Muehlebach v. Missouri & K. I. Ry. Co.

• Decision Date: 19 June 1912
• Citation: 148 S.W. 453,166 Mo. App. 305
• Parties: MUEHLEBACH et al. v. MISSOURI & K. I. RY. CO.
• Court: Missouri Court of Appeals

148 S.W. 453

166 Mo. App. 305

MUEHLEBACH et al. v. MISSOURI & K. I. RY. CO.

Kansas City Court of Appeals. Missouri.

June 19, 1912.

1. INFANTS (§ 47)—CONTRACTS—EXECUTION.

Where the adult parties to a contract, designated, together with an infant, as parties of the first part, were bound to obtain a signature binding the infant, the burden was discharged when they procured the signature of the infant's guardian and curator signing the contract in behalf of the infant, with the approval of the probate court having jurisdiction over his estate.

2. CORPORATIONS (§ 452)—EXECUTION.

A contract designating a corporation and an individual as parties of the second part imposed no obligation on the individual and secured no benefit to him. The corporation signed the contract, and it and the adverse party, without waiting to procure the signature of the individual, proceeded to perform the contract, and the corporation secured benefits. Held, that the contract was binding on the corporation within the rule that a party who signs a contract is bound, though it is not signed by all the parties named in it, unless the parties signing mutually intended that it should be incomplete and not take effect as a contract until signed by all the parties named.

3. CONTRACTS (§ 28)—EXECUTION.

A party attacking a contract on the ground that it has not been signed by all the parties thereto has the burden of showing that when he signed it it was agreed that it should not take effect until signed by all.

4. DAMAGES (§ 76)—LIQUIDATED DAMAGES— PENALTIES.

A contract for a penalty is an agreement to pay a stipulated sum in case of default, intended to coerce performance, to punish default, or to secure the payment of actual damages, while a contract for liquidated damages is a contract by which the parties in advance of breach fix the amount of damages which will result therefrom and agree on its payment.

5. DAMAGES (§ 79)—LIQUIDATED DAMAGES— PENALTIES — CONSTRUCTION OF STIPULATIONS.

Where from the nature of an agreement any attempt to arrive at the actual damages in case of breach would be difficult, the court will treat the sum agreed on as liquidated damages; but, where the subject-matter of the contract is such that the damages for its breach can be computed with certainty, the sum agreed on will be treated as a penalty, especially where there is great disparity between the agreed sum and the actual damages.

6. DAMAGES (§ 85)—LIQUIDATED DAMAGES— PENALTIES — CONSTRUCTION OF STIPULATIONS.

A contract for the removal by an interurban railway company of its road from a tract of an individual, which stipulates that the company shall pay a rental of $50 per month for the right of way on the tract until the removal of the road, and if the road is not removed within six months the rental for the next six months shall be $75 per month, and the rental for the third six months shall be $100 per month, increasing the rental for each period of six months, provides a penalty for the nonremoval, and the individual may only recover the actual loss sustained by the company's occupation of the land.

Appeal from Circuit Court, Jackson County; O. A. Lucas, Judge.

Action by Margaret M. Muehlebach and another against the Missouri & Kansas Interurban Railway Company. From a judgment for plaintiffs, defendant appeals. Reversed and remanded.

Bowersock, Hall & Hook, of Kansas City, for appellant. Sebree, Conrad & Wendorff, of Kansas City, for respondents.

JOHNSON, J.

This suit, commenced in the circuit court of Jackson county, November 27, 1909, is for the recovery of the agreed compensation plaintiffs claim defendant was to pay them for the use of their land for a right of way of a railroad owned and operated by defendant. On December 7, 1909, plaintiffs instituted another suit against defendant in the same court on a promissory note of $1,460 dated January 9, 1908, due 18 months after date and bearing interest at 6 per cent. per annum from January 1, 1909. It appears from the petition in both cases, as well as from the answers filed by defendant, that both actions grew out of and depend upon the validity of a certain contract the parties entered into January 9, 1908. Defendant claims this contract is void and prays for the cancellation of both note and contract. On motion of defendant the two actions were consolidated and tried together in the circuit court without a jury. After hearing the evidence, the court rendered judgment for plaintiffs in each case in accordance with the prayers of the respective petitions, and defendant appealed from each judgment. This opinion deals with the first-mentioned action, which for convenience we shall call the action for rent; but, as the two cases are so closely related, what we shall say will dispose of the questions at issue in the suit on the note.

