every other part thereof, is to inquire after the meaning and intent of the parties; and when that is clearly ascertained from the terms and language used, it must be carried into effect. A court of law possesses no dispensing powers; it cannot inquire whether the parties have acted wisely or rashly, in respect to any stipulation they may have thought proper to introduce into their agreements. If they are competent to contract within the prudential rules the law has fixed [670]as to parties, and there has been *no fraud, circumvention, or illegality in the case, the court is bound to enforce the agreement. Men may enter into improvident contracts where the advantage is knowingly and strikingly against them; they may also expend their property upon idle or worthless objects. or give it away if they please without an equivalent, in spite of the powers or interference of the court; and it is difficult to see why they may not fix for themselves by agreement in advance, a measure of compensation, however extravagant it may be, for a violation of their covenant (they surely may after it has accrued), without the intervention of a court or jury. Can it be an exception to their power to bind themselves by lawful contract? We suppose not; and regarding the intent of the parties, it is not to be doubted but that the sum of $3.000 was fixed upon by them 'mutually and expressly,' as they say, 'as the measure of damages for the violation of the cove nant, or any of its terms or conditions.' If it be said that the measure is a hard one, it may be replied that the defendants should not have stipulated for it; or, having been thus indiscreet, they should have sought the only exemption, which was still within their power; namely, the faithful fulfilment of their agreement." Chancellor Walworth, in the opinion rendered in the same case by the court for the correction of errors, embodied in his opinion the following (22 Wend. 213) : great difficulties might occur in some cases; and in all cases it is prudent in both parties to provide against the trouble and expense of a future investigation. The cases which seem to have interfered with such compacts are those in which the subjectmatter of the stipulation shows that, whatever the form of it may be, the parties could not have contemplated anything more than a penalty to secure against actual damage." So, also, the case of Bagley v. Peddie (1857) 16 N. Y. 469, 471, 69 Am. Dec. 713. makes clear the fact that the New York courts recognize the right of parties to agree beforehand upon damages to be sustained by the breach of a contract, and that evidence aliunde the instrument declared on cannot be received respecting the amount of damage. The last two of what were termed "artificial rules" on the subject of liquidated damages and penalties, recited in the opinion as being peculiar to contracts of this character, were as follows: "Sixth. If, independently of the stipulated damages, the damages would be wholly uncertain and incapable of being ascertained except by conjecture, in such case the damages will be considered liquidated, if they are SO denominated in the instrument. Seventh. If the language of the parties evince a clear and undoubted intention to fix the sum mentioned as liquidated damages in case of default of performance of some act agreed to be done, then the court will enforce the contract, if legal in other respects." Following a review of several decided cases in England, the court said (p. 474, Am. Dec. p. 716): "The above cases will serve to illustrate the kind of certainty as to the sum to be paid as damages for breach of an agreement in order to hold the larger sum agreed to be paid on such breach a mere penalty. They are cases where the lesser sum is named specifically in the instrument itself. or depends on the award of arbitrators. These and similar cases are the cases of certain damages to which the courts allude in the third rule." *The court then quoted approvingly the[672] prior decision of the supreme court in Dakin v. Williams, 17 Wend. 447, and concluded as follows (p. 475, Am. Dec. p. 717): "The case at bar seems to me to fall within the sixth rule, the damages being wholly uncertain, and depending entirely on proof aliunde the instrument declared on." "In Huban v. Grattan, Alcock & N. 389, in which an action was brought to recover the stipulated damages which the defendant had agreed to pay if he did not remove a lime kiln adjacent to the plaintiff's prem ises, Bushe, Ch. J., says: "The stipulation consists of two parts, one affirmative that the lime kiln should be prostrated before a particular day, the other negative that the assignee shall not at any future time erect another lime kiln; and upon those the breaches are assigned. Both bear on one object, to be relieved from the lime kiln And in connection with the New York altogether, and both are essential to that cases it becomes pertinent to notice the case object being accomplished; and both parties of Gay Mfg. Co. v. Camp (1895) 13 C. C. agree in measuring beforehand the damages A. 137, 25 U. S. App. 134, 65 Fed. 794, on consequent upon a breach of either agree- rehearing, 15 C. C. A. 226, 25 U. S. App. ment. Such stipulations as to damages are 376. 