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Opinion of the Court.
it could if done as provided for in the specifications, because where the embankment would be low you would have to make a shallow borrow-pit, and in making a continuous ditch you would have to deepen that borrow-pit to bring it to the ditch level and would have to carry the dirt forward, necessitating a haul. There was no continuous ditch contemplated in the profile of the work."
Fisher, a witness for defendants in error, testified that "he was a civil engineer of thirty-five years' experience, and largely as railroad engineer. If the specifications provided that the earth for embankment should be borrowed equally from both sides, and then a continuous ditch should be required to be made on one side of the embankment, it would necessitate a greater haul and would be more expensive. In consequence of the ditch a greater amount of earth would have to be taken from the side on which the ditch is made. One cannot work to such an advantage in a narrow ditch as in a broad borrowpit. The deeper you go, the harder the earth is to work."
Outside of the testimony of the witnesses, it is manifest that to dig earth on a surface rolling and broken, as the profile shows the surface to have been in this instance, for the sole purpose of constructing a level embankment, and without regard to the depth or extent or level of the pits thereby made, is a very different problem from the digging with the double view of the construction of such an embankment, and the making of a continuous ditch with prescribed directions and uniform bottom level for a length of more than four miles.
It is true that, as the plaintiff in error says, the profile shows ditching in these same sections, covered by the original contract, to the amount of 4660 cubic yards; but it also is true that those ditches were of a very different character, and imposed no such burden on the contractor as did the one in question. Indeed, the plaintiff in error itself treated the modification as a serious change, and especially so considered the ditch, before the controversy arose. In the correspondence between the two engineers of the company, which determined on it, it is spoken of as a new system.
Opinion of the Court.
Second. We also think the engineer, Hurlburt, had authority to make a new contract for the ditching. The plaintiff in error insists that a subordinate engineer has no such authority by virtue of his employment. That may be conceded; but it is not the ground assumed by the defendants in error. They contend that Hurlburt was specially authorized to make the contract; and support that position by quoting the second engineer Nichols, who says, "that the plan of drainage suggested in my letter to Mr. Vaughan was accepted by him, and Mr. Hurlburt was directed to have it carried out." This view is fortified by the fact that in Vaughan's letter to Nichols whereby the proposed changes were sanctioned 16th of August, 1884, and numerous items of adjustment and arrangement made necessary by such changes suggested, Vaughan, himself, clearly recognized the situation as one admitting of new terms with the contractors. He wrote, inter alia, of the change, "this solid bank business " he called it, "we might get a low rate for extra earth in consideration of the same."
In Damon v. Granby, 2 Pick. 345, the inhabitants of the town of Granby had voted that certain persons thirteen in number should be a committee to procure a master builder, and superintend the building of a meeting-house for the town. On the trial of the case, which was an action of debt by the builder of the meeting-house on the contract made with the committee, the defendants objected that the superintending committee had no authority to contract for the building of the house. The court held that the vote of the inhabitants gave to this committee the authority to enter into the contract. "To superintend the building of the house," says the court, "includes the power to make the necessary contracts," etc. See also Story on Agency, § 79.
Third. Nor do we think the court below erred in refusing to charge the jury that the defendants in error were only entitled to recover for such excavation as was actually done for the purpose of making such ditch, as distinguished from such portion of, the ideal ditch as coincided in space with the borrow-pits, as portions thereof. In some cases, nay, in most cases, that would be a proper charge, perhaps, but not in this
Opinion of the Court.
case. Here the plaintiffs below claimed before the jury, as a matter of fact, that they held a valid contract with the defendant below, by the terms of which they were entitled to pay for the whole volume of the ditch (calling it "imaginary" in part makes no difference), from the bottom up to the original ground surface through its whole length; and that, whether said volume coincided with the spaces of borrow-pits or not. It was for the jury to say whether such contract did. in fact exist. It was not for the court to assume and instruct the jury as a matter of law that it did not exist. Such a contract was not legally impossible. It was not claimed that the contractors defrauded the company, or in any way took advantage of it; and the basis of measurement, even if artificial and to an extent "imaginary," is not legally unreasonable, in view of the testimony of the witnesses as to the onerous and complicated labors of such a ditch. As a substitute and equivalent for all the items of demand in increased volume of excavation, increased hauls, increased hardness of earth to be worked, etc., it may have been a very proper system. We cannot say that it was not.
