notes, mortgages, and insurance policies amounting in value to some $50,000 more. Without going into detail, upon the admissions of the parties it became perfectly apparent that the property in question belonged to the bankrupt estate. The district court for the eastern district of Louisiana, upon petition, confirmed the receiver [266] as temporary receiver of that court, and directed that all the property be turned over to him, to be transmitted to the trustee or trustees in bankruptcy of A. Musica & Son, elected and qualified in the district court for the southern district of New York, to be disposed of under and subject to the orders of that court. should be dismissed, if that should happen. Bryan v. Bernheimer, 181 U. S. 188, 45 L. ed. 814, 21 Sup. Ct. Rep. 557; Mueller v. Nugent, supra. Prior to the amendment of June 25, 1910 (36 Stat. at L. 838, chap. 412, U. S. Comp. Stat. Supp. 1911, p. 1493), this court had held that in cases where the bankruptcy court of original jurisdiction could itself make a summary order for the delivery of property to the trustee or receiver, the court of ancillary jurisdiction could do so (Babbitt v. Dutcher, 216 U. S. 102, 54 L. ed. 402, 30 Sup. Ct. Rep. 372, 17 Ann. Cas. 969), and by clause 20, added to § 2 by the amendment of June 25, 1910, the bankruptcy courts were specifically given ancillary jurisdiction over persons or property within their respective territorial limits in aid of a trustee or receiver der this amendment there can be no question that the district court in Louisiana had authority to appoint a receiver, and to take summary proceedings for the restoration of the bankrupts' estate, which was in the custody of people having no right to it, in order that the same might be turned over to the bankruptcy court having jurisdiction for administration. Under the circumstances here shown, there can be no question that this authority was properly exercised in this case. While the Musicas took the case to the Circuit court of appeals, no appeal has been sued out by them to this court, and the only questions here concern the interven-appointed in any court of bankruptcy. Untion of Lazarus, Michel, & Lazarus, who, on April 28, 1913, filed an intervening petition in the district court for the eastern district of Louisiana, claiming $15,000 as attorney fees for services rendered the Musicas in the proceedings against them in the courts of Louisiana to protect their property rights and possession, and for services to be rendered in representing them in proceedings in New York, if their services were there required. The decree of the district court, which was affirmed in the circuit court of appeals, dismissed the petition in intervention of Lazarus, Michel, & Lazarus, reserving their right to assert whatever claim they may have in the bankruptcy court of original and primary jurisdiction. The property, when seized, was, by virtue of the terms of the bankruptcy act, held for and to be turned over to the court of original jurisdiction, and no right could be acquired in it by assignment subsequent to the filing of the petition which would defeat this purpose. Such assignment was a mere nullity, properly disregarded by the bankruptcy court, and notwithstanding which it could direct the delivery of the bankrupts' property to the receiver by summary order. Babbitt v. Dutcher, supra. There is no contention that Lazarus, Michel, & Lazarus had any lien upon this property at the time of the apprehension [268] of the parties and the seizure of the property. Whatever rights they had are asserted to arise by virtue of the assignments made April 1, 1913, and after the filing of the original petition in bankruptcy. The filing of the petition and adjudication in the bankruptcy court in New York brought the property of the bankrupts, wherever situated, into custodia legis, and it was thus held from the date of the filing of the petition, so that subsequent liens could not be given or obtained thereon, nor proceedings had in other courts to reach the property, the court of original jurisdiction having acquired the full right to administer the estate under the bankruptcy law. Muller v. Nugent, 184 U. S. 1, 46 L. ed. 405, 22 Sup. Ct. Rep. 269; Acme Harvester Co. v. Beekman