Exceptions to the report of a master should point out
specifically the errors upon which the party relies, not only that
the opposite party may be apprised of what he has to meet, but that
the master may know in what
Page 151 U. S. 286
particular his report is objectionable, and may have an
opportunity to correct his errors or reconsider his opinions.
The main object of a reference to a master being to lighten the
court's labors, the court ought not to be obliged to rehear the
whole case on the evidence when the report is made.
If the report of a master is clearly erroneous in any
particular, it is within the discretion of the court to correct
that error.
When a contract provides that work done under it shall be
examined by a superintendent every two weeks, and if done to his
satisfaction it shall be a final acceptance by the other party, so
far as done, the acceptance by the superintendent forecloses that
party from thereafter claiming that the contract had not been
performed according to its terms.
In the absence of a certificate by a master that the entire
evidence taken by him was sent up with his report, it is impossible
to impeach his conclusions upon it.
The proceedings in this case were taken within the time required
by the statutes of Alabama.
This was an intervening petition filed by the firm of Gordon,
Strobel & Laureau in a case pending in the Circuit Court for
the Northern District of Alabama for the foreclosure of a deed of
trust, setting up and claiming a mechanic's lien on certain furnace
property described in the petition, to secure the payment of a
large balance due to them as builders. The Central Trust Company of
New York, trustee under the deed of trust and plaintiff in the
foreclosure suit, the Sheffield & Birmingham Coal, Iron &
Railway Company, the mortgagor, Jacob G. Chamberlain, who was
receiver in the foreclosure suit, and one Charles D. Woodson, as
holder of certain bonds of the company, were made defendants to the
petition. Petitioners' claim arose under a contract whereby they
agreed to construct for the Alabama and Tennessee Coal and Iron
Company, the predecessor of the appellant corporation, three iron
blast furnaces at Sheffield, in Colbert County, Alabama, for
$564,000, ninety percent of which amount was to be paid from time
to time during the construction of the furnaces, and which ninety
percent had been practically paid as agreed between the parties,
the claim of the appellees being the balance, together with some
amounts alleged to have been paid out for excessive freight
charges, and upon material furnished to repair and reconstruct one
of the furnaces.
Page 151 U. S. 287
Joint and several answers were filed by the defendants, setting
forth certain defenses to the petition, and demanding proof of each
allegation thereof. It was admitted that the defendant company had
become liable for whatever amount was due the petitioners by the
original Alabama and Tennessee Coal and Iron Company. The main
defense was that Gordon, one of the interveners, had undertaken to
supervise the blowing in of one of the three furnaces, in which
operation the furnace was ruined and subsequently abandoned; that,
in the blowing in of a second furnace, it suffered such damage that
it required about six months to put it in good condition; that the
furnaces were not built according to the plans, specifications, and
agreements of the contract, but were constructed in so faulty and
inadequate a manner that their daily expense for coal was much
larger than it would have been had they been properly
constructed.
A decree was entered by consent, referring the case to a special
master to examine and report the facts as to the existence of the
contract, the construction of the furnaces, the payments made
therefor, the amount due the petitioners, the existence of their
lien, and also to report upon all matters of defense stated in the
answer.
In pursuance of this order, the master took the depositions of a
number of witnesses, found the facts, and reported a balance due of
$57,808.12, with interest from September 18, 1888. Exceptions were
filed to this report by the defendants which, upon argument, were
overruled by the court, and a final decree entered in favor of the
interveners for the amount reported by the master. From this decree
an appeal was taken to this Court.
Page 151 U. S. 288
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
An interlocutory decree was entered in this case by consent, and
the questions in issue arise upon exceptions to the report
Page 151 U. S. 289
of the special master, to whom the case was referred to take
proofs, and to report the amount found by him to be due. He was
not, however, required to report the testimony. Defendants excepted
to so much of said report, and the findings of the master in
reference thereto, as determined --
"1. That the defenses set up by the defendants are not sustained
by the evidence."
"2. That the petitioners, Gordon, Strobel & Laureau, are
entitled to be paid the contract price for their work and
material."
"3. That the sum of $57,808.12, with interest from the 18th day
of September, 1888, is the amount due the interveners, and"
"4. That the interveners have a lien upon the property described
in their petition. And for grounds and reasons for such exceptions
they assign the following:"
"1st. Because the evidence in the case sustained the defenses
set up by the defendants, and showed, 2d, that the work and
materials done and furnished by interveners were not up to the
requirement and guaranty of their contract, by which the value of
the plant, as built and equipped, was worth sixty or seventy-five
thousand dollars less than the contract price; and, 3d, because
such report is contrary to the weight of testimony on each of the
matters so reported."
