ing of any other order of court on matters in which the United States are interested.

The item will therefore be allowed.

R. B. BOWLER,

Comptroller.

PAYMENTS DUE TO A DEFAULTING CONTRACTOR

FOR WORK DONE.

Where a contract provides that upon certain contingencies all sums due the contractor and percentages retained shall be forfeited to the United States, such sums are regarded as penalties and not as liquidated damages, and should be withheld until the completion of the work contemplated by the contract and determination of the damage sustained by the United States.

TREASURY DEPARTMENT,

OFFICE OF COMPTROLLER OF THE TREASURY,

May 23, 1896.

SIR: I have, by your reference of May 4, the communication of Lieut. Col. W. R. King, Corps of Engineers, of April 29, 1896, forwarding the voucher and estimate of Michael H. King, amounting to $332.56, for covering work performed on Flint Creek to Iowa River levee under his contract dated August 20, 1895. He recommends, if practicable, that this payment be made, but asks instructions as to whether it can be done.

It appears that Mr. King's performance of this contract was so unsatisfactory that you, upon March 30, 1896, recommended to the Secretary of War that it be annulled, and that upon April 7, 1896, this recommendation of yours was approved; accordingly this contract stands annulled from April 7.

The work for which this claim is made was performed between March 30 and April 8, 1896, both inclusive, prior to his notification of the annulment of his contract.

Under the contract entered into on the 20th of August between the United States and Michael H. King, it is provided: "If, in any event, the party of the second part shall delay or fail to commence with the delivery of the material or the performance of the work on the day specified herein, or shall, in the judgment of the engineer in charge, fail to prosecute faithfully and diligently the work in accordance with the specifications and requirements of this contract, then, in either case, the party of the first part, or his successor legally

appointed, shall have power, with the sanction of the Chief of Engineers, to annul this contract by giving notice in writing to that effect to the party (or parties, or either of them) of the second part; and, upon the giving of such notice, all money or reserved percentage due or to become due to the party or parties of the second part by reason of this contract shall be and become forfeited to the United States."

It is further provided in this contract:

"It is further understood and agreed that in case of failure on the part of the party of the second part to complete this contract as specified and agreed upon, that all sums due and percentage retained, shall thereby be forfeited to the United States, and that the said United States shall also have the right to recover any or all damages due to such failure in excess of the sums so forfeited, and also to recover from the party of the second part, as part of said damages, whatever sums may be expended by the party of the first part in completing the said contract, in excess of the price herein stipulated to be paid to the party of the second part for completing the same."

From the above stipulations of this contract, it is apparent that this sum due as well as the 10 per cent retained under the terms of the contract is subject to forfeiture to the United States, dependent upon the fact as to what amount, if any, the United States may lose from the failure of the contractor to perform the contract.

From the decisions upon similar cases, it is apparent that these sums are regarded as penalties and not as liquidated damages. (See Van Buren v. Digges, 11 How., 461; Kennedy v. United States, 24 C. Cls. R., 122; Quinn v. United States, 99 U. S., 30; and 20 Opin. A. G., 511.)

In the Kennedy case, the court said:

"Following the inclination of the law as it is found in the many decisions, and upon the faith of what the Supreme Court has decided in those two cases, we hold that the reservation of the 10 per cent., as affected by the forfeiture, is a penalty and not liquidated damages, and the claimant is only subjected to such damages as were incident to his failure to perform the contract. The findings do not show that the United States were subjected to any increased expense in consequence of the failure, and no claim is made that they were; so that the petitioner is entitled to the contract value of the work he did before the contracts were annulled.”

In the opinion of the Attorney-General above referred to, he said:

"When the fact that the United States could lose nothing was ascertained, the reserved fund held as security was freed

from the Government claim and became the property of the contractor.

"In case the United States shall suffer damages by reason of the failure of James A. Mundy & Co. to carry out and perform their contract, the fund first in order, and perhaps the only one in reach, to compensate the United States, is that composed of the reserved moneys under consideration.

"It is my opinion that whenever it becomes clear that the United States can suffer no loss on account of the annulment of the contract in question, then the contractors are entitled to receive the reserved moneys."

I have therefore to repeat that, pending the completion of the work contemplated by the contract entered into August 20, 1895, with Michael H. King, no moneys due him or percentage retained from amounts paid him (see my letter to you of April 18, 1896, ante, p. 503) can be paid this contractor. EDW. A. BOWERS, Assistant Comptroller.

Respectfully, yours,

The CHIEF OF ENGINEERS,

United States Army.

IN RE APPEAL OF E. D. NIX, LATE UNITED STATES MARSHAL FOR THE DISTRICT OF OKLAHOMA.

Section 2153 of the Revised Statutes, providing for the employment of possemen to assist the marshal in executing process in the Indian country, has no application to sections of the country the Indian title to which has been extinguished.