Lumber Co. 222 U. S. 300, 56 L. ed. 208, 32 Sup. Ct. Rep. For an attorney fee for services to be ren96. Under clause 3 of § 2 of the bank- dered ir contemplation of bankruptcy the ruptcy act of 1898 (30 Stat. at L. 544, act makes specific provision in subdivision chap. 541, U. S. Comp. Stat. 1901, p. 3418) d of § 60, and the amount thus attempted the receiver in the original case would have to be used in contemplation of bankruptcy had the right, acting under authority of the proceedings is subject to revision in the court to take possession in a summary [267] court of original jurisdiction, and not elseproceeding of the bankrupts' property, found where. See Re Wood & Henderson, 210 U. as was this, in possession of those admitted- S. 246, 52 L. ed. 1046, 28 Sup. Ct. Rep. 621. ly holding it for the bankrupts, and to hold The contention of the appellants, and the the property until the qualification of the proposition upon which they rely to sustrustee, or until the bankruptcy petition 'tain jurisdiction in this court, is that, by their intervention in the proceeding in the United States district court in Louisiana, they initiated a controversy in the bankruptcy proceeding which is appcalable to this court from the circuit court of appeals, as are ordinary cases in equity where original jurisdiction does not rest on diverse citizenship entirely (Judicial Code, § 128 [36 Stat. at L. 1133, chap. 231, U. S. Comp. Stat. Supp. 1911, p. 193]). To maintain that proposition Hewit v. Berlin Mach. Works, 194 U. S. 296, 48 L. ed. 986, 24 Sup. Ct. Rep. 690; Coder v. Arts, 213 U. S. 223, 53 L. ed. 772, 29 Sup. Ct. Rep. 436, 16 Ann. Cas. 1008; Knapp v. Milwaukee Trust Co. 216 U. S. 545, 54 L. ed. 610, 30 Sup. Ct. Rep. 412; Houghton v. Burden, 228 U. S. 161, 57 L. ed. 780, 33 Sup. Ct. Rep. 491, and cases of that character, are cited. In those cases it was held that controversies arising in bankruptcy, in the nature of plenary suits, concerning property claimed by others than the bankrupt, do not come under the special provisions of the bankruptcy act governing petitions for review and appeals, but take the course of ordinary cases in equity, and are not final in the circuit court of appeals where other cases of a similar character would not be. has not been printed. It is true that ordi- In We reach the conclusion that this appeal must be dismissed. [270] STONE, SAND, & GRAVEL COMPANY and American Surety Company of New York, Plffs. in Err., V. UNITED STATES. (See S. C. Reporter's ed. 270–280.) Damages The bankruptcy act provides for review contract for public work under § 24b of administrative orders and - excess cost of reletting. decrees in the course of bankruptcy proceedThe exclusive measure of damages in case ings which are not made specially appeal- the government annuls a contract for public able under § 25a. And controversies arising work because of the contractor's failure to commence the work by a stipulated day is in bankruptcy proceedings, of the character to be found in a provision in such contract of which we [269] have spoken, under that the contractor shall forfeit all moneys § 24a, are appealable like other equity cases. and retained percentages due or to become See Re Loving, 224 U. S. 183, 56 L. el. 725, due under the contract upon the giving of 32 Sup. Ct. Rep. 446. In this case the merely notice of annulment in case he fails to ancillary jurisdiction invoked in the seizure commence the performance of the work on of this property in the hands of those hold- the day specified therein, or, having commenced the work, fails, in the judgment of ing it for the bankrupts was in a mere sumthe engineer in charge, to prosecute the mary proceeding in bankruptcy, and its same faithfully and diligently, and the character could not be changed or its juris-government therefore cannot recover, diction enlarged, by the attempted intervention of Lazarus, Michel, & Lazarus under alleged assignments of the property, made after the filing of the petition in bankruptcy proceedings in the original case. We think the district court was right in holding, and the circuit court of appeals right in affirming its decision, that what- Argued April 23, 1914. ever claim Lazarus, Michel, & Lazarus had under the circumstances here shown must be asserted in the court of original jurisdic tion. The attempted intervention in the ancillary proceeding did not give jurisdiction over a controversy in bankruptcy ap pealable under the Judicial Code to the court of appeals, and thence to this court. This conclusion must result in the dismissal of the attempted appeal here. It is contended, however, that this motion is premature, because the record in this case damages sustained by reason of the contractor's default, the excess cost of reletting the contract. [For other cases, see Damages, VI. b, in Di I gest Sup. Ct. 1908.] [No. 302.] 