The fact that no such officer as master commissioner is known to
the law does not impair the validity of a reference to a person as
such.
The findings of a referee having been ordered to stand as the
findings of the court, the only question before this court is
whether the facts found by him sustain the judgment.
As the case was not tried by the circuit court upon a waiver in
writing of a trial by jury, this Court cannot review exceptions to
the admission or exclusion of evidence, or to findings of fact by
the referee, or to his refusal to find facts as requested.
S. and three other parties contracted on the 24th of June, 1879,
as follows:
"S. agrees to represent the entire interests and sales of the
coal of the other three parties aforesaid in the trade that may be
denominated the
Page 158 U. S. 357
Detroit trade by rail or by vessel to Detroit, or to and through
Detroit, Michigan; that he will confine himself to the use and
handling of their coal alone in all his sales of soft coal for
whatever use or purpose or market, taking the same from them in
equal quantities; that he will turn in all his present trade and
orders on their coal at the price of seventy cents per ton at the
mines, and that he will take care of all freights and pay them for
their coal by the 20th of the month next after each separate
month's delivery to him at the mines of said other three parties,
and that he will labor to improve the market price of said coal,
giving to said parties the advantage of whatever improvement may be
made in the market for said coal, asking no greater part of such
increase himself than shall be his fair proportion thereof, and
that he will keep his books, sales, and contracts of coal all open
to their inspection at all times. Said other above-named parties
agree to sell coal to no one to conflict with the interests of said
S. under this agreement, and that they will aid and encourage the
trade of said S. in all lawful ways in their power, so long as he
shall confine his sales and operations in soft coal to the product
of their mines."
Held:
(1) That the contract was a several one as between S. and the
three other parties, and that an action would lie in favor of
either of those parties without joining the others.
(2) That the agreement included all contracts and orders which
S. then had, whether for the immediate or future delivery of coal,
but did not bind the other parties to fill contracts made by him
subsequent to June 24, at 70 cents per ton.
(3) That the three parties were bound to furnish S. coal to all
contracts made by him for future delivery, at the market price of
coal at Detroit at the time Shipman made such contracts, and not at
the market price at the time of the delivery of such coal by the
companies to Shipman, from time to time, during the existence of
such contracts.
This was a case originally instituted in the Court of Common
Pleas of Franklin County, Ohio, by the defendant in error to
recover a balance of $19,564.89, claimed to be due on account of
goods sold and delivered. Upon the petition of Shipman, a citizen
of Michigan, the case was removed into the circuit court of the
United States, where an affidavit was filed admitting payments by
defendant after the commencement of suit aggregating $13,017.90,
leaving still claimed the sum of $6,446.90, with interest
thereon.
Defendant filed his answer, setting up a counterclaim, and
alleging that the plaintiff had agreed to sell and deliver all the
coal from its Sugar Creek lower vein, or so much as defendant
Page 158 U. S. 358
should need for his Michigan trade for one year from the date of
the contract, May 28, 1879, at certain prices; that defendant
needed much more coal than was furnished during that period, and
that the price of coal as charged exceeded the contract price by
the sum of $4,991.64. The answer further alleged that, relying on
this contract, he agreed to sell coal in Michigan at prices giving
him but a small profit; that he informed plaintiff of these
contracts, and plaintiff agreed to furnish enough coal to fill
them, but failed to do so, by reason whereof defendant was obliged
to purchase of other parties at higher prices than those at which
plaintiff had agreed to sell, whereby he suffered damages in the
sum of $10,000, in addition to the overpayment above mentioned.
Plaintiff replied to this answer, denying the counterclaims set
up by the defendant, and admitting the payment of $13,017.90 since
the commencement of suit.
Somewhat more than eighteen months thereafter, defendant filed
an amended answer reiterating his former defenses and increasing
the amount claimed for damages and counterclaim to $20,921.11.
Plaintiff filed a reply to this amended answer, claiming that on
June 24, 1879, defendant entered into an agreement which abrogated
the agreement of May 28, 1879, under which defendant claimed; that
this agreement was entered into between Shipman, on the one part,
the Straitsville Coal Company, the Straitsville Central Mining
Company, and J. S. Doe & Co. of the other part, and that it was
understood thereby that this contract superseded all other
contracts between the parties relating to the coal trade; that by
its terms plaintiff was to furnish one-third of the coal called
for, and no more at the market price for such coal for the time
being at its mines, except so far as the defendant's then present
trade and orders were concerned, which were to be filled at the
price to him of seventy cents per ton at the mines, each of the
parties to the agreement furnishing one-third of the coal necessary
therefor.
