166 Mo. App. 305 | Mo. Ct. App. | 1912
— This suit, commenced in the circuit court of Jackson county, November 27,1909, is for the recovery of the agreed compensation plaintiffs claim defendant was to pay them for the use of their land for a right of way of a railroad owned and operated by defendant. On December 7, 1909, plaintiffs instituted another suit against defendant in the same court on a promissory note of $1460 dated January 9, 1908, due eighteen months after date and bearing interest at six per cent per annum from January 1, 1909. It appears from the petition in both cases as well as from the answers filed by defendant that both actions grew out of and depend upon the validity of a certain contract the parties entered into January 9, 1908. Defendant claims this contract is void and prays for the cancellation of both note and contract.
Defendant is a Kansas corporation operating an electric railroad in that state from a point on the line between Missouri and Kansas known as Thirty-ninth street and State Line to Olathe, Kansas. This point at the times of the events in controversy was the western terminus of the “Roanoke line” of the street railway system of Kansas City operated by the Metropolitan Street Railway Company. Defendant has a traffic agreement with the Metropolitan Company that enables it to operate its cars over the tracks of that company to the central portion of Kansas City. Defendant’s road was constructed in 1905, and beginning at its junction with the road of the Metropolitan Company at Thirty-ninth street and State Line took a southwesterly course over a tract of land owned by George Muehlebach which contains about twenty-eight acres, is in Kansas immediately west of the State line, and lies between a prolongation of Thirty-ninth street on the north and Forty-first street on the south. We shall refer to this land hereafter as “tract-A.” Crossing Forty-first street the road continues on a tangent over a smaller tract owned by Muehlebach which we shall call “tract B.” Muehlebach died December 22, 1905, and plaintiffs, with the exception of William Buehholz are his heirs and as such are the owners of the land described. All are of legal age except Carl who is a minor and plaintiff Margaret M. Muehlebach
In 1907, the Metropolitan Street Railway Company contemplated extending its Roanoke line south on Bell street to and beyond Forty-first street and negotiations were begun between defendant and that company for a junction between the two roads at Forty-first and Bell streets in place of the connection at Thirty-ninth street and State Line. Bell street runs north and south, is in Kansas City, Missouri, and is the first street east of State Line. Plaintiffs own the land on both sides of Forty-first street in the blocks between State Line and Bell, and it was the idea of defendant to abandon the road over “tract A” and to run west on Forty-first street from a new junction at Bell street to a connection with its road over “tract B.” Accordingly on April 19, 1907, W. B. Strang, who was not an officer of defendant but was a heavy, stockholder, acting on behalf of defendant, addressed a letter to plaintiffs in which, referring to' a proposal he had received from plaintiffs for a settlement of the pending litigation, he offered a settlement, the prominent features of which were that defendant would abandon the right of way over “tract A” by
This proposal was acceptable to plaintiffs but for some reason was not reduced to a formal contract. Shortly after January 1, 1908, the attorney of plaintiffs and Albert F. Hunt, defendant’s president, resumed negotiations for a settlement which resulted in the execution of the contract now in dispute. This contract which stated on its face that the contracting parties were plaintiffs, spoken of as parties of the first part, and defendant and W. B. Strang, parties of the second part was signed by plaintiffs and defendant but not by Strang who, at the time, was in New York. After the contract was signed it was forwarded by Hunt to Strang for his signature. He refused to sign but plaintiffs were not advised of his refusal until about March 1st when Hunt informed them that Strang had rejected the contract and that he did not consider defendant was bound by it. Plunt admits that, as president, he had authority to execute the contract on behalf of defendant but based his repudiation of the contract on the ground that the refusal of one of the parties to sign absolved the others.
