let their bid stand.
    VI. On the 25th day of May, 1891, petitioners entered into a contract “to furnish, at their own risk and expense, all the material, labor, and other service necessary or required in the erection and construction of two double sets of officers’ quarters at Fort Myer, Va., including all plumbing and gas-piping work described under those headings in the specifications, and including also all work described in said specifications under the heading of heating and ranges, and shall complete the same in accordance with the plans of said buildings furnished by the United States and in conformity with the specifications therefor,” at and for the sum and price of $32,888, as shown by Exhibit C. The specifications applicable to the claim for extra are as follows:
    “ The work to be executed under the direction and to the satisfaction of the U. S. officer in charge, and in conformity with his instructions and such detail drawings as may be furnished from time to time during the progress of the work.
    “The drawings and these specifications shall be considered together, and work or material called for on one and not on the other is to be performed or provided by the contractor in as faithful a manner as though treated of by both.
    “The work must be executed in a prompt and workmanlike manner, and the materials must be the best of their several kinds.
    “The contractor must protect the work and all material on the site from the inclemency of the weather whenever occasion requires, and deliver the building broom clean and perfect in every particular when completed.
    “ The location and grade of the building will be indicated by the officer in charge. The site shall be cleared by the contractor for the reception of the'structure, and should be examined by contractor before bidding.
    “On the outside of foundation walls lay 6" salt-glazed, socket-joint drainpipe, with Y branches and -J- bends, extending up to grade for down spout connections; the lower half of the joints to be cemented, the upper half left oj>en. The drain to be continued to an outlet that will be designated by the officer in charge.
    “Front-door sills, and those of front and side windows, to be of Hummelstown.stone, 5" face, rubbed smooth, and to have washes cut thereon.
    ■ “Sash. — Double-hung sash for all windows, excepting those of cellar, which are to be made swinging. Sash throughout to be of clear white pine If" thick, and of sizes to suit openings, as figured on drawings.
    “All swinging sash to be V!¿" and to have undercut weatherstrips secured to their bottom rails.
    