This contract, the construction of which is the material feature
of this case, is as follows:
Page 158 U. S. 359
"O. W. Shipman, Straitsville Coal Co., Straitsville Central
Mining Company, and J. S. Doe & Co. agree with each other as
follows:"
"Shipman agrees to represent the entire interests and sales of
the coal of the other three parties aforesaid in the trade that may
be denominated the Detroit trade by rail or by vessel to Detroit,
or to and through Detroit, Michigan; that he will confine himself
to the use and handing of their coal alone in all his sales of soft
coal for whatever use or purpose or market, taking the same from
them in equal quantities; that he will turn in all his present
trade and orders on their coal at the price of seventy cents per
ton at the mines, and that he will take care of all freights, and
pay them for their coal by the 20th of the month next after each
separate month's delivery to him at the mines of said other three
parties, and that he will labor to improve the market price of said
coal, giving to said parties the advantage of whatever improvement
may be made in the market for said coal, asking no greater part of
such increase himself than shall be his fair proportion thereof,
and that he will keep his books, sales, and contracts of coal all
open to their inspection at all times. Said other above-named
parties agree to sell coal to no one to conflict with the interests
of said Shipman under this agreement, and that they will aid and
encourage the trade of said Shipman in all lawful ways in their
power, so long as he shall confine his sales and operations in soft
coal to the product of their mines."
"Given under our hands this 24th day of June, A.D. 1879."
" [Signed.]"
By consent of parties in open court, an order was entered June
18, 1883, referring the case for trial to Richard A. Harrison, "a
master commissioner of this Court," who was directed to report the
testimony, with his findings of fact and of law, separately stated,
to the court.
In December, 1884, the referee made a finding of facts, and
propounded to the court five questions of law upon such facts,
Page 158 U. S. 360
viz.: (1) whether the contract of June 24, 1879, superseded that
of May 28th; (2) whether such contract were joint or several; (3)
as to the meaning of the clause "that he will turn in all his
present trade and orders on their coal at the price of seventy
cents per ton at the mines;" (4) whether the three companies were
required to furnish defendant coal to fill contracts, made by him
for future delivery at the market price of coal in Detroit at the
time defendant made such contracts, and not at the market price at
the time such coal was actually delivered by the plaintiff to the
defendant; (5) whether the contract was terminable at the will of
either party.
Answers were made to these questions by the court, and on May
23, 1886, the referee made his report, applying the law as declared
by the court, and awarding the plaintiff the sum of $230.74, with
interest from August 1, 1880. In the meantime, defendant had filed
a second amended answer, to which plaintiff replied, and to a
portion of this reply defendant demurred.
Both parties excepted to the findings of the referee. The court
passed upon the exceptions, reconsidered the questions of law
submitted by the referee, reaffirming the answers given, except to
the fourth question, declaring that the former answer to this
question was wrong, giving a new answer, and recommitting the case
to the referee.
December 13, 1889, the referee filed a supplemental report,
applying the interpretation of the contract given by the court to
the facts as found, and finding the amount due plaintiff to be
$9,282.81. This report was approved and confirmed, and it was
ordered that the findings of the master stand as the findings of
the court. Thereupon the court gave judgment for the plaintiff in
the sum of $9,282.81, with interest from December 3, 1889.
Defendant subsequently procured a bill of exceptions to be settled,
and sued out a writ of error from this Court.
Page 158 U. S. 361
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the court.
1. This case was referred by consent to Mr. Harrison, a
so-called "master commissioner," as referee, with instructions to
report the testimony, with the findings of fact and of law, to the
court. The fact that no such officer as master commissioner is
known to the law does not impair the validity of the reference, as
it is perfectly competent for the court to refer a case to a
private person.
Heckers v.
Fowler, 2 Wall. 123. And, as the court in its
judgment ordered his findings to stand as the findings of the
court, the only questions before this Court are whether the facts
found by the referee sustain the judgment. As the case was not
tried by the circuit court upon a waiver in writing of a trial by
jury, this Court cannot review exceptions to the admission or
exclusion of evidence, or to findings of fact by the referee, or to
his refusal to find facts as requested.
