Court Opinion

ID: 8264145
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:58:48.591028+00
Date Added: 2024-06-11T16:43:17.116407
License: Public Domain

*97ON MOTION FOR REHEARING..
SOHNURMACHER, S. J.
The court having agreed with the contention of plaintiffs that a restoration of the six hundred dollars received by them from defendant and of the court costs paid by defendant was not a necessary prerequisite to confer upon plaintiffs the right to sue, the only question left for consideration and determination upon this motion is whether the petition states facts constituting an equitable cause of action in favor of plaintiffs. If it does, then the circuit court erred in sustaining the objection of defendant to the introduction of any evidence and the motion now made should be sustained. If, on the other hand, no such ease is presented by the petition, the action of the court in excluding all evidence was proper and the motion should be overruled.
From the averments of the petition, it appears that on September 1, 1898, in consideration of the payment hy defendant of six hundred dollars, and the payment by defendant of the costs of the litigation' referred' to in the compromise agreement, which agreement is set forth in full in the petition, plaintiffs released defendant from •all damages, past, present, prospective, resulting from the location and operation of the switch in front of their property; and upon the same consideration plaintiffs who, as is disclosed by the petition, had theretofore denied the right of defendant to maintain said switch’and had •instituted proceedings to enjoin such maintenance and to recover damages therefor, granted and conveyed to •defendant and the milling concern whose property was reached by the switch, “full power and authority to use said switch freely in front of their said property for railroad and milling purposes.” Thus plaintiffs, in consideration of said payments, gave their consent to the location and continued operation of the switch, so far as they could do so, and treated the payments so made as *98satisfaction in full of all damages sustained up to September 1, 1898, and in full satisfaction of any damages they might thereafter sustain in consequence of the location and operation of the switch. To guard, however, against the assertion that they were granting or yielding their assent to the use of the switch for purposes other than the ordinary movement of cars thereon, the provisions above quoted were immediately succeeded by the following: “but with the distinct understanding that neither the milling company nor railroad company shall be permitted to use said switch in front of plaintiffs' property to stand cars thereon, but that the switch in front of their said property shall be kept open and free from cars except Avhen in actual use, as aforesaid.” ’
The petition alleges that without this qualification, the contract of compromise Avould not have been made, and that, notwithstanding the same, and in violation thereof, the defendant has “continued to stand and store its cars on said track in front of plaintiffs’ said property.”
There is nowhere in the petition any suggestion that plaintiffs were overreached or defrauded into signing the contract of settlement, by misrepresentations or otherwise, nor is there any complaint that the agreement Avas the result of any mutual mistake. Its rescission is demanded by plaintiffs solely on the ground that since it was made cars have been allowed to remain on the switch in front of their property, in violation of its terms.
The argument of plaintiffs proceeds on the theory that the contract was made and based upon the undertaking of defendant not to stand or store cars on the switch; that such undertaking was a condition precedent to the agreement of plaintiffs and that the agreement of plaintiffs to accept the six hundred dollars in satisfaction of all damages by them theretofore or thereafter sustained, by reason of the location and operation of the SAvitch track, on the one hand, and the obligation *99of defendant not to permit cars to stand or be stored thereon, on the other hand, are covenants which are mutual and dependent on each other and that a violation by defendant of the latter authorizes a decree of rescission of the compromise arrangement at the suit of plaintiffs.
Giving full force to the averment that the settle- • ment would not have been made by plaintiffs in the absence of the qualification concerning the standing or storing of cars, is it true that these provisions of the contract are dependent, or that the qualification goes to the entire consideration? Assuming, in other words, as averred, that the contract would not have been made without the presence of the qualification, does the admission by defendant that cars have since been allowed to stand on the switch, entitle plaintiffs to equitable relief, or is their remedy in a court of law?
Plaintiffs rely on the principle that where conditions in a contract are mutual and dependent, a breach or default by the one party will ordinarily entitle the other to a rescission or annulment of the contract. Of the correctness of this general proposition, there can be no question. [Lincoln Tr. Co. v. Nathan, 175 Mo. 32, 74 S. W. 1007; Farmers’ Loan and Tr. Co. v. Galesburg, 133 U. S. 156; Grand Haven v. Grand Haven Water Works Co., 99 Mich. 106; Pironi v. Corrigan, 47 N. J. Eq. 135.]
