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leaving open only the question whether an omitted device is supplied by an equivalent device or instrumentality. Water Meter Co. v. Desper, 101 U. S. 332; Gage v. Herring, 107 U. S. 640; S. C. 2 Sup. CT. REP. 819.”
These considerations lead to the conclusion that the decree of the circuit court was correct and must be affirmed.
(115 T. S. 41)
PIRIE and others, Partners, etc., v. TVEDT and another, Partners, etc.
(May 4, 1885.)
REMOVAL OF CAuse-Several Defendants, One of Same State AS PLAINTIFF.
In a suit on a contract brought by a citizen of one state against a citizen of the same state and a citizen of another state, there is no such separate controversy as entitles the citizen of the other state to remove the cause, even though he answers separately from his co-defendant setting up a separate defense, and the statutes regulating proceedings in the state where the suit was brought allowed judgments to be given in actions ex contractu for one or more plaintiffs, or for one or more defendants.
In Error to the Circuit Court of the United States for the District of Minnesota.
G. E. Cole, for plaintiffs in error. No appearance for defendant in error. WAITE, C. J. This is a writ of error brought under section 5 of the act of March 3, 1875, c. 137, (18 St. 470,) for the review of an order of the circuit court remanding a cause which had been removed from a state court. The suit was brought by Tvedt Bros., citizens of Minnesota, against Carson, Pirie, Scott & Co., citizens of Illinois, and Owen J. Wood and Theodore S. Stiles, citizens of Minnesota, to recover damages for a malicious prosecution, it being averred in the complaint that "the said defendants, confederating together, and with a malicious and unlawful design and intent had and entertained by them, and each of them, to injure, oppress, and harass these plaintiffs, and to break them up in business, wrongfully, maliciously, unlawfully, and without any reason, or provocation, or probable cause, caused a certain action to be commenced against these plaintiffs, in which said Carson, Pirie, Scott & Co. were plaintiffs, for the pretended recovery of money, * * * and then and there wrongfully, unlawfully, and maliciously, and with the aforesaid intent so had and entertained by each and all of said defendants, wickedly and maliciously conspired together, and without probable cause, caused to be issued * * * a writ of attachment upon the stock of goods, wares, and merchandise of these plaintiffs; * that, under said writ of attachment, and by direct instruction of the defendants, the sheriff of said county levied the same upon the stock of goods, and closed up the store, and stopped and broke up the business of these plaintiffs." The defendants Wood & Stiles answered separately from their co-defendants, denying all malice and conspiracy, and saying that they, as attorneys at law, and acting for and under the instructions of Carson, Pirie, Scott & Co., brought the action and sued out the attachment in good faith, and not otherwise. The other defendants also filed a separate answer, admitting that they caused the action to be brought and the attachment to be issued, and that the attachment had been vacated, though the action itself was still pending and undisposed of.
Upon these pleadings Carson, Pirie, Scott & Co. filed a petition under the second clause of section 2 of the act of 1875, for the removal of the cause to the circuit court of the United States, on the ground that as the action was in tort, and therefore in its nature severable, there was in it "a controversy which is wholly between citizens of different states, to-wit, between the plaintiffs and Pirie, Scott & M'Leish, ** * * and that said controversy can be fully determined as between them."
(114 U. S. 549)
After the case got into the circuit court on this petition, it was remanded because there was but one controversy in the suit, and that between the plaintiffs, citizens of Minnesota, on one side, and all the defendants, citizens of Minnesota and Illinois, on the other. This ruling is the only error assigned.
