ing order; and likewise on that day one of the receivers gave bond as required by the order appointing him, and took charge of the assets of the defendant company. The restraining order was served on all the defendants on the 27th day of May, 1901, as was also the subpoena; and on that day the defendant company served a notice on the complainants that it would on June 1, 1901, move the court to set aside the order appointing the receiver and granting the restraining order. On the 1st day of June, 1901, the complainants and all of the defendants, by their respective counsel, appeared before the court, the former to resist, and the latter to move, the discharge of the receiver and the dissolution of the restraining order. On that day the receiver filed a report, as he was required to do by the order appointing him, showing the condition of the defendant company, and the assets of the same that had come into his hands; and the defendant company, as well as the individual defendants, filed their several answers to the bill, as also the affidavits of accountants and bookkeepers, and certain statements purporting to show the financial condition of the company; and the cause was then argued by counsel and submitted on said motions. On the 4th day of June, 1901, the court below entered an order declining to dissolve the injunction and refusing to discharge the receiver. From this order, as well as from the order signed by the judge on the 25th day of May, 1901, the defendant company prayed an appeal, which was duly granted.

The assignments of error are many in number, but we find that the consideration of a few will dispose of all the questions really involved in this appeal. Appellants insist that when the order of May 25, 1901, was entered, the suit in which it purported to be issued had not at that time been instituted, and that therefore said order was null and void. This claim is based upon the fact that the bill was not lodged in the clerk's office until the 27th day of May, 1901, and that the subpoena did not issue until that date. In other words, the insistence is that a suit in equity has not been commenced until the subpoena has issued. Appellants, therefore, claim that the receiver was appointed and the restraining order granted before the suit was commenced. While it is true that no process of subpœna can issue from the clerk's office in any suit in equity until the bill has been filed in such office, still it does not follow that the court, or a judge thereof in chambers, may not enter an order on consideration of the bill before it has been so lodged in said office. Under the old English practice, from which our procedure is taken, all bills in equity were first presented to the judge, who determined whether process should issue thereon; and, if he so ordered, then the bill was filed in the clerk's office. Subsequent proceedings in such suits have been controlled chiefly by rules of court, and the practice established thereunder. We are not aware of any statute or rule of practice, nor of any authoritative decision, by which the contention of the appellants in this particular instance can be sustained. In this case the bill was presented to the court on Saturday, the 25th day of May, 1901; and one of the orders now complained of was on that day, after due consideration of the bill and

exhibits, directed to be entered. The bill, therefore, was in fact filed on the 25th day of May, though it seems that process thereon did not issue until Monday, the 27th,-a practice not at all uncommon in the courts of the United States. If, as a matter of fact, the order of the 25th of May by which the receiver was appointed was improvidently awarded, would not the decree of the court made on the 4th of June following, after subpoena had issued, after appellants had given notice to discharge the receiver and dissolve the injunction, and after the court had heard argument thereon, amount, in substance, to the granting of an injunction and the appointing of a receiver? We think so.

Nor do we find merit in the claim of appellants that the court below did not have jurisdiction in this controversy. We think that the appellees, on the allegations in their bill contained, were clearly entitled to be heard in equity. In the case as made by the bill, it would have been useless for them to have again asked the directors of the defendant company for the relief such officials had repeatedly refused to grant them,-relief complainants were entitled to, but the granting of which was antagonistic to the plans the directors had in view. Under such circumstances, it was not necessary that complainants, as stockholders, should have applied to the board of directors or to a meeting of the stockholders for redress, or for permission to institute a suit by means of which relief could have been secured; for, if complainants' charges are true, such procedure would have been little less than a farce, and such suit, if instituted, should not have been under the control of such directors. Phosphate Co. v. Brown, 20 C. C. A. 428, 74 Fed. 321; Cook, Corp. § 741; McGeorge v. Improvement Co. (C. C.) 57 Fed. 262.