      “Transoms. — Transoms of white pine over all doors where required by drawings. All transoms to be secured on spring pivots, excepting those of exterior doors.
    “All ironwork to receive a priming of red lead and three coats of finishing paint. All exterior woodwork to have three good coats of paint. . The floors of porches and vestibules and the ceilings of the former to be painted. All millwork in attic story and in cellars to be painted three coats, and likewise that of kitchens, excepting wainscoting.”
    VII. The petitioners erected and completed said buildings, including the apparatus for heating and ranges and all gas-piping work, on the 23d day of December, 1891, and the defendants accepted the said buildings and work, making a deduction from the contract price as hereinafter shown. _
    VIII. In the performance and completion of said last-mentioned contract petitioners were required to furnish, and did furnish, at the instance and request of the defendants through their agents in charge, material and labor, which materials and labor were used and accepted by the defendants in the said work without specific compensation therefor, as follows:
    1. Sewerage, talcing np and relaying dxainpipe, worth. $170.00 2. Lug'wash on brownstone window sills, worth. 140.00 3. ^Reconstructing 40 cellar and basement windows, making' them double sash instead of single sash. 60.00 4. Balance due for sealing sliding doors. 42.00 5. Cutting floor and fitting slate slabs. 9.00 6. Painting 8 attic doors, at $3 each. 24. 00 7. Cost vestibule transoms, at $5 each. 20.00 8. Cost 6 by 4 pine for cornices (white pine used instead of yellow pine). 110.00
    . Item 1. The pipe was improperly laid. Superintendent required it to be taken up and relaid; no agreement to pay for it.
    Item 2. Lug wash done under protest. Quartermaster insisted they should be made so — insisted that plans called for it.
    Item 3. Cut in single sash when building nearly completed. Officer in charge compelled claimants to take them out and put in double sash.
    Item 4. Claimants insisted this was extra. Defendants paid part, the balance is now claimed; worth what is charged after deducting payment.
    Item 5. Claimants furnished larger slabs. Slabs paid for, but refused to pay for the extra work of cutting floor, nor the $9 difference.
    Item 6. The doors were paid for at $5.65, which included painting.
    Item 7. Work done claimed as extra. Defendants claimed not extra.
    Item 8. White pine was used and larger material in cornice, extended all around the building; difference in cost $110. Officer in charge required the change in size and the use of white pine, and also the other work embraced in this finding; said officer acting as superintendent of defendants.
    IX'. In August, 1891, petitioners entered into a contract with defendants to erect, and did erect, a flagstaff at Fort Myer, and the reasonable value of service is $131, no part of which has been paid them. The first one erected fell without fault of claimants; the second put up at request of defendants, worth as aforesaid.
    In December, 1891, at the instance of the defendants, petitioners furnished the defendants 1,060 pounds sheet lead, which was used and consumed by the defendants in repairs on the barracks at Fort Myer, which was and is of the reasonable value of $85.28, no part of which has- been paid to them.
    X. In May and June, 1891, the petitioners sold and furnished to P. H. McLaughlin & Co., for their use in the-construction of the Naval Observatory, for the building of which the said P. H. McLaughlin & Go. were the contractors with the defendants, 391 barrels of Mannheimer Portland cement, of the reasonable value of $1,204.28, no part of which has been paid to the claimants.
    Afterwards, in the month of September, 1891, the said P. H. McLaughlin & Go. were declared defaulting and failing contractors by the defendants, and at said last-mentioned date there were in the possession of the United States 230 barrels of said cement, which had not been used by the said contractors in the construction of said Naval Observatory, and the petitioners thereupon demanded the return and delivery to them by the United States of the said 230 barrels of cement, which had not been used or paid for, but the United States refused to deliver to claimants on their request the said 230 barrels of cement, and the same was then and there of the value of $3.80 per barrel, and of the total value of $874.
    XI. No agreement in writing was made between the claimants and any officer or agent of the defendants for the performance of any extra or additional work, or for supi>lying any extra or additional material in and about the construction of the aforesaid buildings.
    XII. There was retained by the defendants from claimants out of the amount due them for the construction of the animal house the sum of $450, $200 of which was retained because of an alleged defective and insecure skylight placed in said animal house by claimants instead of the Bicklehaupt skylight, which was required by the contract. The difference between the cost of this skylight and the Bicklehaupt skylight was the sum of $200, as alleged by defendants, which the defendants retained to reimburse themselves. The remaining $250 was the amount retained by the Government for the failure on the part of the claimants to complete said animal house within the contractual period, the forfeiture being $25. per day for ten days, and was retained by the Government under the contract stipulation containing a forfeiture of $25 for each day that said house should be delayed beyond the contractual period of completion. The delay in completing the animal house was in nowise due to any fault, wrong, or neglect on the part of any officer or agent of the defendants. It does not appear what, if any, damage the defendants suffered by reason of the delay in finishing the animal house.
    The skylight which was used by the claimants was not the Bicklehaupt skylight, but certain parts of it were used. The skylight was substantially a good skylight, though not so good as the Bicklehaupt. The value of the skylight made by claimants was $125.
    XIII. There was retained by defendants from claimants the sum of $1,100 from the sum due to said claimants for the erection of the officers’ quarters at Fort Myer. This amount was retained by the United States under the stipulations of the original contract and the stipulations of au alleged supplemental contract entered into by and between the claimants and the defendants. -
    The time for the completion of the agreement was extended in consequence of the claimants’ inability to perform from the 20th of September to November 20. The defendants were urging the claimants to complete by the 20th, as they needed the quarters. The claimants failed to complete by the 20th. The defendants determined to enforce the penalty of the seventh section of the contract, and as a result of that condition the following correspondence passed between the parties:
    “Depot Quartermaster’s Oeeioe,
    “ Washington, D. (]., November 25th, 1891.
    
