New Brunswick & Canada Railroad Company.

Minute of a resolution passed at a directors' meeting February 16, 1880.

nded or of a resolution adopted by the NB. & C. R. R. Co., in referthe sale of old rails, made by you of that company to us on the 31st e same that this resolution was as a matter of form, and a been scat to us for our informa as to mention was made at the berations that you acted substoval by your company. We

-, and understand now, that the that time on behalf of your comas an absolute and final, unconditional Te do not understand, further, that this dra was forwarded to us with the view if my way modifying that sale in any o

e, we understood at the time, and land, that the number of pound ath the of this contract, there being no con specifiction when the contract was made as put 2 but 2,240. Old rails, like the andke plz iron, are bought and sold by the gross ton, not caly in this market but i ey foreign market. The custom of th de fring 2.240 as the standard number o pounds in à ton of old rails is universal, an can be excluded from operating on contract taly by distinct conditions fixing some othe . No such conditions were mentione the contract of your company with us, an we lock, therefore, for the delivery of th his within the dates named in the contract var company, and in gross' not 'net' ton We make no doubt but that your understand and that in so far as this resolution fixes a di ing of that contract is in accord with our ferent number of pounds for each ton, that the directors. We hope to hear from you so fixes them by an oversight on the part your early convenience.

Very truly yours,

E. S. Wheeler." No answer was made to this letter, nor w say further correspondence had until Ju 14th, when the railroad company notific Wheeler & Co. by letter that they had ti 1,000 tons of old rails ready for delivery an added

to avoid dispute, we tender you the deliver of the thousand tons, at gross weight of 2,2 lbs. to the ton, and ask your determinati whether the delivery shall be made at Ne Haven or New York.

**In your letter to James Murchie, as vic
Resolted, That the following sale of old rails, president of our company, of February 2
made by Mr. James Murchie to Messrs. E. S. last, you construe the contract as meaning the
Wheeler & Co., New Haven, Conn., be on the ton of rails specified in that contract
firmed: Sold Messrs. E. S. Wheeler & Co. one 2,240 lbs., or the gross ton; now, without wai
thousand tons of old rails, for delivery in Newing any of our rights under that contract, b
York or New Haven, at their option, before
August the 1st next, at thirty dollars ($30) per
per ton of 2,000 lbs., the duty to be paid by
Wheeler & Co., and also two hundred to six
hundred tons, for delivery in New York or
New Haven between August 1st and Octo-
ber 1st, at twenty-eight ($28) per ton of
2,000 lbs., the duty to be paid by Wheeler &
Co. In each case cash against invoice bill of
lading. Insurance policy in satisfactory com-
pany.
True copy:
F. H. Todd, Pres.”
"New Haven, Feb. 28, 1880.
James Murchie, Esq., Vice-Pres't

New Brunswick & Canada R. R. Co.
St. Stephens, Canada.
Dear Sir: We received duly your favor of
the 17th inst., enclosing what purports to be a

New Brunswick & Canada Railroad Co.
By F. A. Pike,
Special Agent."
To which reply was made by the plainti
in error as follows:

New Haven, June 15th, 1880. New Brunswick & Canada Railroad Co. Gentlemen: Your letter of yesterday, a vising us that you are ready to deliver to 1,000 tons of old rails, and asking us to desi nate a port of delivery, is received.

As we do not recognize the existence of a such contract of sale as your letter conte

we have no instructions to offer upon the > true that we tried last winter to buy 190 gross tons of old rails at a price d have netted us a large profit; but we had to lose, as your company insisted ey were selling net tons, and no conrested upon which we could base our Very truly yours,

pleted and the other twenty-eight days after-
wards.

The first of these, that of Murchie to Wheeler & Co., inclosing the resolutions of the directors of the railroad company, so far from repudiating the contract or denying its force and validity, by this resolution, in express terms, affirms it. Though the contract needed no ratification to make it binding, the company here E. S. Wheeler & Co." ratifies what its vice president had done. In 4milar correspondence took place be- doing this, it thought proper to place its own parties in August, in reference to the construction on the word "ton," as used in the dred tons tendered by the Railroad Com-contract; but neither in the resolution of the er the clause of the contract for directors nor in the letter of Mr. Murchie is Ex hundred tons to be delivered in there the slightest intimation that a difference of opinion on this matter would be relied on as impairing the obligation of the contract. If they believed that their construction was the right one, it was the simplest piece of justice and precaution to suggest it, leaving the question, as by law it must be left, to a court to construe, if the difference was insisted on by either party. Finding that Wheeler & Co. did not concur in this construction, the railroad company waived their view of it, and tendered performance in accordance with the view of the other party.

