Holton v. Job Iron & Steel Co.

• Decision Date: 06 May 1913
• Docket Number: 2,293.
• Citation: 204 F. 947
• Parties: HOLTON v. JOB IRON & STEEL CO.
• Court: U.S. Court of Appeals — Sixth Circuit

204 F. 947

HOLTON v. JOB IRON & STEEL CO.

No. 2,293.

United States Court of Appeals, Sixth Circuit.

May 6, 1913

The draft of proposed contract provided that the Land Company should (a) give $25,000 towards the cost of erecting the building and installing the plant (estimated to cost $180,000), to be paid from time to time as the work of erection and installation progressed and in the same proportion that the remaining $155,000 should be paid by defendant; (b) convey 15 acres of land and 32 lots described (c) procure certain switching privileges-- the lots and the 15 acres to be conveyed only on defendant's furnishing bond with a good and solvent surety company as surety, to be approved by the Land Company, in the penalty of $36,000 conditioned for the performance 'of every condition of this contract,' and to remain in force 'until each and every condition to be performed by the party of the second part has been fully and completely performed. ' The draft of contract provided that defendant should erect and install a building and plant 'estimated to cost not less than $180,000,' the building to be not less than 680 feet long by 130 feet wide; that the 15 acres should be used only for manufacturing purposes; that the operation of the plant should begin by April 1, 1910; that operation should continue for 12 months thereafter (with not less than a certain number of men 'regularly employed for a period of 12 months'), except as interrupted by strikes or other named contingencies, the operation to cover the period of such interruptions in addition to the 12 months; and that in case of defendant's failure to carry out all of its proposed agreements it should, at the option of the Land Company, pay to the latter $300 per acre for the 15 acres and $200 for each of the 32 lots, plus the $25,000 cash bonus with interest thereon, 'as liquidated damages for and in lieu of its failure to so fully and completely carry out the premises and conditions of this contract.' Plaintiff sued to recover a commission claimed to have been earned under a contract for procuring a bonus in aid of the building and installation of a manufacturing plant. Upon the trial verdict was directed for defendant. The propriety of this direction is the principal question presented here.

Defendant was engaged in operating, at Ashland, Ky., a plant for the manufacture of metal sheets. The defendant corporation (or, as it claims, its principal stockholders and owners) desired to locate a plant at Kenova, W.Va. The Kenova-Huntington Land Company owned considerable land at Kenova, and so was interested in promoting the location of manufacturing corporations there. Plaintiff undertook to open negotiations with the Land Company upon the subject of bonus. On July 6, 1909, Job, who was apparently acting as defendant's president, gave plaintiff a letter stating that, if the parties owning the land at Kenova 'are willing to deed to us fifteen (15) acres of ground and erect thereon a steel structural building' of a certain size and suitable to the needs of the projected plant, also to put in necessary switches, 'we will cause to be incorporated a company for profit,' with a capitalization between certain maximum and minimum limits, and to employ a number of men, whose maximum and minimum was also stated. Four days later, and on July 10, 1909, Job wrote plaintiff as follows: 'Referring to our several conversations regarding the proposed bonus you are endeavoring to secure for us at Kenova, W. Va., from the Huntington & Kenova Land Company and other parties, will say that if this deal is put through we will be pleased to pay you in cash five (5) per cent. of the cost of buildings, and also give you in (5) per cent. of the cash given us, in lieu of buildings, and also give you in stock of the company that operates in Kenova, five (5) per cent. of the cost of the buildings given us, or such cash bonus as we may receive. We reserving, however, the privilege of paying this commission all in cash, if we so desire. ' (All italics wherever found in this statement are ours.) On July 23d Job wrote plaintiff that: 'We have decided, after a conference with our stockholders, to close up with the Huntington & Kenova Land Company for the location and operation of a plant at Kenova, W. Va., under the following conditions: Twenty-five thousand dollars ($25,000) in cash to be paid us when a satisfactory bond is executed. Fifteen (15) acres of land for a suitable site. Free switches to our site. An option on ten (10) additional acres at one dollar ($1.00) per acre, said ground to be held by the land company for us until our plant is put in operation.'

The next day the Land Company wrote defendant, declining the proposition contained in the letter to plaintiff last referred to, but proposing to give $20,000 in cash 'to be paid along during the construction of your buildings,' to give 15 acres of land for a suitable site, and also land equal to 32 building lots of a certain size and in a certain location, together with free switches from a belt line to the proposed site; the donations of land and money to be made upon condition that defendant 'enter into a satisfactory contract with the Land Company along the lines discussed when your representatives were here as to the installation of your plant, the number of employes, the length of time which the plant should be operated and all further agreements made by your representatives which induced the donations above given ' August 4th the Land Company advised defendant by letter that the former's board of directors had appointed a committee with power to close negotiations for the location of the plant, the Land Company to give a cash bonus of $25,000, together with the site, building lots, and free switching provisions above referred to, 'provided a satisfactory contract is entered into by you with this company. The selection of the site for the plant and the lots and the terms of the contract to be left to the committee appointed and your representatives. ' At some date (probably between August 4th and ...