    “Messrs. Haliday & Biohaedson,
    
      u728 13th street NW., Washington, J). C.:
    
    “Gentlemen: The two (2) double set of officers’quarters being constructed at Fort Myer, Va., under your contract therefor, dated May 25th, 1891, not having been completed on November 20, 1891, as required by the terms of the contract— the time in which to do the work having been extended by authority of the Secretary of War from September 20, 1891, to November 20,1891 — you are hereby notified that, under the provisions of article 7 of the contract, I shall on Monday, 30th instant, take charge of the work on the two buildings on behalf of the United States, and shall cause the same to be completed in accordance with the provisions of the article above named, and shall charge the cost thereof to, and deduct it from any money due, you, as provided in the contract.
    “Any required material or labor which the contractors may have on the ground will, if acceptable to the inspector, be utilized, if the contractors so desire, and credit given them therefor.
    “Mr. Albert Stephan is named as inspector, with full control of the work, and will see that there is no further delay. He will report daily as to progress and make weekly requisitions for any material required.
    “ Please acknowledge receipt hereof.
    “ Very respectfully, your obedient servant,
    “Geo. ,H. Weees,
    
      “Deputy Quartermaster-General, U. 8. A.,
    
    
      Depot Quartermaster.
    
    
      “ WASHINGTON, D. O., Novr. 30,1891. “Ool. George H. Weeks,
    “ Depot Quartermaster, Washington, D. O.:
    
    “ Sir : Referring to your letter of the 25th inst., and complying with your verbal instructions of the same date as to our contract for the completion of the two double sets of officers’ quarters at Fort Myer, Ya., we make the following proposal:
    according to plans and specifications, and be ready to turn them over by Thursday, December 10th (10 days). Also finish the west double set of quarters complete in like manner by Saturday, December 12th (12 days), or failing to complete these buildings in the time as above stated, we will forfeit the sum of fifty dollars per day for each and every day required after that time to complete the buildings.
    “ Very respectfully,
    “Haliday & Richardson.
    “ [1st endorsement.]
    “Depot Quartermaster’s Opeice,
    “ Washington, D. O., Nov. 30,1S91.
    
    “ Respectfully returned to Messrs. Haliday and Richardson, contractors, No. 728 13th street N.W., Washington, D. O.
    a proposition to forfeit $50 per day for each day after December 10, which may be necessary to complete the east double set of quarters; and the same penalty for each day after December 12 which may be required to finish the west double set of quarters. The penalty in each case to be deducted on the face of the vouchers making payment for the construction.
    “ G-eo. H. Weeks,
    
      “Deputy Qr. Mr. General', U. & Army.
    
    “Haliday & Bici-iardson :
    “Accepted:
    The failure of claimants to complete said work within the time provided by said correspondence was not due to any default or neglect of any of the agents or officers of the defendants. The deduction of $1,100 was at the rate of $50 per day after the 10th of December, 1891, as to one building, and $50 after the 12th as to the other. Ho objection was made by claimants as to the deduction at the time of the deduction.
    
      Mr. John O. Chaney and Mr. John J. Weed for the claimants.
    
      Mr. Georye R. Gorman (with whom was Mr. Assistant Attorney-General Pradt) for the defendants.
   WeldoN, J.,

delivered the opinion of the court:

This proceeding is based on certain contracts entered into by the claimants and defendants in March, April, May, and August, 1891 — the first on the 4th of March, the second on the 17th of April, the third on the 25th of May, and the fourth in August.

The contracts are in writing, except the last one, which is verbal. There is also a claim alleged in the eleventh paragraph of the petition, the substance of which is that the claimants sold to the firm of P. H. McLaughlin & Co., in June, 1891, cement amounting in value to the sum of $1,204.28, for the purpose of being used by them in the construction of the Naval Observatory under a contract with the defendants; that the firm had not paid for the cement; that before the use of the same by them they became insolvent and were declared by the defendants “failing contractors;” and that thereupon the defendants took possession of the cement, used the same with the knowledge that it had not been paid for, although the claimants demanded such cement. There are also claims for material used by defendants belonging to claimants while they were engaged in the work embraced in the contracts alleged in the petition.

