Opposition Brief — Chicago, M. & St. PR Co. v. Clark

Supreme Court brief1900

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Jn the Supreme Eourt of the Rnited States.

OCTOBER TERM, 1898, No. 773.

THE CHICAGO, MILWAUKEE AND

St. Pact Rattway Company,

Petitioner,

against

HEMAN CLARK,

Respondent.

Brief for respondent in opposition

to application for certiorari to the

Circuit Court of Appeals for the Sec-

ond Circuit.

This application is made on behalf of the peti-

tioner to review a decision by the Circuit Court of

Appeals for the Second Circuit, in favor of the re-

spondent, and against the petitioner, affirming a

judgment of the Circuit Court for the Southern

District of New York, entered upon the report of a

Referee in favor of the respondent and against the

petitioner for the sum of $88,084.86.

The recovery had by the respondent was for a

balance due under a written contract entered into

between the parties for the building of a railroad

by the respondent for the petitioner for the sum of

$3,954,600.

\ 2

After the completion of the work, the Chief Engi-

neer made a final certificate, in accordance with the

terms of the contract, bearing date March 3d, 1888,

by which he certified that it was a final estimate of

the amount and value of the work done and ma-

terials used in building the railroad, which had

been ‘‘ constructed, built, completed and finished, in

all respects, in conformity with the agreements of

said contract, except as the said Railroad Company,

party of the first part, has, by agreement with said

Clark, assumed the construction and completion

thereof.”

He then certified the amount due;

As per contract price $3,954,600

From which deductions were made

by him, amounting to 104,372 77

Leaving a balance of, $3,850,227 23

To which he added for items not

covered by contract, etc., 45,571 56

Making a total due to the respond-

ent of $3,895,798 79

See Record, pages 197-203.

To this amount, as certified by the

engineer, the petitioner credited

the respondent for materials sold

by him to it, and for certain re-

bates and other matters, the

sum of, 34,598 90

Making the sum of $3,930,397 69

There was no dispute in this case, but that that

amount due the respondent had never been fully

paid to him, unless by the transactions evidenced by

a receipt signed by him on March 9th, 1888. This

receipt, and it alone, it was claimed by the peti-

tioner before the Referee and in the Court below,

was a bar to any recovery by the respondent in this

action.

The respondent, on the other hand, claimed that

it was no bar, because the difference between the

amount earned and the amount paid, amounting to

$71,057.63, had never been released or discharged

by him and was still due and owing.

The sum of $71,057.63 claimed by the respondent

was made up of the following items:

ist. Deductions made by petitioner for

nutlocks furnished by it to respondent

and used by him in the construction

of the road, the amount not being ques-

tioned, only the liability, $9,558 63

2d. Deductions made by petitioner for

non-completion of the railroad on the

Ist day of June, 1887, in accordance

with an alleged supplemental contract

entered into between the parties, 40,000 00

3d. Deductions made by petitioner for

moneys paid to subcontractors without

right during construction, in all, 21,449 00

Making a total of $71,057 63

Of this amount the Referee refused to

allow the petitioner —

ist. The deduction for nutlocks, $9,558 63

2d. The deduction for the forfeiture

withheld by the petitioner for not

completing in time, 40,000 00

The only defense to the recovery of these items

by the respondent was the interposition by the

petitioner of the receipt as a bar.

The only other item allowed by the Referee was

the claim of the respondent under his fifth cause of

action, to wit, $2,425 for timber belonging to him,

converted by the petitioner to its own use, which

claim was not covered by the receipt.

It will be urged in the following argument that

the petitioner has not brought itself within the

statute allowing writs of certiorari from this Court

to the Circuit Courts of Appeal, nor within the

well-established rules laid down by this Court in

its decisions as to the issuance of such writs.

ist. Because the case affects no public interest,

but simply private rights.

2d. Because there is no conflict betwven the de-

cision in this case and those of this Court and of

the State courts; but, on the contrary, the decision

in this case is in direct line and full accord with the

decisions both of this Court and of the State

courts.

3d. Because the real ground of complaint by

the petitioner is that the Circuit Court of Appeals

did not apply the true rule of the decisions under

the facts found by the Referee, and therefore the

question sought to be reviewed by this Court is not

as to what the law is, but whether upon the partic-

ular facts in this case well-settled legal principles

were properly applied.

4th. Because no request was made by the peti-

tioner for a full bench on the argument in the

Court below.

Point I.

The power of this Court in certio-

rari will only be exercised where

the importance of the questions in-

volved, the necessity of avoiding con-

flict between two or more courts of

appeal, or between courts of appeal

and the courts of a State, or some

matter affecting the interest of the

nation in its internal or external re-

lations, demands such exercise.

In almost every case where an application such

as the one now made, is either granted or refused,

this Court takes occasion to say that the power of

the Court to issue a writ of certiorari to the Circuit

Court of Appeals, ‘‘should be exercised sparingly

and with great caution.”

Ex parte Lau Ow Bew, 141 U. S., 583.

Ex parte Woods, 143 U. §., 202.

Chicago and Northwestern R. R. Co.

v. Osborn, 146 U. S., 354

American Construction Co. v. Jackson-

ville T. K. W. R. Co., 148 U. S., 372.

Forsyth v. Hammond, 166 U. S., 506.

The rule of this Court in respect to certioraris to

the Circuit Court of Appeals is stated by Mr. Jus-

tice Brewer, speaking for the Court, in Forsyth v.

Hammond (supra), as follows: ‘‘So it has been

that this Court, while not doubting its power, has

been chary of action in respect to .certioraris. It

has said, ‘It is evident that it is solely questions of

gravity and importance that the Circuit Courts of

Appeals should certify to us for instruction; that it

' is only when such questions are involved, that the

power of this Court to require a case in which

the judgment and decree of the Court of Ap-

peals is made final to be certified, can be properly

invoked.” Ha parte Lau Ow Bew, 141 U. S., 583-

587. Ea parte Woods, 143 U.S., 202. Lau Ow

Bew v. U.S., 144 U. S., 47-58. Am. Cons. Co. v.

Jacksonville, T. and K. W. R. Co., 148 U. S., 372-

383. * * * ‘We reaffirm in this case the prop-

ositions heretofore announced, to wit, that the

power of this Court in certiorari extends to every

—

case pending in the Circuit Courts of Appeal, and

may be exercised at auy t'me during such pend-

ency, provided the case is one which, but for this

provision of the statute, would be finally deter-

mined in that court. And further, that while this

power is coextensive with all possible necessities,

and sufficient to secure to this Court a final control

over the litigation in all the Courts of Appeal, it is

a power which will be sparingly exercised, and

only when the circumstances of the case satisfy us

that the importance of the questions involved, the

necessity of avoiding conflict between two or more

Courts of Appeal, or between Courts of Appeal and

the Courts of the State, or some matter affecting

the interests of this nation in its internal or exter-

nal relations, demands such exercise.”

Forsyth v. Hammond, 166 U. S., 506.

Point II.

There is no conflict between the

decision in the case at bar and the

decisions of this Court, and of the

other Circuit Courts of Appeal and

of the State Courts, but, on the con-

trary. the legal principles applied

by the Court below are in direct line

and full accord with the decisions of

this Court and of the other Circuit

Courts and of the State Courts.

First. —The legal principles applved by the Court

below in deciding this case are, as stated in the

opinions delivered by the learned Judges, as follows:

(A). An agreement, which is known to the law as

‘*accord and satisfaction,” is a contract, and like

all other contracts it needs a consideration to make

it valid; without consideration it is nudum pactum.

(B.) A receipt in full, and payment of the balance

stated therein, cannot be sustained as an accord

and satisfaction, unless some benefit was thereby

secured to the creditor, which, but for the settle-

ment, he would not have had.

(C). Payment by a debtor of a liquidated amount,

presently due, and to which he has no defense

that can be urged in good. faith or with color of

right, is not by itself a sufficient consideration to

sustain the release by the creditor of other liqui-

dated claims against the debtor.

See Opinion Judge Lacombe.

(D). A promise by a creditor, having a liquidated

and undisputed demand against his debtor, which

is wholly due and payable, to discharge the residue

upon receiving payment of a part, is, according to

all authorities, nudum pactum and totally inopera-

tivé, because the debtor is under a legal obligation

to pay the whole demand.

A demand is not a disputed demand, simply be-

cause the debtor refused to pay or recognize it, for

if this were true, no case would ever arise for the

application of the rule.

It is disputed within the meaning of the rule

only when it is so far disputed as to presenta

‘* proper case for litigation.”

(EZ). In a case where the creditor having two un-

disputed and liquidated demands against the debt-

or, and the latter claiming to have cross-demands

or counterclaims against the creditor, refuses to pay

the creditor’s demands unless the validity of the

cross-demands is acknowledged and their amount

allowed to him by the creditor, the promise to al-

low the whole amount of the cross demands has no

consideration to sustain it, because in contempla-

tion of the law no benefit could accrue to the prom-

isor and no injury to the promisee. The promisor

derives no benefit because he allows the whole; the

promisee is not injured because he relinquishes

nothing.

See Opinion Judge Wallace.

These rules and principles of law, it is submitted,

are well settled and quite elementary. They are the

rules upon which decision of this case was based in

the Court below. ’

It is hardly necessary to say that they are notin

conflict with the decisions of this Court nor of

other Circuit Courts of Appeal nor of the State

Courts.

In fact, the true ground of complaint on the

part of the petitioner is not as to the rules of law

laid down by the Circuit Court of Appeals, but

that the facts shown in this case do not bring it

within their application.

What this Court is asked to do is not really to re-

solve a conflict in the law, but rather to determine

whether, upon the facts in this case, well-settled le-

gal principles were properly applied.

As said by Mr. Chief Justice Fuller in ex parte

Woods (supra), the power under Section 6 of the

Act of March 8d, 1891, *‘Could only be properly in-

‘“voked * * * when questions of gravity and

‘* importance were involved.

‘* This must necessarily be so, in any view, and

‘‘ especially when it is considered that the Circuit

‘* Courts of Appeal were created for the purpose

‘* of relieving this Court of the oppressive burden

‘‘of general litigation which impeded the ex-

‘* amination and disposition of cases of public con-

‘** cern and delayed suitors in the pursuit of justice.

“But in the interest of jurisprudence and uni:

‘* formity of decision, to use the language of the emi-

‘* nent jurist and statesman who had charge of the

‘* bill, provision was made under Section 6 for such

‘‘ supervision on our par: as would tend to avert

** diversity of judgments and guard against inad

“ vertence of conclusions in controversies involv-

‘ing weighty and serious matters.”

Ex parte Woods, 143 U. S., 202.

It is respectfully submitted that as there is no ques-

tion in this case of an erroneous decision on a ques-.

tion of law by the Court below, but only whether the

peculiar facts in this cage brought it within well-set-

tled legal principles, the action being simply between

individuals respecting personal and private interests,

no questions of gravity and importance were in-

volved within the meaning of the statute; nor is a

review of the decision necessary in the interest of

jurisprudence and uniformity of decision, nor to

avert diversity of judgments and guard against in-

advertence of conclusions in controversies involv-

ing weighty and serious matters.

Point III.

The legal principles above enunci-

ated were properly applied by the

Court of Appeals to the facts in the

case at bar.

First.—The wholé issue in this case, both upon

the law and upon the facts, was referred to a

Referee to hear and determine:

In such cases, as said by Judge Lacombe, the

tule laid down by this Court is as follows: ‘* As the

Court in its judgment ordered his findings to stand

as the findings of the Court, the only questions

before this Court are whether the facts found by

theJReferee sustained the judgment.

** As the case was not tried by the Circuit Court

upon a waiver in writing of a trial by a jury, this

Court cannot review exceptions to the admission or

exclusion of evidence or of findings of fact by the

Referee or of his refusal to find facts as requested.”

Shipman v. Straitsville Mining Co.,

158 U. S., 361.

Roberts v. Benjamin, 124 U. S., 64

The only question, then, which was open to the

Circuit Court of Appeals for review, was whether

or not the facts found by the Referee supported the

judgment rendered.

Seconp.—As already said in the statement, two

items only, claimed by the respondent to have been

erroneously deducted from the amount earned by

him under his contract, were allowed by the

Referee.

1st. A claim for nutlocks, $9,558 63

2d. A deduction for not completing the

contract in time, 40,000

Tuirp.—As to the item for the nutlocks, the

Referee made the following findings:

‘*9. That during the progress of the work the

defendant purchased and furnished to the plaintiff

and charged him for patented nutlocks, for which

the defendant paid $9,558.63.

‘10. That the said nutlocks so furnished by the

defendant were used by the plaintiff in the con-

struction of the road.

‘© 11. That there are no provisions in the contract

which require that the plaintiff and the plaintiff

never agreed that he should use in the construction

of the road under said contract any patented nut-

locks.

“12. That the plaintiff was ordered by the de-

fendant to put such nutlocks on the road at the

beginning of the work.

‘13. That he protested against their use, and

finally yielded, and used them in track laying up-

on the promise that the matter of the charge for

nutlocks should be adjusted after the completion

of the contract.”

See Referee’s Findings, Record, pages

112-113.

Upon the facts so found the Referee found as

conclusions of law:

“3. That the plaintiff is not liable to the defend-

ant for the sum of $9,558.63, the cost of patented

nutlocks furnished by the plaintiff to the defend.

ant and used by him in the performance of the said

contract.

4. That there was no obligation imposed by the

contract upon the plaintiff to furnish and pay for

patented nutlocks to be used in the construction of

said road.

5. That the plaintiff is not legally indebted to

the defendant in any sum whatever for patented

nutlocks furnished by the defendant and used in

the construction of the road under said contract.”

See Referee’s Findings of Law, Record,

page 118.

FourtH.—As to the right of the defendant to de-

duct the $410,000 penalty the Referee found the fol.

lowing facts. :

“That immediately after the execution of the

said contract the plaintiff procteded to carry out

and perform the same, and did carry out and

perform the same, except.a portion thereof other:

wise agreed between the parties, and substan-

tially completed the same on or before the 1st

day of November, 1887, and the same was duly ac-

cepted by the defendant on or about the ist day of

March, 1888.”

‘‘That the consideration for the performance of

said contract originally mentioned in said contract

was $3,914,600, but before the execution of said

contract by the plaintiff, by and with the consent

of the defendant, the consideration was changed

and made “om 600.”

“That the plaintiff made and entered into a sup-

plemental contract whereby he agreed with the de-

fendant to complete his performance of said con-

tract on or before the Ist day of June, 1887, and to

allow the said defendant by way of forfeiture, in

case the said railway were not so completed by the

ist of June, 1887, the sum of $40,000.”

That the defendant failed to furnish the plaintiff

with rights of way, as by said contract it had

agreed to do in time to enable the plaintiff

to complete his contract prior to the Ist

day of June, 1887, or prior to the Ist day of August,

1887, but, on the contrary, delayed the plaintiff in

the performance of said contract, at a point upon the

said road known as Minneville, until October 27th,

1887, by reason of the neglect, failure and omission

of the defendant to obtain the necessary right of

way at said point so as to permit the construction

of the road and completion of the contract at said

point.”

“That the plaintiff was thereby prevented from

completing his contract on or prior to August 1st,

1887, and also on or prior to June Ist, 1887, by the

negligence, omission and fault of the defendant.”

See Record, Findings, pages | 11-112.

Upon the facts so found the learned Refereé held

as conclusions of law:

‘¢ That the defendant is not entitled to charge the

plaintiff, or to retain and deduct from the amount

earned and payable to the plaintiff under said con-

tract the sum of $40,000 as a forfeiture or liqui-

dated damages for not completing the contract on

June Ist, 1887.”

‘““That under the facts proved in this case, the

plaintiff is not legally liable to the defendant

for any damages for failure to complete the

contract within the contract time of the

time agreed upon, for the reason that the

plaintiff was prevented by the negligence of the

defendant, and its omission to procure the neces

sary right of way, completing the work in such

time.” :

See Record, Findings, pages 117-118.

Firra.—The only defense interposed by the pe.

titioner to the payment of these just claims, which

were a balance of the contract price earned by the

respondent for ‘work actually done, was a receipt

which the petitioner claimed amounted to an accord

and satisfaction between the parties, and was a bar

to the respondent’s recovery.

That receipt is set out in full both in the petition

for the writ and in the brief of the counsel for the

petitioner, as well as in the opinion of the Circuit

‘Court of Appeals, and need not be set out in extenso

here.

The following is a summary ‘statement of the

transactions, as stated in it.

Summary.

Amount earned under

contract fixed by

engineer, $3,895,798.79 (not disputed. )

Amount allowed for

extras fixed by en-

gineer, ; 34,598.90 *

Total, $3,930, 397.69 «

Transporta-

tion fixed

bycontract $50,000. (notdisputed.)

Amount re-

tained as

security for

liens, etc., 40,000 a

Payment

in money,

etc., $,617,306.50 3,707,306.57 ~

Balance, $223,091.12

Payment for nutlocks, $9,558.63 (amount not

disputed.)

Retained for forfeiture, 40,000. (amount not

disputed fixed

by contract.)

$49,558.63

Balance, $173,532.49 (not disputed.)

“Ls

'' The transaction as shown by the receipt was in

effect as follows:

The petitioner conceded that the

balance earned under the contract by »

the respondent, after deducting all

undisputed credits, amounted to $223,091 12

But there were two items as to

which there was no dispute as to the

amount, but which the petitioner de-

ducted from the balance due the re-

spondent, amounting to 49,558 63

Leaving the conceded balance due

the respondent at all events,

$173,532 49

In the payment of the balance of $173,532.49 the

petitioner did not pay one penny more than it was.

legally bound to pay, and which amount it is con-

ceded was due to the respondent. But the petitioner

claimed that the respondent, in consideration of the

payment of the sum concededly due, agreed that

he would relinquish and release all his claim to the

items deducted for nutlocks and overtime, amount-

ing to $49,558.63.

In the Court below the respondent invoked the.

principles of law above mentioned, and claimed that

the receipt did not amount to an accord and satisfac-

tion, and was no bar to the respondent’s recovery.

Ist. Because, as to all the items paid, they were.

wholly liquidated and undisputed in amount.