1914. Decided June 8, IN ERROR to the United States Circuit Court of Appeals for the Fifth Circuit to review a judgment which, on a second writ of error, affirmed a judgment of the Circuit Court for the Eastern District of Louisiana in favor of the United States in a suit to recover from a public contractor and its surety the excess cost of reletting the contract after the contractor's default. Reversed and a new trial awarded. See same case below on first writ of error, | Brady v. Oliver, 41 L.R.A. (N.S.) 67 and 100 C. C. A. 651, 177 Fed. S21; on second note, 125 Tenn. 595, 147 S. W. 1135, Ann writ of error, 115 C. C. A. 252, 195 Fed. 68. Cas. 1913C, 376. The facts are stated in the opinion. Mr. William Marshall Bullitt argued the cause and, with Messrs. Henry C. Willcox and T. M. Miller, filed a brief for plain tiffs in error: This case turns upon the rights of the parties under a standard printed form of contract prepared and in general use by the United States; and hence, in case of doubt, should be construed most strongly against it. United States v. O'Brien 220 U. S. 321, 327, 328, 55 L. ed. 481, 484, 485, 31 Sup. Ct. Rep. 406; Noonan v. Bradley, 9 Wall. 394, 407, 19 L. ed. 757, 761; Garrison v. United States, 7 Wall. 688, 690, 19 L. ed. 277, 278; Royal Ins. Co. v. Martin, 192 U. S. 149, 165, 48 L. ed. 385, 390, 24 Sup. Ct. Rep. 247; Texas & P. R. Co. v. Reiss, 183 U. S. 621, 626, 46 L. ed. 358, 360, 22 Sup. Ct. Rep. 252; Christian v. First Nat. Bank, 84 C. C. A. 53, 155 Fed. 709; Farrelly v. United States, 86 C. C. A. 539, 159 Fed. 674; Mt. Vernon Refrigerating Co. v. Fred W. Wolf Co. 110 C. C. A. 200, 188 Fed. 168. It is precisely the same clause that was construed in United States v. O'Brien, 220 U. S. 321, 55 L. ed. 481, 31 Sup. Ct. Rep. 406, and the construction then given it should be either authoritatively controlling or conclusively persuasive here. United States v. Harvey Steel Co. 227 U. S. 165, 166, 57 L. ed. 464, 465, 33 Sup. Ct. Rep. 258. As such clause did not contain any provision for charging the excess cost of completion against the contractor, the contractor should neither be charged with such excess cost (United States v. O'Brien, 220 U. S. 321, 327, 55 L. ed. 481, 484, 31 Sup. Ct. Rep. 406), nor receive the profit from a cheaper completion (Quinn v. United States, 99 U. S. 30, 32, 25 L. ed. 269, 270). The United States would have had no right to rescind or refuse to permit the contractor to perform further, merely because he did not begin on January 24, 1900, or even because he was slow and it seemed - likely he had taken too big a job, and could not complete it within the contract time. Kenedy Town & Improv. Co. v. First Nat. Bank, Tex. Civ. App. 136 S. W. 558; Dingley v. Oler, 117 U. S. 490, 502, 503, 29 L. ed. 984, 987, 988, 6 Sup. Ct. Rep. 850; Smoot's Case (United States v. Smoot) 15 Wall. 36, 49, 21 L. ed. 107, 111; Holt v. United Security L. Ins. & T. Co. 21 L.R.A. (N.S.) 695, and note, 76 N. J. L. 585, 72 Atl. 301; King Iron Bridge & Mfg. Co. v. St. Louis, 10 L.R.A. 828, and note, 43 Fed. 768; When the United States annulled the contract and retained the money or reserve percentage due the contractor, then, ipso facto, the United States exercised the sole, exclu sive, and entire right it had under the contract, and it cannot hold the contractor liable for the excess cost of completing the work, which it had, by annulment, prohibited the contractor from further trying to perform. Farrelly v. United States, 86 C. C. A. 539, 159 Fed. 674; United States v. O'Brien, 89 C. C. A. 664, 163 Fed. 1022, 220 U. S. 321, 327, 55 L. ed. 481, 484, 31 Sup. Ct. Rep. 406. The forfeiture of retained pay is liquidated damages. 