I'EDEau,
vol. 51.
GIRARp "LIn
INSURANCE, ANNUITY
&
TRUST CO. tit
al.
fl. CoOPER
It al.
'(Oircu'U Oou.n
0/ ..4.ppea18. E4Ihth OW-cui&. July 6,1892.) No. log.
L
JtBFBlt1mCll-CON8TRUOTI01'r OJ'
, On'. petition by contractors against the receivers of a railway to secure payment for ttJ,!lell6otion of a building, the court referred the cause to a master to ascertain
I
Whiie'oortain railroad buildings were in course of construction, a foreOlosure suit was' instituted against the railroad company, and two receivers were appointed. Shortly e,fterwards, by a joint letter, the receivers notified the builders to stop work,8tatfug that they would later furn,ish designs and directions for oompleting the work, "and rou will name a gross sum for the performance of the same, which . will be submitted to the oourt for approvl,\l." New plans and specifications were then prepared and approved by the oourt, and an order was entered directing tbat , the build!ngs becompleted'in accordance therewitb. The receiver in active cbarge .ofth8,1; portion of the road, notified the builders of this order, and soon afterwards they-answered by letter a bld for.,which they would oomplete the work on th,e new plans. The active recelvertestill.ed that the receivers accepted the bid, and:tbat. a formal contraot was prepal-"ed, and was sig-ned by the builders, but was never trig-ned by the receivers. Relying on tbis contrac1;the buildera oomJlleted the work. The otbel-" reoeiver testified tbat he knew nothing of tbe bid, but tbat be ,afterwards sawt1;le work going on, and assumed it waswitb bis colleague's concurrence,' and without any estimates or contract. Held, that these facts were ;! ,SUffiCient to justify the JDaster in tlnding tbat the work was completed under a , .binding contract with tbe 1'6ceivers. II; 0" PENDING CONTRAOTS. . ,. builder wbo is engaged, under oontract, in erecting a building for a railroad company at the time that reoeivers appointed for tbe road, is entitled to ramUljeration on tbe basis of the contract prioe for the work done after the receivers are, appointed, and before tbey make a new arrangement with him or notify bim to atop work. ' .'
TO ESTABLISH-MAsTER'S FINDINGS.
"1'6
, i
sppelllintS; , ' P. Sandela and A.,G. M08eley, (Sandels &- H'Jl, on the brief,) for " Before CALDWELL an<fSANBORN. Circuit Judges, and SHIRAS, Dis' .
J. W. ,McfiYUd and 8. A. Gilbert, (Samuel Dickson, of counsel,) for
A,.ppeaJ. from the United States Court in the IndianTerritory. Affirmed.
',SHtRis, District ,The Choctaw Coal &; Railway Company, a c6rporation created under the laws of the state of Minnesota, with the rl,ght, 'among other things" to build and operate railways and to Own and develop coal mines, was authorized by the acts of Congress approved 18, 1888, and February 13, 1889, to construCt a railway within the Territory.. ,In connection with the building and operation oHM line of railroad'. the development of itS mining interests, the e<>mpll;ny ,in May. 1890. undertook the erection. at South McAlester. in
GIRARD LIFE INSURANCE, ANNUITY & TRUST CO. 17. COOPER.