Ends as a fact that each of the partime the contract was made, under#s "ast the word “tons" meant tons of 2,240 and there was no misunderstanding bepersons (Wheeler and Murchie) as De true intent and meaning of the contract. also finds that Murchie was duly aumake the contract on behalf of his , and it rendered judgment for the

lita assigned for error that no legal con-
ee the parties to the action was es-

at any contract existed at any time,
dant in error was estopped from set-
ainst the plaintiffs in error by the
and by the facts proved.

contract existed, it was repudiated
ted by the defendant in error in
as to discharge the plaintiffs in
further obligation.

were more than plaintiff was en

Looking now to what was said by Wheeler & Co. in reply to this, it is still clearer that they did not entertain for a moment the idea of an abandonment or rescission of the contract; but, on the contrary, that they insisted on its continued existence and on performance of it according to their understanding of its meaning. After stating that they did not understand that the contract needed the ratification of the company to make it valid, they say: "We understood then, and understand now, that the sale made at that time on behalf of your company As the first of these propositions, it was an absolute and final, unconditional sale. to say that the circuit court finds We do not understand, further, that this resothat there was a contract made. It lution was forwarded to us with the view of in ther facts which establish that prop- any way modifying that sale in any of its terms." end controversy, namely: that Mur- Certainly this was a fair construction of the resWeber, who signed and delivered olution. Then, after commenting on the comwich constituted the written agree-mercial meaning of the word "tons," which authority to do so and to bind the could only be varied by express conditions in eir action. The agreement, on its the contract, they say: "No such conditions & motract. The court finds that were mentioned in the contract of your com*** motake or misunderstanding be- pany with us, and we look, therefore, for the de* and Murchie as to the number livery of the rails within the dates named in the the ton should contain. contract of your company, and in 'gross' not -**fore, to be taken as the foundation'net' tons.' - e case, that when these papers were vered at New Haven, January and completed contract, the one on it was brought, existed between

"

the suit.

and third grounds of error may gether. What was done by the reny which repudiated and termi***ret and discharged Wheeler & on, or estopped the railroad ting it up against them? Cherved that to annul or set tract, fairly made, requires the th parties to it, as it did to make mut Lave been the same meeting of we agreement to modify or aban1 Decessary to make it. All that rase on which reliance is placed, in the two letters, one writdays after the contract was com

They then add their belief that Murchie, to whom the letter was addressed, understood the contract as Wheeler did as to the number of pounds to the ton.

The correspondence ceased here until the time for delivery of the rails arrived. Nothing more was said or done by either party during this time. The last word from each to the other was a clear assertion of the existence of a valid contract, and the very last words of the correspondence was the assertion of Wheeler & Co. that "we look for the delivery of the rails within the dates named in the contract." When, therefore, on the 14th of June, the Railroad Company notified Wheeler & Co. that it was ready to comply with the contract by delivering tons of 2,240 pounds, and requested to know whether it should be made at New York or New Haven, they must have been surprised by the letter of Wheeler & Co., denying the exist

[35]

[36]

[37]

ence of the contract, and treating the matter as
a negotiation from which no contract resulted.
The contrast between this and their last letter
of February 28th is indeed remarkable.

By this letter of June 14th Wheeler & Co. do
not place their refusal to receive on the ground
now set up by counsel, namely: that though a
contract was made, it had been waived or aban-
doned by the parties, or by the railroad com-
pany, or that the company was estopped from
enforcing it; but on the broad ground that the
negotiations for the sale and purchase of the
iron had failed, and had never become a con-
tract because of the disagreement as to the dif-
ference between net and gross tons.

the right to require delivery, were correlative rights, one of which could not exist without the other.

The judgment of the court that plaintiff was entitled to recover is right.

The objection to the amount of the recovery rests upon the contention of defendants, that they were only bound by the contract for the October delivery to accept two hundred tons while the court held them bound for the differ ence in price for six hundred tons.

We concur with the circuit court in holding that when Wheeler & Co. say we have bough of you (the railroad company) "from two (2) t six hundred tons for delivery in New York of New Haven between August 1st and Octobe 1st" that they agreed to accept any amount o old rails between those limits. The Company was selling old rails. It knew that by Augus it would have a thousand tons. It did not know how much more they would have by Octobe 1st. It intended to secure the sale of what might have, between two hundred and six hur dred tons.

