St. Louis, Iron Mountain & Southern Railway Co. v. Jefferson Stone Co.

BLAND, P. J. The defendant’s contention is, that clause thirteen of the contract in respect to the payment of the cost of the switch in the event of the stone company’s failure to furnish the agreed amount of freight, should be construed as a penalty. In construing the contract with a view to ascertain whether the amount stipulated to be paid is a penalty or liquidated damages, the subject-matter of the contract, the language employed and the intention of the parties should be considered. The situation of the stone company was this; it owned a stone quarry that was valueless for want of transportation facilities, but which would be valuable if its products could be transported, by rail from the grounds, to market. The plaintiff owned and operated a nearby railroad that reached markets [181] both north and south; to connect with this road would afford the stone company the desired facilities for transportation. It does not appear from the evidence that the switch would have been of any special value to plaintiff’s main line and that the only profits it might in the future derive from it would be the freights on the products .of the quarry, and we think we may justly conclude that the switch was constructed for the especial benefit of the stone company and not as a valuable accessory to the plaintiff’s road when disconnected from the stone quarry. It was not ascertainable that the stone company could or would furnish sufficient freight to justify the plaintiff to incur the expense of constructing the switch; to provide against the contingency of a loss on its construction, paragraph thirteen was incorporated in the contract to insure the plaintiffs against such loss in the event the enterprise of the stone company should prove to be a failure. The business did fail and the question is, should the stone company, under its agreement, pay not only for the labor in the construction of the switch, but also for the rails, crossties and other materials used in its construction, all of which it is expressly stipulated by the contract shall remain the property of the plaintiff ? If so, the contract is a hard one, but courts can not relieve parties of a hard contract merely because it is hard, unless the sum agreed to be paid on the occurrence of its breach, can be construed as a penalty. Mere improvidence does not of itself afford a sufficient ground for such relief. II. The evidence does not authorize us to pronounce the contract unconscionable and to afford equitable relief on that ground. There is no pretense that the defendants did not enter into the contract freely and voluntarily with all the facts before them, and it must therefore be construed according to its true meaning and intent to be ascertained from the language employed to express that intent. Chase v. Allen, 13 Gray 42; [182] Cushing v. Drew, 97 Mass. 445; Streeper v. Williams, 48 Pa. 450. But one breach of performance is alleged, and but one is provided for by clause thirteen of the contract, hence, the case does not come under the rule announced in Morse v. Rathbun, 42 Mo. l. c. 601, that “where an agreement contains several distinct covenants, on which there may be divers breaches, some of an uncertain nature and others certain, with one entire sum to be paid on the breach'of performance, the contract will be construed as a penalty, and not as liquidated damages followed by this court in Brevard v. Wimberly et al., not yet reported ; but does come under the rule announced in Hamaker v. Schroers et al., 49 Mo. 406, where it was held that, “Where the parties have agreed that in case one of them shall do a stipulated act, or omit to do it, the other party shall receive a certain sum as a just, appropriate and conventional amount of damages sustained by such act or omission, courts will not interfere to grant relief, but will deem the parties entitled to fix their own measure of damages, provided that the damages do not assume the character of gross extravagance, or of wanton and unreasonable disproportion to the nature and extent of the injury, and whether a sum inserted in an instrument to be paid in case of breach, is to be regarded as a penalty or liquidated damages, must be determined by the nature of the contract and its provisions.” If from the nature of the contract the actual damages sustained can be “computed with certainty by definite rules” the courts will construe the sum stipulated to be paid as a penalty, regardless of the fact that the parties may have called it liquidated damages; but on the other hand, if the actual damages can not be “calculated with any degree of certainty” or “are not susceptible of definite ascertainment,” and the “intention of the parties is plain and palpable” and the amount is not “disproportionate to the probable damages,” the court will construe it to be liquidated damages. May v. Craw [183] ford, 150 Mo. 504. The actual damages sustained by the plaintiff, on account of the breach of performance of the contract alleged, are not definite and certain, nor are they “susceptible of definite ascertainment” and we think the intention of the parties is “plain and palpable” that the amount agreed on should he the measure of the plaintiff’s damage for a breach of the performance of the requirements of paragraph thirteen of the contract. We can not say that the amount agreed to be paid for a breach of performance of paragraph thirteen is disproportionate to the probable damages, in view of the fact that the switch was constructed for the especial accommodation and use of the stone company and was of no appreciable value to plaintiff after the stone company ceased to ship quarry products over it. The judgment is affirmed. All concur.