Court Opinion

ID: 9833003
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:22:11.605695+00
Date Added: 2024-06-11T07:43:57.614670
License: Public Domain

on appellee's motion eor rehearing.
Appellee insists that the judgment is not a final one, asserting that our opinion is mistaken in stating that Slosson was dismissed from the case. Appellees have not carefully read the judgment, which begins: “This day coming on to be heard above entitled and numbered cause, the action of plaintiff was dismissed against W. B. Slosson, etc.”
In dealing with the question of penalty or liquidated damages we considered the question as it ordinarily obtains in transactions between individuals. It appears, however, that the ordinary principles governing the subject are not adopted in cases of contracts embodied in legislative grants.
Any grant made by the city of Houston in accordance with a power given in its charter, is of a governmental or legislative character, and entitled to the same construction as if the grant was directly by the Legislature. Conditions attached to such a grant or contract and imposed in favor of the city, are in their nature conditions imposed by the Legislature, when such conditions follow the charter.
Section XIII of the charter of the city of Houston is set forth in the main opinion. It authorizes the city, in granting franchises of the character in question, to provide as a part of the grant or contract that upon the termination of the grant the plant, as well as the property of the grantee in the streets, avenues and public places, shall vest in the city with or without compensation.
The city, by its grant or contract, had the power to fix the time when the grant should terminate, and did so by making it . run for twenty-one years, as authorized by the charter as the maximum life of the grant; and by providing in section YI that it should terminate earlier in certain events, one of which was the failure of the grantee to have cars in operation within twenty-four months from the passage of the ordinance, and as practically nothing was done by the grantee, the grant then had ceased to exist.
The last named section provided, in substance, as the charter authorized the city to stipulate, for the grant, the plant, and property of the grantee in the streets, avenues and public places, to become vested in the city upon termination of the grant.
The cases relied upon by appellee appear to settle the question in favor of its contention that in so far as the forfeiture of the property of the grantee is concerned, in this class of contracts, where admittedly the damages for a breach thereof are incapable of any ascertainment, *563the question of penalty or liquidated damages does not arise as in ordinary contracts; and that such a provision is viewed as a statutory condition of the grant voluntarily accepted, or as the imposition of a statutory penalty for nonperformance. Brooks v. City of Wichita, 114 Fed., 299; Clark v. Barnard, 108 U. S., 436; Salem v. Anson, 67 Pac., 190; Springwells Township v. Detroit, P. & N. Ry., 103 N. W., 700; Indianola v. Gulf, W. T. & Pac. Ry., 56 Texas, 594.
We conclude that we were in error in treating the forfeiture expressed in clause VI of the ordinance in the light of a penalty not to be enforced except as to damages actually shown to have been sustained; and in taking that clause in connection with clause VII in order to determine whether or not the deposit sued for was liquidated damages or penalty.
The latter clause, in effect, provided that the deposit should be returned to the grantees when the road was completed and in operation to Galveston within thirty-six months. The other provision for forfeiture was to run beyond that time and during the life of the contract. Both ran concurrently up to the completion to Galveston. In a case such as we have here, where nothing was done, or' in a case where performance was only partial, the $2,500 deposit might have been substantially all the restitution the city would obtain. After the roacPs completion and operation to Galveston this would be different. It was therefore reasonable and proper for the city to make the provisions separate and we think we were wrong in dealing with them as a single stipulation.
Having upon reconsideration arrived at the above conclusions, and viewing the clause relating to the deposit by itself, we find no difficulty in the way of agreeing with the trial court that it was liquidated damages, and that the city is entitled to retain it. Motion granted and judgment affirmed.

Affirmed.

Writ of error refused.