Roberts v.
Benjamin, 124 U. S. 64;
Boogher v. Insurance Co., 103 U. S.
90;
Bond v. Dustin, 112 U.
S. 604;
Paine v. Central Vermont Railroad Co.,
118 U. S. 152;
Andes v. Slauson, 130 U. S. 435.
There are eighteen assignments of error, but, as most of them
are taken to the action of the referee, they need not be further
noticed.
2. The court below was of opinion that the contract in question
was a several one as between Shipman and the three other parties,
and hence that an action would lie in favor of either of these
parties without joining the others. Three separate actions were in
fact brought against him. There is nothing in the contract
indicating that the three parties were connected in any way, except
that each was to furnish an equal quantity of coal. They are spoken
of in the contract as "the other three parties," as if it were
intended that each of them should stand for himself. If either of
them had failed to furnish his quota of coal, Shipman might have
brought an action against him; but it is clear that, if he had sued
them jointly for such default, the two others might answer that
they had done all that they agreed to do, and
Page 158 U. S. 362
could not be held liable for the default of the third. These
parties did not agree to furnish any definite amount of coal, but
merely that they would ship the defendant the product of their
mines in equal quantities. Separate orders were given by Shipman,
and separate bills were rendered by the companies for coal shipped
upon such orders, and there is nothing to indicate that either of
the parties to the contract treated it as involving a joint
liability.
Leigh v. Hall,
8 Cranch 50. If Shipman had settled with plaintiff according to the
account rendered by it in this case, it seems to us that it could
not be seriously contended that the other parties could not sue him
for the coal furnished by them without joining the plaintiff.
3. The principal controversy in this case, however, grows out of
that clause of the contract which requires of Shipman "that he will
turn in all his present trade and orders on their coal at the price
of 70 cents per ton at the mines." In this connection, the referee
asked the advice of the court as to whether this meant that the
three companies should furnish coal at 70 cents per ton at the
mines, to fill only such orders and contracts as Shipman then had
(June 24, 1879) for immediate delivery of coal, or that they should
furnish it at that price to fill all such contracts and orders,
whether for immediate or future delivery; or whether they should
furnish it to fill all contracts which Shipman then had, or might
thereafter make, before the market price of coal advanced, with
parties who had previously been customers of his, and whether this
was limited to those who were previously customers of his or
not.
The fourth question put by the referee was whether, viewing all
the provisions of the contract, the companies were required to
furnish Shipman coal to fill contracts made by him for future
delivery at the market price of coal in Detroit at the time Shipman
made such contracts, and not at the price a the time such coal was
actually delivered by the plaintiffs to Shipman from time to time
during the existence of such contracts.
The court answered the third question that the clause quoted
included all contracts and orders which Shipman then
Page 158 U. S. 363
had, whether for the immediate or future delivery of coal, but
did not bind the companies to fill contracts made by Shipman
subsequent to June 24th at 70 cents per ton. It at first answered
the fourth question, that the three companies were bound to furnish
Shipman coal to fill contracts made by him for future delivery at
the market price of coal at Detroit at the time Shipman made such
contracts, and not at the market price at the time of the delivery
of such coal by the companies to Shipman, from time to time, during
the existence of such contracts. Upon the basis of these answers,
the referee found a balance of $230.74 due from the defendant to
the plaintiff, with interest from August 1, 1880.
Exceptions were taken by both parties to the report of the
referee, when the court, reaffirming its answers to the first,
second, and third questions, reached the conclusion that the answer
to the fourth question was wrong, and that the true answer was
that, excepting contracts within the designation of "present trade
and orders," which the contract of June 24, 1879, required Shipman
to turn in at the price of 70 cents per ton at the mine, the three
companies named in the contract were not bound to furnish him coal
to fill contracts made by him for future delivery at the market
price of coal at Detroit at the time when Shipman made such
contracts, but that they were entitled to the market price at the
date of the actual sale of such coal by them to Shipman, less his
"fair proportion" of any advance in the price, as specified in the
contract.
