Home Land & Cattle Co. v. McNamara

• Decision Date: 10 January 1906
• Docket Number: 1,201.
• Citation: 145 F. 17
• Parties: HOME LAND & CATTLE CO. v. McNAMARA et al.
• Court: U.S. Court of Appeals — Seventh Circuit

145 F. 17

HOME LAND & CATTLE CO. v. McNAMARA et al.

No. 1,201.

United States Court of Appeals, Seventh Circuit.

January 10, 1906

Wm Brace, for plaintiff in error.

Merritt Starr, for defendant in error.

The facts are stated in the opinion.

Before GROSSCUP, BAKER and SEAMAN, Circuit Judges.

GROSSCUP Circuit Judge.

This case-- an action at law in the Circuit Court to recover the purchase price of cattle delivered by plaintiff in error to defendants in error-- was here once before (McNamara &amp Marlow v. Home Land & Cattle Co., 121 F. 797, 58 C.C.A 245) the judgment of the court below being reversed, chiefly because McNamara and Marlow had been excluded from showing damages suffered by them in the failure of the Home Land and Cattle Company to perform the ninth paragraph of the agreement between them.

On the second trial this error was corrected; but in its correction instead of permitting McNamara and Marlow to prove the actual damages suffered by them, by plaintiff in error's failure to perform, they were allowed the sums stipulated in the paragraph as liquidated damages-- the jury being practically instructed to accept the stipulated sum as the measure of damages. And upon this action of the court below, exceptions having been duly preserved, this proceeding in error is chiefly based.

The ninth clause of the contract is as follows:

'Ninth. Said first party hereby guarantees to deliver to said second parties during the season of 1897 not less than nine thousand head (9,000) of steers of the ages of three years old and up, and spayed heifers of the ages of four years and up. Should they fail so to do, they hereby agree to pay to said second parties the sum of twenty dollars ($20.00) in cash for each and every head less than nine thousand (9,000) head of such cattle so delivered.'

The statute of Montana (Civ. Code, 1895) in force at the time the agreement was made and the case tried, contains the following provision:

'Section 2243: Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent, void, except as expressly provided in the next section.

'Section 2244: The parties to a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.'

In Illinois there is no statute upon the subject.

Two questions, therefore, are raised. First: Is the ninth clause of the agreement to be governed by the law of Montana, or by the law of Illinois? And if it be governed by the law of Montana, Secondly: Was the subject matter of the contract one in which damages would be impracticable or difficult to ascertain?

The contract was made in Illinois, but the subject matter of the contract was the purchase and sale of cattle then in Montana, to be delivered by the seller to the buyer in Montana. The contract, therefore, especially in its main provision, was one to be executed in Montana.

When confronted with the inquiry under what law a specific contract is to be interpreted and enforced, the principle that governs is this: In view of what law was the contract made. Wayman v. Southard, 10 Wheat. 1, 48, 6 L.Ed. 253. And apart from any circumstance other than the contract itself, we think it obvious that the law in view was the Montana law, where the contract was to be executed. Such, apparently, was the understanding of defendants in error, for they asked and obtained interest upon the default, according to the rates allowed by the laws of Montana. And such must have been the view of the court below, for the interest was allowed according to the Montana law. Indeed, other considerations being equal, the presumption is that the law where the performance is to take place is the law under which the performance shall be governed.

But it is argued, on the authority of ...