The material provisions of the contract thus may be stated: Plaintiffs were to dismiss their appeals in the condemnation suits, give the right of way over “tract B,” give defendant the use of land for the new terminal at Forty-first and Bell streets and pay most of the costs of the condemnation suits. Defendant was to remove the road from “tract A” and level off the cuts and fills on that tract, was to allow plaintiffs to
Immediately after the contract was signed by plaintiffs and defendant both parties treated it as a complete and binding contract. Plaintiffs’ attorney and defendant’s president went together to Kansas City, Kansas, and obtained the two deposits. The one of $2540 was received by Hunt and páid at once to plaintiffs’' attorney as a payment on defendant’s obligation of $4000. Each paid his part of the costs of the condemnation suits and plaintiffs* attorney dismissed their appeals “with prejudice.” On behalf of defendant Hunt executed and delivered a quitclaim deed to the right of way on “tract A” and plaintiffs’ attorney filed the deed for record. Apparently it was contemplated by both parties that the new terminal and connection with the Metropolitan road would be made in the immediate future but in addition to the other benefits to plaintiffs we have enumerated, the contract contained provisions designed to accelerate the removal of defendant’s road from “tract A.” The substance of these provisions was that beginning January 1,1908, defendant should pay a rental of fifty dollars per month to plaintiffs for the right of way on that tract until the removal of the road. If the road
At the time the present suit was brought the Roanoke line still ended at Thirty-ninth street and State Line and defendant, ex necessitate, still connected with that line at that place and operated its road over “tract A.” The demand alleged in the petition is for the rent that accrued during the period beginning January 1, 1908, and ending December 1, 1910, amounting in all to $1975 for twenty-three months. At the present time the rental of the tract computed according to the progressively ascending scale of the contract is $375 per month and if we should uphold this provision of the contract, defendant now would be indebted to plaintiffs on account of rent from December 1, 1910, in the sum of $6075: And if defendant should remain five years longer, it would- have to pay about $40,000 more for the use of a right of way the entire value of which for all time was assessed at $2540 in the condemnation suit. For the next ten years the rental would be over $160,000.
I. It appears to be conceded that the right of plaintiffs to recover in the present suit and in the companion suit on the promissory note depends on the validity of the contract of January 9, 1908. In both suits plaintiffs found their actions on that contract and, accepting the position thus tendered, defendant assails the validity of the contract on two grounds, viz., first, that it “never became a contract binding on the defendant” and, second, that the. provision for monthly payments for the use of the right of way over “tract A” was intended as a penalty to coerce per
In support of the first proposition counsel for defendant argue that inasmuch as the contract on its face purported to include Carl Muehlebach among the parties of the first part and W. B. Strang as one of the parties of the second part, the instrument did not become effective as a contract and, therefore, did not bind the signatory parties for the reason that it was not signed by these two parties. Carl Muehlebach was a minor and, of course, his signature to the contract would have had no effect to bind him or his estate and the contract must be construed not as providing for the procurement of his signature, which would have been a vain and useless act, but as binding the first parties who were sui juris to procure a signature that would bind his interest and estate in the subject-matter of the contract. This burden was discharged by the first parties when they procured the duly authorized signature of his guardian and curator who signed the contract in his behalf with the approval of the probate court having jurisdiction over his estate.
Nor do we regard as sound the contention that the contract is void because of the refusal of Strangto sign it. The contract imposed no obligation on Strang and secured no benefit to him. Defendant was the only party of the second part that assumed any obligation or was to secure any -advantage. We concede defendant would have had the right to require that the contrhct should not go in effect unless signed by Strang, though apparently he was but a nominal party but defendant did not take such .position. On the contrary its president who had full authority to act in its behalf did not wait to procure the signa
It would be most unjust to suffer defendant to derive all of the benefits the contract conferred and then repudiate its obligations on the ground of a lack of mutuality as to parties. The contract bound the parties who signed it and the promissory note executed by defendant in pursuance of its provisions is a valid obligation which defendant must discharge.
II. The second proposition relates exclusively to the case in hand. Was the so-called rental agreement in legal intendment a penalty intended to coerce performance of the contract? If it was it cannot be enforced. [2 Page on Contracts, sec. 1167 et seq.] “A contract for a penalty” says this author, ££is an agreement to pay a stipulated sum in case of default, in