2d. Because the payment of those liquidated un-

disputed items formed no consideration for the re-

lease of the balance of the claim.

3d. That the rule that payment by a debtor of a

part of his debt is not a satisfaction of the whole

applied, and that an agreement to release under

such circumstances was nudum pactum and unen-

forcible.

SrxtH.—-The court below held that the facts

found by the Referee brought this case directly

within the principles above enunciated; and refer-

ence need only be made to the opinons of the

learned Judges of the Court below to show the

reasoning upon which they held those rules apppli-

cable to this case.

Judge Lacombe, in his opinion, reasoned as fol-

lows: ‘‘ It appears, as has already been shown, that

at the time the ge in full or proposed ‘‘ accord ”

was prepared and submitted to plaintiff for his ac-

ceptance, the amount earned under the contract

($3,895,798.79) was a claim against the defendant

‘liquidated ” in the strictest meaning of the term.

Not only was it undisputed in the sense that de-

fendants were willing to Pay it but it was no longer

open to dispute, even if they wished to dispute it.

As to the work called for by the contract, that in-

strument bound the defendant to pay the sums

shown by the final estimate to be due whenever the

Chief Engineer should certify to proper completion,

and he had so certified.

The price for such work was fixed by the con-

tract itself. As to the extra work, the Chief En-

gineer had certified that he had ordered it—that it

was done and had fixed and determined the price

for it—and the contract bound the company to pay —

the price so fixed. Therefore, except for the —_

defense of payment, the company was wholly

without defense to the claim for that sum, $3.. -

895,798.79; it could not contest it in court ‘‘ with

good faith ” nor with ‘“‘any color of right.” Had

laintiff before March 9th, 1888, brought suit for the

fatanos of such sum remaining unpaid, after cred.

iting the defendant with all the items of payment

it asserted it was entitled to charge, the railroad

company could not, assuming that its officers were

* conscientious, even have verified an answer which

could have raised any issue or delayed plaintiff’s

entry of judgment beyond the time necessary to

notice a motion for. judgment upon the answer as

frivolous. As to the items of payment, which the

company insisted upon, all. were and always have

been conceded by plaintiff, except the cost of nut

locks and the overtime penalty. When, therefore,

both these items were credited to the defendant in

the receipt, it parted with nothing—not even a

right to litigate—in agreeing to pay and in ac-

tually paying the balance remaining of the liqui-

dated amount earned under the contract after de-

ducting all alleged credits for payment. Hence

there was no consideration moving to the plaintiff

by reason of the payment of this sum on March

Yth, 1888, and unless some other benefit to plaintiff

can be found to support it, his agreement implied by

receipt in full, to abandon all claim to the cost of

nutlocks and overtime charged, was without cuon-

sideration and nudum pactum.

- reference to the receipt in full, which is set

forth in the 13th Finding of Fact, it will be

found that the instrument disposed of another item

not hereinbefore referred to in these terms; ‘‘ And

whereas the further sum of $34,598.90 should be

credited to said Clark for materials sold by him to

said company, and certain rebates and other mat

ters of that description, etc. etc.” This sum is, .by

the statement of account set forth in such receipt,

credited to Clark, and is included in the $173,532.49,

paid to him upon his signing such receipt. From

what has been said before, it is plain that if at the

time of the transactions relied upon, as showing ac-

cord and satisfaction, this sum of $34,598.90, so

allowed to Clark, represented an unliquidated item,

the amount of which he would have to establish

by evidence in case he had sued to recover it, its

allowance to him upon the settlement of March 9th,

1858, would be a sufficient consideration to uphold

that settlement against him as an accord and satis-

faction of all his claims. ;

The findings of fact do not give much informa-

tion as to the details of this item.

It is suggested that the testimony in the case

shows that it covered surplus materials, such as

rails, spikes, bolts, etc., which Clark had brought

on the line of the work. but had not needed; that

it being more advantageous to sell them where they

lay than to transport them elsewhere, plaintiff hail

agreed with defendant that it would take them off

his hands, had made ‘a trade outside of the con.

tract.” But with the testimony this Court has

nothing to do. It sufficiently appears from the

findings that part at least of this sum was for

‘‘materials sold by (Clark) to said Company.”

From the engineer’s certificate, which is included in

the ‘findings, it appears that this item represented

no part of the work specified under the contract,

and no part of the extra work and materials or-

dered by him; that it was not included in his cer-

tificate, nor in the final estimate; that he made no

decision about it one way or the other, and appar.

ently that he never undertook to pass upon it.

Therefore, it was not liquidated by the original

contract, nor by any action of the engineer there-

under. Indeed, it is plain to a demonstration from

the findings, that the item in question was not in-

cluded either in the original contract or in the extra

work, and must represent an additional and inde-

pendent contract of sale. What the terms of

that contract of sale were the findings do not

disclose; if they were of such a character as

to leave the price, of the Article sold open

to future adjustment, and if no’binding agreement

of the parties had subsequently naiuated such price;

in other words, if on March 9th, 1888, the situation

was such that the plaintiff put to his suit could

have recovered this item only by proof of amount

furnished or of reasonable value, or of both, then it

was an unliquidated item; and its allowance to the

plaintiff on settlement would be a good considera-

tion to support the contract of accord and satisfac-

tion. If, on the contrary, before that time, either

when the independent contract was made or later,

the parties had settled on the quantities delivered

and had agreed upon the price, nut by some mere

expression of willingness to pay a particular

amount, but in such a way as to preclude further

litigation ‘“‘in good faith” or “‘ with any color of

right”—then the allowance and payment of the

$34,598.90 would not constitute good consideration.

The only light we have upon this question is

found in a single clause—indeed, practically in a

single word—of the 14th finding of fact: ** That

said receipt and paper contained an accurate, truth-

ful and undisputed account of all dealings between

said parties except in the matter of the forfeiture,”

etc.

It is quite manifest from the findings and con-

clisions that the Referee uses this word ‘ undis-

puted” as synonymous with liquidated. He was

evidently satisfied from the testimony that the prior

transactions between the parties were such that

this sum was not more open to dispute than was

the sum of $3,895,798.79 to which the Chief En-

gineer had certified. By what process it was so

liquidated does not appear in the findings, and no

one seems to have asked the Referee to find the

facts more specifically. We must take his find-

ing, therefore, as conclusive upon the question,

and assume that, either by agreeing for a price in

advance or subsequently by entering into some

binding agreement as to the.sum to be paid, the

defendant had lost its right to throw the plaintiff

into court as to that item. Its allowance and pay-

ment, therefore, could not constitute a good con-

sideration for the alleged accord and satisfaction.

Judge Wallace, in his opinion, said:

‘*The Referee found. as conclusions of law:

(1) That at the time of signing the receipt the

plaintiff was not indebted to the defendant upon

the item for nutlocks; (2) that the plaintiff was not

liable for the item of $40,000 debited to him for

failure to complete the railroad by June Ist, 1887;

(3) that when it rendered the statement of account

the defendant was indebted to the plaintiff in the

sum of $49,553.63, in addition to the sum of

$173.532.49 paid by it upon receiving the receipt;

(4) that the delivery of the receipt and the accept-

ance of the payment by the plaintiff did not consti-

tute a valid payment or accord and satisfac-

tion of the said sume of $9,558.63 and $40,0v0,

or either of them, or any part of them; and

that the plaintiff was entitled to recover the sum

of $49,558.63, with interest from March 9th,

1888. The assignments of error thus raised the

question whether the acceptance of $173,537.49 by

the plaintiff upon a promise to receive it in full of

all his demands was a settlement and satisfaction

of his demands against the defendant, which

amounted to $49,558.63 more than that sum. If

there was no consideration fur his promise, the

conélusion of the Referee was correct. If there -

was a sufficient consideration for it, the assign-

ments of error are good. * * * It is conceded that,

as to the part of the plaintiff’s demand established

by the certificate of the engineer, it was a liqui-

dated and undisputed demand against the detend-

ant in the sense in which these terms are used in

considering the validity of a promise to accept a

part payment in satisfaction of the whole demand.

The other part of the plaintiff's demand that for

the materials, etc., purchased of plaintiff by de-

fendant was, according to the Referee’s finding,

undisputed in fact between the parties, and this

being so, it is quite unnecessary to inquire whether

it was originally one in respect to which there

might have been a fair difference of opinion be-

tween the parties as to the amount due.

The statement of account rendered by the de-

fendant is evidence as against the defendant not

only that it was an undisputed demand, but

one the amount of which had been ascer

tained by the parties. If the amount had been

ascertained, it was a liquidated demand. As no

facts appear in the findings of the Referee to the

contrary, it is to be concluded that this part of the

plaintiff's demand was also liquidated as well as un-

disputed by the defendant. The case is not precisely

one where the debtor refuses to pay the whole of

an undisputed and liquidated demand, and exacts

a promise from his creditor to receive part in satis-

faction of the whole. Strictly it is one where the

creditor having two undisputed and liquidated de-

mands against the debtor, and the latter claiming

to have cross demands or counterclaims against the

creditor, refuses to pay the creditor’s demands un-

less the validity of the cross demands is acknow]l-

edged and their amount allowed to him by the

creditor. By the statement of account and the re-

ceipt annexed to it the defendant, in fact, took this

position and notified the plaintiff that as a condition

to paying the demands which it conceded to be

due the plaintiff, the latter must allow and deduct

the debited items for the nutlocks and the forfeiture.

Upon this state of facts a promise to allow the

whole amount of the cross demands has no con-

sideration to sustain it, because, in contemplation

of the law, no benefit could accrue to the promisor

and no injury to the promisee.

The promisor derives no benefit, because he allows

the whole; the promisee is not injured, because he ,

relinquishes nothing.”

It will thus be seen that both the Judges are en-

tirely in accord as to the law applicable to the

case, which, reduced to a concrete form, is simply

that an agreement without consideration is nudum

pactum and unenforcible.

It will also be seen that both of the Judges con-

cur in the view that, as a matter of fact, there was

no consideration for the release or discharge of his

claims by the respondent.

SixtH.—Upon the receipt, as an accord and bar

to the responadent’s recovery, the petitioner rested

practically its entire defense.

When asked whether it was just and right that

the respondent should be mulcted in the sum of

$40,000 for not completing the road in time, when

the conceded testimony showed and the Referee

found that the fault was that of the petitioner in

not obtaining rights of way, its only reply was, the

respondent has lost his right to payment by reason

of the receipt.

When asked whether it was just and reasonable,

and whether there was any provision of the con-

tract warranting it in taking from the respondent

$9,558.23 for nutlocks, its only answer was, the

receipt prevents the payment.

It was read, reread and read again at every stage

of the trial, and it was claimed constantly by the

petitioner that, no matter how just were the claims

of the respondent, the receipt was a bar to them

all.

It is claimed that the receipt stands as payment,

though no payment has been made. That it stands

for an account stated, though no account had been

rendered and no statement made; that it stands for

an accord and satisfaction without the slightest

proof of either the accord or satisfaction.

The defense, it is submitted, is not a just one,

and the Court below properly found that it also

was not a legal one.

It is believed that this Court will have no diffi-

culty in arriving at the conclusion that the rules of

law were properly applied by the Court of Appeals

to the facts found in this case. ©

22.

Point IV.

None of the cases cited and relied

upon by the petitioner conflicts with

the decision in the case at bar.

The decisions of this Court in the cases of U. 8S.

v. Child, 12 Wall., 232, and U.S. v. Adams, 7

Wall., 463, as well as the other cases in this Court,

relied upon by the petitioner, were distinguished

and held not applicable to the facts in this case, in

the opinion of Judge Lacombe, as follows: ‘* Analy-

eis of the leading reported cases will show that

although it is not always discussed in the opinion,

a valuable consideration is found to be present

wherever a defense of accord and satisfaction has

been sustained. The brief filed by the learned

counsel for plaintiff in error presents such a com-

prehensive selection of authorities that it will be

sufficient to refer to its citations. ,

First to be considered is a group of decisions of

the U. S. Supreme Court, where claimants for sup-

plies furnished to the Government were held fore

closed by wi ye in full and acceptance of part of

their original claims. It should be remembered that

the U. S. Treasury pays only out of appropriations

and upon audit. There being many claims for mili-

tary stores furnished during the Civil War, Con-

gress created a special board to pass upon their va-

lidity and amount. None was required to bring his

claim before such board, but if he did, payment was

at once secured to him of whatever amount the

board might find due, out of a special appropriation

made for that purpose. Payment on all of these

claims out of the ordinary appropriations had been

suspended by order of the Treasury Departinent.

‘* From the time the Secretary issued his order sus-

pending the payment, * * * they must be re-

garded as claims disputed (7. e.. the whole claim)

by the Government; and unless the board had been

constituted, could have been adjusted only by Con-

gress or the Court of Claims” (7 Wall., 463). In

all these cases the amounts paid in settlement were

unliquidated, since but for the finding of the board,

the Government could have litigated them all in good

faith, andin giving mareneer? ye the ei at the weed

time going to the expense of constituting a specia

tribunal to adjust the. claims, and ——s the

more expeditious payment of what might be found.

due, there was certainly abundant consideration to

sustain the settlement. U.S. v. Adams (1868), 7

Wall., 468; U. S. v. Child (1870), 12 Wall., 232; U.

S. v. Justice (1871), 14 Wall., 15. In Sweeny v.

U. 8. (1872), 17 Wall., 77, the claim wasclearly un-

liquidated as to every part of it, involving the ques.

tion of reasonable compensation; a circumstance

which appears from the opinion: ‘“‘ Enough appears

to satisfy the Court that the charter party was.

superseded and that the claim, in fact, was for a

quantum meruit, and as such that it was a proper

subject of compromise.” In U.S. v. Martin (1876),

94 U. S., 400, plaintiff, a laborer, claimed extra pay

under some construction of the eight-hour law. He

presented his claim to the auditor in 1873 and re-

ceived $205, giving a receipt in full. He subse-

quently brought suit for the balance in the Court

of Claims. The payment of the $205 was a suffi-

cient consideration, since the entire claim was

fairly disputable in the courts. In Baird v. U S.

(1877), 96 U. S., 480, plaintiff had a contract with

the Government to furnish certain locomotives.

The stipulated price was, first, a fixed sum for each

locomotive; second, any advance there might be, af-

ter acertain date. in cost of labor and materials; and

third, any damages resulting from giving the Gov-

ernment’s order preference over others. The fixed

price had been claimed and the damages recovered

hy suit. The plaintiff presented a claim for $151,588

for entire advance in cost which was audited and

allowed for $97,507, and plaintiff informed of the

principles upon which the adjustment was made.

He took draft for the amount and collected it. Held

an accord and satisfaction. Manifestly every dol-

lar of the claim of $151,588 was unliquidated and

susceptible of liquidation only by consent of the

Government or by. the courts. As<ent to an adjust-

ment at $97,507 was a valuable consideration.

Pray v. U.S. (1882), 106 U. S., £94, is not in point,

and in Boofington v. Tuyes (1886), 120 U. S., 19s,

there was abundant consideration in the abandon-

ment of a right to appeal. In Fire Ins. Assn. v.

Wickham, 141 U. S., 579, premature payment was

held a good consideration. :

- In Battle v. McArthur, 49 Fed. Rep., 715, plain-

tiff had a contract for grading a railroad, compensa-

tion was at fixed prices for the units of the different

kinds of work done. There had been a long dispute

as to the classification of hardpan by the engineers,

z. e., as to how many units of rock and earth exca-

‘vation respectively should be paid for. After the

work was done, and the amount of final estimate

was being settled on, a conference was had, of

which Thayer, J., says: ‘‘The percentage of loose

rock excavation thus demanded was not allowed,

but it caused the Chief Engineer to raise the classi-

fication some twenty per cent., and that increased

entered into the final estimate.” Here was a con-

cession and payment which certainly constituted a

good consideration.”

Every one of the decisions in the various States,

cited upon the petitioner’s brief in the Court be

low was also carefully examined and distin-

guished.

In every one of those cases, as pointed out in the

opinion of the Court below, some consideration

was present either by the giving up of some right

which the debtor had or the acceptance by the

creditor of some benefit which he would not have

received, except for the settlement and compromise

made.

Thus it will be seen that the Court below fully

recognized the rule of law that the settlement and

adjustment of a claim upon a consideration, would

be a bar to further recovery by the creditor against

the debtor.

While recognizing this rule, they held that the

facts found by the Referee showed that there has

been no accord and satisfaction between the par-

ties, because no consideration for the release of any

claim passed from the petitioner to the respondent.

Point V.

The fact that only two Judges com-

posed the Court rendering the de-

cision sought to be reviewed is no

ground for the issuance of a writ

by this Court.

It is not claimed by the petitioner that any re-

quest for a full Bench was made. If it had been,

the request undoubtedly would have been granted.

The petitioner took the risk and saw fit to argue

the case before two Judges.

As already said, the Judges in no way differ as to

the law applicable to the facts found by the Ref.

eree.

In the opinion of Judge Wallace, the finding of

the Referee that the claim for materials purchased

of the respondent by the petitioner was undisputed

in fact between the parties, made it unnecessary to

inquire whether it was originally one in respect to

which there might have been a fair difference of

opinion between the parties as to the amount due,

and that the statement of account rendered by the

petitioner was evidence as against the petitioner

not only that it was an undisputed demand, but

one the amount of which had been ascertained by

the parties, and that if the amount had been ascer-

tained, it was a liquidated demand.

See Opinion of Judge Wallace.

Judge Lacombe, in his opinion, inclined to the

view that it was not aecessary even to go to the

extent indicated by Judge Wallace, but that the

finding of the Referee that the receipt contained a

‘truthful, accurate and undisputed account”

showed that he was evidently satisfied from the

testimony that the ; rior transactions between the

parties were such that the sum of $34,598.90 was

not more open to dispute than was the sum of

$3,895,798.79, to which the Chief Engineer had certi-

fied; that the finding must be taken as conclusive up-

on the question and assumed that either by agreeing

for a price in advance or subsequently by entering™

into some binding agreement as to the sum to be

paid the petitioner had lost its rights to throw the

respondent into court as to that item.