As to the second branch of the case, viz., that in respect to the piling, it is objected by the plaintiff in error that the instruction of the court was erroneous for the following reasons: First. Because in speaking of the 700 feet still not paid for, the court said: "If you find upon the proof that there was an agreement between plaintiffs and Mr. Hurlburt that these piles should be paid for at what they were reasonably worth," etc.; while there was no evidence tending to show that Hurlburt made the agreement therein supposed. But there was such evidence. Ryan, one of the plaintiffs below, had testified that " we had no contract for this work, and before we began it I had a conversation with Mr. Hurlburt about it. I wanted to know what we would be paid for it, and he said that Mr. Vaughan would do what was right.” This was claimed to be a contract for reasonable compensation. It was for the jury to say whether the conversation. was with a contractual intent or not. The court had no right to assume as a matter of law that it was not, and refuse a
charge on that aspect of the case. Second. Because Hurlburt had no authority to make a contract in reference to this matter. But the contract spoken of, being for a compensation on a quantum meruit, and not for a specified price, it is immaterial whether Hurlburt had such an authority or not. If, as the representative of the company, he had made no express promise to pay, the law would imply one. There is
no question as to his power to direct the work, and no claim that he exceeded his authority in directing the crossings to be made of trestle and pile work. Such being the case, we do not consider it necessary to discuss the abstract question of whether the language used by the court was technically accurate as applied to the case; if it was not, there was yet no material error none that could have injured the defence. We do not think that the acceptance of thirty cents for some of the trestles precluded the plaintiffs as to the value of others.
The judgment of the court below is
CHICAGO, MILWAUKEE AND ST. PAUL RAILWAY COMPANY v. THIRD NATIONAL BANK OF CHICAGO.
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS.
No. 174. Argued January 8, 1890. - Decided March 17, 1890.
A corporation in debt cannot transfer its entire property by lease, so as to prevent the application of it, at its full value, to the satisfaction of the debts of the company; and when such transfer is made under circumstances like those shown in this case, a court of equity will decree the payment of a judgment debt of the lessor by the lessee.
Where, in a court of equity, an apparent legal burden on property is challenged, the court has jurisdiction of a cross bill to enforce, by its own procedure, such burden.
The court which denies legal remedies, may enforce equitable remedies for
Statement of the Case.
the same debt; and an application for the latter is not foreign to a bill for the former.
A cross-bill may be amended so as to work a change in the ground of the relief sought, when the proofs which make it necessary are furnished by the original complainant in support of allegations in his bill.
A lessee of a railroad, receiving money to be expended on the leased property, and misappropriating it by spending it on another property, cannot, by afterwards spending an equal amount of its own money on the leased property, deprive a creditor of the lessor of an equitable right growing out of the misappropriation.
A misappropriation of money by a corporation being proved, and an equit able claim against the wrongdoer being established, and it appearing that the pleadings raise no issue as to the amount of the misappropriation, and that the officers of the corporation can furnish no information on this point, it is no error to hold that it was in excess of the claim.
IN 1865, by a special act of the legislature of Illinois, the Chicago and Pacific Railroad Company was organized as a body corporate, with authority to construct and operate a railroad from the city of Chicago to the Mississippi River, at a point near Savanna, both points being within the State of Illinois. In 1872 it executed a trust deed upon its property to secure $3,000,000 of bonds. On March 9, 1876, judgment was rendered against it in the United States Circuit Court for the Northern District of Illinois for the sum of $3499.73, in favor of Horace Tabor. Execution was first issued upon this judgment September 9, 1876. On May 27, 1876, suit was brought to foreclose the deed of trust. After a decree in such foreclosure, and on May 1, 1879, the property was sold on an order of sale, for $916,100, to John I. Blair and others. Subsequent to April 2, 1880, but within the year prescribed by statute, the Chicago and Pacific Railroad Company redeemed the property from the sale under the foreclosure decree, the Chicago, Milwaukee and St. Paul Railway Company having advanced the money therefor. On the 19th of February, 1880, which was after the foreclosure sale but before the redemption, the Third National Bank of Chicago brought suit in the same court against the Chicago and Pacific Railroad Company, upon notes given by the company to the bank for money loaned. On the 3d of April, 1882, judgment was rendered in that suit, in favor of the bank, for $36,165.36; and on the