333
the Indian Territory, of a building to be used as an hotel and for offices for the company, and entered into a contract withW. H. Cooper & Son for the furnishing of the greater part of the work and material needed in the erection of the building, which was called the "Kali Inla Hotel." For the purpose of securing the holding of terms of the United States court at South McAlester, which it was believed would add to the business of the railway and otherwise benefit the company, it was promised on behalf of the company that if congress would provide for holding (:ourt at South McAlester accommodations for the court and its officers would be furnished free of cost to the United States, and congress, accepting the proposition thus made, designated South McAlester as one of the points for holding court within the Territory. The company thereupon determined to appropriate part of the building in process of erection to the use of the court and its officers. In December, 1890, a bill in equity was filed in the second judicial division of the United States court for the Indian Territory, wherein Langhorne Wister and the Girard Life Insurance, Annuity & Trust Company of Philadelphia were complainants, and the Choctaw Coal & Railway Company was defendant, one of the objects of the suit being to foreclose a mortgage given by the company upon its property to the Girard Company as trustee. On the 8th day of January, 1891, E. D. Chadick and Francis 1. Gowen were appointed by the court receivers of the property of the company, with authority to carryon the business of the corporation in all its branches, and to appoint such agents as the company had done and as were necessary ·in the proper cond uct of the business. On the 3d day of June, 1891, the receivers notified the contractors, Cooper & Son, to stop work upon the building known as the "Kali Inla Hotel," such notification being in writing, and reading as follows: "SOU'l'H McALESTER, IND. TER., June 3d, 1891· TLEMEN:
to and inclUding to-day. We will then furnish yon with designs and directions as to the work to be done, and you will name a gross S.Uffi for the performance of the same, which 'we will submit to the court for their approval -or disapproval. Yours, truly. "EDWIN D. CHADICK, "FRANCIS I. GOWEN,
Under direction of tbe court we notify yon to stop all work on tbe Kali Inla Hotel 1rom tbis date. and make out your bill for the work done up
.. Messrs. W. H. Cooper & Son, South McAlester, Indian Territory--GEN-
"ReceiveI'll Choctaw Coal & By." Upon receipt ofthis letter, Cooper & Son ceased work upon the building, and made out a bill or statement of the sum then due them, which was approved by the auditor of the receivers. On or about June 7th H. W. Cox, who acted under the receivers as a supervising architect, furnished to Cooper & Son the details and specifications of the work required to be done to fit the building for occupancy by the court and the officers 'of the company, and Cooper & Son agreed to do the work thus .called for for the sum of $10,250; and on the 7th day of July 1891, a .contract in writing was drawn up, whereby Cooper & Son agreed to do
I'BDERAL 'lWllroRTEll,
ftbew;ork $ud t'um:ish the materials ,clllled for by the specifications pre,pared. hy tM architect, and the receivers agreed to pay therefor the sum ot$10,250.. T4i.s.contrltct was signed by Cooper & Son and by:H. W. OM, ;4S supel'lVisiIlg architect, and the contractofs..proceeded with' the :work therein Cl!.l1ed for with the full knowledge and approval of E. D. Chadick, who then had immediate charge and supervision of the workbei,ngdoneupon the railway line. !talso appears that the plans and speciitications in question had been submitted to the judge of the court having charge of the trust, and the same were approved by him, although no .record of such approval was made at the time. Upon the oompletion of the building, according to the plans prepared by the .architect,possession of the same was surrendered by the conit has since been used and occupied by the court and by the officers of the company and of the receivers. Cooper & Son made out their bills for the. sums due them for work done since·June 3,1891, certifipdas correct by the architect having supervision of done in remodeling the hotel building. For the purpose of procuring payment of the sU,nJS claini'ed to be due them. the contractors tiled a petition in the foreclosure proceedings, setting forth the facts and Praying for an order upon the receivers directing them to make payment of the sums. claimed to be due, an(l( further praying that a lien in their favor be established upon the building, and for other rt>liefj to which petition Francis 1. Gowen, as receiver, lj.nd the Girard Trust Company, as trUl'itel;l, ,filed and thereupon the court entered an order Iiirecting "that tnt! claim of W. H. Cooper & Son he relerred to the master to takll testimony thereon, .and to ascertain the amount justly and eq];1it!lbly due as the true value of the work done and materials fur!Jished by tlWm. upon and. fQr the ,Kali Inla Hotel building at South McAlester, and that receivers' certificates bearing 7 per cent. interest be issuedaud deJitvered to them for one third of the amount so found to be due, and to sell and deliver in settlement thereof lumber at the market pt'iC'.El thereof· for one third of .said amount, and' the balance in cash to be borrowed ort :certificates as hereinalter authorized." A hearing w,as had belore the Jllaster, at which counsel for Receiver Gowen sough,t to.introduoe evidence on ,the point of the actual value of the work and materials furnish,ad by Cooper & Son in the erection of the Kali Illls'Hotel building, but it WtlS held by the master that, as the eddenoo'shtllv.ied. that the wOl'k hael been done under a contract, the questionwas\vhethel'the contract had been complicjd with; that, until the. (Qfthe,contrnct was disprovi:'d, it was useless to olier evid,ence upnn rtbe point whether the work had bet>nuone and the luatedAls furnished in accordance with the tt>rms of the contract :reHedop,d1indupon ,these pointsr after hearing the evidence addlilced.b,ybot\l pm:ties, the D'laAter found: as mu.tters of fact that Cooper & Son had Qonl:lithe wort-. and furnished the materials used in said buHrli;ng June; 3, 1891, in reliance lupon ,a contract entered into wi.th them of the receivers,and with their knowledge and app,rov/ll jthat: the work done and mAFerials furnished were inaccol'd-
GIRARD LIFE INSURANCE} A1¢N'O't'11Y }&-'TRUS'r CO. 'II. COOPER.