Defendant is a Kansas corporation operating an electric railroad in that state from a point on the line between Missouri and Kansas known as Thirty-Ninth street and State Line to Olathe, Kan. This point at the times of the events in controversy was the western terminus of the "Roanoke line" of the street railway system of Kansas City operated by the Metropolitan Street Railway Company. Defendant has a traffic agreement with the Metropolitan Company that enables it to operate its cars over the tracks of that company to the central portion of Kansas City. Defendant's road was constructed in 1905, and, beginning at its junction with the road of the Metropolitan Company at Thirty-Ninth street and State Line, took a southwesterly course over a tract of land owned by George Muehlebach which contains about 28 acres, is in Kansas immediately west of the State Line, and lies between a prolongation of Thirty-Ninth street on the north and Forty-First street on the south. We shall refer to this land hereafter as "tract A." Crossing Forty-First street, the road continued on a tangent over a smaller tract owned by Muehlebach, which we shall call "tract B." Muehlebach died December 22, 1905, and plaintiffs, with the exception of William Buchholz, are his heirs, and as such are the owners of the land described. All are of legal age except Carl, who is a minor, and plaintiff Margaret M. Muehlebach is his guardian and curator. In 1905, defendant brought a condemnation suit in the district court of Wyandotte county, Kan., the object of which was to secure a right of way over "tract A," and at the same time brought two other suits for the right of way over "tract B." Commissioners were appointed who appraised the damages in the first suit at $2,540 and in the others at $742. Defendant paid these assessments to the clerk of the court and constructed the road over both tracts doing grading, cutting, and filling that damaged the whole of both tracts. Plaintiffs appealed from these awards, and these appeals were pending in the district court until January 10, 1908, when they were dismissed by plaintiffs under circumstances to be recounted hereafter.

In 1907, the Metropolitan Street Railway Company contemplated extending its Roanoke line south on Bell street to and beyond Forty-First street, and negotiations were begun between defendant and that company for a junction between the two roads at Forty-First and Bell streets in place of the connection at Thirty-Ninth street and State Line. Bell street runs north and south, is in Kansas City, Mo., and is the first street east of State Line. Plaintiffs own the land on both sides of Forty-First street in the blocks between State Line and Bell, and it was the idea of defendant to abandon the road over "tract A" and to run west on Forty-First street from a new junction at Bell street to a connection with its road over "tract B." Accordingly, on April 19, 1907, W. B. Strang, who was not an officer of defendant, but was a heavy stockholder, acting on behalf of defendant, addressed a letter to plaintiffs in which, referring to a proposal he had received from plaintiffs for a settlement of the pending litigation, he offered a settlement, the prominent features of which were that defendant would abandon the right of way over "tract A" by January 1, 1908, would continue to use the right of way over "tract B," would establish a terminal at Forty-First and Bell streets on the land of plaintiffs, for all of which it would allow plaintiffs the sum of $742, paid into court for their benefit in the condemnation suits affecting "tract B," and in addition would pay plaintiffs $4,000 for the use of "tract A" to January 1, 1908, and for the land required for the new terminal. This proposal was acceptable to plaintiffs, but for some reason was not reduced to a formal contract. Shortly after January 1, 1908, the attorney of plaintiffs and Albert F. Hunt, defendant's president, resumed negotiations for a settlement, which resulted in the execution of the contract now in dispute. This contract, which stated on its face that the contracting parties were plaintiffs, spoken of as parties of the first part, and defendant and W. B. Strang, parties of the second part, was signed by plaintiffs and defendant, but not by Strang, who, at the time, was in New York. After the contract was signed, it was forwarded by Hunt to Strang for his signature. H...