8 F.2d 576 (8th Cir. 1925), 6886, Egyptian Novaculite Co. v. Stevenson

Docket Nº:6886.
Citation:8 F.2d 576
Case Date:September 14, 1925
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 576

8 F.2d 576 (8th Cir. 1925)




No. 6886.

United States Court of Appeals, Eighth Circuit.

September 14, 1925

Page 577

Robert L. Ward, of Caruthersville, Mo., and Bennett C. Clark, of St.Louis, Mo. (Samuel W. Fordyce, Jr., Thomas W. White, and Fordyce, Holliday & White, all of St. Louis, Mo., on the brief), for appellant.

James A. Finch, of New Madrid, Mo., (Thomas Gallivan, of New Madrid, Mo., on the brief), for appellees.

Before LEWIS, and BOOTH, Circuit Judges, and PHILLIPS, District Judge.

BOOTH, Circuit Judge.

This is a suit (consolidated of two) brought by the appellees, hereafter called plaintiffs, for cancellation of two contracts made by appellant (under its former name Egyptian Gravel Company), hereafter called Novaculite Company, with New Madrid county, Mo., hereafter called the county.

The contracts bore date, respectively, February 25, 1919, and November 1, 1920; were executed on behalf of New Madrid county in accordance with a statute of Missouri by the presiding judge and two other judges of the county court. The contracts provided for the purchase by the county from the Egyptian Gravel Company of a large quantity of road material called novaculite. The second contract was intended to supersede the first, in case certain specified conditions were fulfilled.

While the contracts were being performed, the two suits above mentioned were commenced in the state circuit court of New Madrid county, Mo., under section 9508, Mo. Rev. Stat. 1919, which reads as follows:

'County Contracts to be Inquired Into on Petition, etc.-- Whenever any fifty resident, solvent and responsible taxpaying citizens of any county in the state shall have good reason to believe, and do believe, that any contract made and entered into by the county court of the county, with any person or corporation, affecting or concerning any public building, lands, moneys or property of the county in any manner whatever, or any extension of any such contract, was not made

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and entered into in good faith, or for a just consideration, and with due regard for the best interest of the county, or that any such contract previously entered into has not been carried out by the parties thereto in good faith and according to the terms of any such contract, they may bring a suit in the circuit court of any such county, praying that the matter may be inquired into, and thereupon the circuit court shall make a full investigation of the matters alleged, and shall have power to set aside, reform or cause to be enforced any such contract, or any extension of any such contract, as the court shall deem best under the law and the facts. Should the petitioners fail to sustain their petition, they shall pay the costs; and all such proceedings shall be governed by the law relating to civil practice in circuit courts. The said petition shall be filed in the office of the clerk of the circuit court of said county; and thereafter the death, removal or disability of any one or more of such petitioners or plaintiffs shall not abate or affect the said suit.'

The complaints alleged the making of the contract, and that the plaintiffs had good reason to believe, and did believe, that the contracts were not made and entered into in good faith or for a just consideration and with due regard for the best interest of the county. The county judge who executed the contracts, and the novaculite company, were all made defendants in each of the two suits.

The novaculite company in due time removed the two suits to the United States District Court for the Eastern District of Missouri on the ground of diversity of citizenship and requisite amount involved. It alleged in its petition for removal that the interests of the county and of the individual defendants were all adverse to the interests of the novaculite company, and that therefore such defendants should be aligned with the plaintiffs, thus creating diversity of citizenship. After removal, the two suits were consolidated.

In the federal court the pleadings were completed as follows: The novaculite company filed an answer and afterward an amended answer, denying the allegations of the bill and setting up a so-called cross-bill and counterclaim against the county. In this pleading it alleged that the county had breached the contracts and that the novaculite company had been damaged in the sum of $100,000, for which amount judgment was asked. The defendant county filed an answer and afterward an amended answer, counterclaim, and cross-bill to the amended answer, cross-bill and counterclaim of the novaculite company, setting up in said counterclaim and cross-bill new grounds for cancellation of the two contracts...

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