The first contract relates to a “ drill ball” at Fort Myer, wbicb is Exhibit A to the petition. Under that contract it is alleged that at the instance and request of the officers of defendants the claimants performed extra work amounting to the sum of $277. The second agreement, Exhibit B, relates to the building of an animal house in the Zoological Park at Washington. It is alleged that out of the compensation to be paid claimants for that building the defendants improperly deducted the sum of $450; and that in the performance of the contract they did extra work to the amount of $429, at the request and by the acquiescence of the officers of the defendants.

The third contract, dated May 25,1891, Exhibit G, relates to officers’ quarters at Fort Myer, and in connection with that contract it is alleged that in payment for the work the defendants improperly deducted the sum of $1,100; and it is further alleged that in the execution of said contract the claimants, at the instance and request of the defendants, performed extra work to the amount of $575.

It is alleged that in the performance of Contracts B and O in consequence of the incompetency and unskillfulness of the agents of the defendants in charge of the work, and unreasonable exactions on their part, the claimants were hindered and delayed in the execution of the work; but the findings do not show that the claimants were hindered and delayed as alleged, so that claim is, upon a question of fact, eliminated from .this controversy.

It is also alleged that the claimants, at the instance of the defendants, erected a flagstaff at Fort Myer, which was accepted and used by the defendants, and that the same was worth the sum of $131.

It is further alleged that in December, 1891, at the special instance and request of defendants, the petioners furnished them with 60 pouuds of sheet lead, worth the sum of $85.28; and also furnished defendants extra material not specified or required by said contracts.

The defendants deny that the alleged work upon the different contracts is extra; but that the same comes within the specifications of the agreement. They admit the retention of the sum of $450 under Contract B, but insist that it was properly retained because of the failure and delinquency of claimants; they also admit the retention of the sum of $1,100 under Contract O, but maintain that such retentioii was justified because of tbe failure of the claimants to perform the work within the time agreed upon by an extension of the time limited in the agreement.

It is insisted by the defendants that the proper authority of the defendants did not order the extra work, if any was done; that no agreement in writing was made between the claimants and any officer or agent of the defendants for the performance of any extra or additional work, or for supplying any extra or additional material in and about the construction of the buildings specified in the agreements.

In this connection it is not necessary to refer in detail to the findings on the question of the right of the claimants to recover for extra labor, because of the provisions of the contracts relating to the requirements of an agreement in writing and the direction and sanction of the officer having the superior power of directing the execution and completion of work. The items for which we allow in the conclusion of law and judgment were at the request or requirement of the officers or agents in the immediate direction of the work, and some of them by the sanction of the superior power, under circumstances indicating the good faith of the subordinates. The additions were necessary, as it was thought by those agents; the Government has received the value and benefit of them, which combination of circumstances brings the claim for extras within the spirit if not wholly within the letter of the case of Ford (17 C. 01s. E., 60).

In the third finding is shown the performance of work which is alleged by the claimants as extra, and beyond the terms of the specifications in Contract A. Item 1 is for a change of plan which involved extra labor upon the part of claimants amounting to the sum of $92. The next item is granolithic pavement at south entrance. As to item 3, we think, on the facts, that it should be disallowed. In the fifth finding are the charges for extra work, Exhibit 13, relating to the animal house at the Zoological Park. The first item is for truss at east end of the building. There was no agreement that this was extra, but it was necessary in order to complete the work on that' part of the building. Other items are disposed of in the conclusion of law. As to some of the items claimed as extra, the proof is not sufficient to establish the fact of the work being done as alleged, or the appropriation of the material by the defendants.

The eighth finding has reference to the claim for extra work and materials under Contract C for building the officers’ quarters.