Thus, in the case of Lincoln Trust Co. v. Nathan, 175 Mo. 32, an' action for rent by the lessor, it was held that the lessee, on an answer in the nature of a cross-bill, might have a decree rescinding the lease and a judgment for the return of certain rents paid, it appearing that the improvements on the demised premises had been destroyed by fire and that the lessor, in breach of his covenants, had failed to rebuild within a reasonable time.
The case of Farmers’ Loan and Trust Co. v. Galesburg, 133 U. S. 156, was a proceeding by the city of *100Galesburg against the Galesburg Water Company for an annulment of a contract of the latter to furnish water to the city and its inhabitants and to revest in the city the property in certain water mains, etc. The bill for relief was based on the contention by the city that the company, in violation of its contract, was not furnishing the city water which complied with the requirements of the ordinances on which the contract was made, either in quantity or quality, or before or after the time prescribed in the contract for the successful completion and operation of the works; that the water which was furnished was filthy, polluted, stagnant and wholly unfit for use and dangerous to health and life. On its petition the Farmers’ Loan and Trust Company, trustee in a mortgage to secure bondholders, was permitted to become a party to the proceeding.
Against the position of the city it was urged that the default of the water company was not concerning any condition precedent and gave the city no right to a decree rescinding the contract. From a decree of rescission an appeal was taken. The Supreme Court, in disposing of this particular feature of the case, made use of the following language:
“The principal contention on the part of appellants is that on the acceptance of the ordinance by Shelton, a right in the franchise vested in him, which could not be defeated, even though he afterwards failed to comply with its terms; that the failure of the water company to furnish water in the quantity and of the quality called for by the ordinance was only a breach of a condition subsequent; and that a court of equity will not lend its aid to divest an estate for such a breach; but it seems to us that in respect to a contract of the character of the present one, the ability of a water company to continue to furnish water according to the terms of the ordinance was a condition precedent to the continuing right of Shelton and his assigns to use the streets of the city and to furnish water for a period of thirty years; and that *101wben, after a reasonable time, Sbelton and his assigns had failed to comply with the condition as to the quantity and quality of the water, the city had a right to treat the contract as terminated and to invoke the aid of a court of equity to enforce its rescission. A suit for a specific performance of the contract, or a suit to recover damages for its non-performance, would be wholly inadequate remedy in a case like the present.”
The case of Grand Haven v. Grand Haven Waterworks Co., 99 Mich. 106, cites and follows the Galesburg case in a somewhat similar proceeding, where the city of Grand Haven filed its bill for the rescission of a contract with the waterworks company, on the ground mainly that the water supply agreed to be furnished was inadequate, the pressure insufficient and the quality unwholesome. The court quotes liberally the language of the United States Supreme Court in the foregoing case and declares the two cases to be on “all-fours.”
These cases illustrate the principle on which plaintiffs seem to rely. Has the doctrine of these cases any application to the present facts? For, after all, “the only principle to be extracted from the numerous cases in relation to the dependence or independence of covenants is that they are to be construed according to the intention and meaning of the parties and the good sense of the case.” [Freeland v. Mitchell, 8 Mo. 489.]
The contract in question is before the court. Its language is plain and free from ambiguity. There would seem to be no difficulty in arriving at its meaning, and through it the intention of the parties to this litigation.
Plaintiffs were maintaining in the courts that defendant’s location and operation of the track were without sufficient legal warrant. They were seeking both damages and injunctive relief. They had recovered a Small judgment against the milling firm in whose interest the track was constructed and against the city of Springfield. This action was pending on. appeal. An*102other action against the milling firm and this defendant was pending in the trial court. They were willing, if defendant paid the costs accrued in these cases, and paid them six hundred dollars besides, to accept these payments in full satisfaction and discharge of all claim for damages up to that time sustained and in full of all claim they might make for damages in the future, consequent upon the construction of this switch and its operation in the ordinary way; and, moreover, they were willing, so far as they could, to confer on defendant the right to continue to maintain and use the switch. But they were not willing if, at any time thereafter, the railroad company should use the track otherwise than for the ordinary movement of cars, that is to say, for the storage of cars, to leave their contract open to the interpretation that they had been compensated in advance for any damages which might be occasioned by such use.