See Opinion of Judge Lacombe.

Both of the learned Judges agreed in the con-

clusion that there was no consideration for the

alleged accord and satisfaction.

Point VI.

The application for the writ of

certiorari should be denied.

Respectfully submitted.

KELLOGG, ROSE & SMITH,

Attorneys for the Respondent,

120 Broadway,

New York City,

ABRAM J. ROSE,

Of Counsel,

IN THE

Supreme Court of the United States.

OcTOBER TERM, 1899,

No. 256.

CHICAGO, MILWAUKEE and ST.

PAUL RAILWAY COMPANY, .

Petitioner,

against

HEMAN CLARK,

Respondent.

BRIEF FOR RESPONDENT.

Statement.

This case comes before this Court upon a writ of

certiorari to the Circuit Court of Appeals of the

United States for the Second Circuit to review an

order of said Circuit Court of Appeals affirming a

judgment entered upon the report of a referee for

$88,084.86 by the Circuit Court of the United

States for the Southern District of New York in an

action brought by Heman Clark, as plaintiff,

against the Chicago, Milwaukee and St. Paul

Railway Company, defendant.

See Judgment, pages 229.230.

See Order of Circuit Court of Appeals.

See Writ of Certiorari.

This action was brought to recover on six differ-

ent causes of action.

ist. To recover under a written contract entered

into between the plaintiff and the defendant a bal-

ance unpaid of $71,057.63.

2d. To recover upon quantum meruit the sum of

$127,652.81 for work done in excess of that called

for by the contract and which was not ordered

under the terms of the contract in writing.

8d To recover damages for freight paid to avoid

delays, the sum of $2,196.

4th. To recover the sum of $127,652.81 for fraud-

ulent representations made by the defendant as to

the quantity of work to be done under the con-

tract.

5th. To recover the value of timber converted by

the defendant to its own use, the sum of $2,425.

6th. To recover for damages and increased cost

occasioned by the giving of wrong grades, the sum

of $89,833.33.

By consent of the attorneys for the plaintiff and

and the defendant, an order of reference was en-

tered on the 19th day of October, 1894, referring all

the issues in this action to William G. Choate, as

Referee, to hear and determine the same.

See Order of Reference, pp. 45 and 46.

The Referee appointed by that order having de-

clined to serve, an order was entered on the 3d day

of January, 1895, ordering that George Hoadly be

substituted as Referee in the place and stead of said

William G. Choate, and that ‘‘this action, and all

the issues therein, be, and the same hereby are,

referred to the said Hon. George Hoadly, as sole

Referee, to hear and determine the same.”

See Order, pp. 47-48.

The case came on for trial before the said Referee,

and a judgment was rendered by him in favor of

the plaintiff and against the defendant for the sum

of $80,479.35, with interest and costs.

A motion for a new trial under the rule adopted

February 5th, 1877, in the Southern District of New

York, was made by the defendant and overruled,

and the report of the Referee confirmed by Judge

Addison Brown.

Judgment was entered upon the report of the

Referee on the 6th day of April, 1898, in favor of

the plaintiff, for the sum of $88,084.86.

See Judgment, pp. 229-230.

A writ of error was sued out by the defendant to

review the judgment entered, by the Circuit Court

of Appeals for the Second Circuit, which Court

affirmed the judgment.

The defendant then petitioned this Ccart for a

writ of certiorari, which was granted, and, in pur-

suance of said writ, this case now comes before this

Court.

Pleadings.

The only items allowed by the Referee in this

case were the sum of $40,000, deducted by the de-

fendant from the balance due the plaintiff as

overtime penalty for the alleged non-completion

of the contract within the time stipulated: the

sum of $9,558.63, deducted by the defendant for

nutlocks furnished by it to plaintiff and used

by him in the construction of the road, and

the item of $2,425 for timber belonging to the

plaintiff, converted by the defendant to its own use.

It is only necessary, therefore, to call the Court’s

attention to the causes of action embracing these

three items, to wit, the first and fifth causes of

action.

For a first cause of action the complaint alleges

the making of a contract between the plaintiff and

the defendant on the 6th day of March, 1896, for

the building of a line of railroad for the defendant,

extending from a point in the City of Ottumwa,

Iowa, to Harlem Station, in Clay County, Missouri,

a total distance of 202.8 miles, in accordance with

the plans, profiles and specifications made by the

chief engineer of the defendant and under his

supervision and direction.

That for the work provided to be done under said

contract, the defendant agreed to pay the sum of

$3,954,600, subject, howeyer, to the right of de-

duction of $50,000 by the defendant for transporta-

tion as provided in said agreement.

That the plaintiff proceeded to execute and per-

form said contract and prior to the commencement

of this action had fully completed and performed

the same so far as permitted by the said defendant

and excepting such portions as were not required

by it to be done thereunder.

That the said work had been accepted by the de-

fendant and its Chief Engineer, who had certified

to the proper performance thereof, and that the

amount earned thereunder, after deducting the price

of work not done and adding thereto certain allow-

ances and rebates, as agreed upon, was the sum of

$3, 930,397.69/100.

That there had been paid on account of said con-

tract the sum of $3,859,340.06/100, leaving a balance

due of $71,057.63/100.

See Amended Complaint, pages 32-33,

folios 95-99.

For a fifth cause of action, the complaint alleges

that the plaintiff was the owner of 97,000 feet B.

M. of bridge timber of the full and reasonable

value of $2,425, which said timber had been brought

and placed upon the line of the work for his use in

completing the said contract.

That the defendant, without the knowledge and

consent of the plaintiff, took possession of the same

and converted it to its own use, to his loss and dam-

age in the sum of $2,425.

See Amended Complaint, page 36, folio

107.

The answer of the defendant, —

ist. Admits the making of the contract and the

commencement of the performance thereof and its

acceptance by the defendant and its Chief Engineer.

2d. Denies the amount earned and the balance

alleged to be due thereunder.

It then sets up the following affirmative de-

fenses:

ist. That under the provisions of the contract,

the Chief Engineer had certified for the work done

thereunder, that the plaintiff was entitled to

$3,895,798.79, from which the defendant claimed the

right to deduct for transportation, the sum of

$50,000; and the further sum, by way of forfeiture

for non-completion in the contract time, the sum of

$40,000; and that it had paid to the plaintiff, in

money, material, labor and transportation, a sum

in excess of the amount certified.

2d. That subsequent to the making of the final

certificate by the chief engineer and upon March

9th, 1898, an account was stated and agreed to be-

tween the parties as the amount earned and the

amount to be credited for payment under the con-

tract, and the balance due the plaintiff was fixed at

the sum of $173,532.49, which said sum was paid

by the defendant and received by the plaintiff.

3d. That on the 9th day of March, 1888, the

plaintiff acknowledged in writing that he had re-

ceived payment of said sum of $173,532.49 in full

satisfaction of all claims and demands of every

kind, name and nature arising from or growing out.

of said contract, except the sum of $40,000 retained

for future payments, and executed a receipt and

acknowledgment for the same.

That the said sum of $40,000 so retained had been

paid by the defendant for the purposes certified in

said receipt and agreement, and the sum of $521.75

in excess thereof, for which sum an affirmative

judgment was demanded.

See Amended Answer, pages 20 to 30,

folios 60 to 88.

The reply of the plaintiff is a general denial of all

the facts stated in the amended answer constitut-

ing a counterclaim.

See Reply, page 19.

To state the issues more briefly: The plaintiff

under his first cause of action claims the sum of

$71,057.63 as a balance due under the contract, to-

gether with the sum of $2,425 the value of timber

belonging to him and taken and used by the de-

fendant.

The defendant practically admits performance of

and compliance with the terms of the contract, but

sets up the following affirmative defenses:

ist. Payment in full.

2d. An agreement giving it the right to charge

the plaintiff with the sum of $40,000 forfeiture or

a———

damages for not completing the contract within the

contract time.

3d. An account stated between the plaintiff and

the defendant whereby a balance was found which

has been paid.

4th. A plea of accord and satisfaction growing

out of the execution of a receipt in full.

5th. The payment of the sum of $40,000 retained

by the defendant for specific purposes and the sum

of $521.75 in excess thereof.

Facts.

On March 6th, 1896, a written contract was en-

tered into between the defendant, the Chicago, Mil-

waukee, and St. Paul Railway Company, and

Heman Clark, the plaintiff, wherein and whereby

it was agreed that said Clark should construct and

fully complete, ready for rolling stock, a line of

railroad for the defendant from Ottumwa, Iowa, to

Hariem Station (afterwards changed to Randolph’s

Bluff), Clay County, Missouri, a total distance of

202.8 miles.

The work so to be done was to be in accordance

with the plans, profiles and specifications made, or

thereafter to be made, by the chief engineer of the

defendant, and under his supervision and direction

and to his satisfaction. ~

The price originally bid for the work was

$3,990,000, but was afterwards adjusted at the rate

of $19,500 per mile, which is $3,954,600 and almost

equal to a deduction of $40,000 from the original

bid.

The contract price inserted in the contract prior

to its execution by the plaintiff was $3,914,600 and

the contract was signed in that condition by the de-

fendant.

‘ se + *2y

a ae

But the plaintiff discovered the error and by

consent of the defendant the lump sum to be paid ~

was fixed at $3,954,600 before execution by the

plaintiff.

The contract originally provided that the work

should be completed by the Ist day of August,

1887.

The Referee, however, found that that provision

was modified by a supplemental agreement to the

effect that if the railroad was not completed by the

ist day of June, 1887, a forfeiture of $40,000 from

the contract price should be imposed upon the plain-

tiff.

The finding of the Referee was not based ona

written agreement between the parties, but upon

correspondence testified to at the trial, which the

defendant claimed established a contract.

The only evidence of the plaintiff’s assent was

parol evidence as to a telegram claimed to have

been sent by him, which had been lost, and as to

which there was no proof that he had sent it or au-

thorized its sending. The plaintiff expressly denied

that he had sent it or authorized it.

But whether the agreement to forfeit $40,000

was made or not, the evidence conclusively shows

and the Referee expressly found that the failure to

complete by the Ist day of June, 1887, was wholly

‘due to the failure of the defendant to provide the

rights of way so as to enable the plaintiff to com-

plete his work.

See Referee’s Findings, p. 112, fols.

335-336.

The obligation to furnish rights of way was ex-

pressly imposed upon the defendant as a condition

to be performed by it.

The contract provides ‘‘ For and in consideration

‘of the payments, covenants and agreements of

_——

“the party of the second part to be by said

‘second party made, kept and performed as here-

‘‘ inabove set forth, the party of the first part here-

‘by covenants and agrees to furnish, at his own

‘cost and expense, and at such time or times as

“not to delay the execution of the work in this

‘agreement mentioned and referred to, all the

‘lands now or hereafter marked out and desig-

‘nated by the said first party’s chief engineer for

‘‘ right of way, borrow pits, waste banks and sta-

‘ tion grounds of all kinds as the said lands may be

“required for the construction of the railroad cov-

“ered by this agreement.”

See Contract, p. 169, fol. 506.

The plaintiff continually called upon the defend-

ant to furnish rights of way, but it failed to do so.

The testimony shows that there were twenty-five

places where, until after June 1, 1887, the rights of

way had not been procured.

At a place called Minneville the right of way, for

a distance of 2,750 feet, was not procured until Oc-

tober 27, 1887.

Testimony Hegeman, p. 239.

The next day, after the final right of way had

been furnished. the contract was completed, and

the first train ran over the line on November 1,

1887.

See testimony of Russell, p. 378, fol.

1133.

After the completion of the work, in accordance

with the terms of the contract, the Chief Engineer

of the defendant made a final certificate, bearing

date March 3d, 1888, which was presented to it but

not to the plaintiff.

By that certificate the Engineer certified that it

was a final estimate of the amount and value of the

work done and materials used by plaintiff in build-

ing the railroad, including all extra work done by

him, and that the said railroad agreed to be built

had been ‘‘constructed, built, completed and fin-

‘‘ished, in all respects, in conformity with the

‘‘agreements of said contract, except as the said

‘* Railroad Company, party of the first part, has,

‘by agreement witi: said Clark, assumed the con.

‘* struction and completion thereof.”

He then certified the amount due:

As per contract price, $3,954,600 00

From which deductions were made by

him amounting to 104,372 77

Leaving a balance of $3,850,227 23

To which he added for items not cov-

ered by contract, etc., 45,571 56

—

———

Making a total due to the plaintiff, $3,895,798 79

See Certificate, pp. 197-203.

To this amount, as certified by the

engineer, the defendant credited the

plaintiff for materials sold by him

to it, and for certain rebates and

other matters, the sum of 34,598 90

Making the sum of $3,930,397 69

There was no dispute in this case, but that this

amount due the plaintiff was never fully paid to

him, unless by the transactions evidenced by a

receipt signed by him on March 9th, 1888. Tuis

RECEIPT, IT APPEARS, WAS SIGNED IN NEW YorRK

BY THE PLAINTIFF BEFORE HE HAD RECEIVED OR

SEEN THE CERTIFICATE MADE UP BY THE CHIEF

ENGINEER, AND BEFORE HE HAD RECEIVED ANY

FINAL ACCOUNT OF THE ITEMS MENTIONED IN THE

ore ora

RECEIPT OR HAD ANY KNOWLEDGE OF THEIR COR-

RECTNESS.

The first time that the final estimate of the

Engineer was seen by Mr. Clark was upon the trial

of this action before the Referee. It had been de-

livered to the defendant, and with the final ac-

counts had been sent by the president of the de-

fendant to Mr. Bond, its vice president, who had

an office in New York. Mr. Bond simply sent the

receipt with the check for the balance shown by

the receipt to the plaintiff, and did not forward the

final accounts nor the Engineer's certificate. This

was expressly admitted by Mr. Bond on the trial.

This receipt, it was claimed by the defendant,

was a bar to any recovery by the plaintiff in this

action for any claims.

The plaintiff, on the other hand, chained that it

was no bar, because the difference between the

amount earned and the amount paid, amounting to

$71,057.63, had never been released or discharged

by him and was still due and owing.

This sum of $71,057.63 was claimed by the plain-

tiff in his first cause of action and is made up of

the following items:

ist. Deductions made by defendant

for nut locks furnished by it to plain-

tiff and used by him in the construc-

tion of the road, and for which the de-

fendant rendered bills, from time to

time, the amount not being questioned

Oty Ce one nk Ka wwik twee eens $9,558 63

2d. Deductions made by defendant

for non-completion of the railroad on

the first day of June, 1897, in accord-

ance with an alleged supplemental

contract entered into between the

UN ci Soa ka ec dn ON 126 Sov ilae eee eek 40,000 00

8d. Deductions made for moneys

paid to subcontractors without right,

including the moneys paid in compen-

sation for the death of a.brakeman

during construction, in all............ 21,499 00

ere err eee $71,057 63

Of these amounts the Referee. has

refused to allow the defendant:

ist. The deduction for nutlocks.... $9,558 63

2d. The deduction for the forfeiture

withheld by the defendant for not

completing in time.................4. 40,000 00

The amount retained as payment for the nut locks

does not dppear specifically in the receipt, but it

is included in the sum of $3,626,865.20, claimed

to have been paid by the defendant on account of

the contract.

This was expressly so found by the Referee.

See Findings, p. 113, fol, 339.

The $40,000 appears specifically as deducted in

the receipt.

The only defense to the recovery of these items

by the plaintiff was the interposition by the de-

fendant of the receipt as a bar.

The only other item allowed for by the Referee

in this case was the claim of the plaintiff under his

fifth cause of action, to wit: $2,425 for timber be-

longing to him converted by the defendant to its

own use.

All the other causes of action aggregating $232, -

459.49 have been disallowed by the Referee.

The claims under those causes of action were for

increased cost occasioned to the plaintiff in the

prosecution of the work by the wrongful act and

fault of the defendant, its servants and agents, in

giving him wrong grades and in compelling him to

do more work than required by the terms of the

contract and in a more expensive manner.

As to the items allowed there is no claim or

pretense of payment, except as evidenced by the

receipt.

It will be argued by the plaintiff:

ist. THAT THERE IS NO QUESTION: OPEN FOR RE-

VIEW BY THIS COURT BECAUSE THIS CASE IS A COMMON

LAW ACTION, AND WAS NOT TRIED BY A JURY, NOR BY

THE COURT WITHOUT A JURY, UNDER THE PROVISIONS

or SECTIONS 649 AND 700 OF THE REVISED STATUTES

OF THE UNITED STATES, BUT THAT THE JUDGMENT

RENDERED WAS UPON THE DECISION OF A REFEREE

ACTING AS A COMMON LAW ARBITRATOR.

2p. THAT EVEN IF THE JUDGMENT RENDERED BE

CONSIDERED IN ANY SENSE A JUDGMENT UPON A TRIAL

BY THE COURT, THE ONLY QUESTION WHICH BY ANY

POSSIBILITY CAN BE PRESENTED TO THIS Court Is

WHETHER THE FACTS FOUND BY THE REFEREE SUP-

PORT THE JUDGMENT RENDERED.

3p. THAT THE JUDGMENT RENDERED IS FULLY

SUPPORTED BY THE FACTS FOUND BY THE REFEREE.

4TH. THAT THE RECEIPT OFFERED IN EVIDENCE BY

THE DEFENDANT IS NOT A BAR TO THE RECOVERY OF

THE PLAINTIFF FOR THE TWO ITEMS ALLOWED BY THE

REFEREE UNDER THE FIRST CAUSE OF ACTION.

5TH. THAT EVEN IF THIS COURT WERE AT LIBERTY

TO REOPEN AND REEXAMINE ALL THE FINDINGS OF

FACT MADE BY THE REFEREE THE EVIDENCE TAKEN

UPON THE TRIAL NOT ONLY FULLY SUPPORTS THOSE

FINDINGS IN EVERY PARTICULAR, BUT CONTRARY FIND-

INGS WOULD BE AGAINST THE WEIGHT OF EVIDENCE.

ARGUMENT.

Point I.

