The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-06-01
RULED CUT BY JUDGE KELLY.
COMPANY DID IT'S BEST TO FUL-
FILL ITS CONTRACT, HE
THINKS.
SAVINGS
MINNESOTA
BANK
Cases VIII Come Up Today On the
Motion to Quash Three IN
dictments.

Walter A. Wood Harvester company,
aggregating 100000. The claimants,
who appealed from the action of the
receivers of the harvester company
disallowing their claims, and the
amounts claimed, are as follows:
Theodore Schumacher, $4,000; w. D.
Cornish and Grace H. Hendricks, $780,
600, Angler Ames, $4,000; William L.
Ames, 1000.
In May, 1892, the Walter A, Wood
HARVESTER company entered into con-
tract with the appellants whereby the
appellants conveyed certain land to
the harvester company, upon certain
conditions named in the contract.
These conditions, generally, were that
the company should locate it's plant on
such lands, begin to build it within
certain time, eXpend specified
amount and maintain the plant for
period Of five years. The appellants
contended that the company mad not
fulfilled all the conditions Of its agree
ment, inasmuch as it passed into the
hands of receivers, In March, 1893, ana
thereupon demanded the sums which
in the agreement had been named as
IQuidated damages. The court held
that the sums stated were in the ma
ture of a penalty. In his memoran-
dunn Judge Kelly says:
There are two reasons, in my judg-
ment, why the appellants are emitted
to no relief. First, the contract at
tached to the complaint, and upon
which the appellants rely, undertakes
to fix a lump sum las and for full and
complete hQuidated damages for any
breach thereof The appellant de-
manded the full penalty OF the bond
as lquidated damages. Now, the con-
tract itself provides as follows:
Said party (the harvester company
hereby agrees that it will begin the
making of improvements and the cree
ton of buildings upon any portion of
said entire site it deems best, and
within the distance of half a mile of
the above described real estate, on or
before the LIST day Of August, 1892, and
will expend in the making of the i'm
provements and the erection of such
buildings and the placing of machin-
cry therein upon such portion of said
site so selected, the sum of $25O,OOO, on
or before Oct. l, 1898.
Said Harvester company further
agrees that it will operate and main
tain its manufacturing plant SO con-
structed on said site as it's principal
place for the manufacture of it's
1IbdCIllISS III Tie w est lO1 anu
the period of five years from and after
the first day Of October, 1898, and in
case said first party shall fail in the
performance of the above conditions
and agreements, it hereby agrees to
pay to said second parties the sum
of 100000 as and for full and complete
liquidated damages for such breach,
agreed upon by and between the par
ties to this contract as and for the
full and complete liquidated damages
for such breach"
Now it is claimed by the respondent
that this contract embraces at least
four or five conditions, all distinct:
First (a) to locate within one-half
mile of appellants land; CD to begin
the erection of the building on or be-
fore Aug. 1, 1892; second, to expend
$250,000 on or before Oct. 2, 1893; third,
to maintain at the site it's principal
factory, ETC.; and, fourth, to maintain
such mandatory for and during five
years. And as no provision is made
in the contract for apportiOning the
the respondent that the court must
necessarily declare this a penalty and
not nquidated damages.
While l am not sure the respondent
is not right, still it is clear to my
mind that there are two distinct OBJ
legations assumed by the Harvester
company in this contract, the first be-
ing to begin to build before Aug l,
1892, and to expend thereon on or be-
fore the 1st of October, 1899, at least
the sum Of $250,000 upon the site con-
Veyed), and second, after that to MAIN
tain and operate in it's buildings and
plant it's principal place for the manu-
facture of machines in the West for
and during a period of five years from
nnf NIn CT
damages, being in no wise Invisible,
and the Harvester company having full
ly complied with the first condition
in its obligation or bond, it would be
manifestly unjust to hold it for the
full penalty for a failure to keep it's
manufacturing plant open for the full
five years. This question is not new
in Minnesota, but in Cook versus
Finch, 10 Mimi, 357, and in Carter
versus Strom, Al Mimi, 522, the court
says: 1T may be stated as a general
proposition sustained by great weight
of authority, that, where a contract
specifying one certain sum as liquidat-
ed damages contains various stipula-
tons to all of which the clause as to
damages is clearly applicable such
stipulations either varying greatly IN
their character or Importance or being
OF such nature that the damage from
breach Of some of them could be
easily and certainly measured, and es-
pecially If such damages would OBJ
viously be inconsiderable as compared
with the sum stated In the agreement
as damages for any breach, the latter
should be regarded as penalty and
not as nQuidated damages
Under this ruling am obliged to hold
the sum stated as a penalty and not
as liquidated damages, and therefore
under this complaint and the proof, the
appellant will be entitled to no recovery.
The second reason why appellant
should not recover is that it is by no
means clear that there has been that
sort of breach of the contract that will
entltle him to recover in any event.
The harvester company built it's shops
and established it's plant upon this
land and operated an extensive business
in the manufacture Of machinery from
Oct. l, 1893, until March 49, 1895. On
that last day, the business went into
the hands Of receivers. These receivers
have ever since March IS, 1895. con-
tinued the business, if not as extensive
~ as the Harvester company did prior,
at least substantially So and they are
continuing it still under the permission
of the court, and it appears that they
have succeeded in not merely carrying
on the business, but in very largely
reducing the debt of the so-called in
SsOlNeHl cpIpoTallOH 1ne mann OBJECT
of establishing the plant upon the site
so far AS the appellants are concerned,
was to employ large number Of men
about this business and to carry on
the business. It would seem to be en-
tirely imnaterial who carried on the
business, whether the Harvester COM
pany, the receivers OF the Harvester
or the assignee OF the Har-
vester company. The breach is techni-
cal at the farthest under the proofs in
this case