The findings show in detail what was done by claimants and the value of each item, and as the conclusion of law indicates what items are allowed and what rejected it is not necessary to discuss them in detail.

The findings do not show how much, if any, damages resulted to the defendant's in consequence of the failure of the claimants to finish the building at the Zoological Park within the time specified iu the agreement; and if we construe the provision of the contract as a deduction of a penalty and not as a measure of injury or compensation, then the claimants are entitled to recover in this proceeding on that portion of the claim.

The clause of the contract is as follows: “In case of neglect or failure of the said parties of the first part to complete the above-mentioned house agreebly to and in conformity with the specifications and plans and the terms of this contract, on or before the date specified for the completion thereof, there shall be deducted the sum of $25 j>er day from the amount thereunder, in the discretion of the Secretary of the Smithsonian Institution, for each and every day that the completion and erection of said house, as agreed, may be delayed beyond the time specified in this contract.”

The deduction of the sum from the pay of claimants was not based upon an allegation of actual damages, but in pursuance of the alleged right to enforce the forfeiture because of the failure; and it does not appear what damage, if any, resulted to the defendants in consequence of the failure to complete the work within the time specified in the agreement.

The exaction of the $25 per day by the defendants at the time of the payment was improper if it was by way of penalty, and as it does not appear that any assessment as to damages was made or that the deduction was based upon the theory of actual damage, it must be held that it was the enforcement of a penalty or forfeiture.

If by the terms of the contract, as expressive of the understanding of the parties, it was intended as liquidated damages, then the deduction was proper and the claimants are not entitled to recover on that item of the claim. As was said in the Kennedy Case (24 C. Cls. R., 142):

“The question whether a nominated sum is to be regarded as a mere penalty or liquidated damages is often a question of difficult solution, and courts are inclined to hold it as a mere penalty so as to permit the parties to prosecute and defend upon the broad equities of their rights. It is not necessary to enlarge in this connection by the citation and examination of many decisions. The case which we regard as the most complete authority on this question is the case of Vm Burén v. Biggs (11 How., 301). In passing on the question presented by this record the court say: ‘ The term forfeiture imports a penalty; it lias not necessary or natural connection with the measure or degree of injury which may result from a breach of the contract or from an imperfect performance. It implies an absolute infliction, regardless of the nature and extent of the causes by which it is superinduced. Unless, therefore, it shall have been expressly adopted and declared by the parties to be a measure of injury or compensation, it is never taken as such by the courts of justice, who leave it to be enforced, where this can be done, in its real character, viz, that- of a penalty. In a defense like that attempted by the defendants in a circuit court, upon the essential justness and fairness of the acts of the parties, a positive immutable penalty could hardly be applied as a fair test of their merits.’”

This court in the case of Davis (17 C. Cls. B., 201) has in substance held that “in determining whether an amount named in a contract shall be taken as penalty or as liquidated damages, courts are influenced largely by the reasonableness of the transaction and are not restrained by the form of the agreement, nor by the terms used by the parties, nor even by their manifest intent, which will be carried out so far only as it is right and reasonable.”

As the findings do not show how much, if any, damage the defendants suffered in consequence of the delay of the claimants to finish the building, and construing the provision of the contract as-a penalty and not agreed and liquidated damages, the claimants are entitled to recover the sum of $250, that being the amount deducted by the defendants.

As to the deduction of $200 for the failure to put in a Bickle-haupt skylight, as required by the contract, the findings show that the claimant put in a skylight, but not of the description of the Bicklehaupt. Some parts of the Bicklehaupt were used, but not as a whole. It does not appear that the defendants objected in such a manner as to induce claimants to believe that the skylight would be rejected, because it differed as a whole from the Bicklehaupt pattern. The cost of the Bickle-liaupt was ■$250; the cost of the one used by claimants was one-half of that amount, so that the deduction should have been $125 instead of $200, and on that item of the claims the petitioners are entitled to recover the sum of $75.