335
ltftcewith· the plans andspecificlltioDs approved by the 'receivers and the court;. that the ,work so done had been delivered to·the receivers; that:therewas due to Oooper & Son·the contract pl'iceof $10,250, and the [\lrther sum of $842.74 for extra work done under a provision of the contract upon said building; that there was due for other work performed to make the entire amount due, after by thl'l: 9pntractors a sum allowing all credits, tile s.um of $14,919.37. Exceptions Were filed to the findings and report of the master, but the court on the 19th of January, 1892, affirmed thesllnte, and entered a jUdgment in favor ofOooper & Son for 814,749.45, toreversewhichthe trust company and Gowen, receiver,have brought the case by appeal to this court: . ' The first point made on behalf of appellants is that the order of the court made at Ardmore, October 13, 1891, referring Cooper & Son's claims to the master,cdntentplated an investigation of the entire cost of the' hotel building, to the end that the contractors should only be paid the true value of the work done and materials furnished by them in Carrying on the work, and. therefore the master erred in refusing t() hear evidence on this point, and in confining the examination to the whether the work and materials were furqished under n tract binding upon the receivers and in accordance with its terms. There can be 00 doubt that the language of the order is susceptible of the construction claimed for itib'Ut, upon exceptions to the t'Oaster's report, the court granting the orderl'ulM that it was not intended to bear so broad a construction, and this court would not be justified in holding the contrary, unless it wllS made clear that injustice has resulted therefrom. In ,fact, the rights of the parties are dependent upon the questions heard and determined by the master, the primary one being whether Oooper & Son furnished the work and material used in the hotel building pur" suant to contracts bindi:ng upon the receivers. If Oooper & Son were not acting under a contract f then evidence of the value of the work and materials furnished by them would be pertinent; but if they were ing undeta contract, valid and binding upon the receivers, then, as the master held, the question would be whether the work done and materials furnished met the requirements of the contract, in which event Oooper & Son would be entitled to the contraCt price. But one conclusion is justified by the evidence on the point whether Oooper & Son were acting under a contract fixing the obligations of 'the parties. In the letter of JU1l6 3, 1891, addressed to 000 per & Son and signed by both receivers, the formerwete directed to stop work on the hotel building and to make out their bill up to and including June 3d. This was done, and the account rendered was duly certified to by the architect and approved by the auditor of the receivers. The letter of June 3d further notifies the contractors that "we will then furnish you with designs and directions as to the work to be done, and you will namen gross sum for the performance of the same, which we win submit to the court for their approval or disapproval.» In a few days after the date of this letter the architect employed by the receivers furnished plans. and specifications:for the ·work to be done in remodeling the first
886
....DERAL BJi:p()B'.l'EB, vol.
