Eppes v. Mississippi, Gainesville, & Tuskaloosa Railroad

35 Ala. 33 | Ala. | 1859

A. J. WALKER, C. J.

The defendant’s contract must be construed as importing a promise to pay two thousand dollars, upon assessment and call, to the capital stock of the plaintiff’, with the privilege of discharging it by taking and executing a contract for the making of the road bed, and preparation of it for the iron, (bridging excepted,) which contract might be taken at public letting, or, if not bid off' at public letting, might be taken at private letting, to such extent as might be necessary to make up the amount, at the engineer’s estimate. The contract also contains a stipulation on the part of the plaintiff, to accommodate subscribers, on whose lands the road might be located,- with work upon their premises, as far as it could consistently with the provisions of the contract. If the plaintiff had preferred a payment in work done upon the road bed, it could not have coerced payment in that manner. The right of election, as to- the mode of payment, pertained to the defendant, not to the plaintiff. The defendant secured to himself, by the terms of his contract, the privilege of electing whether he would pay in money, or by the taking and execution of a contract for the construction of the road. In the event of the defendant’s election to pay in work, he was by the contract entitled to the further privilege of taking a contract by bidding off the same at public letting; aud failing to bid off a contract at public letting, which would discharge the debt, he had the privilege of paying by taking a contract at private letting, to do work not otherwise or before let. The privilege of election, as above set forth, was a right of the defendant secured by the contract.

It was impossible to make an election to pay in work, until an opportunity was afforded to him of bidding off a contract at public letting; and if he failed to take a contract at public letting, the performance of which would dischai’ge the debt, until an opportunity was afforded of taking a contract at private letting, to do work not otherwise or before let. The collection of the debt for stock out of the defendant, without affording such opportunity, would practically abrogate the provision of the contract which secures to the defendant the right at his election to pay by taking and executing a contract.

The contract in this case differs from those construed in Lane v. Kirkman, Minor, 411; McRae v. Raser, 9 Porter, 122; Plowman v. Riddle, 7 Ala. 775; and Love v. Simmons, 10 Ala. 113. See, also, 2 Parsons on Con. 163. Under all those contracts, the power of making the election depended upon no act of the promisee, but alone upon the promisor’s volition. Ilerethe election to pay in work could not be made, until the plaintiff so acted as to enable the defendant to make it in the manner provided by the contract. In those cases it was correctly decided, that the promisor should notify the other party of his election. In this case, the defendant might signify his desire to pay in work, before he had an opportunity of taking a contract; but he could not make a binding election, until the opportunity was had. A party is never required to make an election, until full information of every thing calculated to influence the choice was possess, ed. — Beaves and "Wife v. Garrett, at the present term. Such information could not be had, until the letting of contracts occurred. Besides, the defendant’s stipulation is to pay in money, or in work; and there can be no failure to comply with that stipulation on his part, until he has an opportunity to pay in work ; for it would be absurd to say that the defendant had broken his obligation to pay in work, when the plaintiff had not made it possible for him to do so.

[2.] While it was incumbent upon the plaintiff to give the opportunity above specified, the defendant cannot, under the contract, claim that he should not pay in money, until he had had an opportunity of selecting a contract from the route of the road in its entire extent. The plaintiff’s duty would be discharged, by offering lettings of work in the manner contemplated by the contract, to such an extent as would enable the defendant to exercise the privileges provided for him. He has not stipulated for the privilege of selecting the place of his contract from the entire route of the road, and "cannot complain that an opportunity of making such election has not been afforded.

