M. K. & T. Railway Co. v. City of Fort Scott

15 Kan. 435 | Kan. | 1875

The opinion of the court was delivered by •

Brewer, J.:

At the March 1874 term of the district court of Bourbon county, the city of Fort Scott, defendant in error, obtained a judgment against the plaintiff in error for the sum of $100,000, for an alleged breach of contract. „ To reverse that judgment the Railway Company brings this proceeding in error. At the outset we are met with an unpleasant controversy of a personal character. It is insisted by counsel for the city, that no valid case made is here, and that we can only consider such questions as arise upon the pleadings and judgment. On the other hand, the counsel for the company moves to strike out certain portions of the certificate of the trial judge to the case made, on the ground that they are surplusage, and that they are “intentionally false, and were fraudulently incorporated,” and charges a conspiracy between the counsel for the city and the trial judge to prevent the Railway Company from obtaining a case for review.

1 judge pro ana jSuc-

office of pro tem. judge.

The case was tried before a judge pro tem., who on the day of the rendition of the judgment, the 2d of April, gave thirty days in which to make and serve a case. The case was not signed by such judge until the 4th of May. It is insisted that upon the expiration of the term the powers of the judge pro tem. ceased, and that he could not thereafter do any act in the suit, not even to the extent of settling and authenticating a case made. The case' was signed by the regular district judge on the 1st of May, and it is claimed that a judge has no power to settle and sign a case made except in proceedings and actions regularly had and tried before him. In other words, the claim is, that upon the expiration of the term at which a case is tried, if tried before a judge pro tem., the power to obtain a case made ceases. It.may be remarked, that it does not distinctly appear that the term had expired at the time this case was signed by the judge pro tem. Nothing in the law prevented the continuance of the March term beyond the 4th of May. There is no positive affirmation in the record' that the term had been adjourned. The counsel for the city objected, it is true, to any action of the judge, on the ground that the term had been adjourned; but the judge overruled the objection, and it may be that he so ruled because the fact was not as asserted, instead of because he deemed the law not to be as claimed. We do not however rest any decision upon this ground, for while there is no. positive assertion that the court was adjourned, it seems probable, from the ruling of the judge upon the objection of the city’s counsel, as well as from the opening words of his certificate, that such was the fact. The certificate of the trial judge, although a judge pro tem., and made after the adjournment of the term at which the case is tried, is, if there be no other objection to it, sufficient. That the judge before whom a case is tried, is the proper officer to settle the record of the proceeding upon such trial, is manifest. And the power of a judge to settle and sign a case, although his term of office has expired, and although there be no statutory authority therefor,'has been affirmed by courts of the highest authority. Fellows v. Tait, 14 Wis. 156; Davies v. The President of the Village of Menasha, 20 Wis. 194; Hale v. Haselton, 21 Wis. 320. We have a statute bearing upon this question. In § 1, chapter 85 of the laws of 1870, it is provided, that the case made “when so made and presented shall be settled, certified and signed by the judge who tried the cause;” and also, that “in all causes heretofore or hereafter tried, when the term of office of the trial judge shall have expired, or may hereafter expire, before the time fixed for making or settling and signing a case, it shall be his duty to certify, sign or settle the case, in all respects as if his term had not expired.” A statute like this is not to be construed in any restricted, technical manner, but liberally, in the ends of justice, that defeated litigants may have a full opportunity for the reexamination in the supreme court of the questions decided against them below. In Thurber v. Ryan, 12 Kas. 453, we held this statute applicable to a case where, before the time for settling and signing a case made, a law took effect detach-ing the county from one and transferring it to another judicial district, thus giving to the county a new district judge. It may be that it is, strictly speaking, hardly correct to speak of the “term of office” of a pro tem. judge. Perhaps he may not technically have a “term of office;” and yet such an expression does no great violence to language. It clearly comes within the spirit and purpose of this statute, that whenever the judge before whom a case is tried shall, before the expiration of the time allowed for settling and signing the case made, have ceased to be judge, he shall nevertheless settle and sign the case made. His judicial life has ended, yet he may and must prepare-for the review of the appellate court the record of the proceedings before him. We think therefore, the certificate of the trial judge must be held good, notwithstanding this objection.