The allegation is, and the findings show, that the defendants deducted the sum of $1,100 from the consideration of the contract marked “G,” which relates to the building of officers’ quarters at Fort Myer.

The clause of the contract on which they base their action is the seventh, which in substance provides that “in case of a failure of the claimants to comply with the stipulations of the agreement, the defendants shall have the right to procure materials and labor and perform the work at the cost of the claimants, to be deducted from the contract price.” and upon the further fact that the time for completion was extended at the instance and request of the claimants, with an agreement that if the house was not completed within the extended time the claimants should pay the defendants the sum of $50 per day, and that the time of the completion of the work went beyond the extended period time sufficient to amount to the sum deducted, reckoning each day at the rate of $50 per day.

to the officers’ quarters differs from the contract in relation to the animal house in this, that there is no exact penalty in the contract as to officers’ quarters; but simply, that upon a failure to complete within the time the defendants may exercise the right to complete the work at the cost of the claimants, the amount of such cost to be deducted from the contract price. The findings show that there were three failures upon the part of the petitioners to complete the work within the time limited by the original agreement and subsequent extensions. Before the expiration of the second limitation, to wit, the 20th of November, 1891, the officer in charge notified the claimants of the great desire on the part of the defendants to get possession of the buildings, prompted by their necessities, and on the 25th of November wrote claimants, as is shown by the letter of that date, that on the 30th he would exercise the power and right of the Government to take possession of the work and complete the same at the cost of the petitioners.

had already occurred, and the result was that the buildings, which were to be erected by the 20th of September, were still in an unfinished state, the 1st of December with its ■inclemency of weather was in the near future, and upon that condition of fact the parties agreed, as is shown by the correspondence, that for a failure to complete the buildings by the 10th and 12th of December a deduction of $50 a day was to be made from the compensation of the claimants. The agent of the defendants notified the claimants that on the 30th of November he would take possession of the work under the seventh clause of the contract, and to avert the result of such an exercise of power on the part of the defendants, the claimants agreed to deduct from their compensation $50 per day for each day the buildings remained unfinished after the 10th of December as to one of the buildings and after the 12th as to the other. It does not appear that in the payment by the defendants the claimants objected to such deduction, but acquiesced in it as the just right of the defendants.

The correspondence between the parties, applied condition of the work and the different extensions of time, clearly indicate that the purpose and intent of the parties were, that for any failure to complete within the time specified (which could have been avoided by claimants) a deduction of $50 per day was to be made as the just and fair compensation and satisfaction of the defendants.

The deduction under this contract differs in legal essence and effect from the deduction in contract B in this: Being in the form of liquidated damages equivalent to “the measure of injury or compensation,” as used by the Supreme Court in the the case of Van Buren v. Biggs (supra). Upon that item of the claim the petitioners have no right of recover.

The claim made by the petition, the substance appears in the findings, growing out of the use by the defendants of cement in the building of the Naval Observatory under a forfeited contract, can not be successfully maintained as a demand against the Government.

The sale by the claimants to the firm of P. Co. was made while they were in the prosecution of the work on the Naval Observatory, and, although on credit, the title fully passed to McLaughlin & Co. and became their property, which fully authorized the agents of the defendants to deal with it in pursuance of their right under the agreement with that firm.

The fact that the claimants gave the defendants notice and demanded a return of the cement after a failure of the firm, did not create an equity iu the claimants which can be asserted and maintained against the defendants. The title having by the sale of claimants to McLaughlin & Co. passed to them so as to invest them with a complete property in the cement, no legal or equitable right of the claimants was violated by the defendants in taking possession of it and subordinating it to their rights under the contract with McLaughlin & Co. The title having passed from the seller to the buyer, third parties had a right to deal with the property relieved of an equity in the seller.

Upon the whole case we determine that the claimants are entitled to recover the sum of eight hundred and seventy dollars and twenty-eight cents ($870.28) as indicated in the conclusion of law.