In determining the correct answer to this question, it is proper
to consider the situation of the parties and the surrounding
circumstances. For some years prior to June 24, 1879, defendant
Shipman had been extensively engaged in the business of buying and
selling coal in the Detroit market, and had from time to time
purchased considerable coal for that market from the plaintiff. The
two other parties to the contract had also, prior to such date,
established a coal office in Detroit and competed with Shipman for
the Detroit trade. At the date of this written contract and for
some time before and since then, there existed at Detroit a usage
or custom
Page 158 U. S. 364
among coal dealers and their larger customers to make contracts
for the sale and delivery of coal at a stipulated price for the
year next ensuing, and this usage or custom was known to all the
parties to this contract when they entered into it. At the date of
this contract, the price of lump coal was 70 cents, and of nut coal
25 cents per ton at the mines. After the execution of this
contract, the three respectively shipped coal to defendant at
Detroit, and to his customers on his orders, and separate accounts
were kept both by Shipman and the plaintiffs, respectively, of the
coal shipped by each. Monthly bills were rendered by them,
respectively, to defendant, in which they charged for the coal
shipped prior to October 1, 1879 at the rate of 70 cents for lump
and 25 cents for nut coal, and for all coal, both lump and nut,
shipped after October, 1, 1879, bills were rendered to defendant at
the market price, which was largely in excess of 70 and 25 cents.
There appears to have been a slight advance in coal at the mines
some time in July or August, and, in the account rendered in August
by the plaintiff, defendant was charged 75 cents per ton for lump
coal. He called the attention of the company to the fact, and the
company, in the September account, credited the defendant with the
5 cents per ton overcharge.
As the contract made no mention of the price to be charged
except so far as concerned coal furnished to fill orders in
existence at the time of the contract, it would follow that the
plaintiff was at liberty to charge the defendant the current market
price at the mines at the time of each delivery. In view, however,
of the custom of the coal trade at Detroit to make contracts for
the sale and delivery of coal at a stipulated price for the year
next ensuing, and in view of the fact that this custom was known to
all the parties to this contract at the time they entered into it,
it may fairly be presumed that the contract was made with reference
to that custom. The fact that the companies reserved to themselves
the power to inspect defendant's books, sales, and contracts for
coal at all times while the contract remained in force is somewhat
inconsistent with the idea that they had no interest in any
Page 158 U. S. 365
contracts made by him after June 24th, and only contemplated
selling him at the market price. The fact that he had agreed to
labor to improve the market price of coal, giving the other parties
the advantage of whatever improvement might be made in the market,
to which the companies were to lend their aid and encouragement,
tends to show that the relations between them were different from
those between an ordinary vendor and vendee. Indeed, the fact that
the contract provides that he was to represent the entire interests
and sales of the companies in the Detroit trade; that he could only
sell soft coal received from them; that he was to labor for the
improvement of the market, and, if he succeeded in raising the
price, that he was to receive only a fair proportion of such
increase -- indicated rather the relation of partners or of
principal and agent than that of vendor and vendee. If this were
the case, the companies would be bound by his contracts, made
within the scope of his authority and according to the custom of
the Detroit trade. It can hardly be supposed, under this contract,
that if Shipman were to make an agreement, say July 1, 1879, to
deliver one thousand tons during the next year at a given price,
and coal was to rise immediately thereafter, he would be obliged to
pay the companies the increased price and still sell to his
customers at the contract price -- in other words, to sustain the
whole loss himself; inasmuch as he was representing their interests
in Detroit, was obliged to submit to them his books and contracts
for their inspection, and in case of an improvement in the market,
was obliged to account to them for their fair proportion of the
increase. On the other hand, if coal fell after the contract was
made, and it had proved to be a profitable one, it would seem to
have been the expectation of the parties that he should only
receive his fair proportion of such profit.
It is unnecessary to characterize or define this contract, or to
say whether it created the relation of vendor and vendee, principal
and agent, or a partnership, as it possesses some features
characteristic of each of them. But although it is very ambiguous
and indefinite, and was evidently not drawn
Page 158 U. S. 366
by anyone learned in the law, we think the answer first given by
the court to the fourth question corresponds better with its true
meaning and intent, and that the companies were bound to furnish
defendant coal to fill contracts for future delivery at the market
price of coal in Detroit at the time he made such contracts.
So far as Shipman's "fair proportion" of an increase is
concerned, we see no distinction between nut and lump.
This covers all the questions properly raised by the record in
this case, and the result is that the judgment of the court below
must be
Reversed, and the case remanded for further proceedings in
conformity with this opinion.
MR. JUSTICE GRAY was not present at the argument, and took no
part in the decision of this case.
