Brazoria County v. Youngstown Bridge Co.

• Decision Date: 02 February 1897
• Docket Number: 534.
• Citation: 80 F. 10
• Parties: BRAZORIA COUNTY et al. v. YOUNGSTOWN BRIDGE CO. [1]
• Court: U.S. Court of Appeals — Fifth Circuit

80 F. 10

BRAZORIA COUNTY et al. v. YOUNGSTOWN BRIDGE CO. ^[1]

No. 534.

United States Court of Appeals, Fifth Circuit.

February 2, 1897

This was a suit in equity brought by the Youngstown Bridge Company against Brazoria county, Tex., and others, to obtain a construction and reformation of a contract entered into between it and Brazoria county, and praying that an action at law upon the contract be suspended until the further order of the court. A decree having been rendered in favor of complainant, reforming the contract as prayed, defendants have appealed.

On May 25, 1892, the county of Brazoria, state of Texas, entered into a written contract with appellee, the Youngstown Bridge Company, for the construction of two iron bridges. The contract, which was duly executed by the respective parties required the appellee to furnish all necessary material, and to construct the bridges according to the plans and specifications attached thereto. In consideration of the construction of the bridges, the county agreed to pay to the appellee the sum of $16,000, payment to be made in the bonds of the county, in denominations of $100 each, payable 20 years from the date of same, with interest at the rate of 6 per cent. per annum; the bonds, however, to be redeemable at any time after 5 years from their date. As to the time of the completion of the work, and the failure to perform the contract within the stipulated period, the following provisions occur in the contract: 'Both of said bridges are to be completed in accordance with this contract within five months from this date, unless the completion of same is prevented by unavoidable accidents or the act of God; and upon a failure upon part of the party of the first part to so complete said bridges within said time, and to tender the same to the party of the second part, then the party of the first part hereby agrees to pay to the party of the second part the sum of fifty dollars ($50.00) for each day after the expiration of five months from date hereof until both of said bridges are completed according to this contract, and tendered to the party of the second part, which said amount is to be deducted from the purchase price herein agreed to be paid for such bridges. * * * The fifty dollars agreed to be paid upon a failure to complete said bridges within five months from this date is to be paid as liquidated damages for such failure. ' The bridges were constructed by the appellee, but not within the specified time. The county is however, using them, but refusing to issue the bonds. To compel the county to comply with its contractual obligations the appellee on February 8, 1893, instituted a suit at law in the circuit court for the Eastern district of Texas, at Galveston, in which Brazoria county, the county judge, the county commissioners, the clerk of the county commissioners' court, and the county treasurer were made parties defendant. The petition in the suit at law alleged fully the facts in reference to the execution of the contract, the authority of the county to make it, the performance by the plaintiff and breach by the defendant, and prayed the issuance of a writ of mandamus to require the county authorities to issue to the plaintiff, the Youngstown Bridge Company, the bonds of the county, to the amount of $16,000, agreeably to the provisions of the contract. The concluding prayer of the petition is as follows: 'That a writ of mandamus issue to the county judge and the said commissioners, ordering and compelling them, at the said next regular term of the commissioners' court of Brazoria county, Texas, to pass an order, and duly enter the same upon the minutes of said court, providing the levy and collection of a tax sufficient to pay the interest and to create a sinking fund for the payment of said bonds, and providing by said order for the annual levy and creation of sufficient tax for said purpose; for all costs of court; and for such general and special relief as the plaintiff may show itself entitled upon the trial hereof. ' The petition contained no allegation to the effect that Brazoria county had made any provision, by levy of a tax, for interest on the bonds and a sinking fund, as required by the constitution of the state. To the petition the defendants interposed a general demurrer and filed a special answer. The material defense of the county, as set forth in the answer, is embodied in the following averments: 'That one of the conditions and provisions of said contract set out by plaintiffs in their said original petition, and sued on in this case, is that said bridges are to be completed in accordance with this contract within five months from this date, unless the completion of the same is prevented by unavoidable accidents or the act of