„ m , . sec.6»!of code construed.

„ „ ,. 3. Suggesting TKre^aays8' allowed.

Again, it is insisted that the case made must be disregarded because it was not settled and signed until after the expiration of the time allowed therefor. This claim we think arises from a misapprehension of the statute, a misapprehension evidently shared by counsel on both sides. On the 2d of April an order was made that the railroad company “have thirty days in which to make and serve a case.” On the 4th of May the case was settled and signed. This it is true was more than thirty days after time of the order of extension; But that order did not fix the time for settling and signing the case, or direct notice to be given of the time for presenting the case for settlement. It simply extended the time for making and-serving the case. The making and serving of a case are the acts of the plaintiff in error; the suggestion of amendments, the act of the defendant in error;' and the settling and signing of the case, the duty of the judge. Sec. 547 of the civil code (Gen. Stat. 737,) authorizes a party to make a case. Sec. 548 provides that he shall, within three days after the judgment or order is entered, serve such case made upon the opposite party, or his attorney, who may within three days thereafter suggest amendments, and present the same to the party making the case. “The case and amendments shall be submitted to the judge, who shall settle and sign the same; and the case so made shall thereupon be filed with the other papers in the action.” Section 549, as amended in 1870, (Laws of 1870, page 168,) gives the court power to extend the time for making and serving a case, and also to direct notice to be given of the time when the case may be presented for settlement, after it has been made and served, 7 7 aud amendments suggested. Now the extension 0f ^ ^me for maicjng an(j serving a case, does not take away the time for suggesting amendments. The three days thereafter, in which to suggest amendments, still remain. And where there is no order fixing the time for presenting the case for settlement, and only the simple order giving an extension of time for making and serving a case, the case is duly settled and signed, if settled and signed within three days after the time fixed for making and serving a case. It is true, the statute may be read so as to mean that the three days in which to suggest amendments shall be three days after the actual service of the case, and not after the time given in which to serve. Thus, in this case, the case was served on the 21st of April, several days before the expiration of the time granted. Upon such a construction, amendments would have been required by the 24th. But the other construction, that making the three days to commence upon the expiration of the time given for making and serving the case, while equally warranted by the language, is more in harmony with the definitions and regularity of judicial proceedings, and therefore to be preferred. A party whose adversary has taken time to make a case, knows exactly when he must be ready with his amendments, and can arrange his business accordingly, while otherwise he must be ■ in suspense waiting the action of his adversary and ready to proceed immediately after such action. We conclude then, that as the case was settled and signed within the three days after the expiration of the time given for making and serving it, it was settled and signed in time.

4 certificate of trial judge.

The certificate having been signed by the proper officer, by one having authority to sign, and within the legal time, we come to motion of plaintiff in error to strike Quj. a parf; 0f certificate. We give the certificate in full. It is as follows:

“I, John M. Galloway, being a practicing lawyer in the city of Fort Scott, Kansas, and having held the March Term 1874 of said district court, within and for the county aforesaid, as judge pro tem., duly elected and qualified, because of the sickness and absence of the Hon. M. V.Voss, the regular judge of said district, and as the said judge pro tem. having heard and tried the above entitled cause at said March Term 1874, do hereby certify that the above and foregoing case made by defendant was presented to me by Wm. C. Webb,^* attorney for the defendant, the M. K. & T. Railway Company, on this 4th day of May 1874, for settling, signing and allowing the same as of record. And at the same time and place appeared H. C. McComas, John E. McKeighan, and William C. Stewart, attorneys for the plaintiff, the city of Fort Scott. And the said attorneys for plaintiff objected to the said case presented being examined, settled, signed or allowed by me, because the time for making, presenting, settling and allowing said case had expired; and because a pro tem. judge, after the adjournment of the term of court which he 'held, has no further power to act as judge, and because the order herein made, by which the time was fixed for making, presenting and allowing said case was a consent order, and could not be altered or extended by the court — > which objection was by me overruled and denied, and to which ruling the plaintiff, by its attorneys, duly excepted. And I do hereby refuse to extend the time for making and presenting this case, and. do find, as a matter of fact, at the request of the plaintiff, that the time for making, presenting, settling, and allowing said case has expired, and that no case made was presented to me within the time allowed the defendant by the order in said case made.