There is no question open for re-

view by this Court, because this case

is a common law action and was not

tried by a jury nor by the Court

without a jury under the provisions

of Sections 649 and 1700 of the Re-

vised Statutes of the United States,

but before a’ referee acting as a

common law arbitrator.

ist. THIS ACTION WAS A COMMON LAW ACTION TO

RECOVER A SUM OF MONEY CLAIMED TO BE DUE to

THE PLAINTIFF UNDER AND BY VIRTUE OF A CON-

TRACT MADE AND ENTERED INTO BETWEEN HIM AND

THE DEFENDANT, AND FOR DAMAGES BY REASON OF

THE WRONGFUL ACTS OF THE DEFENDANT, ITS SER-

VANTS AND AGENTS, IN THE PROSECUTION OF THE

WORK.

On the 19th day of October, 1894, the following

stipulation was made by the attorneys for the par-

ties:

‘Tt is hereby stipulated and agreed that

‘* the above entitled action and all the issues

‘* therein be referred to the Hon. William G.

‘* Choate, AS SOLE REFEREE TO HEAR AND DE-

‘* TERMINE THE SAME. It is further stipulated

‘‘ and agreed that judgment upon the Report

‘*of such Referee shall not be entered here-

‘in until after ten days’ notice of the filing

‘*of the report of the Referee and of the

‘‘ judgment proposed to be entered thereon

‘‘shall have been given to the opposite

“ce party.”

See Stipulation, page 46.

On this consent an order was entered on the said

day referring this action to Hon. William G.

Choate AS SOLE REFEREE TO HEAR AND DETERMINE

THE SAME.

See Order, page 45.

Mr. Choate declined to serve as Referee, and sub-

sequently an order was entered on the 3d day of

January, 1895, in which the previous order was re-

cited, and the Hon. George Hoadly was appointed

Referee in this action in his place and stead.

The only consent to the entry of the second order

was the stipulation appended to it to the effect that

the parties consented to the entry of the order.

See Order, pages 47 to 48.

It was under this second order that the trial of

this action was had and the decision upon which

the judgment in this action was entered was ren.

dered.

The defendant, in order to avoid the binding

effect of the decision and, if possible, to obtain a

review of the judgment, moved for a new trial

under the rule of the Circuit Court in the Southern

District of New York, passed February 5th, 1877,

before Hon. Addison Brown, prior to the entry of

the judgment. On the 6th day of April, 1898, a

judgment or decision was signed by Judge Brown

overruling the motion and adopting the findings

and rulings of the Referee as the findings and

rulings of the Court.

This decision was simply formal on the part of

the Court, without a re-examination of the ques-

tions involved, and upon the approval as to form

by the attorneys for both parties.

See Decision, pages 221-226.

This confirmation, if it may be so called, by the

Court, however it is submitted, was not sufficient

to open any question for review by this Court.

As said by the Circuit Court of Appeals:

‘*Great embarrassment results to the de-

‘* feated party where a Referee appointed by

** consent, in conformity to the State Code-

‘* of Procedure, has made his Report, and

**th Court has entered judgment thereon;

‘* nor has the existing difficulty been substan-

‘* tially overcome by the rule adopted by the

“three federal districts of this State pro-

** viding for motion for a new trial. —

‘**In view of the decisions, it is rather sur-

** prising that parties to common law actions

‘* in the Circuit Court consent to such refer-

s ences. ”

Parker v. Ogdensburgh and L. C. R.

Co., 79 Fed. Rep., 818-819.

Has, then, the defendant overcome the difficulty

in this case and is its procedure sufficient to open

for review any question whatsoever on this ap-

peal?

Second.—THE TRIAL OF THIS ACTION WAS NOT

HAD BEFORE A JURY, NOR BY THE COURT WITHOUT A

JURY, IN ACCORDANCE WITH SECTIONS 649 AND 700

OF THE REVISED STATUTES.

Ist. By Section 649 of the Revised Statutes it is

provided:

‘*Tssues of fact in civil cases in any Circuit

‘* Court may be tried and determined by the

‘* Court without the intervention of a jury

‘‘ whenever the: parties or their attorneys of

‘* record ‘file with the clerk a stipuldtion in

‘“‘ writing waiving a jury trial. The finding

‘‘ of the Court upon the facts, which may be

‘‘either general or special, shall have the

‘‘ same effect as the verdict of a jury.”

And by Section 700 it is provided:

‘*When an issue of fact in any civil

‘“cause in a Circuit Court is tried and

‘‘determined by the Court without the

‘‘ intervention of a jury, according to Sec-

_ ‘tion 649, the rulings of the Court inthe

‘*‘ progress of the trial of the cause, if ex-

‘‘ cepted to at the time, and duly presented

“* by a bill of exceptions may be reviewed by

‘*the Supreme Court upon a writ of error or

‘‘upon appeal, and when the finding is

‘* special the review may extend to the deter-

‘* mination of the sufficiency of the facts

‘* found to support the judgment.”

See Revised Statutes, Section 700.

The jurisdiction of the Circuit Court of Appeals

to review a judgment entered in a case tried in a

Federal Court otherwise than according to the strict

course of the common law, is limited to cases tried

in accordance with the sections above quoted.

Merrill vs. Floyd, 53 Fed. Rep., 172.

2d. THE CASE AT BAR WAS TRIED BY A REFEREE

ACTING AS A COMMON LAW ARBITRATOR.

To quote Mr. Justice Gray:

‘* Before the passage of this statute it had

“been settled by repeated decisions that in

‘“any action at law in which the parties

‘‘ waived the trial by jury, and submitted

‘‘ the facts to the determination of the Cir-

‘“ cuit Court upon the evidence, its judgment

‘was valid, but that this Court had no

‘* authority to revise its opinion upon the ad-

** mission or rejection of testimony, or upon

** any other question- of law growing out of

‘* the evidence, and therefore when no other

‘** error appeared on the record, must affirm

** the judgment.”

Bond v. Dustin, 112 U.8., 604.

The reasons for this were given by Chief Justice

Taney in Campbell vs. Boyreau, 21 How., 223.

In that case, which was an action of ejectment,

the parties agreed to waive a trial of the facts by

jury, and that the facts as well as the law should

be decided by the Court upon the evidence adduced

by the parties.

Evidence was offered on both sides, and the Court

proceeded to decide the facts in dispute and the

questions of law arising upon the facts so found,

and gave judgment against the plaintiffs in error,

who were defendants in the Court below. ‘

The Chief Justice said:

‘“It appears by the transcript that several

** exceptions to the opinion of the Court were

‘* taken at the trial by the plaintiffs in error—

‘*some to the admissibility of evidence, and

‘* others to the construction and legal effect

‘‘ which the Court gave to certain instru-

‘** ments of writing. But it is unnecessary to

‘* state them particularly, for it has been re.

‘* peatedly decided by this Court, that, in the

‘** mode of proceeding which the parties have

** seen proper to adopt, none of the questions,

‘‘ whether of fact or of law, decided by the

‘* Court below, can be re-examined and re-

‘* vised in this Court upona writ of error. * * *

‘* Indeed, und.: t*e acts of Congress estab-

‘lishing and organizing the Courts of the

‘* United States, it is clear that the decision

** could not be otherwise; for, so far as ques-

‘* tions of law are concerned, they are regu-

** lated in their modes of proceeding accord-

‘* ing to the rules and principles of the com-

‘* mon law, with the single exception of the

‘* Courts in the State of Louisiana, of which

‘‘ we shall presently speak. .And by the

‘‘ established and familiar rules and prin-

*‘ ciples which govern common law proceed-

‘* ings, no question.of law can be reviewed

‘‘and re-examined in an Appellate Court

‘‘upon writ of error (except only where it

‘* arises upon the process, pleadings or judg-

‘*ment in the cause), unless the facts are

‘“‘found by a jury, by a general or special

‘‘ verdict, or are admitted by the parties,

‘* upon acase stated in the nature of a special

‘* verdict stating the facts, and referring the

** questions of law to the Court.

‘* The finding of issues in fact by the Court

‘*upon the evidence is altogether unknown

‘to a common-law Court, and cannot be

‘* recognized as a judicial act. Such ques-

“tions are exclusively within the province

‘of the jury; and if, by agreement of par-

‘* ties, the questions of fact in dispute are

‘submitted for decision to the Judge upon

‘* the evidence, he does not exercise judicial

‘authority in deciding, but acts rather in

‘* the character of an arbitrator. And this

** Court, therefore, cannot regard the facts

‘*so found as judicially determined in the

‘* Court below, nor examine the questions of

‘* law, as if those facts had been conclusively

‘* determined by a jury or settled by the ad-

*‘ mission of the parties. Nor can any ex-

‘* ception be taken to an opinion of the Court

‘upon the admission or rejection of testi-

‘* mony, or upon any other question of law

‘* which may grow out of the evidence, unless

‘*a jury was actually impaneled, and the ex-

‘* ception reserved while they were still at

‘*the bar. The statute which gives the ex-

‘‘ ception in a trial at common law gives it

‘* only in such cases. And as this Court can-

‘** not regard the facts found by the Judge as

** having been judicially determined in the

‘* Court below, there are no facts before us

‘“upon which questions of law may legally

“‘and judicially have arisen in the inferior

‘** Court, and no questions, therefore, open to

** our revision as an appellate tribunal. Con-

*“* sequently, as the Circuit Court had juris-

‘‘ diction of the subject matter and the par-

‘* ties, and there is no question of law or fact

‘“open to our re-examination, its judgment

‘* must be presumed to be right, and on that

‘* ground only affirmed.”

Campbell v. Boyreau, 18 How., 135.

Kelsey v. Forsyth, 21 How., 85.

In the absence, then, of a trial by the Court with-

out a jury, as provided in Section 649 of the Re-

vised Statutes, AS THE FACTS FOUND BY A REFEREE

CANNOT BE TAKEN INTO CONSIDERATION BY THE AP-

PELLATE COURT, THERE IS NOTHING UPON WHICH

THEY CAN MAKE A REVIEW AS TO WHETHER OR NOT

THE JUDGMENT RENDERED BY HIM IS IN ACCORDANCE

WITH LAW.

In other words, the Appellate Court is precluded

from making any examination whatsoever, of the

record and no question is open to it for review,

either upon the facts or upon the law.

That the statute, Section 649, in no way changed

the rule of law stated in the decision before the

passage of the statute, has been expressly held by

this Court.

Mr. Justice Miller, writing the opinion for the

Court, said :

‘*The Judiciary Act of 1789, Section 12,

‘“* declares that the trial of issues in fact in

‘‘ the Circuit Courts shall in all suits, except

‘* those of equity and of admiralty and mari-

‘* time jurisdiction, be by jury. * * * Nu-

‘* merous decisions, however, had settled that

‘* this right to a jury trial might be waived”

‘by the parties, and that the judgment of

‘*the Court in such cases should be valid.

‘“* * * But as was shown in the recent

‘* case of Flanders v. Tweed, 9 Wallace, 425,

‘* this Court had held that no review of the

‘** decision of the Court below could be had

‘* of any ruling atthe trial where the parties

‘* had consented to accept the Court instead

‘* of a jury to decide issues of fact.”

The learned Justice then refers to the passage of

the Act of 1865, and continues :

‘*The question arises on this statute

‘‘ whether the mode of submitting a

‘‘case to the Court without a jury

‘‘was intended to be exclusive of all

‘‘other modes, so that if there is no

‘* stipulation in writing, waiving a jury, there

‘‘is error for which the judgment must be

‘‘ reversed. Although the language of the

‘* Section might admit of that construction,

‘* it is not the only one of which it is suscep-

‘** tible. As said in the case already referred

** to of Flanders vs. Tweed, the main purpose

‘* of the act undoubtedly was to enable the

‘* parties who were willing to waive a jury

‘* to have the case reviewed on writ of error

‘* when tried by the Court alone. This was

‘* rendered necessary, as shown by Mr. Jus-

‘* tice Nelson in the opinion in that case, by

‘* the former decisions based on the idea that

‘in such cases, the Court did not sit as a

‘* Court of law, but as quasiarbitrators. To

‘* remove this difficulty, the statute provided

‘*a mode by which the parties who agree to

‘* waive a jury should have tle benefit of a

‘* writ of error to the rulings of the Court on

‘* questions of law. * * * Wecannot be-

‘‘ lieve that Congress intended to say that

‘** the parties shall not, as heretofore, sub-

‘* mit their cases to the Court unless they do

‘* so by a written stipulation, but that it was

‘* the intention to enact that, if parties who

‘* consent to waive a jury desire to secure the

‘right to a review in the Supreme Court of

‘“any question of Jaw arising in the trial,

‘‘ they must first file their written stipula-

‘* tion, and must then ask the Court to make

‘a finding of such facts as they deem essen-

‘* tial to the review, and ask the ruling of the

‘* Court on points to which they wish to ex-

‘‘cept. If this is not done, the parties con-

‘* senting to waive a jury stand as they did

‘* before the statute concluded by the judg-

‘* ment of the Court on all matters submitted

** to it.”

Kearney vs. Case, 79 U. S., 275.

By THIS DECISION, THEREFORE, IT MUST BE HELD

THAT THERE STILL EXISTS THE RIGHT TO SUBMIT A

CASE TO THE DECISION OF THE CouRT OR A REF

EREE ACTING AS ARBITKATORS, AND THAT THE DECIS-

ION RENDERED, WHILE IT IS BINDING UPON THE PAR:

TIES, IS NOT SUCH A DECISION AS CAN BE REVIEWED

ON APPEAL.

Third.—THE JUDGMENT RENDERED IN THE CASE

AT BAR IS IN THE NATURE OF A COMMON LAW ARBI-

TRATION.

The consent by which the action was referred

provides that all the issues be referred to Honorable

George Hoadly ‘‘ AS SOLE REFEREE TO HEAR AND

DETEKMINE THE SAME.” This was a complete sub-

mission of the entire case both upon the facts and

the law to his decision.

It was in no sense a trial by the Court without

the intervention of a jury, as provided by Section

649, because it was a trial by a Referee, and, under

the decisions above quoted, this Court cannot re-

gard the facts found by him as judicially deter-

mined in the Court below. Nor can it examine any

questions of law, BECAUSE THERE ARE NO FACTS BE-

FORE IT UPON WHICH QUESTIONS OF LAW MAY LE-

GALLY AND JUDICIALLY HAVE ARISEN IN THE INFERIOR

Court, and, therefore, open to revision by this

Court as an appellate tribunal.

Fourth. —NorR DID THE SO-CALLED CONFIRMATION

OF THE REPORT BY JUDGE BROWN AND THE ADOP-

TION BY HIM OF THE FINDINGS OF THE REFEREE AS

THE FINDINGS OF THE COURT, BRING THIS CASE WITH-

IN THE PROVISIONS OF SECTION 649 FOR TWO REA-

SONS:

ist. Because there has been no trial by the Court

of the issues in this action, but simply an adoption

of the findings of the Referee entered by consent

of the parties and without a re-examination or re-

trial before the Court.

2d. Because there was no written stipulation filed

with the clerk waiving a jury and consenting to a

trial by the Court.

(A). The consent referring this case provided in

accordance with the rule in the Southern District

of New York that after decision by the Referee,

no judgment should be entered ‘‘until after ten

days’ notice of the filing of the report of the Ref-

eree and of the judgment proposed to be entered

thereon shall have been given to the opposite

party.”

See Stipulation, page 46.

After the rendering of the Referee’s Report, and

prior to the entry of the judgment, the defendant

made application to the Court for a new trial and

an arrest of the judgment, as provided by the

rule. Judge Brown, uper consent of the parties,

signed a decision which appears at page 221 of the

record. It was simply a formal decision overruling

the motion on behalf of the defendant for a new

trial and for an arrest of the judgment and adopt-

ing the findings of the Referee, both as to the

facts and as to the law, as the findings and con-

clusions of the Court.

This certainly was not a trial before the Court

without a jury, as contemplated or intended by

Section 649 of the Revised Statutes.

(B). Even if it be considered such a trial, then

there was no consent in writing filed with the clerk

waiving a jury and toa trial by the Court without

the intervention of a jury, as required by that sec-

tion.

The only consent in writing was the consent re-

ferring the action TO THE REFEREE TO HEAR, TRY

AND DETERMINE ALL THE ISSUES THEREIN.

In the decision signed by Judge Brown, the de-

fendant attempted to conform to the provisions of

Section 649 by inserting a statement to the follow-

ing effect :

** This cause coming on for trial and to be

‘* held at a regular term of the Circuit Court

‘* of the United States for the Southern Dis-

“trict of New York, held at the United

———_—

‘** States Court House, in the city of New

‘‘ York, before the Hon. Addison Brown,

** District Judge, without a jury, and a trial

‘* by jury having been expressly waived by

‘written consent of the parties duly filed

‘““with clerk of the Court, BY WHICH

‘* CONSENT ALSO IT WAS PROVIDED AND AGREED

“THAT THE Hon. WILLIAM G. CHOATE

‘* SHOULD BE APPOINTED REFEREE TO HEAR

‘* AND DETERMINE THE SAID ACTION AND THE

‘* ISSUES THEREIN.”

See Decision, page 221, folio 662.

While the decision recites that a jury trial was

waived in accordance with Section 649, the very

statement itself shows that that consent was the

one referring the case to Hon. William G. Choate

as Referee.

If, then, a trial by Referee is not considered a

trial before the Court without a jury, certainly a

consent referring au action to a Referee cannot be

considered as the written stipulation required by

Section 649 of the Revised Statutes consenting to a

trial ‘‘by the Court without the intervention of a

‘jury whenever the parties or their attorneys of

‘‘ record file with the clerk a stipulation in writing

‘* waiving a jury.”

In other words, a trial before a Referee cannot

be deemed a trial by the Court, hence a consent

referring the whole issues to a Referee cannot be

considered as a consent to a trial by the Court.

But the proceeding had before Judge Brown, if

in any sense it could be considered a trial by the

Court without a jury, WAS WITHOUT ANY CONSENT

OR STIPULATION AT ALL. The decision itself shows

that the only consent given was the consent to

refer the issues to the Referee.