God; and upon a failure upon the part of the party of the first part to so complete said bridges within said time, and to tender the same to the party of the second part, then the party of the first part herein agrees to pay to the party of the second part the sum of fifty dollars for each day after the expiration of five months from date hereof, until both of said bridges are completed according to this contract and tendered to the party of the second part, which said amount is to be deducted from the purchase price herein agreed to be paid for such bridges. ' The date of said contract is May 25, 1892. Defendants allege that, if said bridges referred to herein and in plaintiffs' original petition were ever at any time tendered to defendants herein, such tender was not made, or pretended to have been made, until June 27, 1893, or 211 days after the expiration of 5 months from date of said contract. The Youngstown Bridge Company, plaintiff in the suit at law, and appellee here, filed its bill on March 24, 1894, against the defendants in the suit at law, and appellee here, filed its bill on March 24, 1894, against the defendants in the suit at law, who are appellants on this appeal, to obtain a construction and reformation of the contract entered into between it and Brazoria county. The bill alleges the execution of the contract, the power of the county to make it, the completion of the bridges, and their acceptance and use by the county. It further alleges that appellee, without any fault of its own, failed to complete the bridges until June, 1893; that the liquidated damage clause was inserted in the contract by accident and mutual mistake of the parties; and that the clause in question was understood and intended to be a mere penalty, and not to be enforced literally as in the contract provided. The purpose of the bill was to secure relief against what appellee regards as a penalty imposed for failure to construct the bridges within the stipulated time, on the ground, as stated, that the clause was made a part of the contract by accident and mutual mistake of the parties. Relief appropriate to the allegations of the bill is prayed, and, further, that the suit at law be suspended until the further order of the court, and also that the county be enjoined from issuing other bonds until it complied with its obligation to issue bonds to the appellee in the sum of $16,000, according to the terms and stipulation of the contract. On April 7, 1894, the appellants and appellee entered into an agreement touching the matter of the issuance of an injunction, and a temporary injunction was duly issued in conformity with the stipulations. Appellants answered the bill August 6, 1894, but, in view of the conclusion reached by the court, the averments of the answer need not be stated. Replication was filed by the appellee January 5, 1895, and testimony taken on the issues joined. The appellants filed a demurrer to the bill on March 16, 1896, but the usual certificate of counsel is not thereto appended. There, however, appears an affidavit of one of the counsel for appellants that the 'demurrer is not interposed for delay. ' On the same day, to wit, March 16, 1896, the demurrer was heard, and the following order entered: 'On this day came the parties to this suit, by their attorneys, and thereupon came on to be heard the defendants' demurrer to the complainant's bill, and was argued; but, the argument not being concluded, the further consideration of the matter was postponed until to-morrow. ' On March 17th the hearing of the cause was on demurrer, the pleadings, and proofs was concluded, and the demurrer was overruled. The court decreed the liquidated damage clause of the contract 'to be a provision for a penalty for the nonperformance of said contract, and not liquidated damages, and that said amount of $50 per day does not fix the amount of damage, but is only a penalty. ' The decree proceeds as follows: 'It is further considered, ordered, adjudged, and decreed that, in all actions sought to be maintained by said complainant upon said contract, that the said terms of said contract be so construed, and that it be used in evidence with said construction, and that the said contract be, and the same is hereby, reformed to the extent that the said provision of $50 per day to be paid by complainant in the case of failure to construct said bridge within the time specified is and was a provision for a penalty, and not an amount fixed as the damages which would accrue in case of nonperformance of said contract. ' The decree further orders the suit at law to proceed to a hearing, and perpetuates the temporary injunction theretofore issued. From this decree the defendants below appeal.

Branch T. Masterson, for appellants.

J. N. Coleman, for appellee.

Before PARDEE and McCORMICK, Circuit Judges, and MAXEY, District Judge.

MAXEY District Judge, after stating the case, .

Before entering upon a discussion of the merits of the case, it becomes necessary to...