“I further certify, that the foregoing case made, together with the amendments suggested by the plaintiff, and submitted to me in writing on the 22d of April 1874, is correct, except that it does not contain all the evidence, and does not contain the charge of the court. It is therefore, ordered and directed that the case as above madé and presented, with amendments thereto, be filed with the clerk of said district court aforesaid, and made a part of the record.”

5. Certificate of mwfe, cannot fee altered or amended.

WRen it may or disregarded.

The motion is to strike out that portion commencing with the words, “And at the same time and place,” and ending with the words, “and does not contain the charge of the court,” and also from the last clause the words, “with amendments thereto.” Upon this motion a large amount of testimony has been taken in depositions before a commissioner heretofore appointed by this court. We forbear comT menting upon this testimony, for it is conflicting, as well as voluminous, and anything like a fair statement of it would •require more space than we can afford to give. And besides, conceding that the charge were proven, as fully and as broadly as it is made, that the facts were exactly as claimed by the plaintiff in error, that the statements objected to were intentionally false, and fraudulently incorporated, and that there was. a conspiracy between the counsel for the city and the judge pro term, to prevent the company from obtaining a case made, still we should be constrained to hold that the motion must be overruled. It involves the reformation of the certificate, and in substance asks this court to make a new certificate. The correction here sought is the striking out of a portion; but the principle would be the same if the application were to add something. In either case the effect is to set aside the certificate as made, and substitute a new one. It becomes really the certificate of this court, instead of the trial judge’s. It may well be, that if a certificate js shown to be intentionally false, and fraudulently prepared, this court should disregard it; but it should be wholly disregarded. The verdict of a jury may be shown to be willfully false to the evidence, and fraudulently prepared ; but the court has no power to reform it, by eliminating the false, and adding the true. It must be rejected altogether. The statute we have quoted heretofore provides that the case should be settled and signed by the trial judge. If he has acted corruptly and fraudulently, the whole act of settling and signing, the entire certificate, is worthless. If the corruption is in favor of the plaintiff in error, and to secure a reversal, ordinarily the rights of the defendant.in error will be protected in a new trial. If in favor of the defendant in error, and to prevent a reversal, cases may arise in which it will be the duty of the reviewing court to set aside the judgment, and order a new trial, presuming, on account of such corruption in the preparation of the case, that the plaintiff in error was wronged in the trial, especially when this corruption involves a conspiracy between the judge and the defendant in error. But even in such a case, we should not attempt to make, by addition or subtraction, a correct certificate, but should reject it altogether. For the correction of a certificate involves a determination of what actually took place, of what is true, and what is false. This court, before it could make a correction, must determine not merely that the trial judge acted 'corruptly, but that his certificate was false in fact. For if the certificate be in fact true, the plaintiff in error has suffered no wrong. And no matter how corrupt and bad the judge may have been, the party has no right to have anything but the truth in the case, or certificate. K. P. Rly. Co. v. Simpson, 11 Kas. 494. And upon a motion like this, to inquire into what actually took place in the trial of a case in the district court, a trial which may have been tedious and protracted, and to settle upon affidavits and depositions a bill of exceptions, or case made, is a proceeding not warranted by authority, nor likely to accomplish successfully the intended result. Suppose the judge had refused to sign the certificate prepared, claiming it to be untrue: would this court, by mandamus, compel him to sign it, or hear evidence to show that it was true, or that the judge corruptly refused to sign it? Shepard v. Peyton, 12 Kas. 616. Take the case before us: to strike out the portions of the certificate objected to, would leave the case made with a statement that it contained the entire testimony, certified to be correct. With the certificate as it stands, it appears that other testimony was also admitted. Now, conceding the corrupt and fraudulent conspiracy, it does not follow that this particular statement in the certificate is untrue. The case as prepared may not in fact contain the entire testimony, and it would be wrong to leave it with such a certificate. And how can we determine its truth or falsity, except by a tedious and unsatisfactory inquiry as to what testimony was actually offered and received on the trial? Surely, such a proceeding is unreasonable, and would tend to error and injustice. The motion therefore to strike out must be overruled. The only substantial difference between the record with the certificate as it stands, and with it as sought to be corrected, is, that in the one case it does not appear to contain the entire testimony, and in the other it does. For the record does not purport to contain the charge of the court; and one of the matters presented by plaintiff in error, on the hearing of its motion, is a claim that it could not obtain from the judge his charge.

