Sorensen v. United States

51 Ct. Cl. 69, 1916 U.S. Ct. Cl. LEXIS 122, 1916 WL 1113
CourtUnited States Court of Claims
DecidedFebruary 7, 1916
DocketNo. 30558
StatusPublished
Cited by3 cases

This text of 51 Ct. Cl. 69 (Sorensen v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sorensen v. United States, 51 Ct. Cl. 69, 1916 U.S. Ct. Cl. LEXIS 122, 1916 WL 1113 (cc 1916).

Opinion

Campbell, Chief Justice,

delivered the opinion of the court:

This case comes before us upon the defendants’ motion for a new trial. The plaintiff sued for $4,323.51 which had been deducted from the contract price by the defendants after completion of the work contracted for, said sum being composed of two items:

Liquidated damages, 142 days, at $25 per day____________$3, 550. 00
Cost of inspection for same period______________________ 773. 51

The contract price was $15,000, and the defendants had paid the plaintiff that amount less said deductions.

The plaintiff’s attorney, among other contentions, insisted that the contract provided for a penalty and not liquidated damages. The court held that the defendants were entitled to retain the amount stipulated as liquidated damages, but that they should not retain the amount deducted as “ cost of inspection,” and gave judgment accordingly.

The defendants assail, upon this motion, the correctness of that conclusion, and contend that both sums were properly deductible under the terms of the contract.

In view of these contentions, we deem it proper to state more at length the facts and the reasons for our former conclusion, to which we adhere.

The Government desired the removal of the wreck of a steamship which had sunk in a main channel of the Boston Harbor and formed an obstruction to and interfered with navigation. Bids for the work were asked for and specifications defining the work and the contractor’s duties and containing a number of provisions for the guidance of bidders were furnished. It was provided in section 4 of these specifications that “parties making bids are to be understood as accepting the terms and conditions contained in such form of contract [referred to earlier in said section], which will provide for liquidated damages in an amount of twenty-five dollars ($25) per day for any period of delay beyond the time agreed upon for completion.”

[72]*72Section 17 provides that “ an inspector or inspectors, paid by the United States, will be employed under the direction of the engineer,” and also provides that if the contractor provide board and lodging for his own employees he should, at the engineer’s request, furnish at the same locality “ as good board and lodging to the inspectors and boatmen” employed by the Government, at a rate not exceeding $20 per month, to be paid by the United States.

Section 22 provides that in case the work did not progress at an average rate which would insure its completion (except for causes stated in the proviso to section 5 of the contract) the engineer could take measures necessary to insure its completion by June 80, 1908; and it is added: “ This provision, however, shall not be construed to affect the right of the United States to annul the contract or to enforce the stipulation in paragraph 4 providing for liquidated damages in an amount of twenty-five dollars ($25) per day for any period of delay beyond the time agreed upon for completion, as provided for in the form of contract to be entered into.” It is to be noticed that there is no reference here to “costs of inspection,” the saving clause being confined to liquidated damages.

Section 14 provides that the work should be completed on or before June 30, 1908.

After the plaintiff was awarded the work a contract was executed which expressly makes the specifications a part of it.

To determine whether the contract provided for liquidated damages we should keep in view the general significance of the terms.

It is competent for parties entering upon an agreement to avoid all future questions as to the amount of damages which may result from the violation of the contract and to agree upon a definite sum as that which shall be paid to the party who alleges and establishes the violation of the agreement. In this case the damages so fixed are termed liquidated, stipulated, or stated damages. Sedg. Meas. Dam,., 7th ed., 212.

A contract for liquidated damages is a contract by which the parties in advance of breach fix the amount of damages [73]*73which will result therefrom and agree upon its payment. 2 Page on Gontr., 1793.

“A claim is liquidated only when the amount of it has been determined or the data settled upon which the amount can be calculated.” Charnley v. Sibley, 73 Fed. R., 980, 982.

In Beale v. Hayes, 5 Sanf., N. Y. Super. Ct., 643, it is said:

“ If the sum mentioned in the agreement must be regarded as liquidated damages in the proper sense of the term, as distinguished from a penalty, the plaintiff will be entitled to recover the whole sum without any other proof than that of the breach which he has assigned, but to that sum his recovery will be limited. He will not be allowed to give evidence of an actual loss to a larger amount. Liquidated damages, when a breach is proved to which they apply, are a positive debt, and as such they exclude on both sides the consideration and the proof of actual damages.”

In Bagley v. Peddie, 16 N. Y., 469, 471, cited in Sun Printing Association case, 183 U. S., 642, 671, it is declared that where the damages are liquidated, “evidence aliunde the instrument declared on can not be received respecting the amount of the damages.” Other cases holding that where the damages are liquidated it is unnecessary to adduce evidence to prove the damages are Stanley v. Montgomery, 102 Ind., 102; Sanford v. First National Bank, 94 Iowa, 680; Kelso v. Reid, 145 Pa. St., 606.

In Maryland Steel Co. case, 235 U. S., 451, 458, is this language:

“ It may be said that a provision for liquidated damages is a declaration by the parties of the fact of damage from delay in the performance of the work contracted for and the measure of its amount, it not being susceptible of exact ascertainment.”

A question which has frequently engaged the attention of courts is as to whether a particular stipulation in a contract is to be construed as a penalty or as a liquidation of the amount of the recoverable damages, and they are generally agreed that the mere designation of the stipulation as a penalty or as liquidated damages will not necessarily determine its real character. On this subject, referring to a contract [74]*74then under consideration, it is said in United States v. Bethlehem Steel Co., 205 U. S., 105, 119:

“ This contract might be considered as being one of that class where a doubt might be claimed, if nothing but the contract were examined. The courts at one time seemed to be quite strong in their views and would scarcely admit that there ever was a valid contract providing for liquidated damages. Their tendency was to construe the language as a penalty, so that nothing but the actual damages sustained by the party aggrieved could be recovered.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Timberland Paving & Construction Co. v. United States
35 Cont. Cas. Fed. 75,713 (Court of Claims, 1989)
Martin J. Simko Construction, Inc. v. United States
33 Cont. Cas. Fed. 74,888 (Court of Claims, 1986)
Wise v. United States
52 Ct. Cl. 400 (Court of Claims, 1917)

Cite This Page — Counsel Stack

Bluebook (online)
51 Ct. Cl. 69, 1916 U.S. Ct. Cl. LEXIS 122, 1916 WL 1113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sorensen-v-united-states-cc-1916.