Appellants insist that even if the case was properly before the court below, and if the order granting the injunction and the appointing the receiver were regularly made, nevertheless, on the motion to dissolve and discharge, and on the case as made by the answers and the exhibits filed therewith, the court below erred in refusing to dissolve the injunction and in declining to discharge the receiver. It must be borne in mind that this is an appeal from an order appointing a receiver and granting an injunction, as well as from an order refusing to discharge said receiver and declining to dissolve the injunction. The court appointed the receiver and granted the injunction on the allegations of a bill, duly verified, charging the improper and fraudulent management of the defendant company by its directors; that the company was running at a loss and practically insolvent; that such condition of affairs was well known to the old board of directors, and that they, because thereof, abandoned the management of said company; that the new directory, being also the directors of another company, were using the assets of the defendant company in the interest of that other corporation; that complainants were refused payment of the withdrawal value of their stock, although other stockholders, whose applications for withdrawal were filed after complainants had given their notices, were paid in full. Also, we should bear in mind that the affidavits and exhibits filed by complainants fully sustained the charges in the

bill, and demonstrated the insolvency of the defendant company. Such being the case, the judge who entered the order of May 25, 1901, did not improvidently exercise the legal discretion with which he was invested.

Nor did the court below err in its order of June 4, 1901; for the case, as made by the answers and the testimony filed with them, was not materially changed thereby. We would not be justified in reversing the orders complained of by appellants, unless it was plainly apparent that the court below committed errors in entering them. The facts were found by the judge who heard the case, from conflicting testimony, we concede; but we think he exercised his discretion wisely, and we cannot, on the evidence now before us, do otherwise than affirm his action.

We are not at this time disposing of the case as if the appeal were from a final decree on the merits, and it will now go back to the court from whence it came, for further proceedings therein to be had, when additional evidence will doubtless be offered, and the questions at issue be finally disposed of.

Affirmed.

(113 Fed. 256.)

HULL COAL & COKE CO. v. EMPIRE COAL & COKE CO.
(Circuit Court of Appeals, Fourth Circuit. February 5, 1902.)

No. 414.

1. CONTRACTS-CONSTRUCTION-QUESTION FOR COURT.

The construction of a contract in writing is a matter of law for the court, and it is immaterial at whose suggestion particular clauses were inserted.

2. SAME-PERFORMANCE BY PARTY CLAIMING DAMAGES-NECESSITY.

A party suing for breach of a contract containing mutual dependent agreements must show a performance on his part.

8. SAME STIPULATION QUALIFYING GUARANTIES.

A provision that the usual strike clause shall mutually govern in a contract for the purchase of all the coke manufactured by the seller during a fixed period (the latter guarantying a specified amount; the price, time of payment, and quality of the coke being agreed upon) qualifies only the guaranties that the purchaser will take all the coke manufactured, and that the seller will furnish a specified amount, during such period.

4. SAME-STRIKE CLAUSE-SUSPENSION OF DELIVERIES-EFFECT.

A provision in a contract for the purchase of all the coke manufactured by the seller during a fixed period (the latter guarantying a fixed amount; that in case of strikes, accidents, or other causes causing stoppage in the works of the seller, deliveries under the contract may be "suspended") relieves the seller from the obligation of its guaranty, where such causes have prevented it from furnishing the guarantied amount during the specified time, for the word "suspended" does not mean "postponed," and therefore the purchaser cannot demand delivery of coke, to make up the deficiency, after the expiration of the fixed period.

5. SAME-TIME-ESSENTIAL ELEMENT.

In a contract for the purchase of all the coke manufactured by the seller during a fixed period, time is an essential element, because of the fluctuations in the market, and the life of the contract must be limited to the time fixed by the parties.

8. SAME.

Where the intention of the parties to limit a contract to a certain period is manifest, time is of the essence of the contract.

7. SAME CONSTRUCTION-GENERAL RULES.

The subject-matter and purposes of a contract, and the situation of the parties to it, are material to determine the intention of the parties and the meaning of the words used; and, where these are ascertained, they prevail over the dry words used.

8. SAME-BREACH BY ONE PARTY-REPUDIATION BY THE OTHER.

Where a buyer in a contract for weekly shipments of coke for a fixed period failed to pay on the 20th of the month for the coke received during the preceding month, as required by the terms of the contract. the seller might repudiate the contract; the latter not being in default. 9. SAME CONDUCT CHANGING TERMS OF CONTRACT-SUFFICIENCY.

The terms of a contract for the purchase of all the coke manufactured by the seller for a fixed period, the seller guarantying a specified amount, are not changed by the buyer sending to the seller orders for delivery of coke in excess of the specified amount, where such orders are received in due course of business, but are not accepted.

In Error to the Circuit Court of the United States for the Southern District of West Virginia.

Lucian H. Cocke and Malcolm Jackson (A. J. Reynolds, on the brief), for plaintiff in error.