6. contract teRailway comtions.

Upon the case as it stands before us, appear two principal questions, one involving the validity of the original contract between the parties, and the other the measure of damages for the breach of such contract. On the 25th of July 1870, an ordinance was passed by* the city council of the city of Fort Scott ordering an election on the 30th of August following, upon the question of subscribing to the stock of the corporation, plaintiff in error, and issuing the bonds of the city in payment therefor. The election was held, and resulted in favor of the subscription. The bonds were issued, and the subscription and bonds accepted by the company. For a breach of the terms of this subscription, was this action brought. The first, fourth, fifth, and eighth sections of this ordinance are the only material ones, and read as follows:

Section 1. That a special election be and the same is hereby ordered to be held in the several wards of the city of Fort Scott, on Tuesday the 30th of August 1870, for the purpose of submitting to the qualified electors of said city, the question of subscribing, in the name of the city, and on the conditions hereinafter prescribed, for seventy-five thousand dollars of the capital stock of the Missouri, Kansas Texas Railway Company, and also the further question of authorizing the mayor and city council of said .city, to issue the b.onds of the city in a sum not exceeding twenty-five thousand dollars, for the purpose of procuring the right of way for the road of said company through the corporate limits of the city, and in addition thereto, to purchasing grounds, as hereinafter provided, not exceeding in the aggregate twenty-eight acres, for depots, engine-houses, machine-shops and yard-room, and donating the same to said company.

Sec. 4. If upon a canvass of the votes cast at said election, it shall be found that a majority of such votes are in favor of the stock, and donation, the mayor' and city council shall be authorized and required to subscribe, in the name of the city of Fort Scott, for seventy-five thousand dollars of the capital stock of said company, on the following fundamental conditions, to-wit:

First: That the said company, théir successors or assigns, shall, within six months from the date of the election above provided for, construct or cause to he constructed, and put in practical operation, a line of railway from Sedalia, in Missouri, to the city of Fort Scott, and shall extend the same as soon thereafter as practicable, in a southwesterly direction, to a point on the Missouri, Kansas & Texas Kailway, lately known as the Southern Branch of the Union Pacific Railroad, Eastern Division.

Second: That said company shall make said line of railway from Sedalia, or from any point to the northwestwardly thereof, to which said company may hereafter extend its road, or cause the same to be made, the great through-line, by way of Fort Scott, to the southwest, and south, through the Indian Territory, to Texas; and no other line of railway shall be constructed by said company, or its successors, from Nevada, in Missouri, south of Fort Scott, through Bourbon or Crawford counties, in Kansas.

Third: Said company shall make or cause Fort Scott to be made the end of a division on said line of road, and shall erect engine-houses and machine-shops at or near said point, before doing so at any other point southwest of Sedalia, on the through-line of railroad from Sedalia by way of Fort Scott to the Indian Territory and Texas, as soon as the business of said line shall, in the opinion of said company, r-ender such shops necessary.

