sum is liquidated damage, that sum must be fixed as the basis of compensation and substantially limited to it; for just compensation is recognized as the universal measure of damages not punitory. Parties may liquidate the amount by previous party." Parr v. Greenbush, 43 Hun, 232. The use of the words "liquidated damages" will not control the construction if the court can find in the whole instrument reason to doubt that it was the intention of the parties to so contract. Bagley v. Peddie, 16 N. Y. 469; Wolf v. Des Moines Ry. Co., 64 Iowa, 380; Ex parte Pollard, 2 Low. 411; S. C., 17 Nat. Bank. Reg. 229; Condon v. Kemper, 47 Kan. 126. In Pierce v. Jung, 10 Wis. 30, Paine, J., said: "The opinions on this subject are conflicting. On the one hand, they lean towards treating such provisions as in the nature of penalties, and to do so have sometimes disregarded the positive and implicit language of the parties. On the other, they go for upholding contracts as made, treating the parties as equally competent to provide for the amount of damages to be paid in case of a failure to perform as to determine any other matter contained in them. The case of Astley v. Weldon, 2 Bos. & Pul. 346, and Kemble v. Farren, 6 Bing. 141, are strong illustrations of the first class; and in Crisdee v. Bolton, 3 C. & P. 240, the opposite doctrine is very clearly stated. But even the first class of cases concede the power of the parties to liquidate the damages by their agreement in case of a non-performance. And they profess also to go upon the intention of the parties. And perhaps the only real difference between the two is that the former takes greater liberties than the latter with the words of the parties in determining what the intention is. They pay more attention to the whole nature and object of the agreement than to the precise words in determining whether the intent was to create a penalty or provide for liquidated damages." In Beale v. Hayes, 5 Sandf. 640, Duer, J., said: "It is not always, however, that damages are to be construed as liquidated because the parties have declared them to be so. The language of the parties (to the agreement in question) is clear and emphatic that the sum of £3,000 shall be recoverable from the party making default as and for liquidated damages; yet no court of justice, without an entire disregard of prior decisions, can give effect to the apparent intention of the parties by adopting that construction of their agreement which the terms they have used so forcibly suggest. . . . When consequences so unreasonable would follow, the law presumes that they must have been overlooked by the parties, and therefore mercifully gives to their language an interpretation which excludes them. When it would be plainly unconscientious to exact a large sum for a trivial breach, even a court of law, acting upon a principle of equity, will release the parties from the literal obligation which their language imports." In Jaquith v. Hudson, 5 Mich. 123, Christiancy, J., said: "It is true the courts in nearly all these cases profess to be construing the contract [482] with reference to the intention of the parties, as if for the purpose of ascertaining and giving effect to that intention; yet it is obvious from these cases that wherever it has appeared to the court from the face of agreement. But when a stipulated sum is evidently not based on that principle, the intention to liquidate will either be found not to exist or will be disregarded and the stated sum treated as a penalty. Contracts are not made to be broken; and hence, the contract and the subject-matter that the sum was clearly too large for just compensation, here, while they will allow any form of words, even those expressing the direct contrary, to indicate the intent to make it a penalty, yet no form of words, no force of language, is competent to the expression of the opposite intent. Here, then, is an intention incapable of expression in words; and as all written contracts must be expressed in words, it would seem to be a mere waste of time and effort to look for such an intention in such a contract. And as the question is between two opposite intents only, and the negation of one necessarily implies the existence of the other, there would seem to be no room left for construction with reference to the intent. It must, then, be manifest that the intention of the parties in such cases is not the governing consideration. "But some of the cases attempt to justify this mode of construing the contract with reference to the intent, by declaring in substance that though the language is the strongest which could be used to evince the intention in favor of stipulated damages, still, if it appear clearly by reference to the subject-matter that the parties have made the stipulation without reference to the principle of just compensation, and so excessive as to be out of all proportion to the actual damage, the court must hold that they could not have intended it as stipulated damages though they have so expressly declared. See, as an example of this class of cases, Kemble v. Farren, 6 Bing. 141. "Now this, it is true, may lead to the same result in the particular case as to have placed the decision upon the true ground, viz.: that though the parties actually intended the sum to be paid as the damages agreed between them, yet it being clearly unconscionable, the court would disregard the intention and refuse to enforce the stipulation. But, as a rule of construction or interpretation of contracts, it is radically vicious and tends to a confusion of ideas