Hardie Tynes Foundry & Machine Co. v. Glen Allen Oil Mill

• Decision Date: 11 April 1904
• Citation: 84 Miss. 259,36 So. 262
• Parties: HARDIE-TYNES FOUNDRY & MACHINE CO. v. GLEN ALLEN OIL MILL
• Court: Mississippi Supreme Court

36 So. 262

84 Miss. 259

HARDIE-TYNES FOUNDRY & MACHINE CO. v. GLEN ALLEN OIL MILL

Supreme Court of Mississippi

April 11, 1904

FROM the circuit court of Washington county. HON. A. MCC. KIMBROUGH, Judge.

The Glen Allen Oil Mill, appellee, was plaintiff in the court below; the Hardie-Tynes Foundry & Machine Co., appellant, was defendant there. Both parties were corporations. From a judgment in plaintiff's favor defendant appealed to the supreme court. The facts are stated in the opinion of the court.

Reversed and remanded.

Jayne &amp Watson, for appellant.

A cardinal rule for the interpretation of contracts is that the intention of the parties must govern. While it is true that the words of the contract are to be considered in determining the intent of the parties, it is also true that the circumstances surrounding the parties at the time are to be considered in interpreting the words used in the contract. The written words, "It is understood that the above described engine will be shipped August 15, 1902, and failing to do so, Hardie-Tynes Foundry & Machine Co. agrees to pay as forfeit $ 5.00 a day for every day behind this time," were not intended to annul that part of the contract embraced in the first paragraph or clause whereby it is agreed "That the engine should be shipped in August, 1902 unless delayed by strikes, fires or manufacturing contingencies beyond our reasonable control."

The whole of the contract should be taken together in order to get at the true intention of the provision; and if one part be irreconcilable with another upon any reasonable construction, it ought nevertheless to aid in the consideration of the whole, though apparently inconsistent. 2 Parsons on Contracts [9th ed.], sec. 3, star paging 500 and star paging 491; 10 Pickering, 228.

It is a cardinal rule of the interpretation of mutual contracts, that one part is not to be abrogated or impaired by another when that other has one separate meaning and fully satisfies the words. We do not dispute the rule that where there is an irreconcilable conflict in a contract between a written and a printed part, that the writing will govern, but to invoke this rule the court must be satisfied what the intentions of the parties were, and the language must be such as to compel the court to assume that the written part was intended to abrogate the printed part, and the printed part must be irreconcilable with the written part.1 Beach, Modern Law of Contracts, 728; 99 Penn., 171.

The parties agreed upon the $ 5.00 per day as a penalty. The court will, where there is doubt, construe a sum payable for breach of contract as a penalty rather than liquidated damages. Lansing v. Dodd, 45 N. J. L., 525; Foley v McKegan, 4 Iowa 1; 3 Parsons on Contracts [9th ed.], star paging 156, et seq.; 91 Ill. 609; 109 Ind. 564.

Percy & Campbell, for appellee.

Where a contract is partly printed and partly written, and the printed part and the written part are in such conflict as not to be reconciled by any reasonable construction, the written part will prevail. 17 Am. & Eng. Ency. Law, 21; Summers v. Hibbard, 46 Am. St. Rep., 872; Insurance Co. v. Van Os & Shuster, 63 Miss. 431.

The first clause of the contract in question, which is printed, and the addendum thereto, which is written, present such a conflict.

The amount fixed in the contract to be paid by appellant for each day's delay in the shipment of the engine was properly construed by the court as liquidated damages, and not as a penalty.

It is competent for the parties, in making a contract, to fix therein the amount of damages to be paid upon breach thereof; and where the damages are in their nature indefinite and uncertain, and the parties have mentioned a specific sum as the damages to be paid in case of a breach of the contract, and the same is not greatly disproportioned to any probable estimate of the actual damages, the same will be construed as liquidated damages, and not as a penalty.

In considering whether a stipulation to pay a sum of money on a breach of contract is to be treated as a penalty or as liquidated damages, the test appears to be whether the loss which will accrue from an infringement of the contract can or cannot be accurately or reasonably calculated in money antecedently to the breach. 1 Beach on the Modern Law of Contracts, 624-629; 19 Am. & Eng. Ency. Law, 400412; 1 Pomeroy's Eq. Jur., secs. 441,...