[3.] If the plaintiff afforded to the defendant an opportunity to take a contract, by bidding off the same at piublic letting, then the defendant’s privilege of taking a contract at private letting extended only to “ any portion not otherwise or before let.” Whether he would avail himself of that privilege, was a matter for his own determination ; and the plaintiff could be required to do nothing more in reference to it, than to allow a reasonable time to the defendant to make known his determination. If he elected to take a contract at private letting, it was his duty to give uotice of his election. As there was no time specified, within which the election was to be made, the law prescribes that it should be made within a reasonable time ; and in the event of a failure to make it within a reasonable time, the obligation to pay in money would become absolute. — See the authorities above cited; also, Skinner v. Bedell, 32 Ala. 44; Shepherd’s Dig. 497, § 136.

[4.] Unless notice of the assessments and calls is required by the charter of a corporation, it is not indispensable to the right of action upon subscriptions to the capital stock, that such notice should be given. — Pierce on American Railroad Law, 77 ; Br. Bk. v. Gaffney, 9 Ala. 163; Henderson v. Howard, 2 Ala. 342; Evans v. Gordon, 8 Porter, 142 ; Montgomery v. Elliott, 6 Ala. 701.

The propositions which we have thus far maintained, lead us to an approval of the rulings of the court below upon'the defendant’s demurrer, and upon the objection to tbe admission in evidence of the written contract, and upon the 6th and 7th charges requested by the defendant.

[5.] The plaintiff acted as a corporation under its amended charter, and the defendant contracted with it when so acting, and contracted with it in. the name which it was authorized by the amended charter to take. That there was a legal acceptance of the amended charter, the defendant, who contracted with the plaintiff when acting under the amendment, and in the name authorized by it, cannot deny. — Tar River Nav. Co. v. Neal, 3 Hawks, 520, opinion of Henderson, J., 537 ; Jones v. Dana, 24 Barb. 399; Dutchess Cot. Man. Co. v. Davis, 14 Johns. 245; All Saints Church v. Lovett, 1 Hall, (N. Y.) 198; John v. F. & M. Bk. of Inch, 2 Blackf. 367 ; Searsburg Turnpike Co. v. Cutler, 6 Verm. 315; Congregational Society v. Perry, 6 N. H. 164; Hamtranck v. P., D. & C. of Edwardsville, 2 Mis. 169 ; 2 Ld. Ray. 1535 ; Mont. R. R. Co. v. Hurst, 9 Ala. 513, Duke v. Cakaba Nav. Co., 10 Ala. 90; Selma & Tenn. River R. R. Co. v. Tipton, 5 Ala. 808.

It is a result of this last proposition, that there was no error in the 1st charge given, nor in the 1st, 2d, 3d, and 4th refusals to charge as requested by the defendant.

[6.] The second charge given asserts, that the letting out of contracts in pursuance to a notice in a newspaper calling for proposals was a public letting within the meaning of the defendant’s contract; and the 9th charge requested seems to have been designed to assert the converse of that proposition. By the terms of his written agreement, the defendant had a right to take a contract by “ bidding off the same at public letting.” By giving the second charge, and refusing the defendant’s ninth request to charge, the court made & public letting consist of a letting in pursuance to a notice in a public newspaper inviting propsals for contracts, and treated an opportunity to make proposals for a contract in pursuance to such notice as an opportunity to bid off a contract. Upon the doctrine of the charge, if the corporation advertised for proposals, and, when they were made, acted upon them in private, and in private assented to or rejected them, there was a bidding off contracts at a public letting, and there was afforded to the defendant an opportunity to bid off a contract at a public letting.