63 Fed. 67, much relied upon in arguupheld by courts of law upon two grounds: ment. As we have previously observed, 1st. Because a man may set a value, not language is employed in that opinion which, [671]only *upon matters connected with his prop- broadly interpreted, seems to countenance erty, which value is capable of being esti- the idea that if a jury can ascertain the mated, but also upon matters of taste or damages suffered by the breach of a stipufancy, such as prospect or ornament, which|lation, an agreement by the parties, emhe alone can appreciate; and, 2dly, because bodied in a written contract, fixing such even in matters capable of ascertainment damages, will be treated as a nullity. This deduction appears to have been drawn from sale thereof, or, on being solicited, to place of the courts of New York. It may, we think, fairly be stated that when a claimed disproportion has been asserted in actions at law, it has usually been an excessive disproportion between the stipulated sum and the possible damages resulting from a trivial breach apparent on the face of the contract, and the question [673] of disproportion has been simply an element entering into the consideration of the question of what was the intent of the parties, whether bona fide to fix the damages, or to stipulate the payment of an arbitrary sum as a penalty, by way of security. In the case at bar, aside from the agree-I am not disposed to deny that a cause may ment of the parties, the damage which might arise in which it is doubtful, from the lanbe sustained by a breach of the covenant guage employed in the instrument, whether to surrender the vessel was uncertain, and the parties meant to agree upon the measure the unambiguous intent of the parties was of compensation to the injured party in case to ascertain and fix the amount of such of a breach. [See Kemp v. Knickerbocker damage. In effect, however, the effort of Ice Co. 69 N. Y. 45.] In such cases, there the petitioner on the trial was to nullify would be room for construction; but certhe stipulation in question by mere proof,tainly none where the meaning of the parnot that the parties did not intend to fix ties was evident and unmistakable. When the value of the yacht for all purposes, but they declare, in distinct and unequivocal that it was improvident and unwise for its terms, that they have settled and asceragent to make such an agreement. Substan-tained the damages to be $500.00, or any tially, the petitioner claimed a greater right than it would have had if it had made application to a court of equity for relief, for it tendered in its answer no issue concerning a disproportion between the agreed and actual value, averred no fraud, surprise, or mistake, and stated no facts claimed to warrant a reformation of the agreement. Its alleged right to have eliminated from the agreement the clause in question, for that is precisely the logical result of the contention, was asserted for the first time at the trial by an offer of evidence on the subject of damages. "When the parties to a contract, in which the damages to be ascertained, growing out [674] of a breach, are uncertain in amount, mutually agree that a certain sum shall be the damages, in case of a failure to perform, and in language plainly expressive of such agreement, I know of no sound principle or rule applicable to the construction of contracts that will enable a court of law to say that they intended something else. Where the sum fixed is greatly disproportionate to court of equity may relieve; but a court of the presumed actual damage, probably a law has no right to erroneously construe the intention of the parties, when clearly expressed. in the endeavor to make better themselves. In these, as in all other cases, contracts for them than they have made for the courts are bound to ascertain and carry into effect the true intent of the parties. other sum, to be paid by either failing to perform, it seems absurd for a court to tell them that it has looked into the contract and reached the conclusion that no such thing was intended; but that the intention was to name the sum as a penalty to cover any damages that might be proved to have been sustained by a breach of the agreement." As the stipulation for value referred to was binding upon the parties, the trial court rightly refused to consider evidence tending