55 L. ed. 481, 31 Sup. Ct. Rep. 406; CrawUnited States v. O'Brien, 220 U. S. 321, ford v. Heatwole, 34 L.R.A. (N.S.) 587, and note, 110 Va. 358, 66 S. E. 46; Madler v. Silverstone, 34 L.R.A. (N.S.) 1, and note, 55 Wash. 159, 104 Pac. 165; King Iron Bridge & Mfg. Co. v. St. Louis, 10 L.R.A. 826, and note, 43 Fed. 768; K. P. Min. Co. v. Jacobson, 4 L.R.A. (N.S.) 755, and note, 30 Utah, 115, 83 Pac. 728; Sun Printing & Pub. Asso. 380, 22 Sup. Ct. Rep. 240; United States v. v. Moore, 183 U. S. 642, 669, 46 L. ed. 366, Bethlehem Steel Co. 205 U. S. 105, 119, 51 L. ed. 731, 736, 27 Sup. Ct. Rep. 450. It is obvious that the present case is wholly different from those cases where the employer annulled the contract because the completed the work by the time specified contractor, although still at work, had not 13 How. 307, 14 L. ed. 157; Quinn v. United (Philadelphia, W. & B. R. Co. v. Howard, States, 99 U. S. 30, 25 L. ed. 269; Baer v. Sleicher, 82 C. C. A. 281, 153 Fed. 129; United States v. McGee, 171 Fed. 206); or work within the contract time, the employer where the contractor, failing to complete the refused to let him continue on it longer (United States v. Gleason, 175 U. S. 588, 44 L. ed. 284, 20 Sup. Ct. Rep. 228); or rived, the contractor, having done some where, before the time for completion arwork, absolutely abandoned the work, and the employer waited until after the date specified for completion, and then annulled it (United States v. McMullen, 222 U. S. 460, 56 L. ed. 269, 32 Sup. Ct. Rep. 128; Hayes v. Nashville, 26 C. C. A. 59, 47 U. S. App. 713, 80 Fed. 641); or where, after the time for completion passed, the contractor abandoned the contract, left the work unfinished, and the employer then annulled the contract (Graham v. United States, 231 U. S. 474, 58 L. ed. 319, 34 Sup. Ct. Rep. 148); or where the contractor abandoned the con- burg, Mississippi. For this work the United tract ab initio and refused to do any work | States agreed to pay 8.49 cents per cubic whatever (United States v. Grosjean, 106 C. C. A. 573, 184 Fed. 593; Sparhawk v. United States, 67 C. C. A. 274, 134 Fed. 720; Chesapeake Transit Co. v. Walker, 158 Fed. 850); or where the contractor, while engaged on the work, abandoned and repudiated the contract before the time for completion (Amer- | ican Surety Co. v. Woods, 45 C. C. A. 282, 105 Fed. 741). It is equally unlike those cases where the contractor abandoned the work because wrongfully interfered with by the other party (Anvil Min. Co. v. Humble, 153 U. S. 540, 38 L. ed. 814, 14 Sup. Ct. Rep. 876, 18 Mor. Min. Rep. 97), or where the employer stopped a contractor who was not in default (United States v. Behan, 110 U. S. 338, 28 L. ed. 168, 4 Sup. Ct. Rep. 81), or where the employer annulled the contract while the contractor was in full prosecution of the work, with no intention of abandoning it (American Bonding Co. v. United States, 93 C. C. A. 310, 167 Fed. 915). Solicitor General Davis argued the cause, and, with Mr. Francis H. McAdoo, Special Assistant to the Attorney General, filed a brief for defendant in error: The government's right of action on the breach was not lost by annulling the con Bollman v. Burt, 61 Md. 415; Cleveland Rolling Mill Co. v. Rhodes, 121 U. S. 255, 30 L. ed. 920, 7 Sup. Ct. Rep. 882; Johnson v. Allen, 78 Ala. 387, 56 Am. Rep. 34; Norrington v. Wright, 115 U. S. 188, 29 L. ed. 366, 6 Sup. Ct. Rep. 12; Pope v. Porter, 102 N. Y. 366, 7 N. E. 304. Mr. Justice Lurton delivered the opinion of the court: This was an action by the United States against the Stone, Sand, & Gravel Company, a corporation, hereinafter styled the contractor, and its surety, the American Surety Company of New York, to recover the excess cost of completion of a certain contract for excavating 7,500,000 cubic yards of earth within certain designated localities in the work of improving the harbor of Vicks yard as the work progressed, and the con- and The only breach of contract alleged was the failure to begin active operations on the day stipulated with a plant and force adequate to produce the monthly output required. The breach is confessed, but the tract, for such a breach, limits the measure