It has been decided at this term in Louisville & N. R. Co. v. Ide, 114 U. S. 52, S. C. ante, 735, that, in a suit on a contract brought by a citizen of one state against a citizen of the same state and a citizen of another state, there was no such separate controversy as would entitle the citizen of the other state to remove the cause, even though he answered separately from his codefendant setting up a separate defense, and the statutes regulating the practice, pleadings, and forms and modes of proceeding in the state where the suit was brought, allowed judgments to be given in actions ex contractu for one or more plaintiffs and for one or more defendants. In that case it was said: "A defendant has no right to say that an action shall be several which a plaintiff elects to make joint. Smith v. Rines, 2 Sumn. 348. A separate defense may defeat a joint recovery, but it cannot deprive a plaintiff of his right to prosecute his own suit to a final determination in his own way. The cause of action is the subject-matter of the controversy, and that is, for all the purposes of the suit, whatever the plaintiff declares it to be in his pleadings. Here, it is certain joint contracts, entered into by all the defendants for the transportation of property. On the one side of the controversy upon that cause of action is the plaintiff, and on the other all the defendants." We are unable to distinguish this case in principle from that. There is here, according to the complaint, but a single cause of action, and that is the alleged malicious prosecution of the plaintiffs by all the defendants acting in concert. The cause of action is several as well as joint, and the plaintiffs might have sued each defendant separately, or all jointly. It was for the plaintiffs to elect which course to pursue. They did elect to proceed against all jointly, and to this the defendants are not permitted to object. The fact that a judgment in the action may be rendered against a part of the defendants only, does not divide a joint action in tort into separate parts any more than it does a joint action on contract.
The order remanding the cause is affirmed.
MARTINSBURG & P. R. Co. v. MARCH.
(May 4, 1885.)
RAILROAD COMPANY-CONSTRUCTION CONTRACT-PAYMENT-APPROVAL OF WORK BY ENA contract for the construction of a railroad provided that the company's engineer should, in all cases, determine questions relating to its execution, including the quantity of the several kinds of work to be done, and the compensation earned by the contractor at the rates specified; that his estimate should be final and conclusive; and that "whenever the contract shall be completely performed on the part of the contractor, and the said engineer shall certify the same in writing under his hand, together with his estimate aforesaid, the said company shall, within 30 days after the receipt of said certificate, pay to the said contractor, in current notes, the sum which, according to this contract, shall be due." Held, that in the absence of fraud, or such gross mistake as would necessarily imply bad faith, or a failure to exercise an honest judgment, his action in the premises is conclusive upon the parties.
In Error to the District Court of the United States for the District of West Virginia.
Wayne MacVeagh, for plaintiff in error. No appearance for defendant in
*HARLAN, J. This case is within the principles announced in Kihlberg v. U. S. 97 U. S. 398, and Sweeney v. U. S. 109 U. S. 618, S. C. 3 Sup. Ct.
REP. 344. Kihlberg sued the United States upon a contract for the transportation of military, Indian, and government stores and supplies from points on the Kansas Pacific Railway to posts and stations in certain states and territories. The contract provided for payment for transportation “in all cases according to the distance from the place of departure to that of delivery, the distance to be ascertained and fixed by the chief quarter-master of the district of New Mexico, and in no case to exceed the distance by the usual and customary route." One of the issues in that case was as to the authority of that officer to fix, conclusively for the parties, the distances which should govern in the settlement of the contractor's accounts for transportation. There was neither allegation nor proof of fraud or bad faith upon the part of that officer in his discharge of the duty imposed upon him by the mutual assent of the parties. This court said: "In the absence of fraud, or such gross mistake as would necessarily imply bad faith, or a failure to exercise an honest judgment, his action in the premises is conclusive upon the appellant as well as upon the government." This principle was affirmed and applied in Sweeney's Case, in which he sought to recover from the United States the price of a wall built by him around a national cemetery. The contract provided that the wall should be received, and become the property of the United States, after an officer or civil engineer, to be designated by the government to inspect the work, should certify that it was in all respects such as the contractor agreed to construct. The officer designated for that purpose refused to so certify, on the ground that neither the material nor the workmanship was such as the contract required. As the officer exercised an honest judgment in making his inspections, and as there was on his part neither fraud, nor such gross mistake as implied bad faith, it was adjudged that the contractor had no cause of action on the contract against the United States.