It, therefore, follows :

Ist. THAT IF THE JUDGMENT RENDERED IN THIS

ACTION WAS NOT IN ACCORDANCE WITH THE PRo.-

VISIONS OF SECTION 649, IT WAS IN THE NATURE

OF A COMMON LAW ARBITRATION AND UNDER THE

DECISIONS OF THIS COURT NO QUESTION IS OPEN FOR

REVIEW.

2d. THAT IF THE PROCEEDINGS HAD BEFORE

JUDGE BROWN WERE EQUIVALENT TO A TRIAL BE-

FORE THE COURT, WITHOUT A JURY, THEN THERE

WAS NO STIPULATION CONSENTING ‘TO SUCH A TRIAL

FILED WITH THE CLERK IN WRITING WAIVING A

JURY UNDER THE PROVISIONS OF SECTION 649.

In either aspect of the case, there is no question

open for review by this Court, and the parties

‘* stand as they did before the Statute concluded by

‘*the judgment of the Court on all matter submit-

‘*ted to it.”

Kearny v. Case (supra).

POINT II.

Even if the judgment rendered be

considered in any sense a judgment

upon a trial by the Court, the only

question which by any possibility can

be presented for review, is whether

the facts found by the Referee sup-

port the judgment rendered.

THE WHOLE ISSUE IN THIS CASE, BOTH UPON THE

LAW AND THE FACTS, WAS REFERRED TO THE REF-

EREE TO HEAR AND DETERMINE.

The proceedings before Judge Brown, as claimed

under Point I, was simply a motion for a new

trial, under the rule in the Southern District of

New York, and was in no sense a trial by the Court.

But, if that proceeding be considered such a trial,

then this case is within that class of cases where

the parties consent to a trial by the Court without

filing a stipulation under Section 649; or where the

Court refers the case to a Master or Referee to hear

and report the evidence, and upon the coming in of

the report adopts the findings of the Master or

Referee as the findings of the Court and renders

judgment accordingly; or where the consent is to

a referee to hear and report to the Court; or where

a partial reference may have been ordered.

In such cases it has been decided over and over

again that the only questions before the appellate

court are whether the facts found by the Referee

sustain the judgment.

The appellate court cannot review exceptions to

the admission or exclusion of evidence or to find-

ings of fact by the Referee or to his refusal to find

fact as requested.

Shipman v. Straitsville Central Mining

Co., 158 U. S., 356.

Roberts v. Benjamin, 124 U. S., 64.

Boogher v. N. Y. Life Ins. Co., 103 U.

S., 90.

Bond v. Dustin, 112 U. S., 604.

Paine v. Central Vermont R. R. Co.,

118 U.S., 152.

Andes v. Slauson, 130 U. S., 435.

To the same effect are the decisions of the Circuit

Court of Appeals in the various Circuits.

Shipman v. Ohio Coal Exchange, 70

Fed. Rep., 652.

Board of Commissioners v. Sherwood,

64 Fed. Rep., 103.

Abraham v. Levy, 72 Fed.Rep., 124.

Merrill v. Floyd, 53 Fed. Rep., 172.

Wesson v. Saline County,73 Fed. Rep.,

917.

In Shipman v. Straitsville Mining Company, this

Court, speaking by Mr. Justice Brown, said :

‘*This case was referred by consent to Mr.

‘Harrison, a so-called Master Commissioner,

‘* as Referee, with instructions to report the

‘* testimony with the findings of fact and of

‘‘law to the Court. The fact that no such

‘* officer as ‘Master Commissioner’ is known

**to the law does not impair the validity of

‘* the reference, as it is perfectly competent

‘for the Court to refer a case to a private

‘* person (Hecker v. Fowler, 69 U. 8., 2 Wall.

** 123). And as the Court in its judgment

‘* ordered his findings to stand as the find-

‘*ings of the Court, the only questions be-

‘* fore this Court are whether the facts found

‘“by the Referee sustained the judgment.

‘ As the case was not tried before the Cir-

‘* cuit Court upon a waiver in writing of a

** trial by jury, this Court cannot review ex-

** ceptions to the admission or exclusion of

‘‘evidence or to findings of fact by the

‘* Referee, or to his refusal to find facts as

‘* requested.”

Shipman v. Straitsville Central Min-

ing Co., 158 U. S., 356-361.

The only question, then, which by any possibil-

ity is open to this Court for review is whether the

facts found by the Referee support the judgment

rendered.

Point III.

The judgment rendered is fully

supported by the facts found by the

Referee.

Of the seventy seven assignments of error filed

by the defendant in this case, it is submitted, only

one, to wit, the Seventh, raises any question for

examination by this Court.

The Seventh assignment of error is as follows:

‘That the said Circuit Court erred in

‘holding and deciding, upon the hearing

‘‘and trial of this action as aforesaid, that

‘‘ the findings of fact made by the said Ref-

‘‘ eree, as contained in his said report made

“and filed in this action on the 18th day of

‘* February, 1898, authorized said judgment

‘* for the plaintiff.”

See Assignments of Error, page 479.

This is the only assignment of error which raises

any question as to a ruling and decision upona

matter of law after the award of the Referee.

First.—THE FINDINGS OF FACT BY THE REFEREE

FULLY SUPPORT THE JUDGMENT RECOVERED BY THE

PLAINITFF UPON THE FIRST CAUSE OF ACTION.

The balance claimed by the plaintiff to be due

him from the defendant, amounted to $71,057.63.

It was reached in the following manner:

Amount earned under the contract,

as shown by the engineer’s certifi-

ONES ca eich saa cce cars icened) $3,895,798 79

Amount credited by the defendant

to the plaintiff for materials fur-

WE et x ccdoke wai cheexcnuxe Pas $34,598 90

NN ooo acdsee Ly $3,930,397 69

From this there was deducted the

following:

Amount of payments. $3,626,865 20

Less nut

locks

charged. .$9,558 63

Amount

paid for

dead

brakeman. 1,999 00 11,557 63

Balance... .... . $3,615,307 57

Transportation .... . 50,000 00

Final payment....... 173,532 49

Balance properly ex-

pended out of $40,-

000 retained....... 20,500 00 $8,859,340 06

Balance......... $71,057 63

These amounts agree with the engineer’s certifi-

cate and with the figures contained in the final re-

ceipt.

That balance was claimed by the plaintiff under

a full compliance by him with the terms of the

contract.

The defendant did not deny that that balance

had been earned, but sought to avoid its payment

by setting up various affirmative defenses, hereaf-

ter to be considered, under which it claimed the

right to charge the plaintiff with the following

items:

A penalty for not completing the con-

Greet om Fume Idk... wc cvccccececces $40,000 00

For patented nut locks furnished by

the defendant to the plaintiff and

SY UE Uk vas caked baewns. $9,558 63

Settlement of judgment of King &

“31

Wetherill against plaintiff's wish and

without his consent..............6- 19,500 00

Paying damages for killing brakeman. 1,999 00

——_ ———_— -— ——

MN caus cna ue ees welee $71,057 63

Of this balance of $71,057,63 claimed by the

plaintiff, the Referee has allowed two items only:

ist. The amount deducted by the de-

fendant, as liquidated damages, for non-

completion of the contract on June Ist,

RH Ra Vin Syne ote rey Ran eS $40,000 00

2d. The amount deducted by the de-

fendant for patented nut locks furnished

by the defendant to the plaintiff and

charged to him ............-+eeee sees: 9,558 63

It will be only necessary then to consider the

findings of fact by the Referee in reference to these

two items.

(A). As to the right of the defendant to deduct

the $40,000 penalty, the Referee found the follow-

ine facts:

‘‘That immediately after the execution of the

‘said contract, the plaintiff preceeded to carry out

‘and perform the same, and did carry out/and per-

“form the same, except a portion thereof, other-

“ wise agreed between the parties, and substantially

“completed the same on or about the first day of

‘November, 1887, and the same was duly ac-

‘cepted by the defendant on or about the first day

‘of March, 1888.”

‘* That the consideration for the performance of

* said contract originally mentioned in said con-

** tract was $3,914,600, but before the execution of

‘* said contract by the plaintiff, by and with the

‘consent of the defendant, the consideration was

** changed and made $3,954,600.”

‘* That the plaintiff made and entered into a sup.

‘*plemental contract whereby he agreed with the

‘* defendant to complete his performance of said

‘* contract on or before June Ist, 1887, and to allow

‘* the said defendant by way of forfeiture in case

‘* the said railway were not so completed by the Ist

‘* of June, 1887, the sum of $40,000.”

‘* That the defendant failed to furnish the plaintiff

‘with rights of way as by said contract it had

‘‘ agreed to do in time to enable the plaintiff to

‘* complete his contract prior to the Ist day of June,

‘** 1887, or prior to the ist of August, 1887, but on

‘* the contrary, delayed the plaintiff in the perform-

‘* ance of said contract at a point upon the said

‘‘road known as Minneville, until October 27th,

‘* 1887, by reason of the neglect, failure and

‘omission of the defendant to obtain the neces-

‘sary right of way at said point so as to permit

‘* the construction of the road and completion of

‘* the contract at said point.”

‘* That the plaintiff was thereby prevented from

‘* completing his contract on or prior to August Ist,

** 1887, and also on or prior to June Ist, 1857, by

‘* the negligence, omission and fault of the defend-

‘“ ant.”

See Findings, pp. 111-112.

Here, then, is a conclusive finding by the Referee

that the defendant failed in its obligation to furnish

rights of way to the plaintiff to enable him to com-

plete his contract within the contract time.

UpoN THE FACTS SO FOUND, THE LEARNED REF-

EREE HELD AS CONCLUSIONS OF LAW:

ist. ‘‘That the defendant is not entitled to charge

‘the plaintiff or to retain and deduct from the

‘‘amount earned and payable to the plaintiff under

“the said contract, the sum of $40,100 as a for-

‘* feiture or liquidated damages for not completing

“the contract upon June Ist, i887.”

vd. ‘That under the facts proved in this case,

‘‘ the plaintiff is not legally liable to the defendant

‘“ for any damages for failure to complete the con-

‘tract within the contract time or the time agreed

‘‘upon for the reason that the plaintiff was pre-

‘vented by the negligence of the defendant and

“its omission to procure the necessary right of

‘““ way completing the work in such time.”

See Findings, pp. 117-118.

(B). That the conclusions reached by the Referee

are fully supported by the facts found by him is

conclusively settled by the authorities.

It is a well-settled rule that where one party de-

mands strict performance as to time by another

party he must perform on his part all the conditions

which are requisite in order to enable the other

party to perform his part, and a failure on the part

of the party demanding performance to do the pre-

liminary work required, in order to enable the

other party to complete his within the time limited,

operates as a waiver of the time provision in the

contract.

Dannat v. Fuller, 120 N. Y., 558.

Stewart v. Keteltas, 36 N. Y., 388.

Grube v. Schultheiss, 57 id., 669.

Gallagher v. Nichols, 60 id., 438.

Weeks v. Little, 89 id., 566.

It is also weil settled that after the failure to

perform a condition precedent not only is the time

limit in the contract broken, but that thereafter

the other party has a reasonable time to perform.

In other words, after the failure to procure the

rights of way either before June Ist or August Ist,

the time limit was broken and the plaintiff had, for

the performance of his contract, such reasonable

time as might be proved to be necessary for the

completion of his work.

In the present case there was no proof of what a

reasonable time for completion would have been.

It should be sufficient for the Court to know that

the entire work was substantially completed within

a few days after the procuring of the last right of

way.

This doctrine is well settled in our Courts.

‘The time specified in the contract for perform.

ance had been abrogated and the obligation as to

time no longer bound either party. Thereafter

each party had a reasonable time in which to per-

form.” Opinion, RAPALLO, J.

Lawson v. Hogan, 93 N. Y., 44.

Dady v. The Mayor, 57 Hun, 559.

Willis v. Webster, 1 App. Div., 301.

These cases were decided upon the authority of

earlier authorities to the same point.

They are based substantially upon the doctrine

that the extension of time in days covering periods

eee

during the different seasons when the days are

either short or long, clear or rainy, cannot be

properly apportioned by the Court as between the

parties.

This precise point was raised in a case in the New

York Court of Appeals and was decided contrary to

the defendant’s contention

The Court says:

‘The contractor could gain nothing by

‘‘ haste and pressure in one direction so long

‘“‘as entire completion was delayed by his

‘‘employers. We cannot divide and appor-

‘‘ tion the fault. It is enough that damages

‘* were payable upon a failure of entire com-

‘* pletion, and that was rendered impossible

‘* by the defendant’s acts; and her executor

‘*cannot recover for a failure which she

‘*made inevitable. But for that we cannot

‘say that there would have been any delay

‘** beyond the contract time.”

Weeks v. Little, 89 N. Y., 570.

Willis v. Webster, 1 App. Div., 301.

The conclusion, then, of the learned Referee that

the defendant was not entitled to deduct the $40,000

forfeiture for non-completion by the first day of

June, 1888, is fully supported by the facts found by

him as to the non-performance of its obligations by

the defendant and its waiver thereby of the time

limit in the contract.

Second.—THE FINDINGS OF THE REFEREE FULLY

SUPPORT HIS CONCLUSION THAT THE DEFENDANT WAS

NOT ENTITLED TO CHARGE THE PLAINTIFF WITH THE

SUM OF $9,553.63, THE AMOUNT PAID BY THE DEFEND-

ANT FOR PATENTED NUT LOCKS WHICH WERE FUR-

NISHED BY IT DURING THE PERFORMANCE OF THE

WORK.

This amount is included in the sum of $3,626,.

865.20 stated in the receipt as the amount of pay-

ment made by the defendant to the plaintiff under

the following heading:

‘*And whereas the said Chicago, Milwau-

kee and St. Paul Railway Company has paid

the said Clark to apply on said contract in

money, material, labor and transportation,

the sum of $3,626,865.20.”

See Receipt, page 114, folio 341.

The item for nut locks, although not specifically

designated, is contained in that amount.

See Referee’s Findings, p. 113, fol. 339,

There was no question in the case upon the fol.

lowing points:

ist. That the nut locks were furnished and paid

for by the defendant.

2d. That they were used in the construction of

the road.

The only point was as to which of the parties is

properly chargeable for them.

(A). As to the items for nut locks, the Referee

found the following facts:

‘*That during the progress of the work the de-

‘* fendant purchased and furnished to the plaintiff

‘* and charged him for patented nut locks for which

‘* the defendant paid $9,558.63.”

10.

‘*That the said nut locks so furnished by the de-

‘* fendant were used by the plaintiff in the construc-

** tion of the road.”

‘‘That there are no provisions in the contract

‘‘ which require that the plaintiff, and the plaintiff

‘‘ never agreed that he should use in the construc-

“tion of the road under said contract any patented

* nut locks.

‘* That the plaintiff was ordered by the defend-

‘ant to put such nut locks on the road at the be-

‘* ginning of the work. That he protested against

“their use, and finally yielded and used them in

“track laying upon. the promise that the matter of

‘‘ the charge for said nut locks should be adjusted

“after the completion of the contract.”

11.

See Referee’s Finding, pages 112, 113.

UPON THE FACTS SO FOUND, the REFEREE FOUND

| AS CONCLUSIONS OF LAW:

| “That the plaintiff is not liable to the defendant

“for the sum of $9,558.65, the cost of patented

‘‘ nut locks furnished by the plaintiff to the defend-

‘ant and used by him in the performance of the

‘* said contract.”

‘That there was no obligation imposed by the

‘contract upon the plaintiff to furnish and pay for

‘* patented nut locks to be used in the construction

** of said road.”

‘* That the plaintiff is not legally indebted to the

‘“ defendant in any sum whatever for patented nut-

) ‘locks furnished by the defendant, and used in the

‘ construction of the railroad under said contract. ”

See Conclusion of Law, page 118.

(B). The conclusions of the learned Referee are

fully supported by the facts found by him, as there

was no obligation upon the plaintiff to furnish

patented nut-locks, and they were furnished by the

defendant without the request of the plaintiff, and

used by him in the construction of the road solely

upon its request so to do.

ist. IF If Is CLAIMED THAT THEY WERE REQUIRED

TO BE FURNISHED UNDER THE CLAUSE OF THE Con-

TRACT REQUIRING THE WORK TO BE DONE IN A

WORKMANLIKE MANNER, THEY CANNOT BE §0

CHARGED.

The workmanlike manner under which this con-

tract was to be performed, was_ that particularly

specified and desiguated in the contract and speci-

fications themselves.

Nut-locks were not mentioned in the specifica.

tions and contract. They are a patented and ex-

pensive article.

If it had been intended to obligate the plaintiff

to furnish nut-locks, they should have been speci-

fied.

The explicit mention of all the other items of

track material, forbids the including of nut-locks.

This makes applicable the legal maxim, ‘‘ Mentio

unius exclusio alterius.”

2d. IF THEY ARE INCLUDED IN THE CONTRACT, THEY

MUST BE INCLUDED UNDER THE HEADING OR NOMEN-

CLATURE OF SPLICES AND BOLTS OF THE J. T. CLARK

PATTERN OR SPIKES AND TIES, STEEL RAILS, ANGLE-

BARS AND BOLTS, TRACK BOLTS AND TRACK SPIKES,

AND AS SUCH, MUST BE CHARGED FOR BY WEIGHT

UNDER THE CONTRACT.

Those are the only track materials specified in

the contract.

See Article 6, Section 1, p. 159.

i ae < s. |

+ - — © Be

—a——

Those were the only kind of track material speci-

fied in the contract, which could in any way cover

the nut locks.

They were the only classes of track materials

which the defendant was at liberty to purchase

and charge to the plaintiff.

The defendant’s witnesses, Delano, Moore and

Moll, say that nut locks are part of the track bolt.

It will be observed that in each of the three arti-

cles of the contract above referred to, track bolts

are specified.

Upon either of these theories, the defendant

would only have the right to charge the plaintiff

at the rates specified in the contract and not at the

exorbitant rate sought to be charged.

The contract fixes the sums to be paid as fol-

lows:

Angle bars, 1.65/100 cents per pound.

Track bolts, 2.60/100 cents per pound.

See Contract, Article 6, Section 1, p.

160, fol. 478.

In other words, the contractor was to be charged

by weight for those articles instead of by price

paid.