By turning to "Webster’s dictionary, I find that “ letting” is an amerieanism, used to signify the act of putting out portions of work to be performed by contract, as on a railroad or canal, and it has in our country that acceptation. The letting or putting out of the contract is a different thing from the invitation to make proposals for it. The letting is posterior to the invitation for proposals. It is made after the proposals have been received in pursuance to the invitation, and after they have been considered ; and is the act of awarding the contract to the proposer. The distinction between the advertisement for proposals and the letting of a contract is precisely the distinction between the advertisement of a sale and a sale. There may be an advertisement for proposals, and no letting ; as there may be an advertisement of a sale, and yet no sale. There may be public advertisement, calling for proposals, and yet the letting may be private; just as there may be a public notice of a sale, and yet the sale may be private. If the defendant’s stipulation had been for an opportunity in the first place to take at a private letting, it would scarcely be contended, that the defendant had had no opportunity to take at & private letting, because the plaintiff had invited proposals by & public advertisement. If the defendant had, in such case, argued his immuuity from liability to pay in money, he would have been told, that the public call for proposals did not impair his opportunity privately to apply for and take a contract; aud that, notwithstanding the public call, he might have applied for and taken a contract under circumstances of the profoundest secrecy. If a letting after public call for proposals would be deemed private to satisfy the requisitions of such a contract, it cannot be public- in this case, in order to satisfy the requisition of a contract containing a precisely opposite stipulation. A letting of the same character cannot be private or public at the option of the plaintiff.

The contract itself plainly discriminates between a public and a private letting, in providing for the defendant a right to take contracts in succession at lettings of the two different characters. No reasonable or useful purpose can be found for the discrimination between public and private lettings, and for carefully securing to the defendant the privilege to take first at one, and then, if necessary, at the other, if we consider a letting as public or private, without' regard to the circumstances of publicity or privacy under - which it is made, according as it was made with or without public notice calling for proposals. Under such a view of what is meant by a public letting, the defendant does not provide for himself any substantial benefit which he would not have had if he had merely provided for himself a right to take at private letting. If public letting had been entirely omitted from the contract, he would still have had the privilege, in common with the rest of the community, of proposing terms for a contract to the private consideration of the plaintiff.

.The defendant here has stipulated for the privilege, not only of taking a contract at a public letting, but of taking it by “bidding” at a public letting; and not only that, but by “lidding” it “off” at a public letting. The language is, “by bidding off the same at public letting.” Bidding, in its comprehensive sense, is making an offer; but, in its more ordinary acceptation, it signifies the making of an offer at an auction. — Bouvier’s Law Dict., Bid, Bidder; Payne v. Cave, 3 Term R. 149; 2 Kent’s Com. 734. One is said to bid off a thing, when he bids at an auction, and the thing is knocked down to him m immediate succession to the bid, and as a consequence of it. The expression “bidding off” a contract at public letting, would manifestly be perverted, in using it for the description of a transaction, in which proposals were made and privately passed upon, as the judgment of the plaintiff, uncontrolled by the consideration of the lowest bid, might dictate. If a private gentleman should advertise for proposals to do a.work, and, after receiving the proposals, should, in the exercise of his discretion, award the contract to' one of the proposers, no one would say that the contract had been “bid off” at a public letting.

I do not controvert the position, that the parties must be regarded as having contracted with a view to facilitate the enterprise of constructing the railroad. There are, doubtless, cases in which the court, construing a contract in the light of this presumed intention of the parties, might attain a conclusion more favorable to the corporation than would otherwise be adopted. But the court, in the application of the principle, must not permit itself to be led into the consideration of doubtful questions of policy involved in the construction of railroads. To do so, would constitute us judges of what is expedient in railroad building, as well as of law. The policy, to which we could look in the construction of a contract, must be palpable, and not disputable. It is not sufficiently manifest, that the letting out of contracts for the construction of a railroad to the lowest bidder would always be detrimental, to justify an allowance of much consideration to the argument made upon that assumption. It is conceivable that railroad corporations might, at least in some eases, consult their best interests by so letting out contracts, and taking suitable guaranties for the performance of the work. Aside from this, the rule, that we must construe a contract in the light of the presumed intention to facilitate the enterprise, is designed to aid in the ascertainment of the meaning of the language employed, and does not authorize a perversion of it. It is assumed that, to let out contracts for the construction of a railroad, would be inconsistent wdth the interests of the enterprise, because it is necessary that there should be a judicious selection of such contractors as would execute the work with expedition, fidelity and skill; and that there must, therefore, be a discretionary authority to reject bids, although the most favorable in amount. ' Now, if the plaintiff has such an authority in reference to the defendant’s bid, the provision giving him a right to bid off a contract at public letting is annulled. lie cannot have a right to take a contract by bidding it off, and the plaintiff at the same time have a right to reject his proposal, although the most favorable in its terms. If the plaintiff has such a right, the defendant might be ready and willing to take a contract, and might propose to do it on the most favorable terms; and yet always have his proposal rejected by the plaintiff in the exercise of its discretionary authority. The plaintiff has stipulated with the defendant that he may discharge his debt by taking a contract, and it would be alike unjust and inconsistent with that stipulation to allow to the plaintiff the discretionary authority to reject the defendant’s proposal, upon the ground of his unsuitableness to do the work, and yet coerce the payment of the debt in money. The plaintiff has agreed that the defendant may discharge his debt in work, and it cannot now say he is unfit for the task. Thus it appears, that the argument drawn from the presumed policy of allowing the plaintiff the discretionary authority of rejecting the proposals of persons deemed unfit, leads to a conclusion inconsistent with the clear right of the defendant under the contract, and cannot therefore be maintained.