Sec. 5. The mayor and city council shall be further authorized and required to issue the bonds of the city in payment for said stock, at par, that is, to the amount of seventy-five thousand dollars. Said bonds shall be issued in sums of not less than one thousand dollars each, shall bear interest at the rate of seven per centum per annum, payable semi-annually in the city of New York, where the principal shall also be payable, shall have interest-coupons attached, shall be payable thirty years after the date thereof, and shall be executed in due form of law.

Sec. 8. It shall also be the duty of the mayor and city council, in case the election hereinbefore provided for shall result in favor of the stock and donation, to proceed forthwith to confer with the proper officers of said company, or its successors, and ascertain at the earliest possible moment the route selected by said company, or its successors, for the line of their road through the corporate limits of the city, and also the grounds chosen by them for depot and other purposes; and they are hereby authorized and required to proceed, in such manner as may be deemed most conducive to the interests of the city, to purchase so much land as may be necessary for the right of way through said city, and also twenty-five acres exclusive of the right of way, at such point convenient to the city limits, as the officers of said company may select, for depot, engine-houses, machine-shops and yard-room, and they are further authorized to issue bonds of the city, not exceeding twenty-five thousand dollars in amount, for the purpose of raising funds to pay for the same: Provided however, That in case the mayor and city council shall be of the opinion that the interest of the city will be better subserved by purchasing eight acres within the city limits, and twenty acres outside the city, at some point to be designated by the proper officers of said company, for machine-shops, engine-houses and yard-room, they shall be authorized and hereby required to do so, and to issue the bonds of the city in payment therefor, as above provided.

Breach of con-Damages.

Section 10 provided for donating to the company the right of way, and grounds, when purchased. By subsequent arrangement between the city and the company, the twenty-five thousand dollars of bonds were issued directly to the company, in lieu of the purchase by the city of the right of way and grounds. It appears that the company has complied with the first and second conditions of the subscription, but has broken the third, by building engine-houses and machine-shops at Parsons, and none at Fort Scott, and by making Parsons, and not Foi’t Scott, the end of a division. The petition, after the allegations necessary to show the breach of contract by the company, contains these and only these allegations as to damages:

“And the plaintiff charges, that it has been greatly damaged by reason of the conduct of the defendant in this behalf; that if the defendant had complied with its said agreement, and made the city of Fort Scott the end of a division, on the line of its road, and erected the said engine-houses and machine-shops at or near said city, the so doing would have greatly increased the business and augmented the population and wealth of the said city, and thereby decreased the rate of taxation necessary to.pay the interest on said bonds so issued to the defendant. The plaintiff avers, that the sole consideration of and for the said twenty-five thousand dollars in bonds, was to enable the defendant to purchase grounds for said engine-houses and machine-shops,- etc.; and that the defendant received said bonds, negotiated them, and applied the proceeds to other and different purposes, and did not apply the proceeds thereof to the purposes aforesaid.”

. In reference to the validity of the contract, so far as it involved the condition of locating the machine-shops, etc., at Fort Scott, it is hardly so presented by counsel as to justify us in deciding the question. Counsel for the city ignore it entirely, and assume, virtually, that there is no question of its validity. Counsel for the company do not directly attack its validity, nor discuss the power of the city to attach such a condition to its subscription. We quote the language of the brief. After referring to the act for the organization of cities of the second class, to show that no power is there delegated in reference to such a subscription, or contract, and asserting that the only power given is that by §§ 51, 52, and 53 of ch. 23 of laws of 1868, it says:

“What authority then, did this latter statute confer? Simply to permit the city to subscribe to the capital stock of the railway company, and pay up such subscriptions in its bonds, or loan its credit to such company. No authority was given to enter into speculations in building machine-shops, engine-houses, speculating in" real estate, or any such thing. If it had entered into a contract for such subscription, or loan, with the conditions that are attached to the ordinances herein, it is barely possible it could enforce it in case of breach, by a recovery in damages — but only such damages as would bear a pro rata proportion between those conditions performed, and those not performed. In other words, that it .could only make such a contract, as would itself furnish the measure of damages. It could take the necessary measures to protect itself in what it paid, but no further.” * * * “For the purpose of this argument, I admit that it may enforce the performance of the conditions upon which the subscription was made, provided they are legal, and mutually operative. But in case of breach, it can only recover such damages as grow out of the contract, and then to be measured pro tanto.”