As there was a contract, as neither party had abandoned it, or expressed any purpose to do so, Wheeler & Co. were bound to accept and pay for the rails when tendered, unless they have some other good reason for not doing so. It is said such reason is to be found in the silence of the railroad company after the receipt of the letter of Wheeler & Co. to Murchie of the 28th February, by which the railroad company is estopped from enforcing the contract. Besides, as it was bound to do the first act i It would be difficult to make out such an es- performance of the contract by delivering th toppel from mere silence, since nothing re- iron, the option, if there was one, was with th mained to be done by either party until the time railroad company. The defendants were neve for performance came. If the letter of Wheel-in condition to exercise this option, if one e er & Co. had expressed any doubt of the bind- isted. Townsend v. Wells, 3 Day, 327; l'ateli ing force of the contract, or had made any pro- v. Swift, 21 Vt., 292; M'Nitt v. Člark, 7 Johns posal for its modification, or had suggested a 465. willingness to reconsider the question of weight of the tons, there myht be some reason why the railroad company should have responded and why a failure to respond might be some small evidence of want of good faith.

But these letters show a determination on both sides to insist on their rights under the contract, and Wheeler & Co.'s letter left no answer to be made unless the other party should yield its construction of the contract. It was not bound to do this. It had a right to insist on the contract, and to refer its performance of it to the courts in case it became necessary. The railroad company could, when the time for delivery of the rails came, deliver the one thousand tons by either standard. If the other party accepted there was an end of the matter. If it did not, it could accept pro tanto, and sue for the balance, or it could refuse to accept at all. But in all this the contract would remain, and would be the measure of the rights of the parties in court or out of it.

There was, therefore, no necessity for the Railroad Company to reply to the letter of Wheeler & Co. It was not bound to say any more than it had said as to the true meaning of the contract. There was no demand in the letter of Wheeler & Co. that the railroad company should accept its construction. There was no intimation that if this was not done the contract was at an end, or would be abandoned.

Let us suppose that the price of iron had risen instead of declining during this three or four months, and the railroad company had failed to deliver, would Wheeler & Co. have lost their right of action by anything in their letters, or by the cessation of the correspondence? Clearly not. And yet, if that correspondence released one party, it must have released both. There remained no obligation, unless it was mutual. The right to deliver and require payment, and

The judgment of the Circuit Court is affirme
True copy. Test:

James H. McKenney, Clerk, Sup. Court, U.

Mr. Justice Blatchford, dissenting: Justices Field, Harlam, Matthews and m self are unable to concur in the judgment the court in this case. When the directors the Railroad Company came to consider, a Board, the transaction between Murchie an Wheeler & Co., they took it up, as their res lution states, as a sale by Murchie to Wheel & Co., and confirmed it on behalf of the Ra road Company, as a sale of tons of 2,000 11 When Wheeler & Co. received Murchie's l ter inclosing a copy of the resolution of t board, their letter of reply of February 28, 188 states their understanding to be, that the sa was not made subject to approval by the Ra road Company, and that the ton was 2,240 lb and that they look for the delivery of the ra in gross and not net tons. But the resoluti of the board expressed the contrary view, as the ton, and so the letter proceeds to say, th Wheeler & Co. make no doubt that Murchi understanding of the contract, as he had ma it, is in accord with that of Wheeler & Co., a that, in so far as the resolution of the Bos fixed 2,000 pounds for each ton, it did so by oversight on the part of the directors. T was a plain appeal to Murchie, to bring his u derstanding of the contract to bear on 1 directors, to induce them to change their vi and their statement of the contract, in resp of the tons; and it was followed up by the cl ing words of the letter: "We hope to hear fr you at your earliest convenience." The wh tenor of this letter was to throw the matter i the field of negotiation and arrangement, wh the Railroad Company asked to have it Ε That Company plainly said to Wheeler & C