error insisted upon here is that the conof recovery to liquidated damages; namely, a forfeiture of all money or retained percentages due or to become due under the contract, and that the court below erred in allowing as damages the excess cost of the work under the reletting. The clauses of the contract which give rise to this contention occur in the standard form of contract used by the War Department, known as form 19, and are the same clauses construed by this court in United States v. O'Brien, 220 U. S. 321, 55 L. ed. 481, 31 Sup. Ct. Rep. 406. The clauses involved for purposes of reference may be described as clauses A and B. In clause A [276] it is expressly provided that if the contractor "fail to commence with the performance of the work on the day specified 'herein, or shall, in the judgment of the en The engineer in charge is thereupon authorized, if an immediate performance of the work "be, in his opinion, required by the public exigency, to proceed to provide for the same as prescribed in § 3709, Revised Statutes (U. S. Comp. Stat. 1901, p. 2484). Following clause A are three other clauses dealing with changes in the work, cost of extra work, and liabilities for labor and material furnished. Then comes B, which reads as follows: "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 percentages 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." That there was no abandonment of the contract by the plaintiffs in error is too plain to need discussion. Large expenditures were made to get ready, and further extensions [277] of time were sought both before and after notice of annulment. The explanation of the failure to get ready lies in the obvious fact that the contract was larger than the financial capacity of the contractor, and the United States was plainly within its contract right in putting it off the job and in reletting the work. What is the measure of recovery against the contractor where the government "annuls" the contract for failure to commence the work upon a stipulated day? The right to "annul," that is, to prohibit the contractor from going on under the contract, is plainly conferred in two distinct cases by clause A,-first, when the contractor fails to begin upon the day stipulated, and, second, when, having commenced the work, the contractor fails, "in the judg To escape confession of error in the judgment below, in so far as the United States was permitted to recover the excess cost of reletting the job, it has been argued that the right to annul the contract did not arise out of clause A, but was "a right inherent" in this and every other contract when time is of the essence, and that when there was, as in this case, a breach of an express agreement to begin the work upon a certain day, the right to annul was complete; and upon annulment the right to [278] recover all actual damages followed. Of course, this so-called "inherent right" to annul a contract, with the consequent right to recover all actual damages as for a complete breach, are rights supposed to arise not out of any express agreement, but out of the common law. But the assumption that, aside from clause A, an agreement to begin such a work on a particular day would be such a vital term of the contract as to justify the other party in an immediate annulment if the work was not so begun is seriously challenged. The vital character of time to the contract would depend upon its nature and particular circumstances. These might be such that time would not be of the essence of the contract at all. resort to the contract here involved as making time the essence of the agreement must include clause A, which expressly determines the consequences. Such an appeal to the contract would naturally result detrimentally to the argument here made, since the contract, while making time vital, provides also for the consequence of a breach in that respect. The benefit and the burden of clause A must hang together. Any But we need not deal with the consequences as if clause A had been omitted. The right might have been inherent, or not so vital as to justify the rigor of annulment. Both parties elected to deal with the matter by express stipulation, and that should be and is the end of it. In such a situation |