to show that the admitted value was excessive, and the circuit court of appeals prop The law does not limit an owner of properly gave effect to the expressed intention erty, in his dealings with private individ- of the parties. uals respecting such property, from affixThe decree of the Circuit Court of Appeals ing his own estimate of its value upon a was right, and it is therefore affirmed. [675]*SOUTHERN PACIFIC RAILROAD COM- | States, and ten alternate sections of land PANY, Plff. in Err., v. ISAAC T. BELL. (See S. C. Reporter's ed. 675-690.) Railroad land grants—withdrawal from set- The Secretary of the Interior was not author- Southern Pacific Railroad, to withdraw from [No. 20.] per mile on each side *of said railroad when-[676) "Sec. 6. And be it further enacted, That Argued and Submitted December 5, 6, 1901. or after they are surveyed, except by said company, as provided in this act; but the other lands on the line of said road when Statement by Mr. Justice Brown: This was a complaint in the nature of a By 18 of the same act authority was bill in equity filed by the Southern Pacific given to the Southern Pacific Railroad ComRailroad Company in the superior court of pany, incorporated under the laws of CaliFresno county, California, against Isaac T.fornia. "tr connect with the said Atlantic Bell, praying to be declared the rightful & Pacific Railroad, formed under this act, owner of a certain quarter section of land at such point near the boundary line of the in that county, and that it be adjudged state of California, as they shall deem most that the defendant Bell holds the legal title suitable for a railroad line to San Francisto said land in trust for the plaintiff, and co, and shall have a uniform gauge and requiring him to convey the same to it free rate of freight or fare with said road; and of all encumbrances. in consideration thereof, to aid in its construction, shall have similar grants of land, subject to all the conditions and limitations herein provided, and shall be required to construct its *road on the like regulations,[677] as to time and manner, with the Atlantic & Pacific Railroad herein provided for." The facts of the case, as set forth in the complaint, are substantially as follows: By "An Act Granting Lands to Aid in the Construction of a Railroad and Telegraph Line from the States of Missouri and Arkansas to the Pacific Coast" (14 Stat. at L. 292, chap. 278), such road being incorporated under the name of The Atlantic & Pacific Railroad Company, there was granted to such railroad company"Sec. 3.. Every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile, on each side of said railroad line, as said company may adopt, through the territories of the United NOTE. As to land grants to railroads- -see note to Kansas P. R. Co. v. Atchison, T. & S. F. R. Co. 28 L. ed. U. S. 794. On November 26, 1866, the plaintiff accepted the terms and conditions of the charter and grant of July 27, 1866, as above set forth, and on January 3, 1867, duly fixed the general route of its line of road, designating the same by a plat thereof filed in the office of the Commissioner of the General Land Office. This plat and designation having been duly approved and accepted by the Commissioner and Secretary of the Interior on March 22, 1867, all the odd-numbered sections of land lying within 30 miles of the railroad, as shown upon 389. The words "hereby granted," as used in the various acts of Congress granting lands in aid of railroads, include lands within the indemnity limits of the grant, as well as within the primary limits of such grant. the plat, were withdrawn from sale or loca- | 139 U. S. 1, 35 L. ed. 77, 11 Sup. Ct. Rep. Northern P. R. Co. v. United States. 36 Fed. 282; Barney v. Winona & St. P. R. Co. 24 Fed. 889; Northern P. R. Co. v. Barnes, 2 N. D. 310, 51 N. W. 786; Chicago, M. & St. P. R. Co. v. Sioux City & St. P. R. A certain quarter section of land within Co. 3 McCrary, 280, 10 Fed. 435; Re Chithe granted limits of the railroad, as con-cago, St. P. M. & O. R. Co. 9 Land Dec. 465; structed and shown on the map, having been Wood v. Beach, 156 U. S. 548, 39 L. ed. 528, granted and otherwise disposed of, prior to 15 Sup. Ct. Rep. 410. the time when the line of the route was des- It has been held by this court that a secignated by the plat filed with the Commis- tion in the Northern Pacific act of 1864 (13 sioner of the General Land Office, the quar- Stat. at L. p. 365, chap. 217), which is subter section of land in dispute in this case, stantially identical with the 6th section of which was within the indemnity, but not the act in question, was equivalent to a within the granted limits of the road, be- withdrawal of the lands granted to the railing more than 20 but within 30 miles on road company by the Secretary