Those decisions control the determination of the claim arising out of the contract here in suit, whereby the defendant in error, who was plaintiff below, covenanted and agreed that he would furnish all the material required,— which should be sound, durable, and of good quality, and approved by the company's chief engineer,—and perform all the labor necessary to construct and finish, in every respect, in the most substantial and workman-like manner, the grading and masonry of a certain section of the Martinsburg & Potomac Railroad.
The contract provides that, to prevent al disputes, the engineer of the company "shall, in all cases, determine" the quantity of the several kinds of work to be paid for under the contract, and the amount of compensation that the appellee should earn at the rates therein specified; that he "shall, in all cases," decide every question which can or may arise relative to the execution of the contract, and "his estimate shall be final and conclusive;" that in order to enable the contractor to prosecute the work advantageously, the engineer "shall make an estimate from time to time, not oftener than once per month, as the work progresses, of the work done," for which the company "will pay in current money within twenty per cent. of the amount of said estimate on presentation;" that, in calculating the quantity of masonry, walling, and excavation, the most rigid geometrical rules should be applied, any custom to the contrary notwithstanding; and that "whenever this contract shall be wholly completed on the part of the said contractor, and the said engineer shall have certified the same, they [the company] will pay for said work" the prices in the contract named. These stipulations were emphasized by this additional provision in the agreement: "And it is further agreed that whenever the contract shall be completely performed on the part of the contractor, and the said engineer shall certify the same in writing under his hand, together with his estimate aforesaid, the said company shall, within thirty days after the receipt of said certificate, pay to the said contractor, in current notes, the sum which according to this contract shall be due."
The plaintiff, in his declaration, which is in assumpsit, sets out the written contract in full, and counts specially upon its various provisions. The other count is the ordinary one of indebitatus assumpsit. A general demurrer by the company to the whole declaration, and to each count, was overruled. This action of the court below cannot be upheld without disregarding the express conditions of the written agreement; for it does not appear from the declaration that the engineer ever certified in writing the complete performance of the contract by the plaintiff, together with an estimate of the work done, and the amount of compensation due him according to the prices established by the parties. Until after the expiration of 30 days from the receipt" of such a certificate, the company did not, by the terms of the agreement, come under a liability to pay the plaintiff the balance, if any, due to him under the contract. Nor does the declaration state any facts entitling him to sue the company, on the contract, in the absence of such a certificate by the engineer, whose determination was made by the parties final or conclusive. And upon the supposition that the engineer made such a certificate as that provided by the contract, there is no allegation that entitled the plaintiff to go behind it; for there is no averment that the engineer had been guilty of fraud, or had made such gross mistake in his estimates as necessarily implied bad faith, or had failed to exercise an honest judgment in discharging the duty imposed upon him. The first count of the declaration was, therefore, defective for the want of proper averments showing plaintiff's right to sue on the contract, and the demurrer to that count should have been sustained.
As, for this reason, the case must be remanded for a new trial, it is proper to say that if the declaration had been good on demurrer, we should have been compelled to reverse the judgment for errors in the instructions given to the jury. Several instructions were asked by the defendant embodying the general proposition that the final estimate of the engineer was to be taken as conclusive, unless it appeared from the evidence that, in respect thereto, he was guilty of fraud or intentional misconduct. These instructions were modified by the court by adding after the words "fraud or intentional misconduct" the words "or gross mistake." This modification was well calculated to mislead the jury, for they were not informed that the mistake must have been so gross, or of such a nature, as necessarily implied bad faith upon the part of the engineer. We are to presume from the terms of the contract that both parties considered the possibility of disputes arising between them in reference to the execution of the contract. And it is to be presumed that in their minds was the possibility that the engineer might err in his determination of such matters. Consequently, to the end that the interests of neither, party should be put in peril by disputes as to any of the matters covered by their agreement, or in reference to the quantity of the work to be done under it, or the compensation which the plaintiff might be entitled to demand, it was expressly stipulated that the engineer's determination should be final and conclusive. Neither party reserved the right to revise that determination for mere errors or mistakes upon his part. They chose to risk his estimates, and to rely upon their right, which the law presumes they did not intend to waive, to demand that the engineer should, at all times, and in respect of every matter submitted to his determination, exercise an honest judgment, and commit no such mistakes as, under all the circumstances, would imply bad faith.
