Beel v. Plant City

At the conclusion of the argument to the court by the respective counsel for plaintiff and defendant, the court announced to counsel that, owing to the difficulty of retaining in mind the testimony which had been presented to it in the hearing, it would prefer, unless serious objection were made by counsel, to dispose of the ease at once; for these reasons as well as the facilitating the final disposition of the case on appeal, if appeal should be made. No objection being made, the court said (orally):

Now, gentlemen, as I understand this -action the plaintiff filed the petition against Plant City, and in the original petition a claim was made for a money judgment. Attachment and garnishment were issued and to the petition an answer was fiLed. Thus the defendant appears in court. The defendant having been brought into court, the plaintiff filed an amended petition. An answer has been filed to the amended petition and thus the issues arise between the parties,- both being personally present and within the jurisdiction of the court.

The evidence shows that certain checks were issued by the plaintiff and deposited with the city clerk of Plant City, Florida. The deposit was made upon terms and conditions that arose by an invitation on the part of the.city for bids, the filing of a letter with the clerk and an acceptance afterwards by the clerk; the acceptance, however, came from the clerk of the city and thus from the city. The letter of acceptance was of the date of February 2d, 1920; which was the date fixed by the city authorities through their ordinance, at which bids would be received and were received, for the bond issue which the city proposed to market.

After the lapse of sixty days, the city deposited these checks to its credit. They came through the ordinary commercial channels to the Guardian Trust & Savings Bank in Toledo. They *149were there at the time the original action was commenced. I presume, then, that it is a matter of indifference whether that fund be treated-as an outstanding obligation in the form of a certificate of deposit, or as a credit with the Guardian Savings Bank Company. The relief which is sought is equitable in its nature, and the consequence is, that in this action, a jury having 'been expressly waived, the court exercises its jurisdiction as a chancery tribunal.

The first question in the record, and it seems to me the primary question, is where are the terms of this contract to be found? In the first place, they are to be found in the documents which are here in the record itself. Counsel for defendants assets that the contract arose upon the proposal in the advertisements and notices of the bond sale by the city, which appear in the transcript, and the submission of the letter of February 2d by the plaintiff together with the deposit of the checks. The plaintiff contends that the terms of the letter do not follow precisely the terms of the ordinance, but contain a new proposal, and that whatever obligation arose between the parties arose from the fact that the authorities of the defendant accepted the proposal of the plaintiff with reference to these bonds, and that a contract of sale thereby existed in the terms of the letter and the acceptance by the defendant of the offer of the counter proposition made by the plaintiff to Plant- City. It is apparent upon an inspection of the two papers that the terms of the printed ordinance and of the letter of the defendant are not identical. The letter of the defendant is not. a catagorical acceptance of. the proposal contained in the advertisement. The letter says, "We will take-up and pay for bonds in current funds within five days after proposal.” There is nothing of that sort in the advertisement. The letter says: "Prior to delivery of bonds to us and promptly after awarding the same, you are to furnish us with a full and complete certified transcript of all proceedings necessary to evidence the legality to the satisfaction of our attorney.”

Those terms are not in the original proposition. The city accepted by an endorsement upon this letter: "The above bid duly *150accepted by resolution of city council passed February 2, 1920. ’ ’ It is quite apparent then, that the contract of the parties is that which arose by reason of the proposal of the plaintiff to the defendant, and not by the proposal of the defendant to the plaintiff.

The circumstances leading to the submission of this bid are relevant circumstances, tending to show the circumstances and conditions surrounding the parties. But the creation of the obligation took place when this proposal of the plaintiff to the city was accepted by the city. The question then becomes whether or not the term “for sixty days” is applicable. There is nothing of this in the proposal, nor does the term in the advertisement carry that element into this. The ordinance providing for the issuing of the bonds, and after the passage of the ordinance public notice thereof was given by advertisement which attracted the attention of the bidders. Applying the act of the defendant in reference to the checks to the terms of the bid, we find that these cheeks were deposited for a specific purpose. The city became the holder by virtue of the terms on which the plaintiff deposited these checks, viz: to be “returned to us on demand should we not be awarded the bonds.” (They were awarded). Then follow words in the alternative, viz: “ or should our attozmey decline to approve the legality of same, or applied by you as full liquidated damages in case we refuse to carry out the. terms of this bid... ” The city must then claim the cheeks as part payment for the bonds awarded upon the bid, and there is no evidence that such ap plication has been made, nor does the evidence disclose that the checks were applied as liquidated damages. The city has no right to penalty or to liquidated damages until those have been established. The defendant has neither pleaded nor proved facts showing such established right. The city has no right at the expiration of sixty days to declare a forfeiture. No court of equity will recognize a forfeiture.' A court of equity will recognize a stipulation for liquidated damages, but the action of the city i or the collecting of these checks by forfeiture will be stayed until its- rights further appear.