L

regard the ton in this contract as a we do not; and, if you do, we do not - any contract." Wheeler & Co. We do, and we think such was Mr. view at the time, and that your Lave committed an oversight in their - which 'fixes' the ton at 2,000 but in view of all this, we ask to hear your early convenience about it." A rails were $33.50 to $34 a ton fkom pounds, without duty. The contract *****$30 and $28, without duty. The " was a good one for Wheeler & Co., if then sell the rails, for future delivhe market rate of that date, and if the At the pract were 2,240 pounds. So, it part for them to know whether the Company would adhere to the view thelution or would recede from they sought to learn. But they received from Murchie or his Company. They at to take the Company at its word act on its solemnly announced underof the contract. They did so and ret turning the contract to any benea resale of the rails. They were dealers and bought only to resell. They did to use otherwise. This the Railroad Murchie knew.

what is the finding of the Circuit
It is, that Murchie in fact understood

peaching the good faith and fair dealing of
Wheeler & Co. They were not guilty of any
deceit or misrepresentation; they held out no
false lights; they did not attempt to procure an
advantage by an untrue statement of their un-
derstanding of the contract; they did not mis-
lead the other party to his injury. Their letter
to Murchie of February 28th was a model of
mercantile candor and fair dealing. It de-
manded a reply. The absence of a reply was no
ground for supposing that the Company had
abandoned the position it took in the resolu-
tion, for Wheeler & Co. did not then know,
what they learned afterwards-that the resolu-
tion was a sham and a false pretense.

The conclusion seems to us to follow inevit-
ably, under the findings of the Circuit Court,
that the Company had lost its right to recover
on the contract; and we, therefore, dissent from
the judgment of affirmance.

True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. S.
Cited-117 U. S., 501.

Co.," 55, 56.)

of the contract were 2,240 pounds, (See 8. C., Reporter's ed.. "Richter v. Union Trust
Beer & Co.; that the Company, while
derstanding, intended to induce
Co to think it misunderstood, for
of having Wheeler & Co. agree
tons should be 2,000 pounds; that this
"disingenuous"; and that the
et of a failure to reply to Wheeler

A motion for a commission to take depositions de
bene esse, pending an appeal, is denied, there being
a remedy under § 866, R. S.
[No. 839.]

was to create "great uncertainty" ⚫ of Wheeler & Co., and to cause and pecuniary loss" to them. On at it is held, that, when the market de rails has fallen to one half of the the Company can insist on com& Co. to take the rails at the * price, because the Company then - A tar around and say: "The ton was prands. We were wrong all the were right; and we now reply to saying that we did commit in our resolution, as you sug

Tation no such view of the rights to a commercial transaction. The male statements, in its resolution and the Circuit Court finds were not To understanding regarding the ton; that court finds it knew were not

Argued Apr. 20, 1885.

Decided May 4, 1885.

APPEAL from the Circuit Court of the United
States for the Western District of Michigan.
On motion for a commission to take testimo-
ny de bene esse€.

his affidavit for the issue of a commission out
The appellant files his motion, supported by
of this court, to take the testimony of four wit-
nesses alleged to be aged and infirm, said testi-
but in the court below, provided the decree dis-
mony, when taken, not to be used in this court
missing the bill is reversed.

Messrs. J. P. Whittemore and Wm. P.
Wells, for appellant.

Mr. H. H. Wells, for appellees.

Mr. Chief Justice Waite delivered the opinion of the court:

This motion is denied. Equity Rule 70 has no sented do not show such facts as render it neapplication to this case, and the affidavits prewaib that court finds it intended in the premises. Under section 866 of the Recessary for this court to make any special order reunded by Wheeler & Co. as hon-vised Statutes "any circuit court, upon apand which it is clear it intended Co should act upon; and which plication to it as a court of equity, may, accordapen, to their injury. The actual ing to the usages of chancery, direct depositions to be taken in perpetuam rei memoriam, every by the Company in this if they relate to any matter that may be cogad proof of the untruth of the as-nizable in any court of the United States." abr the Company, followed by There is nothing in the motion papers to indithat Wheeler & Co. nad no right cate that the appellant may not proceed, under were and my on those assertions. Every this statute, to take and perpetuate his testieluta 5 estop the Company from a truth of those assertions, and from mony, if he has reason to fear that it will other

Apeler & Co. should not have re-
There is not a suggestion im-

wise be lost.

True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. &

[55]

[56]

[67]

[67]

[68]

HENRY EHRHARDT, Piff. in Err.,

0.

MANERVA HOGABOOM.

(See 8. C., Reporter's ed., 67-69.)