There are two difficulties in the way of considering the case
upon these exceptions.
(1) The exceptions themselves are too broad, and amount simply
to a general denial of the facts and conclusions of the master. The
first three are to the finding of the master that the defenses are
not sustained, that the petitioners are entitled to the contract
price, and that the sum awarded is the amount due. In other words,
they are general denials of the merits of the claim. The fourth is
a denial of petitioners' lien because the evidence sustained the
defenses, because the work was not up to the requirements of the
contract, and because the report was against the weight of
testimony. This exception is scarcely more definite than the other.
There are no exceptions here to the findings of the master, now
assigned
Page 151 U. S. 290
as error, that the interveners did not guaranty that the work or
plant,
as a whole, should be adequate in design, strength,
and capacity for the purposes intended and specified, or to the
finding that the petitioners were entitled to be paid the freight
excess payments and extra material furnished for the construction
of the furnaces, or that the furnaces had attained the product in
the making of pig iron, as specified in the contract.
Proper practice in equity requires that exceptions to the report
of a master should point out specifically the errors upon which the
party relies, not only that the opposite party may be apprised of
what he has to meet, but that the master may know in what
particular his report is objectionable, and may have an opportunity
of correcting his errors or reconsidering his opinions. The court,
too, ought not to be obliged to rehear the whole case upon the
evidence, as the main object of a reference to a master is to
lighten its labors in this particular. In the case of
Dexter v.
Arnold, 2 Sumner 108, an exception to a report of a master
that he had stated and certified that there was due on a certain
mortgage a certain sum, when he ought to have reported that there
was nothing due, was held by Mr. Justice Story to be quite
untenable. "It is too loose and general in its terms," said he,
"and points to no particulars. It comes to nothing unless
specific errors are shown in the report, and those errors, if they
exist, should have been brought directly to the view of the court
in the form of the exception itself. At present, it amounts only to
a general assignment of errors, and the argument on this exception
has shown none."
The same rule was laid down in
Story v.
Livingston, 13 Pet. 359, wherein the exceptions to
the report of a master were held to be too general, indicating
nothing but dissatisfaction with the entire report and furnishing
no specific grounds, as they should have done, wherein the
defendant had suffered any wrong, or as to which of his rights had
been disregarded. The court observed that "exceptions to the report
of a master must state, article by article, those parts of the
report which are intended to be excepted to." The court cited with
approval
Page 151 U. S. 291
the case of
Wilkes v. Rogers, 6 Johns. 566, wherein it
was said that exceptions to reports of masters in chancery are in
the nature of a special demurrer, and the party objecting must
point out the error, otherwise the part not excepted to will be
taken as admitted.
So, in
Greene v. Bishop, 1 Cliff. 186, 191, Mr. Justice
Clifford held that
"general allegations of error, without pointing to any
particulars, are clearly insufficient for the reason that, if
allowable, the losing party might always compel the court to hear
the case anew, and if that practice should prevail, references such
as are made in this case would become both useless and burdensome,
as they would only operate to promote delay and increase the
expenses of litigation, without relieving the court from any of the
labor of the trial or ever accomplishing anything of value to
either party."
See also Stanton v. Alabama &c. Railroad, 2 Woods
506, 518.
That this is not a novel practice in Alabama is evident from a
number of decisions of the supreme court of that state affirming
the general doctrine in the most specific terms.
Alexander v.
Alexander, 8 Ala. 796;
Royall v. McKenzie, 25 Ala.
363;
O'Reilly v. Brady, 28 Ala. 530;
Mahone v.
Williams, 39 Ala. 203.
See also White v. Hampton, 10
Ia. 238;
Reed v. Jones, 15 Wis. 44;
Smalley v.
Corliss, 37 Vt. 486, 492. Cases are referred to a master not
on account of his presumed superior wisdom, but to economize the
time and labor of the court, and, as exceptions are usually filed
to his report, if they are so general as to require a rehearing of
the entire case, there is really nothing saved by a reference.
It is true that if the report of the master is clearly erroneous
in any particular, it is within the discretion of the court to
correct the error, but we see no occasion for exercising such
discretion in this case. It would appear from the report and the
recital in the final decree of the court that the main contest was
over the construction of a certain guaranty in the contract that
"all the work" was
"to be done in good and workmanlike manner, and of suitable
material, and each part to be adequate in design, strength,
capacity, and workmanship
Page 151 U. S. 292
for the purposes for which it is intended, for the sum of
$564,000."