L. A. Anderson and G. E. Price (Rucker & Anderson and Flournoy, Price & Smith, on the brief), for defendant in error.

Before GOFF and SIMONTON, Circuit Judges, and PURNELL, District Judge.

PURNELL, District Judge. Plaintiff brought its action on the case in assumpsit, claiming $10,000 damages for breach of contract. The Hull Coal & Coke Company, plaintiff below, a corporation with its chief office at Roanoke, Va., was engaged in purchasing and selling coal and coke in Virginia and West Virginia. The Empire Coal & Coke Company, defendant below, a corporation with its chief office at Landgraf, W. Va., was engaged in mining coal and manufacturing coke. On November 19, 1898, the plaintiff addressed a letter to the defendant, which was afterwards accepted, and mutually agreed should be a contract between them. This letter was as follows:

"We make you the following proposition for the purchase by us of all the coke you can make at your ovens at Landgraf, W. Va., from January 21st, 1899, to December 31st, 1899: We guaranty to give you orders enough to keep all of your ovens-one hundred (100)-running full. You to guaranty to furnish not less than twenty thousand (20,000) net tons of coke during the above-mentioned time. Orders and deliveries of coke to be made in as nearly as possible equal weekly installments. Price to be one dollar and sixteen cents per net ton, f. o. b. cars at ovens. Settlements to be made in cash on the 20th day of each month for shipments of the previous month. The usual strike, accident, and transportation clauses to mutually govern. Coke to be of standard quality, and you to ship no coke to others than ourselves, except as covered by attached memorandum. Your acceptance of this letter to constitute a contract between us."

It is agreed that the following was the usual strike, accident, and transportation clause referred to, or that part applicable to this controversy:

"In case of strikes, accidents, deficient transportation, or other cause, unavoidably causing stoppage or partial stoppage of the works of the manufacturer of this coke or its shipment, or in case of strikes or accidents unavoidably causing stoppage or partial stoppage of the works of the buyer, deliveries herein contracted for may be suspended or partially suspended, as the case may be, or, at the option of the party not in default, may be immediately canceled during the continuance of such interruption, by immediate notice to that effect given to the other party."

The Hull Coal & Coke Company made requisition upon the Empire Coal & Coke Company for coke to the capacity of the ovens, and in excess of the guarantied output of 20,000 tons; and the defendant company failed to furnish the amount,-only furnished during the period contemplated by the contract 14,572 tons and 1,100 pounds, which was 5,427 tons and 900 pounds less than the 20,000 tons called for in the contract; and it is claimed that, acting on the faith of the contract, the plaintiff below (appellant) had made sales of the coke which it had purchased, and, in order to meet its obligations, purchased coke at $2.50 per ton, being $1.34 per ton in excess of the price under the contract; and, for the damages thereby caused, this suit was brought. The Empire Coal & Coke Company relied on several defenses; i. e., the failure on its part to furnish the amount of coke guarantied by it was due to deficient transportation, a strike among its employés, a severe drought, which prevented it from securing the necessary water to manufacture the coke, and because plaintiff failed and refused to pay for the November delivery by the 20th of December. Under the ruling of the trial court these defenses were deemed sufficient, and under the instructions of the court there was a verdict for defendant.

It is conceded the Empire Company shipped to the Hull Company all the coke manufactured at its ovens, except that covered by the memorandum referred to, and under the strike clause the defendant was excused from deliveries at the particular times it failed to make such deliveries. The record does not disclose any complaint by or difference between the parties until December. The contract was executory, dependent on mutual agreements, containing guaranties, all governed by the strike clause as applicable. It can make no difference who suggested the strike clause, as argued. The contract is what the parties agreed to, and, being in writing, the construction is a matter of law for the court. Under a contract dependent on mutual agreements, the party alleging and claiming damages for a breach must allege and prove he has complied with his agreement and discharged his obligations. These are fundamental principles, which it is well to observe and keep in mind. in considering the contentions in this case. What did the parties contract to do? Plaintiff agreed to purchase all the coke defendant could make at its 100 ovens from January 21, 1899, to December 31, 1899; to give orders enough to keep ovens running full; to make orders in as nearly as possible equal weekly installments; to pay $1.16 per net ton f. o. b. cars at the ovens in cash on the 20th day of the month for shipments of the previous month. Defendant agreed to furnish all the coke it could make, except as noted in memorandum attached, not less than 20,000 net tons of standard