Now this course of reasoning alone would leave the city still with a qualified property in these checks and a' right to hold *151them as outstanding legal obligations. It becomes necessary to determine whether or not the city, under the situation that has developed subsequent to the bids, is entitled to proceed against the plaintiff for liquidated damages for. a breach of the contract which was entered into between them. That, in turn, requires that we consider and find what is intended by the parties by the terms “legal” and “evidence the legality to the satisfaction of our attorney. ’ ’ I notice, in a Kansas case, the judges have turned lexicographers and undertake to make definitions. But the purpose in every case is to penetrate the ideas which underlie the action of the parties and upon which they have agreed in their transactions and to ascertain them through the veil of words which falls over their ideas. Mr. Masslich has expressed his opinion on the meaning of these terms, and he seems by his opinion to consider that his duty required him to refuse his approval. He says: “ I regard inability to enforce payment, if that inability is caused by anything in the law, as a matter upon which my opinion could not be silent. ’ ’ It was within his province to consider the matters which he has passed upon in his letter of April 10th. The evidence clearly shows reasonably prompt action on the part of the bidder, the plaintiff here, to secure an opinion as to the validity of these bonds. The bidder had a right in good faith to choose his authority, viewing the market for his securities. Upon the submission to his attorney, the attorney was of the opinion that the matter was within his province. His opinion has been made one of the terms of the bid: “to the satisfaction of our attorney.” Therefore the parties intended that the opinion of counsel selected in good faith should be deemed to be involved within the term “legality” as used by the parties and as within the meaning of this term of their contract. The bond issue was, in his opinion, imperfect.

Counsel for defendant contends that “legality” signifies a perfection of the procedure which has been followed in creating the bonds which have been issued. In this ease the opinion of the attorney shows that the proceedings have been substantially in compliance with the statutory regulations—those formal proceedings which are necessary to be followed in order that the *152bonds shall be valid expressing of an obligation. Bnt I assume that “legality” means something more than the mere formality of issue. It means the expression of a perfect obligation. It means that the bonds shall not be merely the expression according to legal form, perfect in its intonation and following all the regulations but that the result of these formalities shall be the creation of. an obligation on the issuing of those securities that is perfect so that the buyer shall have no concern about the security returning both his income and investment. That, therefore, involves the construction of the entire law that relates to the obligation. In the opinion of counsel in this case the limitations which the laws of Florida fix upon a municipality are such that in this instance there is an imperfect obligation. That is precisely the question intended to be submitted to him; so that he has given to the purchaser an opinion of the profession with regard to the security that the obligation created. Now it matters not that these bonds could be pursued to a" judgment. Yon may have as many judgments as you can get, but only one satisfaction. It is not the ability to secure a judgment, but it is the perfection of the security of the investment by virtue of the statutory provision for payment, which constitutes its legality. Here counsel, in good faith and true to their client, have given their opinion that they should not approve the bonds. In the pleadings the defendant alleges that there was fraud and a confederation and conspiracy between the plaintiff and his counsel. There is no evidence of this. This being denied in the reply, the burden is upon the defendant to show by a preponderance of evidencé in its favor and the ordinary rule is that the proof shall be clear, and as counsel say, convincing; but of this there is not the slightest evidence. On the contrary, the uncontradicted evidence is that Mr. Masslich is an attorney of high standing and national reputation.

It follows from this that the plaintiff is entitled to a permanent injunction restraining the paying over of this fund and restraining the defendant from seeking to enforce it. I am not sure whether the prayer of the petition is for cancellation and surrender of these certificates. If it is, cancellation will be decreed, it being within the jurisdiction of the court.