51.
and second floors of the building fOlcourt purposes and for the raUway offices,: and the same were sent by Receiver Chadick to Muscogee for; tbeexaQ1ination of the court, and, being approved, the receiver was directed to proceed with the work. Thereupon the following letter Wal addressed to Cooper & Son: "SOUTH MoALESTER, IND. TEa.· June 23d. 1891· . "JfeafW8.W.H. aoope,. & Bon, South McAlester-GENTLEMEN: We havf beei:t'tldvised by Major William Nelsoll, ID8l!ter. of the fotlowing order of the lSt$tes court: · Y(>uare hereby directed to finish up court room and <?n lower tIoor of hotel building, and also such rooms on second floor as may be necessary,' in acco.rdance .with estimates to be hereinafter fur. . Yours, trUly, , nished. '. . .' "EbwIN D. CHADIOK. for Cooper & Son answered this letter, as follows: "JUNE 24th. '1891. ' . fJhadifJk. Biq·· GO' C. «f By. aO.-DEAR SIR: We will tprnisJi 1\11 material and complete and sP6.cifications part of tbe west. hill! of the. ,hotel bu\ldil)g, to be as, q. ,S. court. ni9nts, for the sum of seven thousand nine hUildredahd iieventy.eight dotlars; also the east part c;>fsaidJ:hiilding, to be used as R. R;officeS and and bank department,Qsper plans and specifiO'dtions,fdrthe 8um of twenty! two hUndred:and.seventy-two dollars; or both for ten thollsand two hundred !Xhe:CQD)pany bas onhaqd totbe value Clf $2,500, deduct same from above amount. which It c,anfurnish, . W· .H. Co0P1m: &; SON., i , i
Ohadiok testified that the receivers accepted the bidthils made; that .be could. not· 8ay that II formal letteriofaoceptancewas written, but. it wllBhis:impression that he did write a'letter in regard to it; that the .chiteQt, }>repare<ia .formal contractinwriting, with the plans and speci. ficatioos.a'i::mexed, but that the same iWaSllever signed by the receivers; thatCooper&'Sonproceeded with the work, relying upon the contract agreeduponjandcompleted the work according to the plans and speci.. ficationll·JUrJ;l:ished them. Mr. Gowen testified that he did not know of the 1891, in which Cooper & Son stated the price for which.they.wouldundertake the work, until towards the end of August; that he knew and saw: that work was going on upon the court rooDiS and offices: that he assumed that Cooper & Son were going on with the work with Mr;. Chadick'$ ooncurrence, without any regard to the directionsgiven in the letter of June 3, 1891; and without furnishing any estimate ormaj{ing any contract, after due authority obtained from the court; ,that. hiHnade no protest at the time because he understood the work had to be done, and he. felt confident when it came to paying for it the courtwo.uJd take .that Cooper & Son would not be allowed tllnT excesaive SUm. Thus the evidence. shows that the receivers notified Cooper .Son t4at. plans Rnd specifications of the work to be done in remodeling the :building would be prepared, upon which they would be asked to .tate the gross. sum. for which they .would do· the work accord... ing.to ,the plans submitted; the plans were prepared and8.pproved by the oourt,Q{ :wbichnoth:e was given. toQQoper& Son, who thereupon
GIRARD LIFE INSURANCE, ANNUITY & TRUST CO.
v.
COOPER.
337
stated in writing the sum for which they would undertake the work; that Chadick, who up to that time had been the receiver in active charge onhe work in the Indian Territory, accepted the bid made, and directed Cooper & Son to proceed with the work; that Receiver Gowen knew that the work was being done, but made no objection thereto; that Cooper & Son commenced and completed the work called for by the plans and specifications furnished them in the belief that they were to be paid the price stated by them in their letter of June 24, 1891. These facts entirely justify the finding of the master that Cooper & Son, in remodeling the building according to the plans furnished them, were acting under a contract binding upon the receivers. The fact that the formal written contract prepflred by the architect of the receivers was not signed by them does not show that an agreement had not been reached. When the plans and specifications were furnished by the receivers to Cooper & Son, and the latter had stated the gross sum for which they would perform the work called for, terms of the proposed contract were made plain, and, when Cooper & Son were directed to proceed with theW-6rkcaHed for by the plans, the contract between the parties was closed,: lind the preparation and signing of a formal writing would ortlyihllvecalled intlMxistence additional evidence of the fact that the parties had contracted for the performance of the work included within the specifications for the price stated in the letter written by Cooper & Son under date of June 24, 1891. It