Public lands-ejectment-evidence-decisions of
Land Department-how far conclusive.

and overflowed land. A patent of the United States, regular on its face, cannot, in an action at law, be held inoperative as to any lands cov. ered by it, upon parol testimony that they were swamp and overflowed, and therefore unfit for cultivation, and hence passed to the State under the grant of such land on her admission into the Union. In French v. Fya, 93 U. S. 169 [Bk. 23, L. ed. 812], this court decided that by *1. In an action of ejectment for lands in Califor-the 2d section of the Swamp Land Act the pow nia, where the plaintiff traces title to the lands from a patent of the United States issued to a settler under the preemption laws, oral evidence is inadmissible on the part of the defendant to show that the lands were not open to settlement under those laws, but were swamp and overflowed lands, which passed to the State under the Act of September 28, 1850.

er and the duty devolved upon the Secretary of the Interior, as the head of the department which administered the affairs of the public lands, of determining what lands were of the description granted by that Act, and made his 2. It is the duty of the Land Department, of office the tribunal whose decision on that subwhich the Secretary of the Interior is the head, to determine whether land patented to a settler is of ject was to be controlling. And he was to transthe class subject to settlement under the preemp-mit a list of such lands to the Governor of the tion laws, and his judgment as to this fact is not open to contestation, in an action at law, by a mere intruder without title. [No. 265.]

Submitted Apr. 22, 1885. Decided May 4, 1885.

the court:

to him.

This is an action for the possession of a tract of land in Sacramento County, California, designated as the northeast quarter of section six of a certain township, which is described. The plaintiff below, the defendant in error here; deraigns her title, through a patent of the United States embracing the demanded premises, bearing date June 10, 1875, issued to one Elkanah Baldwin, a settler under the preemption laws, and his conveyance to her of the land patented On the trial, the patent and the conveyance to the plaintiff were produced and given in evidence. The defendant thereupon admitted that he was in possession of twenty acres of the tract covered by the patent, lying south of a certain fence, but contended that these twenty acres were swamp and overflowed lands, which passed to the State of California under the Act of Congress of September 28, 1850. This character of the land as swamp and overflowed he offered to prove by parol, but the offer was rejected, and, we think, correctly. He did not connect himself in any way with the title to the twenty acres. The certificate of purchase from the register of the State land-office, which he produced, related to different land-to what constituted a portion of the southeast quarter of section six, whereas the land in controversy is part of the northeast quarter of that section. He was, as to the twenty acres, a simple intruder, without claim or color of title. He was, therefore, in no position to call in question the validity of the patent of the United States for those acres, and require the plaintiff to vindicate the action of the officers of the Land Department in issuing it. It does not appear that the twenty acres formed a part of any land selected by the State or claimed by her as swamp

*Head notes by Mr. Justice FIELD.

State, and at the latter's request issue a patent
therefor to the State. In that case, parol evi-
dence to show that the land covered by a patent
to Missouri under the Act was not swamp and
overflowed land, was held to be inadmissible.

on the same principle parol testimony to show
that the land covered by a patent of the United
States to a settler under the preemption laws
was such swamp and overflowed land must be
held to be inadmissible to defeat the patent. It
is the duty of the Land Department, of which
the Secretary is the head, to determine whether
land patented to a settler is of the class subject
his judgment as to this fact is not open to con-
to settlement under the preemption laws, and
without title. As was said in the case cited of
testation, in an action at law, by a mere intruder
the patent to the State, it may be said in this
be a departure from sound principle and con-
case of the patent to the preemptioner, it would
trary to well considered judgments of this court
to permit, in such action, the validity of the pa-
tent to be subjected to the test of the verdict of
a jury on oral testimony. "It would be," to
quote the language used, substituting the jury,
which Congress had provided to determine the
or the court sitting as a jury, for the tribunal
question, and would be making a patent of the
United States a cheap and unstable reliance as
a title for lands which it purported to convey.'
The judgment is therefore affirmed.
True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. 8.

JAMES GRANT, Appt.,

v.

GEORGE H. PARKER.

(See S. C., Reporter's ed., 51–55.)

Mining corporations-" syndicate" to purchas controlling interest in stock-bill to enforc previous agreement concerning management.

1. An agreement between the members of a “syn dicate est in the stock of a mining corporation, that on "formed to purchase the controlling inter of them should "control the management of th mine," is necessarily subject to such reasonabl tors may adopt for the government of the officer rules and regulations as the stockholders or dire of the company.

2. A bill in equity, to restrain a member of th "ayndicate" from acting as a stockholder and d