Harrison Bros. v. Murray Iron Works Co.

BROADDUS, J. Under the stipulation of the parties, the first question for us to determine is, was the defendant’s liability limited in the event of a failure to fully perform its contract to a return of the amount of money received from the plaintiffs! If so, the plaintiffs were not entitled to recover. The clause in the contract in reference to this'matter is as follows': “After the plant is erected, we (defendant) to furnish an engineer to have charge of the operation of the [357] machine for ten days, during the .time, he will do the work herein specified. At the end of the above mentioned ten days, you (plaintiffs) shall accept or reject the plant. It being understood, however, that if it fulfills the requirements of this proposition, it shall be accepted. If rejected, you shall notify us in writing thereof, and hereby permit us to enter the premises and remove all our machinery without charge to you, and upon refunding to you whatever money has been paid us.” It must he conceded that the plaintiffs’ claims for damages are such as would he allowed at law, and we do not understand that defendant denies such to be the case. Damages of this character following as a matter of right at law, may he restricted or altogether excluded by contract, hut such contracts being in derogation of law are to he strictly construed. Bishop on Contracts, section 4.04, lays down the rule in the following language: “Terms in a contract in derogation of law — that is, establishing for the particular instance a rule contrary to what the law would provide — are, like provisions in a statute in derogation of the common law, construed strictly. For instance, it is so, when a common carrier undertakes to limit his liability by a special agreement with the party, he can claim nothing beyond what is plainly within the words.” In Richardson v. Railway, 149 Mo. 311, the court adopted the said rule from Bishop. This rule is applied by other courts. Wellston v. Matthews, 55 Minn. 422; Newton v. Pyne, 40 Iowa 166; 5 Am. and Eng. Ency. of Law (2 Ed.), page 333. In Fisher v. Barret, 4 Cushing 381, the court adopts the rule as laid down by Comyn on Contracts, that stipulated damages can only he where there is a clear and unequivocal agreement, which stipulates for the payment of a certain sum as liquidated satisfaction fixed and agreed upon by the parties, for the doing or not doing of certain acts particularly expressed in the agreement.” ■ It is obvious that the stipulation in the case had reference to only one matter, and that was the right of defendant to enter plaintiff’s-premises, and remove the [358] machinery, upon payment to them of the money it had received from them in payment on the contract. It is a special agreement and under the rule must be strictly construed. It does not purpose to include any other claim plaintiffs may have growing out of the transaction. The conclusion is unavoidable, that the stipulation in question was not a limitation upon the plaintiffs to a return of the money so paid. It being agreed, “that the advanced purchase money is admitted to have been in the liquidated sum of $3,800, and that, under the facts proved, it was un-. conditionally due from appellant’s at the time the release was executed,” the question submitted is, “was said release valid,” and we suppose that when the parties used the word valid they did so with the understanding that the court was to determine whether it was efficacious, for the purposes- claimed by the defendant. The respondents contend, that - said release is void for want of consideration.' That is to say, that the money in question paid to them was liquidated 'and due and there being no other or further consideration, the release could have no effect in extinguishing plaintiffs ’ claims for unliquidated damages. In Railway v. Clark, 92 Fed. Rep. 968, the court held: “Payment by a debtor of a liquidated amount, presently due, and to which he has no defense, that can be urged in good faith, or with color of right, is not, by itself, a sufficient consideration to sustain a release by the creditor of other unliquidated claims against the debtor.” The facts in that case were that the defendant “was indebted to plaintiff in amounts which were due and liquidated and undisputed, rendered him a statement of account, in which he was credited with such amounts only, and was charged with certain cross-demands, which were unliquidated and open to dispute. It tendered payment of the balance shown by the statement to be due, on the execution by him of a receipt in full, which accompanied the statement. “It was held, that the execution of the receipt, and the making and acceptance of the payment, did not constitute an accord and satis [359] faction: there being no consideration for the receipt.” The court cites many adjudications supporting its opinion. In Swaggard v. Hancock, 25 Mo. App. 596, it is held that “the payment of a debt clearly due, does not constitute a sufficient consideration to support any kind of a contract or agreement.” The question was before the Supreme Court in McCormick v. City of St. Louis, 166 Mo. 315. The court among other things discussed the principles we are considering as follows: “Appellants final suggestion, that as defendant only paid what it acknowledged and conceded to be due, the agreement on his part, evidenced by his receipts in full satisfaction and discharge of all demands, was without consideration, and only operated as a discharge of so- much of his claim as was actually paid, and not that part involved in the present suit, is erroneous in this, that he overlooks the fact that the amount due under the several contracts with the defendant city was at all times in dispute, at least so far as the plaintiff was concerned. Though the city only paid at last what it at all times acknowledged to be due, and had expressed its readiness to pay under the terms of the contract, it was not bound to pay that until the plaintiff would agree to accept it in full satisfaction of all demands, and this constitutes in law a sufficient consideration to support a settlement made. ’ ’ The court in its opinion seems to recognize the principle announced and upheld in the foregoing authorities, but the difficulty arose as to its proper application to the facts of the case. Notwithstanding there was some disagreement between the parties at and prior to the time of the signing and delivery of the release as shown by the erasures and interlineations on its face, and by other evidence, as to what items should be allowed in making up the sum total, that plaintiffs had paid on the contract, the defendant by its stipulations for the submission of the case waived all controversy as to that matter, and the case now stands as if there had been no such disagreement, and said sum of $3,800 is to be considered as [360] liquidated, due and undisputed. At the time and prior to the payment of said sum and the signing and delivery of said release, plaintiffs had made no claim upon the defendant for any part of the unliquidated damages now in controversy. It is true that plaintiffs ’ attorney during the time complained to defendant’s agent to the effect, that it was an outrage upon plaintiffs to require them to sign the release as the amount therein named was due them; and that he well knew that is was the expressed design of defendants to get a release for all claims for damages before he would pay the money. But because such were the circumstances under which the release was executed, can make no difference in the principle applicable to the case, for in the end the result was the same, the writing stood without any consideration. It was nudum pactum. Because defendant required a release for all claim for damages before it would pay what was admittedly due, does not bring the case within the rule in McCormick v. City of St. Louis, supra, where the claims were held to have been at all times in dispute. In this cáse, they had not been asserted and were not in dispute at any time prior to the execution of the release. Applying the principle of the foregoing case, it is clear that the release is invalid. The cause is affirmed. All concur.