must, therefore. be held that the work done and materials furnished in carrying out the plans and specifications, furnished to Cooper & Son in June, 1891, were so done and furnished tinder a conttactbinding upon the receivers, whioh fixed the price to be paid therefor. The same is true of the work done up to and including June 3,1891. The evidenoe shows that when the receivers were appointed Cooper & Son were engaged in the erection of the building under a written contract dated May 23, 1890. The receivers took no steps to terminate this contract until June 3, 1891, when the letter of that date was written, directing the cessation of work, and under the terms of that letter, as applied'to the existing facts, it must be held that the contractors are entitled to demand the contract price for the work done after the receivers were appointed and up to and including June 3, 1891. ,The evidence shows, and the contrary is not claimed by appellants, that the contractors fulfilled the requirements of the plans and specifications under which they undertook the work performed by them, and therefore they have shown themselves entitled to the contract price for the work done, which is all that the decree appealed from awards the appellees. Exception is also taken to the decree in that it directs that payment must be made on or before February 15, 1892, one third to be paid in receivers' ,certificates, one third in lumber, and one third in cash, it being urged 'that thereby an undue preference is awarded appellees over ,other creditors entitled to payment from the funds nnder control of the receivers. The general rule,is that equality is equity among the 'creditorB of a receiver, who is the representative of the court having charge of V .51F.no.7 -22
388
,lin
. , .' ; "
admiJldfltl'lt:fld .upOn, apd is gOOd. and sufficient rea,aontQ! the contrary, proportionate payments should lie made to all: creditoraentitled, to 'the common fundj and this is. especially ,true if ,th'erlHs reason to fear·that the fUl;l.d abletnay, not, be., sufficient 'to all dema,nds in full. We are not by:'tbe recQrdof the facts in this, caSe to determine 'whether the decree should .modified in this particular. It may :be' that the amount of funds under the control of the receivers and the, equities of the Ii1ppellees, as known to the court having immediateicharge of the"trust property, were such as to justify the order made in this particular. , Aa the time for Payment fixed in the de.cree has :already ,passed, a Dew order in this particular becomes necessary, which should be made byr,the C.Ourt below, and iQthe making of which due regard· should be, had: to the equities and rights of other creditora as the same may.bemadetQ:appear bl'lfpre the court. The decJ;ee, appealed from is therefore affirrued at cost of appellants, in so Hawards judgment for the sum therein named in favor of W: H. Cooper, & Son; and the: caUB.e is remanded to the court below, withinstruc.tions to enter.an order directing the mode and time. of pnyment,'8uchns the coutt" Dlay be advised is l'equired by the of the case. '_ " :' . ' .'
BIL'IJNGB
et' at.
'11. 'kPEN MINING
&:
Co. et al.
'(Circuit Court qf ..4ppea18, Eighth Circuit. ,July 5,1892.)
No.
so.
1.
MINING
An allen who, has expended tune, money, lind laboTin exploring for and locating on public landis. COnjointly with others, may hold his interest, or a mining' reoover :the sltlIle if deprived as against his colooators, and as against, all the worlciexcept the United ,S;ta:tes, though Rev. St. § 2319, confines the right of exploration; purchase,and odOupat1Qn of unsurveyed mining lands to citizens of the '(Jnited personlj whr;Ib,a.1e declarEid. intention to become citizens. I3,Y
0'
TO HqLD.
The q,uestion whether an allen can inherit an interest in a mining 'claim located . upon gove;l'nment lands is determined, not by the federal law, but by laws of the state the mine and under Acts Colo. Nov. 4, located in that state. Where perBonsliving in a foreign country or a distant state, and having no tni?duced to in a claim inadequate COl1s\<1er.atlOn, on the,' representation of the purchaser's have no real.·il1terest therein, and·that he desires the conveyances .,lihe pU11l0se of jhis0'f'n title against pend.ing .litigation, suell conveyance' will be set aside, thougn the were honestlY made· .. SAME."'.· . But where a person livt'rlg in, an adjOining state refuses to make adeed,onsuch representations, and caUlles, inq:uiries to be made in her behalf aud receives independent information. and then mukes a conveyance tor a much large,r consideration, she is concluded thereby, though the consider-ation is still inadequate. fora' 'i , " " . ' "
.um ,FEDERAL LAWS.
i"
S. CANCELLATION 011 DEED":"MIsBEPRESENTATIONB.