We shall therefore assume that the contract of subscription, with the conditions attached, was valid and binding. It is obvious, that the question of power of a municipality, in this direction, may arise in at least two ways: first, where, without any subscription to the capital stock, a municipality makes a contract with a railroad company for the location by the latter of its engine-houses and machine-shops in consideration of municipal aid; and second, where the location is made as a condition of a subscription to the stock. Chapter 29' of the laws of 1869, amending the sections of the law of 1868 heretofore cited, provides in terms for subscriptions by municipalities “upon such condition or conditions as may be prescribed” by them. So that express statutory authority is given for a subscription upon conditions other than the mere cash or bond payment for the stock.

Measure of <iamages for breach. or contract.

7.speculative damages not allowable.

inquiry as to uncertain profits, not allowed,

8. what damages mayheieoov

Amount paid withinterest,

Taxable property-

9. Entire contracts, not appoitionabie.

We pass then to the remaining question as to the measure of damages.- As the charge of the court is not in the record, we cannot say what rule was laid down by the court for the admeasurement of the damages, and can only in- . . _ . , quire whether the testimony admitted, bearing upon the matter of damages, was properly admitted. While the certificate of the judge shows that the record does not contain all the testimony, yet as the amendment suggested by counsel for the city was, to insert, in lieu of the statement that it contained the entire testimony, the statement that “the foregoing is the substance of the testimony taken upon said trial, and submitted to the jury,” we feel justified in assuming that we have in the record the main matters of evidence upon which the jury based their estimate of damages. Whether this be so or not, if matters improper for their consideration were submitted to them, we cannot say that such matters did not enter into and form a part of their estimate of damages, and so prejudice the rights of the plaintiff in error. Referring to the record, we find that -the court permitted testimony, over the objection of the defendant, tending to show the changes in the population and in the values of real estate in the city, the number of manufactories, dry-goods stores, etc., the price of fuel, etc., from the year prior to the subscription and until after the building of the machine-shops and engine-houses at Parsons. And so far as population and values are concerned, the inquiry was not directed to the number of hands whibh would be employed about the shops and engine-houses, nor to the value of shops and houses as taxable property, but to the general changes of population, and the depreciation generally through the city of the value of real estate. It also permitted, over like objection, testimony as to the amount paid monthly by the railroad company to their employés at the machine-shops, at Parsons. It is obvious that this testimony had no bearing on the question of a breach of the contract, but 1 i _ must have been admitted as ,bearing upon the question of damages. These matters therefore were presented as tending to show how much the city had been damnified by the failure of the company to comply with its contract. In other words, if the city had lost in population since the building of the shops at Parsons, the jury might attribute the loss to that fact, and mulct the company in damages accordingly. If real estate had declined in value, if the number of stores, factories, etc., had decreased, the same fact might be taken as the cause, and the company held responsible therefor. We are clearly of the opinion that this testimony was inadmissible, though we are not so clear as to what, in a case like this, is the proper rule for the measurement of damages. The testimony was inadmissible for two or three reasons. First, it involves a mere" speculation. There is no certain connection of cause and effect between the failure to build machine-shops and engine-houses, and the decline in population, or decrease in values. Granted, that the failure may tend to produce the decline and the decrease, yet it is but one of many causes; and' who can tell, or by what process can it be determined, how much of the result is due to this cause? A general or local financial depression, or failure of crops, the lack of business energy or tact on the part of the citizens, the jealousy of rival places, or the prejudice of the surrounding population, the superior activity and prosperity of adjacent cities, and many other causes, may. all have been actively at work, and the main if not the sole causes of the depreciation. To prove the result, and permit the jury to attribute it wholly to the single cause, would often work the greatest injustice. To present all these phenomena, and ask them to determine the extent to which this single cause has contribued to the result, is to invite the jury to the wildest speculation. It is something beyond the power of human wisdom to determine. Again, this is tantamount to an inquiry into profits, _ x . , and profits both remote and uncertain. I he city seeks to recover, not what it has paid out, nor the value of that which the company agreed to build, nor the amount which it would be entitled to collect in the way of taxes off from such improvements, but rather what profits it would have made out of the shops and engine-houses if they had been built according to contract. For the results in the way of increase of population, values, and business, are really nothing but the profits which might be expected to flow from the performance by the company of its contract. Now, while profits are sometimes a legitimate matter of inquiry in actions for damages on account of breach of