in the construction of contracts generally. It is this, more than anything else, which has produced so much apparent conflict in the decisions upon this whole subject of penalty and stipulated damages. It sets at defiance all rules of interpretation, by denying the intention of the parties to be what they in the most unambiguous terms have declared it to be, and finds an intention directly opposite to that which is clearly expressed 'divinatio, non interpretatio est, quæ omnino recedit a litera.' "Again, the attempt to place this question upon the intention of the parties, and to make this the governing consideration, necessarily implies that if the intention to make the sum stipulated damages should clearly appear the court would enforce the contract according to that intention. To test this, let it be asked whether in such a case if it were admitted that the parties actually intended the sum to be considered as stipulated damages and not as penalty, would a court of law enforce it for the amount stipulated? Clearly, they could not, without going back to the technical and long-exploded doctrine when parties provide for the consequences of a breach, they proceed with less caution than if that event was certain, and they were fixing a sum to be paid absolutely. The intention in all such cases is material; but to prevent a stated sum from which gave the whole penalty of the bond, without reference to the damages actually sustained. They would thus be simply changing the names of things, and enforcing under the name of stipulated damages what in [483] its own nature is but a penalty. "The real question in this class of cases will be found to be, not what the parties intended, but whether the sum is in fact in the nature of a penalty; and this is to be determined by the magnitude of the sum, in connection with the subject-matter, and not at all by the words or the understanding of the parties. The intention of the parties cannot alter it. While courts of law gave the penalty of the bond, the parties intended the payment of the penalty as much as they now intend the payment of stipulated damages; it must, therefore, we think, be very obvious that the actual intention of the parties in this class of cases and relating to this point is wholly immaterial; and though the courts have very generally professed to base their decisions upon the intention of the parties, that intention is not and cannot be made the real basis of these decisions. In endeavoring to reconcile these decisions with the actual intention of the parties, the courts have sometimes been compelled to use language wholly at war with any idea of interpretation, and to say that the parties must be considered as not meaning exactly what they say.' Horner v. Flintoff, 9 M. & W. 678, per Parke, B. May it not be said, with at least equal propriety, that courts have sometimes said what they did not exactly mean? The foregoing remarks are all to be confined to that class of cases where it was clear from the sum mentioned and the subject-matter that the principle of compensation had been disregarded." In Dwinel v. Brown, 54 Me. 468, the defendant had bound himself, in the event of a failure to perform each and every condition and stipulation represented in a certain license and agreement for carrying on a lumbering operation upon the plaintiff's land, in the full and liquidated sum of $1,000 well and truly to be paid," on demand, "over and above the actual damages" which should be sustained by the non-performance. Dickerson, J., said: "The question presented for our determination is whether the sum named in the contract to be paid by the defendant on his failure to fulfill its conditions is penalty or liquidated damages. It is competent for the parties in making a contract to leave the damages arising from a breach of its provisions to be determined in a court of law, or to specify the amount of such damages in the contract itself. If the contract is silent in respect to damages, the law will allow only the actual or proximate damages. In order, however, to provide for consequential damages or secure the profits which are expected to arise from business, or contracts that depend upon the performance of the principal contract, or to save expense, or to render certain what would otherwise be difficu't if not impossible to ascertain, it is sometimes desirable that the contract should fix the amount of damages. If, for instance, a party has a con being treated as a penalty the intention should be apparent to liquidate damages in the sense of making just compensation; it is not enough that the parties express the intention tract for building a ship at a large profit, conditioned upon his having her completed at a specified time, it would be competent for him in contracting for the material to make the damages, in case of breach, sufficient to cover his prospective profits in building the ship. While to persons unacquainted with the circum[484] stances the damages stipulated in such a contract might seem greatly disproportionate to the loss sustained by a breach of it, they might, in fact, be insufficient to indemnify the party against the loss he might sustain by being prevented from completing the ship according to his contract. The parties themselves best know what their expectations are in regard to the advantages of their undertaking, and the damages attendant on its failure, and when they have mutually agreed upon the amount of such damages in good faith and without illegality, it is as much the duty of the court to enforce that agreement as it is