Temple Street Cable Railway v. Hellman
Before: Beatty
Synopsis
Corporations—Street Railway Company—Power to Execute Note—. Baseball Park—Increase of Business.—A street railway corporation has power to execute a note to the conductor of a baseball park in consideration that he will discontinue his former place of business, and establish a first-class baseball park on a tract of land adjacent to the land of the street railway, with a view to increase its business.
Id.—Breach of Contract—Indemnity Por Note—Election of Remedy— Where the conductor of a baseball park gave a bond of indemnity with sureties for the amount of the note and interest upon his failure to comply with his contract, and, after partially complying with it, abandoned the enterprise and forfeited his lease, the street railway company may elect either to sue him for the profit it would have made by performance of the agreement, or to sue him and his sureties upon the contract of indemnity for the amount of the note and interest.
Id.—Action Por Indemnity—Part Performance—Setoff.—In an action upon the bond of indemnity, whatever sums the street railway company received as the result of the part performance of the contract by the conductor of the baseball park, he. and his sureties have a right to set off or deduct from the amount of the note and interest.
Id.—Execution of Corporate Note—Admissions in Contract—Burden OF Proof—Want of Authority.—The admissions of the defendants, in the contract of indemnity given to the street railway company, of the execution of the note by it, are sufficient evidence, prima facie, to sustain a finding that the note of the corporation was duly executed, and to throw the burden upon the defendants to show want of authority on the part of the officers of the corporation to execute it.
Id.—Contract Giving Right of Action—Payment of Note Before Suit Por Indemnity.—Where the defendants expressly agreed that an action might be immediately commenced upon the failure of the conductor of the baseball park to perform any of his agreements, irrespective of the payment or maturity of the note given by the street railway company, it is no objection to the right of the street railway company, to recover upon the bond of indemnity, that it had not paid its noce before the action was commenced.
Beatty, C. J. On May 5, 1890, the plaintiff was a corporation owning and engaged in operating a street railway at Los Angeles, and the defendant, Marco Hellman, was conducting a baseball park on First street in that city. For the purpose of increasing the traffic on its road the plaintiff at the date mentioned entered into an arrangement in pursuance of which it executed to Heilman its negotiable promissory note for $5,500, payable in two years, with interest at the rate of ten per cent per annum, which he transferred to a third party, who at the commencement of this action was the owner and holder thereof. In consideration of the receipt of this note Heilman on his part agreed, among other things, to discontinue the playing of baseball at the First-street grounds, and within sixty days to establish, and for two years thereafter to maintain, a first-class baseball park on a tract of land adjacent to plaintiff’s line, of which he had become the lessee. He further agreed to give at the new grounds not less than one hundred and four games of baseball or other equivalent entertainment each year, to provide suitable accommo[637]dations for the public, and to pay over to the plaintiff, monthly, ten per cent of the gross receipts for admissions.
The other defendants, in order to induce the plaintiff to- enter into this contract and to execute its said promissory note to Hellman, became his sureties on a bond in the penal sum of $7,000, .conditioned for the faithful performance by him of the principal contract, or in case of the violation of any of its stipulations, to save the plaintiff harmless on account of its promissory note.
Hellman having failed to complete his preparations to open the new grounds within sixty days, he and his sureties, on July 5th, obtained an extension of time until August 1st, and on the 2d of August they obtained a further extension of time until October 1st. Both of these extension agreements were in writing, and contained various stipulations in regard to continuing the games at the First Street grounds, division of the gate receipts, indemnity to plaintiff for loss of fares, and other matters not requiring special notice.
In addition to these things Hellman and his sureties, at the time of obtaining the second extension, executed a new contract of indemnity to the plaintiff, which, after referring to and reciting the more material portions of the various contracts, etc., above mentioned, contains, among others, the following stipulation: “That in case said Marco Hellman fails to perform any of the agreements mentioned in the said contract of May 5, 1890, as modified by the agreement of extension of July 5, 1890, and this agreement, or fails to perform any of the covenants on his part contained in the agreement of July 5, 1890, or this agreement, at the time in said contract or in said agreements mentioned, they will pay the amount of the note mentioned in the said contract and the interest therein provided, and said company shall have the right to immediately begin suit against said Marco Hellman and the sureties on said bond to recover the amount of the said note and the interest therein provided. This provision shall not be con
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