contract, yet it is only when such profits are the direct and immediate fruits of the contract. The direct result of the performance of the contract would be, the addition to the taxable property of the city, the value of the improvements made within the city. ■ The indirect result might be the increase of the value of real estate generally through the city. And it was this indirect result, to which the examination of witnesses was directed. Suppose that it were within the power of a city, as it is of a private corporation, to engage in manufacturing, and it had made a contract with an individual to build for it a factory: what, in case of a breach of such contract, would be its measure of damages? Could it recover for the enhanced value of the real estate within the city which might be expected to result from the addition of such a manufacturing establishment? Clearly not. Such a result, while it might be termed the profits to flow from the enterprise, is a result too remote and uncertain to become a legitimate matter in the estimate of damages. Yet, wherein does the illustration differ from the case at bar? Again, the theory of the law, in the matter of damages, is compensation. It aims at nothing more. Indeed, it is said by a leading writer on the subject, that “the law in fact aims, not at the satisfaction, but at a division of the loss.” Sedgwick on the Measure of Damages, 3d ed., p. 35. It does not intend to so award damages that a plaintiff profits more by his adversary’s breach, than he would by his performance of his contract. In matters ex delicto, the range of inquiry is wider than in actions, ex contractu. Some reasons for this are well stated by Mr. Justice Christiancy, in the case of Allison v. Graham, 11 Mich. 552, from whom we quote as follows: “There are some important considerations which tend to limit damages in an action upon contract, which have no application to those purely of tort. Contracts are made only by the mutual consent of the respective parties; and each party, for a consideration, thereby consents that the other shall have certain rights as against him, which he would not otherwise possess. In entering into the contract, the parties are supposed to understand its legal effect, and consequently the limitations which the law, for the sake of certainty, has fixed for the recovery of damages for its breach. If not satisfied with the risk which- these rules impose, the parties may decline to enter into the contract, or may fix their own rule of damages when in their nature the amount must be uncertain. * * * Again, in the majority of cases upon contract, there is little difficulty from the nature of the subject in finding a rule by which substantial compensation may be readily estimated; and it is only in those cases where this cannot be done, and where from the nature of the stipulations, or the subject-matter, the actual damages resulting from a breach are more or less uncertain in their nature, or difficult to be shown with accuracy by the evidence, under any definite rule, that there can be any great failure of justice by adhering to such rule as will most nearly approximate the desired result. And it is precisely in these classes of cases that the parties have it in their power to protect themselves against any loss to arise from such uncertainty, by estimating their own damages in the contract itself, and providing for themselves the rules by which the amount shall be measured, in case of a breach; and if they neglect this, they may be presumed to have assented to such damages as may be measured by the rules which the law, for the sake of certainty, has adopted.” In Sedgwick on the Measure of Damages, 3d ed., p. 34, the rule is thus stated: “ In all cases growing out of the nonperformance of contracts, and in those of infringement of rights, or nonperformance of the duties imposed by the law, in which there is no element of fraud, willful negligence, or malice, the compensation recovered in damages consists solely of the direct pecuniary loss, which includes, in mere money demands, interest for the detention of the amount claimed, and the costs of the suit brought for the recovery of the demand. No indirect loss is accounted for.” Now, what what was the direct pecuniary loss of the city, in cage a^ ^,9 pajj $100,000 in bonds, and some subsequent interest, for the entire agreements of the company. Does not the amount paid fairly represent the direct pecuniary loss? and if that amount was returned to the city, would she not receive compensation ? So that, if it could be ascertained what amount the city paid for this particular part of the company’s agreements, and that were returned, would she not receive all to which she was entitled? Would she not be compensated? Wherever therefore, in case of a subscription upon conditions by a city to the capital stock of a railroad company, there has been a failure on the part of the company to comply with one or more of the conditions, and it can be shown by the contract, or aliimde, what amount was Pa^ as a consideration for the condition or con¿itions broken, such amount and interest is the proper measure of damages. If in this case the allegation of the petition were sustained by the evidence, and it was shown “that the sole consideration of and for the said twenty-five thousand dollars in bonds was to enable, the defendant to purchase grounds for said engine-houses and machine-shops, etc.,” that amount at least, with interest, would be properly recoverable from the company. Or, if there were more than this one consideration for such bonds, and the value of the other could be determined, then the difference would be properly recoverable. Again, where the unperformed condition is the erection within the city of buildings, or other improvements, another measure of damages may be accepted. The city, by the nonperformance of the condition, loses the value