It may be argued, that the labor and expense of railroad grading depends upon the character of the earth to be removed from, and to be carried on to the road bed; that this cannot be determined, except as the strata are exposed in the progress of the work; that therefore it is customary and necessary for railroad companies to let out contracts at so much per cubic foot for the different kinds of earth; that in so letting out contracts, it is impossible to tell which one of various bids is the lowest, because it cannot be known how much of the different kinds of earth will have to be removed; and that, for those reasons, it would bo unreasonable to attribute to the parties a design to have a public letting to the lowest bidder. This argument assumes, that the track of the railroad cannot be such that contracts might be prudently taken and awarded for the doing of the grading at so much for a given distance. This assumption we are not authorized to make. If the parties have agreed that contracts are to be bid off, the presumption is a fair one, that they have done so with the knowledge necessary to determine upon the practicability of executing it. At all events, this court is not authorized to make and enforce a new contract for them, even though it might find the one actually made difficult or impossible of accomplishment.

It may be that it is customary with railroads to receive proposals to grade different sections of the road, at so much per cubic foot for removing and filling in the various kinds of earth, and to select from among the different proposals that which, taking into consideration the different prices proposed for the various kinds of work, and the probable amount of each of the different kinds of work to be done, the corporation may suppose most favorable. If such be the customary mode of letting contracts for grading, we cannot suppose that the parties to the contract in this case intended to adopt it. Under that mode of awarding contracts, they are not necessarily let to- the lowest bidder, but to him whom the corporation may suppose or conjecture to be the lowest bidder. If a proposer or bidder gets a contract under that system, he does it because, in the exercise of the judgment of others, he is the most favorable bidder. He does not know who are his competitors, or what were their bids, or the considerations which influenced the judgment in awarding the contract. If that plan of letting contracts were adopted, whether the defendant would ever get a contract would depend upon the irresponsible and privately exercised judgment of his adversary; and if he knew what the competing bids were, he could not- tell whether his was the best bid until the work was done, ffhe defendant has provided for himself, by the terms of his subscription of stock, a right to have a contract because he bid it off at a public letting, and not a right to have it or not as the irresponsible judgment of the adverse party, exercised in private, and in reference to competing bids unknown to him, may determine. It is thus evident that the mode of awarding contracts, which I have admitted may be customary with railroads, could not have been adopted consistently with the contract; and I cannot therefore suppose, that such mode was contemplated when the stock was subscribed. When a custom is proved, it is not received in evidence for the purpose of varying . n contract, but for the purpose of showing what the contract ■yvas.