When a marshal, acting under section 2153, Revised Statutes, employs possemen for service in the Indian country, he is entitled to be reimbursed for per diems paid to them, although upon going with the posse into the Indian country he finds the person for whom he has a warrant has left, and the arrest is therefore made without the limits of the Indian country.

TREASURY DEPARTMENT,

OFFICE OF COMPTROLLER OF THE TREASURY,

May 27, 1896.

Mr. E. D. Nix, late United States marshal for the district of Oklahoma, appeals from the settlement by the Auditor for the State and other Departments of his account under the appropriation "Fees and expenses of marshals, United States Courts," for the quarter ending June 30, 1895. In the settlement of that account the Auditor disallowed a large number of payments made to possemen because the arrests were not *made within the limits of Indian reservations.

Section 2153, Revised Statutes, provides:

"In executing process in the Indian country, the marshal may employ a posse comitatus, not exceeding three persons, in any of the States respectively, to assist in executing process by arrest and bringing in prisoners from the Indian country, and allow them three dollars for each day in lieu of all expenses and services."

The question for determination is the meaning of the words "Indian country," as used in that section. It does not appear that the section itself has ever received judicial consideration, but the words "Indian country," found in other sections of the same chapter, have several times been construed by the Supreme Court and have acquired a definite meaning. By section 1 of the Indian intercourse act of June 30, 1834 (4 Stat., 729), a definition of the words "Indian country" for the purposes of that act was given. In Bates v. Clark (95 U. S., 204–209) it was said:

"It follows from this that all the country described by the act of 1834 as Indian country remains Indian country so long as the Indians retain their original title to the soil, and ceases to be Indian country whenever they lose that title, in the absence of any different provision by treaty or by act of Congress."

See Ex parte Crow Dog (109 U. S., 556–561) and United States v. Le Bris (121 U. S., 278), in which it was held that the definition of the words "Indian country" found in the act of June 30, 1834, might be referred to for the purposes of determining what was meant by those words "when found in sections of the Revised Statutes which were reenactments of other sections of this statute," although section 1 of the statute was repealed by section 5596, Revised Statutes. Section 2153 is taken from an act making appropriations for deficiencies in the Indian service of June 14, 1858 (11 Stat., 363). No definition is given therein of the words "Indian country." They evidently refer to that which had been previously defined by Congress as Indian country in the act of June 30, 1834; and such it seems must have been the conclusion of the revisers, for they incorporated this section with other sections from the Indian intercourse act of June 30, 1834, into chapter 4, of Title XXVIII, of the Revised Statutes, in many of which sections the words "Indian country" are used without explanation, but which have been construed by the Supreme Court, as heretofore shown, to mean all that portion of the territory described in the act of June 30, 1834, to which the original Indian title has not been extinguished. It was specifically

held by Attorney-General Miller, in 19 Opin. A. G., 306, that the lands within the boundaries of what was known as Oklahoma ceased to be "Indian country" after the Indian title became extinguished and the lands were thrown open to settlement, but before they were erected into the Territory of Oklahoma by the act of May 2, 1890 (26 Stat., 81). It follows that the construction placed by the Auditor upon section 2153, Revised Statutes, is correct.

There are, however, within the limits of the Territory of Oklahoma several Indian reservations to which the Indian title has not been extinguished, and these reservations are still Indian country, to which section 2153 applies. In certain cases deputy marshals having warrants of arrest, being informed that the persons for whom the warrants had been issued were within the limits of these reservations, took with them possemen when they started for the Indian country. In some of these cases the persons wanted were not found in the Indian reservation but were arrested beyond the borders of the reservation. In cases where a deputy marshal, having reason to believe that a defendant was to be found in an Indian reservation, employed possemen to assist him as authorized by section 2153, the mere fact that after going into the Indian reservation it was discovered that the parties sought to be arrested had withdrawn therefrom will not preclude the marshal from receiving credit for payments to the possemen, who under the circumstances in the case were rightfully employed within the authority conferred by section 2153. Mr. Nix's accounts will be revised accordingly. R. B. BOWLER,

Comptroller.

SUBSISTENCE ALLOWANCE OF OFFICER OF THE COAST SURVEY ON DUTY IN WASHINGTON.

An officer of the Coast and Geodetic Survey engaged in field duty in the city of Washington is not entitled to an allowance for subsistence, such allowance being given by law only to officers of the field force ordered to Washington for consultation with the Superintendent.

TREASURY DEPARTMENT,

OFFICE OF COMPTROLLER OF THE TREASURY,
May 27, 1896.

SIR: I have received your letter of the 25th instant inclosing an account of C. H. Sinclair, assistant in the Coast and Geodetic Survey, for subsistence during the month of April, at $2.50 per day. From your statement it appears that Mr.