the other provisions of the contract. As in construing the other parts of the contract, so in giving construction to the stipulation concerning damages, the intention of the parties governs. The inquiry is, what was the understanding of the parties; and when it is said in judicial parlance that certain language of the parties is held to mean liquidated damages and certain other language a penalty, this is affirmed of the intention of the parties, and not of the construction of the court, in contradistinction from such intention. It is the province of the court to uphold existing contracts, not to make new ones. It is not for the court to sit in judgment upon the wisdom or folly of the parties in making a contract when their intention is clearly expressed, and there is no fraud or illegality. No judges, however eminent, can place themselves in the place or position of the parties when the contract is made, scan the motives and weigh the considerations which influenced them in the transaction so as to determine what would have been best for them to do; who was least sagacious, or who drove the best bargain. Courts of common law cannot, like courts where the civil law prevails, award such damages as they may deem reasonable, but must allow the damages, whether actual or estimated, as agreed upon by the parties. The bargain may be an unfortunate one for the delinquent party, but it is not the duty of courts of common law to relieve parties from the consequences of their own improvidence, where these contracts are free from fraud and illegality. "The controversy in the courts, whether the particular language of a contract in regard to damages is to be construed as a penalty or liquidated damages, arises mainly from a desire to relieve parties from what, under a different construction, is assumed to be an imprudent and absurd agreement. When, however, it is considered how little courts know of the modifying circumstances of the case, how far the particular provision was framed with reference to the personal feelings of the parties, what fluctuations in the market were anticipated at the time and what effect the contract in question was expected to have upon other business engagements or negotia that the stated sum shall be paid in case of a violation of the contract. A penalty is not converted into liquidated damages by the intention that it shall be paid; it is intrinsically a diftions, there is perhaps less cause for the actual damages' in the event of departing from the literal construc- his failure to do and perform each tion of the language used than might and every condition and stipulation at first view be supposed. These in his contract. Language can considerations should at least ad- scarcely make the intention of the monish us that in straining the lan- parties to fix the amount of the damguage of a contract to prevent a ages more clear and emphatic. The seeming disadvantage to one of the sum is not only ‘liquidated,' but, as parties, we may impose upon the if to exclude all possibility of its other party the very hardships which being a penalty, it is declared to be both intended to protect him against 'over and above the actual damages.' by the terms of their agreement. Whether it was to afford an addiThe interests of the public are quite tional stimulus to secure the fulfillas likely to be subserved in main- ment of the contract, or to provide taining the inviolability of contracts against all other losses, or compenas they are in contriving ways and sate for other advantages contingent means to make a contract mean upon this contract, or from the diffi[485] what is not apparent upon culty of ascertaining the actual damthe face of it to save a party from ages, or for some other reason, it is some conjectural inequity growing manifest that other damages than out of his supposed inadvertence or the legal damages were taken into improvidence." The judge stated the account by the parties when they three rules upon which he said the incorporated this provision in their courts are substantially agreed, and agreement. Besides, the contract the third he stated as follows: "If contains several distinct conditions the instrument provides for the pay- and requirements for the fulfillment ment of a larger sum in future to of which, respectively, no sum is pay a less sum, the larger will be re- specified; and it is impossible to asgarded as penalty in respect to the certain such damages from the very excess over the legal interest what- nature of these stipulations. What ever the language used; and if the actual damages would result to the contract consist of several stipula- plaintiff solely from the defendant's tions, the damages for the breach of omission to land the logs at a suitwhich independently of the sum able place, or to notify the scaler named in the instrument are uncer- seasonably, or to mark the logs, or tain and cannot well be ascertained, drive them as early as practicable, the sum agreed upon is to be treated or to cut clear without waste, or to as liquidated damages. Orr v. perform the dozen other stipulations Churchill, 1 H. Bl. 227; Astley v. of the contract, is practically beyond Weldon, 2 B. & P. 346; Mead v. the power of a judicial tribunal to asWheeler, 13 N. H. 351; Atkyns v. certain with anything like accuracy. Kinnier, 4 Exch. 776. The case clearly comes within the second clause of the third rule of interpretation, that when parties incorporate several distinct stipulations "In the case at bar the defendant bound himself 'in the full and liquidated sum of $1,000 over and above |