Cleveland Crane & Car Co. v. American Cast Iron Pipe Co.

ANDERSON, J. The courts of the land have experienced no- little difficulty in construing contracts stipulating for a payment of a specific sum of money on a contingency, and in determining whether the sum so mentioned should be regarded as a penalty or as liquidated damages. The primary rules for interpretation are laid down in the case of Keeble v. Keeble, 85 Ala. 552, 5 South. 149; and, applying those rules to the contract in question, it was the manifest intention of the .parties thereto to fix the sum named as liquidated damages to compensate the defendant for losses in the operation of its plant caused hv a delay in the shipment of the cranes, which, while constituting but a part of the defendant’s works or plant, were essential to the manufacture of its products and the successful operation of same. The damages accruing could not be easily .estimated or ascertained in an action at law, and it was but natural for the parties to agree upon a fixed and certain sum as liquidated damages, and which was not intended as a penalty. Such is not only the wording of the contract, but said wording is substantiated by the surrounding facts and circumstances, which evince an intent and purpose of the contracting parties to provide for liquidated damages rather than a penalty; and we think that the trial court properly construed the contract, and properly overruled the plaintiff’s demurrers to the defendant’s special pleas of set-off and recoupment. Replications 3 and 4 were subject to the demurers interposed to same, and which were properly sustained by the trial court. The trial court committed no reversible error in ruling upon the evidence. [256] There was proof in support of the defendant’s special pleas abundantly supporting the judgment of the trial court. Nor can we agree with the appellant’s contention that its second replication was proven, as we think the proof fails to show that any delay upon the part of the defendant in inspecting and returning the blue prints was the cause of the delay in manufacturing and shipping the cranes. The judgment of the circuit court is affirmed. Affirmed. Dowdell, C. J., and Sayre and Evans, JJ., concur.