of the Inte one side of the road as constructed, was se- rior, and that any withdrawal by the Secrelected by the railroad, in lieu of the quar-tary was only giving publicity to what the ter section above described as having been law had already done. granted and otherwise disposed of by the United States. The land so selected was at the time the act of July 27, 1866, was passed, vacant and unappropriated public land of the United States, not mineral, to which the United States then had full title, not reserved, sold. granted, or otherwise appropriated, and free from pre-emption or other claims or rights, and such land has ever since so remained, except as it has been affected by the acts of the parties to this suit. The company had not, at the time the selection was made, nor has it since, se[678]lected or received lands to the extent or amount earned and acquired by it in virtue of the grant and the provisions of the granted act. The complaint further alleged that notwithstanding the rights of the company seeured to it by the act of July 27, 1866, the United States issued a patent for the quarter section so selected in lieu of the other, to the defendant, who claims the legal title to said land in fee simple and free from any trust or obligation to the plaintiff. To this complaint the defendant interposed a general demurrer, which was sus tained, and the plaintiff having refused to amend his complaint, a final judgment was entered against it and an appeal taken to the supreme court of California, where the judgment of the superior court of Fresno county was aflirmed upon the authority of another case against one Wood. 124 Cal. 475, 57 Pac. 388. Whereupon plaintiff sued out a writ of error from this court. Mr. Maxwell Evarts argued the cause, and, with Mr. L.E. Payson, filed a brief for plaintiff in error: St. Paul & P. R. Co. v. Northern P. R. Co. 139 U. S. 1, 35 L. ed. 77, 11 Sup. Ct. Rep. 389; Buttz v. Northern P. R. Co. 119 U. S. 55, 30 L. ed. 330, 7 Sup. Ct. Rep. 100; Southern P. R. Co. v. Groeck, 68 Fed. 609. Indemnity lands are included within the term "lands granted by this act" used in the act of July 26, 1866, which are the equivalent of the words "land hereby granted" found in the section of the act now under consideration, and where there is a withdrawal of such lands they are not subject to sale, entry, or pre-emption by anyone except the railroad company. Wood v. Beach, 156 U. S. 550, 39 L. ed. 529, 15 Sup. Ct. Rep. 410. A withdrawal of indemnity lands included within a railroad grant is effective as against a grant of the lands to another railroad under a subsequent act of Congress. Northern P. R. Co. v. Musser-Sauntry Land, Logging & Mfg. Co. 168 U. S. 604, 42 1. ed. 596, 18 Sup. Ct. Rep. 205. The indemnity lands granted by the act of 1866 (the act involved in this case) are not open to entry, sale, or pre-emption after the filing of the map of the general route of the grantee, except to such grantee. United States v. Colton Marble & Lime Co. 146 U. S. 615, 36 L. ed. 1104, 13 Sup. Ct. Rep. 163. The question involved in the present case has often been before the lower Federal courts in one form or another, and has almost uniformly been decided in favor of the railroad. Southern P. R. Co. v. Wiggs, 43 Fed. 333; Southern P. R. Co. v. Araiza, 57 Fed. 98; Southern P. R. Co. v. Groeck, 31 C. C. A. 334, 59 U. S. App. 366, 87 Fed. 970. The intent of Congress to give the South Selection is unnecessary when the deficiency in the place limits of a grant is great-ern Pacific Railroad Company by the act of er than the amount of the indemnity lands applicable thereto. St. Paul & P. R. Co. v. Northern P. R. Co. 1866 its full amount of 101 sections of land per mile should not be defeated by applying to the grant the rules of the common law, which are properly applicable only to transfets between private parties. Missouri, K. & T. R. Co. v. Kansas P. R. Co. 97 U. S. 491, 24 L. ed. 1095. Mr. Joseph H. Call submitted the cause for defendant in error: particular tract of indemnity land passes until it has been selected and approved, and until that time the land is open to disposal by the Land Department. The act of Congress of July 27, 1866, as amended by the joint resolution of June 28, 1870, required of the Southern Pacific, not only a map of general route, but one of defi-9 Land Dec. 250; Northern P. R. Co. v. Wal nite location. United States v. Southern P. R. Co. 146 C. S. 570, 36 L. ed. 1091, 13 Sup. Ct. Rep. 152: Southern P. R. Co. v. United States, 168 U. S. 1, 42 L. ed. 355, 18 Sup. Ct. Rep. Brady v. Southern P. R. Co. 5 Land Dec. 658; Secretary Lamar to President, 6 Land Dec. 77; Re Atlantic & P. R. Co. 6 Land Dec. 84; Northern P. R. Co. v. Miller, 7 Land Dec. 100; Southern P. R. Co. v. Meyer, ters, 13 Land Dec. 230; Southern