A correct calculation of all the nut locks used

upon the main line of this railroad shows the fol-

lowing facts :

352 joints were used for each mile of road ; there

were six nut locks on each joint or 2,112 nut locks

toa mile. The entire number of nut locks for 202.8

would be 428,313 nut locks.

From actual weight of locks used, 154 to 16 nut

locks made a pound.

If the defendant’s contention as to the interpreta-

tion of the contract is correct as to the weight of

the nut locks, the plaintiff could be charged only

for them by weight and as angle bars or splices at

the following rates :

As a part of the angle bars and at angle bar

price, 27,108 pounds of nut locks at .0165 per

pound, $441.11.

Or as part of track bolts at track bolt price,

27,108 at .026, $704.80.

Testimony of Hegeman, pp. 407-408.

The plaintiff claims that the patent nut locks

could not be required in any case under the terms

of the contract, but that if they could be required,

the defendant could only charge for them under

the two theories above mentioned the sum of

$447.28 or $704.80, instead of the sum of $9,558.63.

Third.—THE RECOVERY BY THE PLAINTIFF OF

THE SUM OF $2,425, THE VALUE OF TIMBER BE-

LONGING TO HIM CONVERTED BY THE DEFENDANT

IS ALSO FULLY SUPPORTED BY THE FACTS FOUND

BY THE REFEREE.

(A). The facts found by the Referee are as fol-

lows :

19.

‘*That in or about the months of March and

‘** April, 1888, the plaintiff was the owner of 97,000

“feet B. M. bridge timber then in the yard of

‘the defendant at Chillicothe and on the line of

‘* the railroad.”

20.

‘* That the said lumber did not conform to the

‘* standard of the defendant and was not purchased

‘* by the defendant from the plaintiff or allowed in

‘* the final certificate of the chief engineer under

‘* the contract in this action to the plaintiff.”

21.

“That in and about the month of June, 1888,

‘the defendant took possession of the said lumber

‘‘and converted the same to their own use without

‘assent or knowledge of the plaintiff.”

22.

‘That the value of the said lumber at the time

‘‘ of the taking in June, 1888, was $2,425.”

See Referee’s Findings, page 117.

Upon the facts so found, the Referee held as a

conclusion of law.

“That the plaintiff is entitled to recover from

“the defendant the sum of $2,425, with interest

‘from June Ist, 1888, for the conversion by the

‘defendant of lumber belonging to the plaintiff.”

See Referee’s Findings, page 118, folio

354.

(B). There is no merit in the technical defenses

set up by the defendant to the recovery of that

item.

ist. It was not covered in the engineer’s final

estimate, for the reason that the estimate antedated

the conversion of the material.

od. It was not at all affected by the provisions of

the contract in regard to the final estimate, for the

reason that it is a claim entirely outside of the con-

tract and not arising under it.

3d. No question as to joinder of actions of tort

and contract can be raised.

As it appears upon the face of the complaint, it

must be raised by demurrer and is waived because

not so raised.

See N. Y. Code, Sec. 499.

The questions above considered, it is submitted,

are the only ones which are open, in any event,

for review by this Court, and as to those questions,

it is also submitted, there is no error of law in

the judgment upon the facts found hy the

Referee.

Point IV.

The receipt offered in evidence by

the plaintiff in error is not a bar to

the recovery by the defendant in

error for the two items allowed by

the Referee under the first cause of

action.

First. —THE FACTS FOUND BY THE REFEREE IN

RELATION TO THE RECEIPT, ARE AS FOLLOWS:

13.

‘*That upon the 9th day of March, 1888, the

‘* plaintiff signed and caused to be delivered to a.

‘* representative of the defendant a paper writing

‘‘or receipt presented to him by the defendant

‘“‘ for signature, of which the following is a copy;

‘and upon the signature thereof by said Clark,

‘‘ and its delivery by him to the defendant, the

‘* plaintiff was paid by the said defendant, the said

‘sum named therein of $232,532.40, less the sum

‘** of $40,000 claimed in said paper to be retained

‘* for forfeiture in not completing performance o

ans rita

‘“ his work under said contract on or prior to June

‘‘ Ist, 1887, and the sum of $3,626,865.30 included

‘therein, embraces said sum of $9,558.63 claimed

“by defendant to be due for nut locks. Said

‘* $40,000 so deducted and the actual amounts so

* paid, was $173,532.49.”

(Here follows a copy of the receipt):

14.

‘* That said receipt and paper contained an ac-

‘curate, truthful and undisputed account of all

‘* dealings between said parties, except in the mat-

‘* ter of the $40,000 deducted for time forfeiture. The

‘* $9,558,63 for nul locks embraced in the $3,626,868. -

‘© 30 and the lumber hereinafter referred to and

‘‘ herein valued at $2,425. Besides the above, the

‘‘ defendant has paid the $40,000 reserved as in-

‘‘demnity or security for the payment of claims

‘ against Clark and in addition thereto upon like

‘* accounts, the sum of $521.75.”

‘* That at the time of the signing and delivery of

‘‘ said last mentioned paper, the final certificate or

‘“ estimate of the chief engineer under the contract,

‘“had not been delivered to the plaintiff or any of

‘his agents by the defendant or the said engineer

“ and the contents thereof were not known to the

‘* plaintiff other than by reference thereto contained

‘‘in said receipt of March 9th, 1888.”

‘That no other final settlement of the accounts

‘under said contract had been had between the

‘ plaintiff and the defendant at the time that the

‘*said last-mentioned paper was signed and de-

* livered.” ;

‘*That at the time of the signing and delivery of

** said last-mentioned paper the question of the

* liability of the plaintiff for nut locks which had

*“been left by the parties to this action open for

** settlement and adjustment until after tne comple-

‘* tion of the work under said contract and had been

‘‘ referred by the defendant to the chief engineer

‘* under said contract, had not been passed upon by

‘‘ him; that the said chief engineer had referred the

‘* question for opinion to the defendant’s counsel,

‘* but had not at said time given his opinion in re-

** lation thereto.”

‘*That no account was ever otherwise than by

‘* said paper and a receipt of said money, stated of

‘‘the transactions under and connected with said

‘* contract between the plaintiff and the defendant.”

See Findings, pages 116-117.

UPON THE FACTS SO FOUND, THE LEARNED REF.

EREE FOUND AS CONCLUSIONS OF LAW.

‘That the signing and delivery by the plaintiff

‘‘ of the receipt on or about the 9th day of March,

‘* 1888, and the acceptance of the check of $173,-

‘* 532.49 under the facts and circumstances proved

‘* in this case were as to the two sums of $9,558.63

‘‘ charged for nut locks and $40,000 charged by

‘* way of forfeiture for non-performance in time

‘* wholly without consideration and in violation of

‘* the contract between the parties and do not con-

‘* stitute any bar to the recovery of the plaintiff for

‘the sums of $9,558.63 and $40,000 otherwise as

** due under the contract.”

‘‘That the signing and delivery of said receipt, .

‘ and the acceptance of the check thereunder, do not

‘constitute a legal payment or accord and satisfac.

‘ tion of the said sums of $9,558.63 and $40,000 or

‘either of them cr any part or either of them.”

‘That no account of the transactions under this

‘contract and of the claims sued on in this action

‘‘ was ever had or stated between the parties to this

‘action otherwise than by said receipt or paper of

‘* March 9th, 1888.”

See Conclusions, pages 118-119.

By this receipt, the defendant sought to estab-

lish

Ist. Payment.

2d. Accord and satisfaction.

3d. An account stated.

As to payment, the answer alleges:

““And the defendant alleges that it has

‘paid to or for the plaintiff, or on his ac-

‘count, under the said contract, in money,

‘‘ material, labor and transportation, as au-

“thorized and provided for in and by the

‘‘ said contract, a sum in excess of any and

‘‘all amounts which became due or were

‘‘ earned by the plaintiff under said contract,

*‘ or which had been certified to or allowed

“by the Chief Engineer of the defendant

‘Railway Company, including all extra

‘“ work performed or material furnished by

‘* the plaintiff under said contract, or in addi-

‘* tion thereto.”

See Amended Answer, page 24, fol. 71.

As to the account stated, the answer alleges:

After stating the making of the supplemental

contract and of the final} estimate and certificate of

the engineer, it alleges:’

‘*And thereupon and on or about the 9th

** day of March, 1888, an account was stated

‘* and agreed to by and between the plaintiff

‘and the defendant Railway Company,

‘“ whereby the amount of the compensation

‘*due to the said plaintiff Clark for all the

‘‘ work done and material furnished by him

‘* under the said contract of March 6th, 1886,

‘* for the construction of the railroad of the

*‘ defendant from Ottumwa, Iowa, to the

** Missouri River, including all extra work

‘* performed and material furnished of every

‘kind and description, less deduction made

‘‘ for work not done and work assumed by

‘‘ the defendant Company, was agreed upon

‘‘and fixed and adjusted at the sum of

“* $3,895,798.79. * * * And that the

‘* amount then due to said Clark on said con-

** tract was the sum of $213,532.49.”

See Amended Answer, 4th defense,

pages 27-28, fols. 81-82.

As to accord and satisfaction, the answer alleges:

** That thereupon, and on the said 9th day

‘* of March, 1888, the said defendant Railway

‘*“Company duly paid to the said Heman

‘* Clark the said sum of $173,532.49, and the

‘‘said plaintiff Clark thereupon acknowl-

‘* edged in writing that he had received from

“the said defendant Railway Company the

** said sum of $173,532.49, in full satisfaction

‘‘of the amount due to him on said esti-

‘* mates of said Chief Engineer of the defend-

‘‘ant Railway Company, and in full satis-

‘* faction of all claims and demands of every

‘‘kind, name and nature arising from, or

‘* growing out of, said contract of March 6th,

‘* 1886, and of the construction of said rail-

“‘ road, excepting the obligation of the said

‘* Railway Company to account for such sum

‘* of $40,000, as provided in and by the said

‘receipt and acknowledgment of the said

‘¢ plaintiff Clark.”

See Amended Answer, page 29, fol. 87.

This receipt, it will be noticed, has upon it no

seal and cannot, therefore, be treated as a sealed

instrument.

Upon it the defendant rested practically its entire

defense.

When asked whether it was just and’ right that

the plaintiff should be mulcted in the sum of

£40,000 for not completing the road in time when

the conceded testimony shows, and the Referee

found, that the fault was that of the defendant, its

only reply is the plaintiff has lost his right to pay-

ment by reason of the receipt.

When asked whether it was just and reasonable

and whether there is any provision of the contract

warranting it in taking from the plaintiff $9,558.23

for nut locks, its only answer is the receipt pre-

vents the payment.

It was read, reread and read again at every stage

of the trial, and it was claimed constantly by the

defendant that no matter how just were the claims

of the plaintiff, the receipt was a bar to them all.

It is claimed that the receipt stands as payment

though no payment has been made ; that it stands

for an account stated though no account has been

rendered and no statement made; that it stands

for an accord and satisfaction without the slightest

proof of the accord. The defense is not a just one,

and, it is submitted, is also not a legal one.

The receipt will now be considered in the three

aspects relied upon by the defendant :

Ist. ITS LEGAL EFFECT AS EVIDENCE OF Pay-

MENT.

2d. ITS LEGAL EFFECT AS AN ACCORD AND SATIS-

FACTION.

3d. ITS LEGAL EFFECT AS AN ACCOUNT STATED.

Second.—The legal effect of the re-

ceipt as payment.

(A). Jt is well settled that a receipt is simply

prima facie evidence of payment.

‘Receipts form a well-established exception to

‘*the rule that a written instrument cannot be

‘* varied or contradicted by parol evidence. One

‘“may thus contradict his own receipt. The ac-

‘*knowledgment of mere payment in a receipt is

** prima facie evidence only and may be rebutted

‘** by parol evidence showing that the consideration

‘* is different in kind or amount from that named,

** or that notes or checks were taken in payment;

‘** that it was paid only in part or not at sll, or that

‘* the consideration which did pass was illegal. In

** most of the States this may be shown, though

** the receipt may be in full of all demands or em-

** bodied in the consideration clause of an instru-

** ment under seal.”

Am. Enc. of Law, Vol. 19, page 115.

There are some States in which it is held that

where the receipt contains a seal, that it is not

open to oral explanation.

In the present case there is no seal upon the re-

ceipt, and there is no claim that any seal was ever

placed upon tt.

The decisions of all the States agree that in such

cases receipts are open to oral explanation.

It will be sufficient, in addition to this general

statement of the rule, to cite cases showing that the

same rule prevails in the Federal courts and in the

courts of the State of New York.

Fire Ins. Co. v. Wickham, 141 U. S.,

564.

Harris v. Davis, 44 Fed. Rep., 172.

‘€}

Judge Eart, of the Court of Appeals, thus very

clearly lays down the rule:

‘“The only question then for us to con-

- sider is whether the various receipts in full

‘‘ were so far conclusive upon the plaintiff

‘* that he could not show by parol ‘that the

‘‘ items for extra bonus paid ‘by him to the

‘* butchers were nevertheless his due.

‘‘ It has long been settled in this State, that

‘a receipt furnishes mere prima facie evi-

‘* dence of the facts stated therein, and that

‘‘it may be controverted or explained by

‘ parol evidence. This grows out of the fact

‘“ that a receipt is not a contract. Itisa

‘* mere declaration or admission in writing.

cet &

‘¢ It has never been intimated, in any case

‘‘in this State, that it made any difference

‘* whether the receipt was for a specified sum

‘‘ of money, or in full. The same rule ap-

‘* applies, and no reason is apparent why it

‘‘ should not. A receipt for‘a specified sum

‘‘of money contains a declaration that so

‘* much has been paid upon account, or for a

‘* particular purpose. A receipt in full con.

‘* tains a declaration that a certain sum has

** been paid in full of all claims of a certain

‘kind. or of all demands. Neither kind of

** receipt embodies any contract.. Both fur.

‘nish only prima facie evidence, and are

‘* valuable only as such. Both are equally

‘* open to explanation or contradiction.”

Ryan v. Ward, 48 N. Y., 207.

Miller v, Coates, 66 N. Y., 609.

(B). The transactions culminating in the receipt

show that the defendant has never actually paid the

amount claimed by the plaintiff.

It was conceded by both parties, and stated in the

engineer’s certificate, and in the receipt itself, that

there had been earned by the plaintiff under the

contract the sum of $3,895,798.79.

It was also not disputed, and likewise stated in

the receipt, that the plaintiff should be credited for

materials sold, and for rebates and other matters

of that description the sum of $34,598.90, making a

total of $3,930,397.69.

As to that amount being due, there was no dis-

pute whatsoever.

We start then with

the amount conced-

edly due to the plain-

ae ukh cewek es cas $3,930,397 69

The receipt states

that there had been

paid to the plaintiff to

apply on the contract

in money, material,

labor and transporta-

tion, the sum of..... $3,626,865 20

In this amount the

Referee found that

the plaintiff’s claim

for nutlocks was in-

cluded. (See Find-

ings, page 166, folio

346.)

There had then been

paid in money, ma-

terial, etc., less the

claim for nutlocks, the

eum Bisa in cere ness 8,617,306 57

Claim for nutlocks. 9,558 63 $3,626,865 20

Leaving a balance

OF. xcikcwaee cakes $303,532 49

Out of this balance

the defendant sought

to otfset two items,

which were undis-

puted as to amount.

The items are the

amount charged for

transportation....... $50,000

Amount deducted

by way of forfeiture

for non-completion. . 40,000 90,000 00

Leaving a balance

OF cc kota ee ER owes $213,532 49

As against this bal-

ance the defendant re-

tained under the con-

tract, and it was not

disputed that it had

the right so to do, as

security for liens and

Cal. 6c. onks showne 40,000 00

Leaving a balance

ee akin earennt ean $173,532 49

It was this balance

that was paid by the

check and for which

the receipt was given.

The following statement will show more clearly

the transactions as shown in the receipt:

SUMMARY.

Earned under contract fixed by

IN vcciscn osc aiteacnemence-< $3,295,798 79

Amount fixed for materials, re-

bates and other matters of that

CN hin ss ccccd ccccecccnes 34,598 90

i vkdakawagew aakeness $3.930,397 69

PAYMENTS AND CREDITS.

Transportation fixed by contract. $ 50,000

Amount retained as security for

PN Mia its cciuoanunanseanee 40,000

Payments in money, etc......... 3,617,306 57 3,707,806 57

MIR bss sGaniesnawaneascs $223,091 12

Deducted for nutlocks........... $9,558 63

Deducted for overtime penalty.... 40,000 00 49,558 68

MND, aio wc dvntcncicinccalct $173,532 49

At the time of the receipt by the plaintiff of the

$173,532.49 there was no dispute, and could be none,

between the parties but that at least that sum was

due, asit was the difference between the amount due

the plaintiff, after deducting all offsets claimed by

the defendant in accordance with its contention.

IN OTHER WORDS, BY THAT PAYMENT THE PLAINTIFF

GOT SIMPLY THE AMOUNT WHICH, IN ANY EVENT, HE

WAS LEGALLY ENTITLED TO AND AS TO WHICH

AMOUNT THE DEFENDANT HAD NO DEFENSE TO ITS

‘PAYMENT.

Unless, then, the defendant can show that the dif-

ference between the amount due to the plaintiff, to

wit, $3,930,397.69, and the amount of the payment

for which the receipt was given, $173,532.49, has

been paid or released, the acceptance by the plain-

tiff of the sum of $173,532.49 in full payment

would be no bar to his recovery for the difference,

under the rule that payment by a debtor of a part

of his debt is not a satisfaction of the whole.

United States v. Bostwick, 94 U. S., 53.

Fire Ins. Co. v. Wickham, 141 U. S.,

564.

Ryan v. Ward, 48 N. Y., 204.

Gray v. Barton, 55 N. Y., 68.

Perkins v. Lockwood, 100 Mass., 249.

Curran v. Rummell, 118 Mass., 483.

McKay v. Myers, 168 Mass., 312.

Hodges v. Truax (Ind.), 49 N. E. Rep.,

1079.

Myers v. Green (Ind.), 51 N. E. Rep.,

942.