The clause of the contract provides, that the plaintiff would arrange, as far as it could consistently with the preceding provisions, that subscribers through whose land the road ran should be accommodated with work on their premises. This clause cannot control the construction of those going before, because it is expressly subordinated to them. The defendant had an absolute right to take a contract by bidding it off. This right could best be exercised, and could only be protected, through an auction. For this reason, and for the other reasons which I have given above, I think the plaintiff has no right to collect the defendant’s subscription of stock, until it has afforded to him an opportunity of bidding off a contract at public auction. In my opinion, the meaning of “public letting,” construed in connection with the accompanying words, is public auction. I think the court erred in giving the second charge, and in the ninth refusal to charge ; but my brethren both differ from me.

[7-8.] There was no error in the 8th, 6th and 10th refusals to charge as requested. The contract does not impose upon the corporation the duty of giving actual notice of the letting contemplated. It would be sufficient if it gave the public notice usual in such cases. Nor does the contract impose upon the plaintiff' the duty of adhering to a location made at the time when the contract was entered into. There is nothiug in the contract which would authorize a release of the defendant for the cause specified in the tenth refusal to charge.

The majority of the court disagree with me as to the only point upon which I think there was error in the rulings of the court below. There must, therefore, be an affirmance.

STONE, J.

A majority of the court are not able to agree with the chief-justice, in his construction of the phrase, “bidding off the same at public letting.” While we concede that a letting of railroad contracts by oral outcry, and to the lowest bidder, pursuant to public proclamation, would be a public letting ; yet we do not think that the only mode in which a letting maybe public.

The word letting, when used in this connection, is an americanism. As defined by Mr. Webster, it is “the putting out of portions of work to be performed by contract, as on a railroad.” There is, evidently, nothing in the word letting, which requires the putting out to be by public outcry. It simply means a putting out of the contracts, or engaging con tractors to do the work. If this word stood alone in this contract, all would concede that the corporation might comply with its terms, without public outcry. This word-seems to have been employed in this sense, in the act “ to establish a board of commissioners for the improvement of the navigation of the Coosa river, and for other purposes,” (Pamph. Acts of 1837, p. 13 ;) and in the act “ for the preservation of the State capitol, and the grounds belonging to the same,” Pamph. Acts 1847-8, p. 439.

The adjective, public, has many significations. Nope of them, in our judgment, implies that kind of publicity, proclamation, which attends sales at public outcry. The definition which, we think, expresses the intention of the parties to the present contract is, “ open to all — notorious.” To become notorious, it is necessary that fair and reasonable public notice shall be given. To render the letting open to all, it is necessary that the public shall have the equal privilege of bidding for the contracts, and becoming contractors for the work. The letting which furnishes this notoriety, and secures to the public equal competition, is a public letting. On the other hand, no matter how many persons may have notice of, and be present at the lettingand no matter how public the act of letting, or putting out the contracts may be — unless the letting be so conducted as to secure to the public an equal right to bid for and take the contracts, the subscriber who is denied this privilege, may justly complain that there has not been extended to him the right to take contracts by bidding off the same at public letting.

In coming'to these conclusions, we do not shut our eyes to the nature of the work to be performed, and the character of bids and contracts which experience has demonstrated to be promotive of success in such enterprises. Iu common with all men, we must be presumed to have knowledge of the leading practical principles which obtain in the construction of these public works.

The defense relied on in the circuit court, as we understand the record, raises but a single question on the feature of the contract above discussed. It contends that the letting should have been at public outcry. It is not anywhere contended that the publication was not sufficient, nor that Mr. Eppes was denied the right to compete fairly with the public for contracts to do work. In the charges given, and in the refusals to charge on this point, the circuit court took the view of this contract which we have taken ; and we think the record, on the matter of the public letting, is free from error.

Case Details

Case Name: Eppes v. Mississippi, Gainesville, & Tuskaloosa Railroad

Court Name: Supreme Court of Alabama

Date Published: Jun 15, 1859

Citation: 35 Ala. 33

Court Abbreviation: Ala.