The intention of the parties is said to be paramount and controlling.1 This means, however, not what they have agreed to call it, nor even what they may in good faith think it is; for this involves their opinion upon the law.2 When their intent is said to be paramount, what is meant is that if from the surrounding facts and circumstances it appears that they are in good faith contracting for the actual amount of the loss as estimated in advance, the contract is one for liquidated damages; while, if they are contracting for an arbitrary sum, intended to coerce performance or punish default, they are contracting for a penalty.3 In case of doubt, the courts prefer to treat the stipulation as one for a penalty, since this construction makes the actual amount of the damages the amount of recovery.4

7 McCurry v. Gibson, 108 Ala. 451; 54 Am. St. Rep. 177; 18 So. 806.

8 Sanders v. Carter, 91 Ga. 450; 17 S. E. 345.

9 Hardie, etc., Co. v. Oil Mill, -Miss. - ; 36 So. 262.

10 "Liquidated damages"- prima facie correct. Stegman v. O'Connor, 80 L. T. (N. S.) 234; Kelly v. Fejervary, 111 Ia. 693; 83 N. W. 791; Garst v. Harris, 177 Mass. 72; 58 N. E. 174. "Penalty"- prima facie correct. Smith v. Brown, 164 Mass. 584; 42 N. E. 101; Wilkinson v. Colley, 164 Pa. St. 35; 26 L. R. A. 114; 30 Atl. 286. Held penalties " in the penal sum of estimated amount of freight."Watts v. Ca-mors, 115 U. S. 353. "Forfeiture"

Van Buren v. Digges, 11 How. (U. S.) 461.

11 Foley v. McKeegan, 4 Ia. 1; 66 Am. Dec. 107; Smith v. Brown, 164 Mass. 584; 42 N. E. 101; Smith v. Wainwright, 24 Vt. 97.

12 Tayloe v. Sandiford, 7 Wheat. (U. S.) 13, 17.

1 Kelly v. Fejervary, 111 Ia. 693; 83 N. W. 791; Heatwole v. Gorrell, 35 Kan. 692; 12 Pac. 135; Perkins v. Lyman, 11 Mass. 76; 6 Am. Dec. 158; Taylor v. Newspaper Co.. 83 Minn. 523; 86 N. W. 760; Cotheal v. Talmage, 9 N. Y. 551; 61 Am. Dec. 716.

2 Willson v. Mayor of Baltimore, 83 Md. 203; 55 Am. St. Rep. 339; 34 Atl. 774.