Fletcher v. Wurgler, 97 Ind., 223.

Marion v. Heimbach (Minn.), 64 N. W.

Rep., 386.

McIntosh v. Johnson (Neb.), 70 N. W.

Rep., 522.

Cincinnati v. Cincinnati Railroad Co.,

6 Ohio N. P., 140.

See also Fitch v. Sutton, 5 East’s Rep.,

230.

That the receipt in full of itself would in no way

bar recovery by the plaintiff if its effect was to dis-

charge an amount concededly due by the payment

of a part, was expressly decided by this Court in

FirE Ins. Assn. v. WICKHAM (supra).

In that case, speaking of the effect of a receipt in

full, Mr. Justice Brown said:

‘*It was not seriously contended in this

‘“‘case that the defendant was not legally

‘liable upon its policies for the expenses

‘* clearly incidental to the fire, of raising and

‘* saving the vessel as well as for the direct

‘‘injury to the vessel in consequence of the

“fire, and if the plaintiffs were induced to

‘* settle their claims for one-half the amount

‘*that was due them, and there was no con-

‘‘sideration for the relinquishment of the

‘other half, this suit willlie for the recovery

‘ofthe amount. The rule is well established,

‘* that where the facts show clearly a certain

‘*sum to be due from one person to another,

‘*a release of the entire sum upon payment

‘‘of a part is without consideration, and the

‘‘creditor may still sue and recover the

‘* residue.

‘‘If there be a bona fide dispute as to the

‘* amount due, such dispute may be the sub-

‘‘ject of a compromise and payment of a

‘‘certain sum as a satisfaction of the entire

‘‘claim, but where the larger sum is ad-

‘* mitted to be due, or the circumstances of the

““case show that there was no good reason to

‘*doubt that it was due, the release of the

‘‘whole upon payment of part will not be

‘“considered as a compromise, but will be

‘treated as without consideration and void.”

Fire Ins. Assn. v. Wickham, 141 U.5.,

564.

Unless, then, there was a release by the plaintiff of

the balance of his claim upon some new considera-

tion, the receipt in full is no bar to his recovery.

Third.—The legal effect of the re-

ceipt as an accord and satisfaction.

es, .

To make the rule that payment of a part of a

debt concededly due is no bar to the recovery of the

balance inapplicable to this case, either one of two

things must appear.

(a). That the amount due the plaintiff was an un-

liquidated demand, or

(b). That there was a bona fide dispute between

the parties as to the amount due, which was settled

upon a sufficient consideration.

Neither one of these two conditions exists in the

case at bar.

ist. THE AMOUNT DUE THE PLAINTIFF WAS A

WHOLLY LIQUIDATED DEMAND.

(a). The contract, Article 15, Sec. 1, provides as

follows:

‘* The party of the first part further agrees

‘‘to pay to the said second party, in the man-

‘*ner and at the time and times hereinafter

‘set forth, the sum of $3,954,600; which

‘*said sum shall be in full settlement, pay-

‘‘ment and satisfaction, of all and every

‘‘claim and demand _ of said _ second

“party upon or against the said first party

‘* for building, constructing and fully com-

‘* pleting, in strict conformity to the stipula-

‘*tions, specifications and requirements,

‘‘ hereinabove mentioned and referred to, the

‘‘ said railroad, in this agreement proposed

‘** and agreed to be built, and the said pay-

‘*ment and payments shall be made as fol-

‘* lows, to wit:

By Article 15, Section 2, it is provided:

‘* The party of the first part further agrees

‘* that whenever the said Chief Engineer shall

By Art. 16. Sec 3:

‘* furnish to it, the said first party, his certif-

‘* ¢cate that all the stipulations and coven-

‘‘ants in this agreement contained, to be by the

‘“ said second party kept and performed, have

‘** been by said party well and truly observed

** and carried out, and that the said first par-

‘* ty’s railroad herein proposed and agreed to

‘* be built, has been by said second party con-

** structed, built, completed and finished in

‘‘all respects, in full conformity with the

‘* covenants and agreements hereinabove in

‘* that behalf made by said'second party, and

“‘ shall with said certificate also present his,

‘** the said Chief Engineer’s , estimate of the

‘* amount and value of the various kinds of

‘* work done by said second party under the

“terms of this agreement, which said esti-

‘“‘ mate shall be final and conclusive between

‘* the parties hereto, then the said first party

** shall and will pay to the said second party

‘the sum or suns, if any, shown by said

‘‘ final estimate to be due to said second

‘** party under the terms of this agreement,

‘* and will also pay so much of the said sum

‘‘ of five hundred thousand dollars thereto-

** fore retained by said first party as has not

‘been previously paid to said second party.

‘* Provided that the entire amount of com-

** pensation so to be paid to said second

“ parly, as in this article provided, shall

‘* not exceed the said sum of $3,954,600.”

“It is further mutually understood and

** agreed, by and between the said parties,

‘* that, in case the said second party shall be

‘* by said Chief Engineer required, in writing,

‘to furnish any material, or to do any

‘‘work not hereinabove required of and

‘agreed to be furnished or performed by

‘‘ said second party; or in case the said sec-

‘‘ ond party shall in like manner be required

‘‘by the said Chief Engineer to furnish and

‘erect any structure of a more expensive

‘“‘ design or plan than that called for by the

‘* standard plans of said first party, and herein-

‘* above by said second party agreed to be fur-

“‘ nished and erected, then and in every such

‘« case the said second party shall furnish such

‘‘ material or do such work, or shall furnish

‘and erect such more expensive structure

‘as aforesaid, as the case may be, and shall

‘“‘ receive from said first party such just and

‘ reasonable compensation for such material

‘* or work, or for such more exnensive struc-

‘* ture so as aforesaid required of him, as the

‘‘ said Chief Engineer shall fix and deter-

‘* mine.”

Under all these provisions, no matter which is

allowed to control, the contract price is a liquidated

demand.

ist. Under Article 15, Section 1, it is absolutely

liquidated in words and terms in the contract.

2d. Under Article 15, Section 2, it is liquidated

by the provision which makes the estimate of the

Chief Engineer final and conclusive between the

parties hereto.

If there was any extra work ordered in writing,

or any additional structure or more expensive plan,

as provided under Article 16, Section 3, the com-

pensation was also to be fixed and determined by

the Chief Engineer.

THE AUTHORITIES ARE UNIFORM TO THE EFFECT

THAT THE FINAL CERTIFICATE, IN THE ABSENCE OF

FRAUD OR MISTAKE, IS AN ABSOLUTE BAR, AND

BINDING UPON BOTH PARTIES,

Kihlberg v. U. S. 97 U. S., 398.

Sweeney v. U. S., 109 U. S., 618.

Mundy v. Louisville & N. R. R., 67

Fed. Rep., 633.

Brayman v. Ann Arbor R. Co., 85

Fed. Rep., 579.

Sweet v. Morrison, 116 N. Y., 19.

Smith v. the Mayor, 12 App. Div., 391,

As to the sum of $3,895,798.79, certified by the

Engineer, there can then be no question but that it

was a liquidated amvuunt in the strictest sense.

(6). Nor was the sum of $34,598.90 credited by

the defendant to the plaintiff in the receipt for ma-

terials sold and for rebates and other matters of

that description an unliquidated or unascertained

amount.

The Referee, as to the amounts stated in the re-

ceipt, expressly finds ‘‘that said receipt and paper

‘* contained an accurate, truthful and UNDISPUTED

‘* account of all dealings between said parties, ex-

‘** cept in the matter of the forfeiture of the $40,000

‘* deducted for time forfeiture, the $9,558.63 for nut

‘* locks embraced in the $3,626,865.20 and the lum-

‘‘ber hereinafter referred to and herein valued at

“ $9 495.”

See Referee’s Findings, page 116, folio

347.

The construction put upon this finding by the

learned judges in the court below was that the

Referee used the word ‘undisputed ” as synony-

mous with the word ‘‘liquidated;” that he was evi-

dently satisfied from the testimony that the prior

transactions between the parties were such that

the sum of $34,598.90 was no more open to dispute

than was the sum of $3,895,798.79, to which the

chief engineer had certified.

See Opinion Lacombe, J., Chicago, Mil-

waukee & St. Paul R. R. Co. v.

Clark, 92 Fed. Rep., 968, at page 982.

That the learned Judge correctly interpreted the

finding clearly appears from a reference to the

opinion written by the Referee, wherein he says:

‘* The claim of Clark against the company

** for the sum of $3,930,397.69 was a liquidat-

‘“ed sum, liquidated by the umpirage of the

‘* Chief Engineer, as proved by the final cer-

‘* tificate and estimate, and by this receipt

‘* prepared by the Company. * * *

‘“Had it been an unliquidated or undis-

‘* puted claim, or a claim upon a quantum

““meruit requiring a valuation of worth or

‘‘ material, different considerations might

‘‘ apply, but these are properly speaking un-

‘* disputed claims. They are claims which

‘** the Company had no right to dispute, and

‘*the written concession contained in this

‘* receipt by Clark was based upon no con-

** sideration whatever.”

See Referee’s Opinion, page 81, fols.

241-242.

If this Court were permitted to look into the

record, it would find that the sum of $34,598,90

was, in fact, settled upon and fixed long prior to the

signing of the receipt.

Mr. Hegeman, the superintendent in charge of

the work under Mr. Clark, testified:

‘** T stated that $3,930,397.69 was the amount

‘‘earned under the contract and for mate-

‘* rials sold to the Company. Of that amount

‘* T said $34,598.90 was material sold by Mr.

‘*Clark to the Company. Those materials

‘* were bridge ties, some grade ties, timber,

‘* various construction materials. * * *

‘**T arrived at those figures in this way; the

‘“accounts were made up by our bookkeeper

‘*and the accounts as to freight, charges,

*etc., our account was made out and a

‘** counter-account was made out by the Chi-

** cago, Milwaukee & St. Paul, and the two

‘* bookkeepers got together and checked their

‘* accounts, and that is the result of it, a

** statement of it.”

See Testimony of Hegeman, page 256,

fols. 765-766.

Mr. Kimball, the assistant chief engineer for the

plaintiff in error, also testified:

‘The aggregate amount of the monthly

‘* estimates with which Mr. Clark was cred-

‘* ited is $3,895,798.79. * * Other credits

‘“ were made to Mr. Clark. There were a

‘ series of vouchers aggregating in the whole

“* $34,598.90. * * (Paper handed witness.)

‘This is the voucher for that sum; that is

‘the voucher that includes the credit for

‘*Jumber taken off of Mr. Clark’s hands at

‘*the time of the completion of the con-

** tract.”

See testimony of Kimball, page 322,

fol. 964.

Aside from the findings of the Referee and the

construction put upon them by Judge Lacombe, it

is clear that the statement of that amount as due

to the plaintiff in the receipt prepared by the de-

fendant is an admission binding upon it which pre-

—

cludes the contention that the same was not a

fixed and undisputed amount, and hence a liqui-

dated claim as between the parties. This was the

view taken by Judge Wallace.

In his opinion the learned Judge said:

‘* It is conceded that as to the part of the

‘* plaintiff’s demand established by the certifi-

‘‘cate of the engineer, it was a liquidated

‘and undisputed demand against the de-

‘‘fendant in the sense in which these terms

‘* are used in considering the validity of a

‘* promise to accept a part payment in satis-

‘* faction of the whole demand. The other

‘** part of the plaintiff’s demand that for the

‘‘ materials, etc., purchased of plaintiff by

‘* defendant was, according to the Referee’s

‘* finding, undisputed in fact between the

‘* parties; and this being so, it is quite un-

‘** necessary to inquire whether it was origin-

‘‘ally one in respect to which there might

‘‘ have been a fair difference of opinion be-

‘‘tween the parties as to the amount due.

‘* The statement of account rendered by the

‘* defendant is evidence as against the de-

‘* fendant, not only that it was an undisputed

‘* demand, but one the amount of which had

‘* been ascertained by the parties. If the

‘‘amount had been ascertained, it was a

‘liquidated demand. As no facts appear in

‘‘ the findings of the Referee to the contrary,

‘*it is to be concluded that this part of the

‘* plaintiff's demand was also liquidated as

‘* well as undisputed by the defendant.”

Chicago, Milwaukee and St. Paul R. R.

Co. v. Clark, 92 Fed. Rep., 968, at

page 985.

In every view of the case, therefore, the amount

—

due to the plaintiff, $3,930,397.69, was a wholly

liquidated demand.

2d. Not only was the amount due to the plaintiff

a fixed and liquidated sum, but the amount of every

payment and offset deducted by the defendant was

likewise a fixed and liquidated amount.

The payments and offsets conceded by both par.

ties to have been properly made and deducted are

the following items:

(A). Amount paid in

money, material, labor,

and transportation, $3, 626,865.20

Less payment for nut-

locks 9,558.63 $3,617,306.57

(B). Additional amount

deducted for transporta-

tion, 50,000

(C). Amount retained

as security for liens, etc. 40,000

$3, 707,306.57

As already shown under this Point

there was no dispute between the par-

ties as to the amount earned, $3,930, 397.69

Nor was there any dispute as to the

defendant being entitled to the above

credits for. 3, 707,306.57

Leaving a balance of $223,091.12

This balance; it is submitted, is a wholly liquidat.

ed demand because it is simply the difference be-

tween amounts concededly due and not arrived at

by the settlement of any dispute whatsoever.

It is just as much a liquidated claim as if the

plaintiff had a claim against the defendant on a

promissory note for $3,930,397.69 and the defendant

had a claim against the plaintiff on a note for $3,-

707,306.57. ©

Of course it could not be said that the difference

between the amounts of the notes, $223,091.12, was

unliquidated in any sense.

IN OTHER WORDS, A DEMAND CANNOT BE SAID TO BE

UNLIQUIDATED IF IT CAN BE ASCERTAINED BY THE

SIMPLE PROCESS OF CALCULATION.

And so here the difference between the amounts

concededly earned and the amount concededly paid

is a wholly liquidated demand.

29d. WE ARE THUS BKOUGHT TO THE CONSIDERA-

TION OF THE OTHER PROPOSITION: WAS THERE A BONA

FIDE DISPUTE BETWEEN THE PARTIES WHICH WAS

SETTLED UPON A SUFFICIENT CONSIDERATION, WHICH

PRECLUDES THE RECOVERY BY THE PLAINTIFF OF THE

DIFFERENCE BETWEEN THE LIQUIDATED DEMAND OF

$223,091.12 AND THE AMOUNT PAID THEREON, $173, -

532-49, VIZ.: $49,558.63.

In considering this question it must be remem-

bered that it is not claimed that there had ever been

a settlement between the parties prior to the giving

of the receipt.

There had been no going over the accounts pro

and con and the receipt given as a release of the

mutual settlement of their differences.

The Referee expressly found ‘‘that no other final

settlement of the accounts in said contract had been

had between the plaintiff and the defendant at the

time that the said last-mentioned paper was signed

and delivered.”

See Referee’s Finding, page 116, folio

247.

Hence the sole question for consideration is what

is the legal effect of the receipt under the facts

found by the Referee as a release and discharge of

an indebtedness legally due?

As to none of the items mentioned in the receipt

was there any dispute as to their amount, and with

the exception of the two above mentioned there was

no dispute whatsoever between the parties as to the

right to deduct them. In the payment of the bal-

ance of $173,532.49 stated in the receipt, the defend.

ant did not pay one penny more than it was legally

bound to pay, and which amount it was conceded

was due to the plaintiff in any event.

In the language of Judge Wallace:

‘*The case is not precisely one where the

‘* debtor refuses to pay the whole of an un-

‘* disputed and liquidated demand and exacts

‘* a promise from his creditor to receive part

‘fin satisfaction of the whole; strictly it is

*“ one where the creditor having two undis-

** puted and liquidated demands against a

‘“debtor and the debtor claiming to have

‘*cross demands and counter-demands against

‘*the creditor refuses to pay the creditor’s

‘* demands unless the validity of the cross-

‘** demands is acknowledged and their amount

‘* allowed to him by the creditor.

‘* By the statement of account and the re-

‘* ceipt annexed to it, the defendant in fact

‘** took this position and notified the plaintiff

‘* that as a condition to paying the demands

‘* which it conceded to be due the plaintiff,

‘* the latter must allow and deduct the deb-

‘* ited items for the nut locks and the forfeit-

‘ure. Upon this state of facts, a promise to

‘‘allow the whole amount of the cross-de-

‘* mands has no consideration to sustain it,

** because in contemplation of the law no

‘* benefit could accrue to the promisor and

‘*no injury to the promisee. The promisor

‘* derives no benefit, because he allows the

‘‘ whole. The promisee is not injured because

‘‘ he relinquishes nothing.”

Opinion Wallace, J., Chicago, Milwau-

kee and St. Paul R. R. Co. v. Clark

(supra).

In other words, where there are disputed claims

and conceded claims, the disputed claims cannot be

discharged or released by payment simply of the

conceded claims.

There must be a new consideration of some kind

to settle and discharge the disputed claims.

If the defendant had said we owe you $173,532.49

in any event and there is a dispute between us as to

whether or not we owe you $40,558.63. If you will

relinquish your claim to the disputed items, we

will pay you $180,000 in full payment and satis-

faction, then, of course, the receipt of the sum of

$180,000 in full payment and satisfaction would be

a bar to any recovery by the plaintiff on the dis-

puted items. There would then have been a new

consideration. But, in this case, there was not

one dollar paid by the defendant in consideration

of the release by the plaintiff of the disputed

claims.

There was no mutual concession in this case to

support a settlement, because the defendant has

not paid one penny more than was concededly due

by it under the contract, giving to it full credit for

the disputed items. A release by the plaintiff of

his rights would under such circumstances be a

gift pure and simple to the defendant of $49,558.63

for which he received no consideration whatso-

ever.

His agreement, to release, no matter how binding

| it might be in its language, would be a nudum

pactum and hence unenforcible.

3d. THAT AN ACCORD TO BE BINDING MUST BE

BASED UPON A _ SUFFICIENT CONSIDERATION jg

THOROUGHLY WELL SETTLED BY ALL THE AUTHOR.