Immediately following this is a stipulation that the
"superintendent shall pass upon the work every two weeks, and, if
to his satisfaction, it shall be a final acceptance by" the company
"so far as done; but, if not in compliance with the contract and to
his satisfaction as to the quality of material or character of
workmanship," petitioners agreed "to make it so as rapidly as
possible." The evidence showed without contradiction that one Doud,
who was the superintendent of the coal and iron company, made
inspections and supervised the work from time to time, and accepted
it when in his judgment it was in compliance with the contract. The
contractors claimed to have finished the work on the 8th of August,
1888, and requested its final acceptance. The president of the
Sheffield and Birmingham Coal, Iron and Railroad Company, which had
become, by consolidation with the Alabama and Tennessee Coal and
Iron Company, responsible on this contract, referred the matter of
final acceptance to Mr. Doud, the superintendent who on the 18th of
August accepted, in writing, the plant as completed according to
the terms of the contract.
The master and the court agreed in holding that the interveners
did not guaranty in their contract that the work or plant as a
whole should be adequate in design, strength, capacity, and
workmanship for the purposes intended and specified, and that, as
an acceptance of the work biweekly, as it progressed, was shown,
and a further acceptance of the whole on completion of the contract
was made by the superintendent in compliance with the terms of the
contract, such acceptance, in the absence of fraud or mistake on
the part of the superintendent, was conclusive upon the company. We
see no reason to question the correctness of this conclusion. It is
difficult to see what effect should be given the acceptance of the
work by the superintendent if not to foreclose the parties from
thereafter claiming that the contract had not been performed
according to its terms.
Martinsburg &c. Railroad v.
March, 114 U. S. 549.
There was, it is true, a proposal for an additional remuneration of
$20,000 to guaranty a certain
Page 151 U. S. 293
product, with an additional proposal that neither the ten
percent reserved in the hands of the company nor the $20,000 should
become due until the specified product had been attained, but it
does not appear that this proposal had ever been accepted, nor any
agreement made to pay the extra $20,000 for the attainment of this
product. The only guaranty in the proposal as accepted was that
each part -- by which we understand each part as related to every
other part -- should be adequate in design, strength, capacity, and
workmanship for the purpose for which it was intended. In view of
the other provisions, we think the court was correct in holding
that there was no guaranty intended of the plant as a whole.
(2) There is another objection, however, to our examination of
the facts in this case. The order referring the case to the special
master, though minute in its details, did not require him to send
up the testimony; neither does he purport to do this in his report;
and, while a number of depositions taken before him are filed,
there is nothing to indicate that these were all the testimony in
the case. He finds in this connection that the defenses set up by
the defendants are not sustained by the evidence, and that the
petitioners, Gordon, Strobel and Laureau, are entitled to be paid
the contract price for the material.
In the absence of any certificate that the entire evidence taken
by the master was sent up with his report, it is impossible to
impeach his conclusion in this particular.
Scotten v.
Sutter, 37 Mich. 526;
Nay v. Byers, 13 Ind. 412;
Fellenzer v. Van Valzah, 95 Ind. 128. There is no
presumption that all the testimony was sent up.
(3) A further objection is made that the proofs contained in the
record do not disclose the filing of the claim of lien in the
office of the judge of probate of Colbert County, as required by
the statute. The master, however, finds that on the 18th of
January, 1889, a verified statement of the amount claimed to be due
on this contract was filed with the Judge of Probate of Colbert
County, in substantial conformity with section 3022 of the Code of
Alabama of 1886, and there is no evidence to
Page 151 U. S. 294
impeach his finding in that particular, and no objection or
exception taken to the want of proof upon this point. There would
appear to have been, from a memorandum we find in the testimony, a
mechanic's lien introduced in evidence as an exhibit, but, as it is
not attached to the record, it is impossible to say that it does
not bear out the finding of the master. The statute of Alabama
requires a statement in writing, claiming a lien, to be filed in
the office of the judge of probate within six months after the
indebtedness to the lien holder has accrued, and as it appears that
the work in this case was finished on August 8, 1888, and accepted
August 18th, that the unpaid residue of the consideration was not
due for several months thereafter, and that suit was begun on
February 11, 1889, there seems to be nothing in the objection that
proceedings were not taken within the time required by law.
Upon the whole, we think the decree of the court below was
correct, and it is therefore
Affirmed.