There is one other error in the instructions to which it is proper to call attention. The contract provided that for "bridge masonry" the contractors should receive $7.50 per perch of 25 cubic feet. In reference to certain pier masonry, for which plaintiff charged, in his account, $14 per perch, the court instructed the jury as follows: "The jury are instructed that in respect to the item of pier masonry,' and the charge of $14 per perch therefor by the plaintiff, as shown in his estimate or bill of particulars, that if they find that the defendant's chief engineer ordered such masonry to be made, and saw and
inspected or examined the same after its completion, and considered the same in his final estimate, and therein treated the said pier masonry' as bridge masonry,' to be paid for by the defendant at the price of $7.50 per perch, under the terms of the contract, then such determination and judgment of the engineer is final and binding on the plaintiff, unless the jury find that the price and value of the masonry fixed and returned by the engineer was inadequate and unjust to the contractor, in which event the jury may presume fraud. and disregard the price fixed by the engineer in his final estimate."
This instruction, to which defendant excepted, was clearly erroneous; for, if the masonry was of the class described in the contract as bridge masonry, or if the parties by subsequent agreement, express or implied, authorized it to be put in that class,-the determination of which questions might be controlled by special circumstances not appearing on the face of the agreement, -then the estimate of the engineer, upon the basis of the contract price, was conclusive, unless impeached on the ground of fraud, or such gross mistake as necessarily implied bad faith. The test was not whether the price and value of the masonry fixed and returned by the engineer was inadequate and unjust. Much less did the jury have the right to presume fraud and disregard the engineer's estimate, merely because the price, upon which the parties originally agreed for bridge masonry, proved to be inadequate and unjust; for that would have enabled them to make for the parties a contract. which they did not themselves choose to make.
Without expressing an opinion upon other questions of a subordinate character, discussed in the brief of the defendant's counsel, and which may not arise upon another trial, the judgment is reversed, and the case remanded, with directions to set aside the verdict and grant a new trial, and for such further proceedings as may be consistent with this opinion. Reversed.
(114 U. S. 555)
STRANG and others v. BRADNER and another.
(May 4, 1885.)
The rule reaffirmed that the term "fraud," in the clause defining the debts from which a bankrupt is not relieved by a discharge under the bankrupt act, means positive fraud or fraud in fact, involving moral turpitude or intentional wrong, not implied fraud, which may exist without bad faith.
CLAIM FOR DAMAGES ON ACCOUNT OF FRAUD.
A claim against a bankrupt for damages on account of fraud or deceit practiced by him is not discharged by proceedings in bankruptcy; nor is a debt, created by his fraud, discharged, even where it was proved against his estate, and a dividend thereon received on account.
3. SAME-FRAUDULENT REPRESENTATIONS OF PARTNER.
If, in the conduct of partnership business, and with reference thereto, one partner makes false or fraudulent misrepresentations of fact, to the injury of innocent persons dealing with him, as representing the firm, and without notice of any liniitations upon his general authority as agent for the partnership, his partners cannot escape pecuniary responsibility therefor upon the ground that the misrepresentations were made without their knowledge, especially where the firm appropriates the fruits of the fraudulent conduct of such partner.
In Error to the Supreme Court of New York.
G. H. Forster, for plaintiffs in error. Wm. F. Cogswell, for defendants in
HARLAN, J. On the first day of June, 1877, each of the appellants, who were defendants below, received from the district court of the United States for the Southern district of New York his discharge from all debts and demands, which, by the Revised Statutes of the United States, title "Bankruptcy," were made provable against his estate, and which existed on the third day of July, 1875,-other than such debts as were by law excepted from