ITIES.

We cannot do better than quote from the opinion

of Judge Lacombe in the Court below, declaring

what is known to the law as ‘accord and satis-

faction.”

The learned Judge said:

* The agreement between parties which is

‘*known to the law as ‘accord and satis-

‘* faction’ is a contract, and like all other

‘** contracts it needs a consideration to make

‘*it valid. Without consideration it is nudum

** pactum.

** The consideration may present itself in

‘* many different shapes, It may be found

‘‘ in premature payment; in payment in some

‘* manner different from that bargained for

**in the criginal contract; in the giving of

‘** some desired article in place of money; in

‘* the giving of further security or of differ-

‘ent security for the reduced amount; in

‘* mutuality of concession; in abandonment

“ of a right to litigate or to appeal. But in

‘* some form or other a consideration must

‘* be found. There must be some advantage

‘‘ or presumed or assumed advantage accru-

‘** ing to the party who yields his claim.” * *

‘*The rule of law as to accord and sat-

‘* isfaction is usually stated thus:

‘* Payment by a debtor of a part of his liqui-

‘* dated debt is not a satisfaction of the whole

‘* unless made and accepted upon some new

‘* consideration, but where the debt is un-

‘* liquidated, the rule does not apply.” When,

‘** however, a creditor’s claim is made up in

‘* part of an amount so adjusted by agree-

‘* ment of the parties that the debtor cannot

‘* in good faith contest it, and in part of an

‘* amount not thus adjusted, and the debtor

‘* nays only the adjusted portion of the claim

‘* and insists on the release of the entire or

** unadjusted portion, without any new con-

‘* sideration moving to the creditor, reason

‘and principle would require a decision that

‘ there had been no accord and satisfaction;

‘and except for the few cases referred to

‘* above where the point was not discussed

‘the authorities are in harmony with such

‘* a decision.

‘*The rule might be more accurately

‘* stated: “‘ Payment by a debtor of a liqui-

‘* dated amount, presently due, and to which

‘he has no defense that can be urged in

‘* good faith or with color of right, is not by

‘ itself a sufficient consideration to sustain a

‘* release by the creditor of other unliquidated

‘* claims against the debtor.”

Opinion Lacombe, J., Chicago, Mil-

waukee & St. Paul R. R. Co. v.

Clark, 92 Fed. Rep., 968, at page 976.

The conclusions of the learned Judge, it is sub-

mitted, are fully borne out by the authorities.

Fire Ins. Assn. v. Wickham, 141 U.

S., 564.

U. S. v. Bostwick, 94 U. S., 53.

McKay v. Myers, 168 Mass., 312.

Currran v. Rummell, 118 Mass., 483.

Perkins v. Lockwood, 100 Mass., 249.

Hodges v. Truax (Ind.), 49 N. W. Rep.,

1079. :

Myers v. Green (Ind.), 51 N. E. Rep.,

942. ;

Marion v. Heimbach (Minn.), 64 N. W.

Rep., 386.

Fletcher v. Wurgler, 97 Ind., 223.

McIntosh v. Johnson, 70 N. W. Rep.,

522 Neb.

In Fire Ins. Assn. v. Wickham (supra), this Court

expressly held that where a certain sum was due

for loss upon an insurance policy, a release of the

entire sum, upon payment of a part, was without

consideration, and the insured — still sue and

recover the residue.

In that case, the payment of the part of the

claim was made before it actually came due, but

this Court said that such pre-payment was not a

good consideration for the release of the residue,

because it was not offered by the one party and

accepted by the other as an element of the von-

tract, and, therefore, formed no consideration.

4th. THE AUTHORITIES RELIED UPON BY THE

DEFENDANT IN NO WAY CONTROVERT THE RULES OF

LAW ABOVE STATED, AND ARE CLEARLY DISTIN-

GUISHABLE IN THEIR FACTS FROM THE CASE AT BAR.

Every one of the cases cited by the defendant

was examined and distinguised by Judge Lacombe,

and it would be a work of supererogation to do

more than refer to the discussion of the authorities

in the opinion of the learned judge.

It is, however, desired to call attention to

two cases in the State of New York, particularly

relied upon by the defendant, viz.:

Fuller v. Kemp, 138 N. Y., 2381.

Nassoiy v. Tomlinson, 148 N. Y., 326.

In Fuller v. Kemp (supra), a physician sought to

recover for professional services upon a quantum

meruit, no agreement having been made in advance

as to the rate to be charged.

The Court said:

‘** The original contract which the law im-

‘* plied was ap agreement on the part of the

‘‘ defendant to pay the plaintiff what his

““ services were reasonably worth. From the

‘““ very nature of the case a further agree-

‘* ment must be reached by the parties fixing

‘*the value of the services, or else resort

‘“must be had to a judicial determination

‘for that purpose.” * * * * ‘Under

‘such circumstances the assent of the cred-

*‘ itor to the terms proposed by the debtor

‘* will be implied, and no words of protest can

* affect the legal quality of his act. Where

‘“ the demand is liquidated, and the liability

‘of the debtor is not in good faith disputed,

‘* a different rule has been applied.

‘*In such cases the acceptance of a less

“sum than is the creditor’s due, will not, of

‘‘ itself, discharge the debt, even if a receipt

‘‘in full is given. The element of a consid-

‘‘ eration is lacking and the obligation of the

“debtor to pay the entire debt is not

** satisfied.”

In Nassoiy v. Tomlinson (supra), a real estate

agent brought an action for commissions on a sale,

the amount of which had not been agreed upon by

the parties.

In both the Fuller and the Nassoiy cases the

plaintiffs’ claim was a wholly unliquidated demand,

and both cases are clearly within the exception to

the general rule that—

‘* Payment by a debtor of a part of his

‘* liquidated debt is not a satisfaction of the

“‘ whole, unless paid and accepted upon some

** new consideration, but where the debt is

‘* unliquidated, the rule does not apply.”

When asked to apply the doctrine laid down in

those cases to a case not strictly within the limits

of the facts in those decisions, the Court of Appeals

of the State of New York in a subsequent case said;

*“In these cases (Fuller v. Kemp, supra,

‘*and Nassoiy v. Tomlinson, supra,) the doc-

‘* trine of accord and satisfaction was carried

‘to the extreme limit and it is not our pur-

‘* pose to further extend the rule.”

Eames Vacuum Brake Co. v. Prosser,

157, N. Y., 289 at page 299.

There was then no accord and satisfaction evi-

denced by the receipt in this case.

By the payment of the sum of $173,532.49, the

plaintiff received only the amount which he was

legally entitled to in any event and the rule that a

debt concededly due cannot be discharged by the

payment of a part is applicable.

(a). Because the amount due the plaintiff was a

liquidated demand.

(6). Because there was no dispute between the

parties which was settled upon a new consideration

Third.—The legal effect of the re-

ceipt as an account stated.

(Ist). The following finding was made by the

Referee:

18.

‘*That no account was ever otherwise than

‘* by said paper and the receipt of said money

— mmmmcceres

‘* stated of the transactions under and con-

‘* nected with said contract between the plain-

‘* tiff and the defendant.”

See Finding, page 117.

This finding of the Referee is simply that inde-

pendent of and leaving out of consideration the re-

ceipt there was no account rendered or agreed upon

between the parties.

The Referee did not find either as a matter of

fact or as conclusion of law that the receipt was

an account stated, or that it was an account agreed

upon.

All that was intended by the finding and all that

it is in effect is that there was no claim of any other

account having been rendered or stated between

the parties. ;

It is confidently claimed that all the necessary

elements to make this receipt an account stated are

lacking.

The receipt itself does not contain, nor does it

pretend to contain, the account to be adjusted or

settled. It does not contain any items of account.

It is not in the form of an account. It contains a

summary of recitals of items in gross, and of facts

which are not proved to be true, but on the contrary,

held by the Referee to be false.

The Referee found that the receipt ‘‘contained an

‘accurate, truthful and undisputed account of all

‘dealings between said parties, except in the

‘matter of the $40,000 deducted for time for-

* feiture, the $9.558.63 for nut locks embraced in

** the $3,626,865.20 and the lumber hereinafter re-

“ ferred to, and herein valued at $2,425.00.”

See Referee’s Finding, p. 116, fol. 346.

No account had ever been rendered by the defend-

ant to the plaintiff, either in detail or in gross. No

final certificate or allowance of the engineer had

been ever served upon, or delivered to, the plaintiff.

The account in gross was in the possession of the

vice-president here in the city of New York, and

yet it was not rendered, but withheld. The en-

gineer’s certificate upon the defendant’s proof was

in the possession of the defendant, and yet neither

it nor any copy of it was shown to the plaintiff.

(2d). As to the legal effect.

There are at least two reasons why the receipt

does not constitute an account stated.

(a). The minds of the parties never met. This is

absolutely necessary to make the account stated.

The principle is well stated in the language of Judge

EARLE:

‘*But what is an account stated? It takes

‘*two parties to make one, the debtor and

‘* creditor. There must be a mutual agree-

‘*ment between them as to the allowance

‘* and disallowance of the respective claims,

‘* and as to the balance as it is struck upon

‘* the final adjustment of the whole account

‘‘and demands of both sides. Their minds

‘* must meet as in making other agreements,

‘* and they must both assent to the accounts

‘* and balance as correct.”

Stenton v. Jerome, 54 N. Y., 484.

Champion v. Joslyn, 44 N. Y., 663.

It can hardly be said in the face of these decisions

that a receipt or paper signed by a party having no

knowledge of the facts, witheut possession of either

accounts or final certificate in the absence of the

other party or other communication from him, can

constitute an account stated, in which the minds of

the parties have met.

(b). It is not an account stated hy acquiescence or

acceptance.

It needs no argument to sustain this proposition.

In order to create an account stated in this manner,

it is necessary that some account should be pre-

sented; that the account should be presented and

retained without objection; it should be an account

containing some details and items which would

give the party receiving it an intelligent idea of its

elements.

None of these facts can be stated as existing in

regard to this receipt. No account was made, de-

livered or left with the plaintiff.

As to the effect of the receipt as an account

stated, Judge Wallace said:

‘‘ By signing the receipt and acquiescing

‘* for a considerable period in the correctness

‘‘ of the account rendered by the defendant,

“the plaintiff was not precluded from recov-

‘ery. An account stated ‘is an admission

‘‘ that the account is correct, and if the party

“to whom it is rendered omits to communi-

‘* cate objections to the other party within a

“ reasonable time, an inference may be drawn

‘‘that he was satisfied with it. But there

‘ig no arbitrary rule of law which renders

‘the omission to object in a given time

‘equivalent to an actual agreement or a

‘‘ consent of the correctness of the account.

“An account settled is stronger evidence

‘‘and requires more proof to overcome it

“than a mere account stated. But the

‘‘ parties are never concluded except by the

‘* statutes of limitation from proving the in-

‘‘ correctness of the account unless the case

‘‘ ig brought within the principles of an estop-

“nal in pais or of an obligatory agreement

‘* between them (Lockwood v. Thorne, 18 N.

*'Y., 285; Perkins v. Hart, 11 Wheat., 237),”

Chicago, Milwaukee and St. Paul R.

R. Co. v. Clark, 92 Fed. Rep., 968, at -

bottom of page 986.

It is, therefore, respectfully submitted that the

receipt, in no aspect whatsoever, is a defense or

bar to the recovery of the plaintiff in this action.

Point V.

The receipt could not,in any event,

be a bar to the plaintiff’s recovery

or of itself even be prima facie evi-

dence of payment, because the Ref-

eree expressly found that it con-

tained an untruthful and false state-

ment.

As has been stated, the sole defense to the payment

of the plaintiff’s claim was this receipt. But the

Referee has found that as to the only two items of

plaintiff’s claim for which recovery has been al-

lowed that the receipt was inaccurate and un-

truthful.

First.—In the statement that there had been

paid to the plaintiff in money, materials and trans-

portation the sum of $626,865.20.

Second.—In that the $40,000 penalty for over-

time had been incurred by the plaintiff.

(A). As a matter of fact, the sum of $3,626,-

865.20 had not been paid because the defendant had

gees

included in that amount the sum of $9,558.63, the

undisputed cost of the nut-locks. This sum it had

no right to deduct, for the question of liability for

this sum had been left open for the decision of the

chief engineer of the defendant, who, in turn, had

referred it to the counsel of the defendant. At

the time of the signing of the receipt no opinion

in regard to the liability of the plaintiff for that

amount had been given.

(B). The plaintiff had not become liable for the

$40,000 penalty for overtime, because the failure of

the defendant to provide rights of way excused the

delay.

That the receipt was false and untrue in respect

to these two items of $40,000 and $9,558.63, which

latter sum did not appear specifically as deducted

in the receipt itself, but was hidden and included

in the aggregate sum of the amounts alleged to

have been paid, was expressly found by the Ref-

eree.

“That said receipt and paper contained an ac-

curate, truthful and undisputed account of all deal-

ings between said parties, EXCEPT IN THE MATTER OF

THE $40,000 DEDUCTED FOR TIME FORFEITURE, THE

$9,558.63, EMBRACED IN THE $3,626,865.20 AND THE

LUMBER HEREINAFTER REFERRED TO AND HEREIN VAL-

UED AT $2,425.”

See Referee’s Findings, page 116, folio

346.

Irrespective of the other questions raised, it is

respectfully submitted that a defense founded solely

on a false paper made up by the defendant itself,

containing an untrue statement, and so found by

} the Referee, cannot be sustained.,

Point VI.

If this Court were at liberty to re-

open and re-examine all the findings

of fact made by the Referee, the evi-

dence taken upon the trial not only

fully supports those findings in every

particular, but contrary findings

would have been against the weight

of evidence.

Up to this point, this case has been considered

only on the technical objections raised by the

defense.

It is now proposed to show, although perhaps

unnecessary under the plaintiff’s contention, that

the equities are wholly in favor of the recovery had

by him.

The only items to which attention need be called

and the testimony taken in support of them, are

the three already considered.

First.—As TO THE RIGHT TO DEDUCT THE $40,000

PENALTY.

(A). There wes no provision in the original

contract which referred to or provided in any way

for the deduction of $40,000 from the plaintiff,

provided the work was not finished in time.

The contract provided that the plaintiff should

have until the 1st day of August, 187, in which to

complete the work.

See Contract, Article I, Section 2, page

139, fols. 445-446.

There was a supplemental contract in writing

made between the parties in reference to this work

_ —, : wae

on July 12th, 1887, but in that contract no provi-

sion was contained which covered or in any way

related to a forfeiture for non-completion within

the time fixed.

The defendant, however, claimed that after the

making of the original contract and prior to the

supplemental contract, an agreement was entered

entered into in relation to the $40,000 forfeiture.

It sought to establish that contract simply by

correspondence.

On March 19th, 1886, Mr. Miller, the general

manager of the defendant wrote the following let-

ter to the plaintiff:

**March 18th, 1886.

HemMAN CLARK, Esq.,

2066 Fifth Ave., New York.

Dear Sir.—I think there is some misunderstand-

ing as to the consideration to be paid for. When

Mr. Hegeman’s despatch arrived here the other

day Mr. Kendall was absent, and I could not lay

my hands on the proposition you made, dated

January 26th. I telegraphed, in reply, that the

consideration was to be $19,500 per mile, under-

standing the contract to require completion June

ist, 1887. I find, however, that the contract was

made for completion August Ist, and therefore the

consideration should be $3,914,600, instead of

$3,954,600. You will readily see this from the fact

that your written bid of Jan. 26th was $3,990,000;

June Ist, $3,950,000; August Ist, while the con-

tract as signed was $3,954,000 or $4,000 more than

you offered to do the work for. The agreement was

$19,500 per mile, completed June Ist; $40,000 off

if allowed to August Ist.

Yours truly,

ROSWELL MILLER,

Gen’l Manager.”

See Letter, page 326.

On April Ist a telegram was sent by Mr. Miller to

Mr. Clark as follows:

‘* MILWAUKEE, April Ist, 1886,

HEMAN CLARK,

2066 Fifth Avenue, New York.

Have you heard from Hegeman in regard to

error in contract? We are perfectly willing to let

the compensation stand as it is, completion to be

June Ist, and if at any time you desire till Au-

gust Ist, you can have the additional two months,

the compensation’ to be reduced forty thousan@

dollars ($40,000), as stated in your proposition, upor

making the same to me in writing.

ROSWELL MILLER.”

See Telegram, page 327, fol. 979.

To this telegram the defendant contended an

answer was sent by telegram by Mr. Clark.

The telegram was not produced, but testimony

was given tending to show that it had been lost.

Under the plaintiff’s objection, Mr. Miller was

permitted to give the contents of the telegram

according to his recollection, which was: ‘‘ Your

understanding correct. We will forfeit $40,000 if

road not completed June Ist.”

See Testimony, page 327, fol. 981.

One other officer of the defendant gave testi-

mony somewhat similar to that of Mr. Miller.

See Testimony of Kimball, page 314,

folio 941.

It is a noteworthy fact that, while the contract to

which it relates and the letters and telegrams sent

mame

by Miller to Clark are to be found, this telegram,

the most important of all the evidence, cannot be

found. That so important a paper, if it ever ex-

isted, should be missing, in a well organized rail-

road office, is surprising. ‘

The defendant denies that he ever sent such a

telegram or authorized the sending of it.

See testimony of Clark, pp. 442-443,

fols. 1326-1327.

The testimony also shows that an attempt was

made by Mr. Miller to make the deduction bodily .

in the contract as i! was originally drawn, and was

sent in that condition for the signature of Mr.

Clark after it had been signed by Mr. Miller.

The lump sum or price to be paid was inserted as

$3,914,600, and the time of completion fixed as

August Ist, 1888.

Mr. Hegeman, representing Mr. Clark, perceiving

the error, telegraphed Mr. Miller, who sent him a

reply, giving him authority to make the proper

change, as follows:

‘* MILWAUKEE, March 12, 1886.

W. W. HEGEMAN,

Yonkers, New York.

The contract should be at the rate of nineteen

thousand five hundred dollars per mile. You can

correct to this amount and execute in New York.

ROSWELL MILLER.

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