P. R. Co. v. Wasgatt, 13 Land Dec. 145; Southern P. R. Co. v. McWharter, 14 Land Dec. 610; Southern P. R. Co. v. Waters, 17 Land Dec. 270; Re Southern P. R. Co. 18 Land Dec. 314; Northern P. R. Co. v. McMahan, 21 The route laid down in the charter or arti-Land Dec. 402; Northern P. R. Co. v. Lillecles of incorporation of a railroad company thun, 21 Land Dec. 487; Southern P. R. Co. is deemed to be read into the congressional V. Mckinley, 22 Land Dec. 493; Southern act making a grant of lands or of right of. R. Co. v. Kanawyer, 23 Land Dec. 500; way to the company, and it is presumed that Congress had such line of route in view. Denver & R. G. R. Co. v. Alling, 99 U. S. 474, 25 L. ed. 438; Washington & I. R. Co. v. Cœur D'Alene R. & Nav. Co. 160 U. S. 77, 40 L. ed. 346, 16 Sup. Ct. Rep. 231. 18. Where the termini of a land-grant road are fixed the road must be constructed upon the shortest practicable route. St. Paul & P. R. Co. v. Northern P. R. Co. 139 U. S. 1. 35 L. ed. 77, 11 Sup. Ct. Rep. 389; United States v. Northern P. R. Co. 152 U. S. 284, 38 L. ed. 443, 14 Sup. Ct. Rep. 398. Northern P. R. Co. v. Ayers, 24 Land Dec. 40; Re Southern P. R. Co. 25 Land Dec. 223; Southern P. R. Co. v. Davis, 26 Land Dec. 595; Northern P. R. Co. v. Gunther, 26 Land Dec. 340; Lund v. Northern P. R. Co. 27 Land Dec. 348; Northern P. R. Co. v. Blain, 27 Land Dec. 361; California v. Southern P. R. Co. 27 Land Dec. 542. When the selection has been approved by the Secretary of the Interior the equitable title passes to the company, but only when patent is issued, under the provisions of § of the act of July 27, 1866, does the full legal title pass, and until patented the land is within the control of the Interior Depart In filing its map of general route on Jan uary 3, 1867, and securing a temporary res-¦ment. ervation at that time, the Southern Pacific Barden v. Northern P. R. Co. 154 U. S. did not acquire, by virtue thereof, any right | 288, 38 L. ed. 992, 14 Sup. Ct. Rep. 1030; or title to any lands along the line. Wisconsin C. R. Co. v. Price County, 133 U. New Orleans P. R. Co. v. Parker, 143 U. S. 496, 33 L. ed. 687, 10 Sup. Ct. Rep. 341; S. 42, 36 L. ed. 66, 12 Sup. Ct. Rep. 364: Michigan Land & Lumber Co. v. Rust, 168 United States v. Southern P. R. Co. 146 U.U. S. 589, 42 L. ed. 591, 18 Sup. Ct. Rep. S. 570, 36 L. ed. 1091, 13 Sup. Ct. Rep. 152; Southern P. R. Co. v. United States, 168 U. S. 1. 42 L. ed. 355, 18 Sup. Ct. Rep. 18; United States v. Oregon & C. R. Co. 176 U. S. 28, 44 L. ed. 358, 20 Sup. Ct. Rep. 261. Until the selection of indemnity land has been made by the company, and approved by the Secretary of the Interior, no right or title passes to the company. | 208; Brown v. Hitchcock, 173 U. S. 473, 43 L. ed. 772, 13 Sup. Ct. Rep. 485; Rogers Locomotive Mach. Works v. American Emigrant Co. 164 U. S. 559, 41 L. ed. 552, 17 Sup. Ct. Rep. 188; Hawley v. Diller, 178 U. S. 476, 44 L. ed. 1157, 20 Sup. Ct. Rep. 986. The facts found by the Land Department upon the issuance of the patent to defendant Bell are conclusive against the Southern Pacific. Wisconsin C. R. Co. v. Price County, 133 U. S. 496, 33 L. ed. 687, 10 Sup. Ct. Rep. Steel v. St. Louis Smelting & Ref. Co. 106 341: Ryan v. Central P. R. Co. 99 U. S. U. S. 447, 27 L. ed. 226, 1 Sup. Ct. Rep. 389; 382. 25 L. ed. 305; St. Paul & S. C. R. Co. Lee v. Johnson, 116 U. S. 48, 29 L. ed. 570, V. Winona & St. P. R. Co. 112 U. S. 720, 28 6 Sup. Ct. Rep. 249; Heath v. Wallace, 138 L. ed. 872, 5 Sup. Ct. Rep. 334; Sioux CityU. S. 573, 34 L. ed. 1063, 11 Sup. Ct. Rep. & St. P. R. Co. v. Chicago, M. & St. P. R. Co. 380; United States v. Marshall Silver Mi 117 U. S. 406, 29 L. ed. 928, 6 Sup. Ct. Rep. Co. 129 U. S. 579, 32 L. ed. 734, 5 Sup. Ct. 790: Barney v. Winona & St. P. R. Co. 117 Rep. 343: Russell v. Maxwell Land Grant U. S. 228, 29 L. ed. 858, 6 Sup. Ct. Rep. 654; Co. 158 U. S. 253, 39 L. ed. 971, 15 Sup. Ct. Cedar Rapids & M. River R. Co. v. Herring, Rep. 827. 110 U. S. 27, 28 L. ed. 56, 3 Sup. Ct. Rep. The controlling principle in this case, 485; United States v. Missouri, K. & T. R.namely, that there was no authority to with(0.141 U. S. 358, 35 L. ed. 766, 12 Sup. Ct.draw the indemnity lands as against homeRep. 13; New Orleans P. R. Co. v. Parker, stead and pre-emption entries, and that pat143 U. S. 42, 36 L. ed. 66, 12 Sup. Ct. Rep.ents issued to settlers under such entries 364; Southern P. R. Co. v. Wood, 124 Cal. are valid, has been lately presented and 475, 57 Pac. 388; Moore v. Cormode, 20 fully determined by the court adversely to the Wash. 305, 55 Pac. 217. contentions of the plaintiff in error in the present case. The decisions of the Interior Department uniformly hold that no right or title to any 183 U. S. U. S., Book 46. 25 Hewitt v. Schultz, 180 U. S. 139, 45 L. 385 |