Therefore, as is obvious from the context and from all the terms of the document in question, words were inserted negativing the thought that plaintiffs were authorizing such use of the track. It is as though plaintiffs had said to defendant: “If you will pay the costs of the pending litigation and pay us six hundred dollars, we will not only accept such payment in satisfaction of all past and future damages, but will sanction the location of the switch and its continued use; but in saying this, we want it distinctly understood that we are not agreeing that cars may be allowed to stand thereon; on the contrary, if they are, any damage that may ensue from such action is not embraced in this settlement and we shall be free to hold you responsible therefor.”
If this is the proper interpretation of the contract, then, conceding that plaintiffs would not have made the settlement but for such reservation, the defendant’s violation of its terms does not affect the validity of the settlement nor even the consideration upon which it was based. At most, it amounts only to a breach of contract arising subsequent to its execution, for which plaintiffs *103may have their' action for damages. In this respect it resembles one feature of the case of Paquin v. Milliken, 163 Mo. 1. c. 102, 63 S. W. 417, 1092, concerning which it was said:
“The answer to the suit on the note, then, upon, its face only pleaded a failure of consideration and breach of the contract after its execution. The said allegations were clearly no ground for rescission, as the counterclaim was only based on the efforts of defendant after the sale, to decry and destroy the good will of the property he had sold the plaintiffs.”
The contention of plaintiffs amounts merely to an assertion that if defendant had insisted on providing in the settlement and agreement that the payment of costs and the six hundred dollars should be deemed to cover future damages from standing cars in front of the property of plaintiffs, they would not have entered into the agreement. Giving the agreement the interpretation that plaintiffs have not compromised or released their right to claim damages, if any, resulting from the conduct of defendant in permitting cars to stand in front of plaintiff’s premises, and all their rights are fully preserved and protected. But the enforcement of those rights can be had in an ordinary action for damages at law. It may well be true, and for the purposes of this discussion it must be taken to be true, that without the “distinct understanding” plaintiffs would not have entered into the compromise; that they would not have signed the agreement if it had been left open to the imputation that it embraced future damages from the standing of cars — but how does that aid in the solution of the question, if the “distinct understanding” was merely an explanation and not a covenant?
The facts of this case make it unlike the ease of Lincoln Trust Co. v. Nathan, where, as already shown, a lessor in default respecting a covenant to rebuild, was seeking to enforce the payment of rent by a lessee under a covenant which was dependent on the performance of *104the lessors own covenant. The court there speaking of the two covenants said:
“The obligation of the lessors to rebuild is stated first, aud the performance is required as a primary and precedent duty to any liability, and the lessee’s obligation to pay rent during that time is based upon the express consideration that the premises shall be rebuilt in a reasonable time and the lessees put into occupancy as soon as possible. The covenants are therefore as clearly dependent as if they had been declared to be so, in so many words, and the. lessee’s liability to pay the rent depends upon the prior liability of the lessors to rebuild.”
The rule thus referred to can have no application to the contract here under discussion. The defendant agreed to pay and did pay a certain sum of money to plaintiffs. In consideration thereof plaintiffs released defendant from all claim for damages for the maintenance and operation of the switch. There was nothing-further for defendant to do. There was no prior condition to fulfill. But to guard against any future contention by defendant that it had compensated plaintiffs for damages which might arise from standing cars in front of their property, it was recited in the agreement as the “distinct understanding” of the parties that no such meaning should attach to their agreement. In other words, the language relied on by plaintiffs was not intended to nor did it create any obligation on the part of defendant, in the sense of its furnishing a consideration for the compromise which was entered into, but was used merely to make clear beyond question the character of the prospective damages for which plaintiffs were being paid and which they were releasing.
Assuming, upon this view of the contract, that plaintiffs had been allowed to introduce proof and that they had established every averment of their petition, their prayer for a rescission of the contract would still have had to be-denied and they would have been remitted *105for redress to an action at law; in which, action, if defendant attempted to claim immunity from liability by reason of the compromise agreement, it might well 'be that plaintiffs could meet such claim with the argument that by reason of their “distinct understanding” the claim was not well founded.
For these reasons, the motion for a rehearing should be overruled.