improvements for purposes of taxation, and this is a direct pecuniary loss, and one sus-

ceptible of determination with reasonable certainty. The average rates of taxation in the past — there being no exceptional causes of temporary excessive taxation — may fairly be accepted as the rate of the. future. The value of the improvements being shown, the amount of the annual tax is a simple mathematical calculation. This annual tax may be considered in the nature of an annuity, whose present value is susceptible of exact determination by the ordinary tables. In a case like the present, where the size and value of the contemplated improvements are not fixed by the contract, the law implies that they shall be such as are reasonably suited to the purposes for which they are to be used. We suggest these measures of value as applicable, one or both, to the case at bar, though -at least for the latter an amendment would have to be made to the petition. Cases may arise,

perhaps the case at bar (when all the facts are presented) may be found to be such an one, m

which the contract is an entirety, and there is in it no means of apportionment; and nothing can be shown aliunde to establish an apportionment, nor to show the relative or absolute values of the conditions performed, and those broken. In such a case, the rule of law, we take to be, that no action can be maintained to recover the consideration, nor upon a quantum meruit, until all the conditions are performed; and-that in case the consideration be paid in advance, and only part of the conditions are performed, the entire consideration can be recovered. Yet to this conclusion, in any given case, the law reluctantly comes, and only when it is perfectly clear that, by no construction or evidence can there be any apportionment or determination of values. With these suggestions we conclude this opinion, fully aware that there may be difficulties in the further progress of this case which we have not guarded against. We are clear that the testimony was improperly admitted, and therefore the judgment must be reversed. We are satisfied that the rules we have laid down for the measurement of damages' in this class of cases are correct; but how far either one of them may be found applicable in the future trial of this case, we cannot now determine, the testimony on the trial already had having been turned in an entirely different direction.

The judgment of the court below will be reversed, and a new trial ordered.

All the Justices concurring.

* [*Although -wholly immaterial to any question controverted or decided in this court, it is due to the “truth of (personal) history,” to say, that Mr. Webb was not then, or at anytime, the attorney or an attorney for the M. K. & T. Ely. Co. in this action or proceeding; but in presenting the case-made to the trial judge, for his signature, Mr. W. was merely performing a friendly office for (and at the personal request of) Judge Sears, the Company’s attorney, who was at that time absent. — Bepouter.]

Case Details

Case Name: M. K. & T. Railway Co. v. City of Fort Scott

Court Name: Supreme Court of Kansas

Date Published: Jul 15, 1875

Citation: 15 Kan. 435

Court Abbreviation: Kan.