Baltimore & O.R. Co. v. Brydon
| Decision Date | 24 June 1886 |
| Citation | 9 A. 126,65 Md. 611 |
| Parties | BALTIMORE & O. R. CO. v. BRYDON, USE OF DAVIS AND ANOTHER. [1] |
| Court | Maryland Court of Appeals |
Appeal from superior court, Baltimore city.
On April 3, 1886, a motion for a rehearing of this case was made by the appellant. The court overruled the motion, and the following separate opinion was delivered.
J K. Cowen and I. N. Steele, for appellant.
I T. Poe and Wm. Walsh, for appellees.
When this case was decided, after full argument, I concurred with the other judges in the conclusion that the judgment of the court below ought to be affirmed. This was my conclusion upon full examination of the record; it appearing that the case had been carefully tried and fully submitted to the jury upon correct principles of law. After the decision of the case in this court, there was a motion by the appellant for reargument; and, in support of that motion, quite an elaborate brief was filed, urging several matters and questions supposed to have been overlooked by the court, or not fully considered by it, in arriving at the conclusion announced in its opinion. That motion has been considered and overruled by the court; and while I concur in overruling the motion for reargument, I deem it due to the reasons assigned in support of that motion, to state briefly the grounds of my judgment.
The contract, upon which the action was brought, contains the condition that the quantity of coal to be furnished, during the three years for which the contract was to run, was to be of such quality as should be satisfactory to the masters of transportation and of machinery, who were employes and agents of the appellant, and to be delivered into the tenders of the appellant's locomotive engines at such times as the appellants might require, etc. The contract was dated the seventeenth of May, 1875, but was not to take effect until the fifteenth of July following. Coal had been delivered to the appellant by the appellee, from the same mine, from September, 1874, to the time when the contract went into operation, but only under special orders and the appellant continued to receive coal from the appellee, from the same mine, and for the same purpose,--that is, for generating steam for locomotive engines,--until May 6, 1876, with occasional suspensions. The appellee, in his declaration, assigned as breaches of the contract (1) that the appellant improperly refused to receive the coal tendered by the appellee; and (2) that, though the appellee was ready and willing to deliver to the appellant daily the stipulated quantity of coal, of such quality as was required by the contract, and which in fairness and truth was and should have been satisfactory to the masters of transportation and of machinery of the appellant, the latter falsely pretended that the coal thus offered to be delivered was not of the quality contemplated by the contract, and was not satisfactory to the masters of transportation and of machinery, and therefore refused to accept such coal of the appellee. It was upon these alleged breaches of the contract that the issues were formed.
Such then, being the issues for trial, one of the most prominent questions of fact presented for the determination of the jury was, at what particular time did the master of transportation and the master of machinery really determine to condemn the coal supplied under the contract, because it was not satisfactory to them? On the part of the appellee, it was contended, and sought to be maintained by his proof, that it was not until the sixth of May, 1876, that the appellant ceased accepting the coal under the contract, and that it was not then stopped because it was in truth unsatisfactory to the agents named, but because of the fall in price of a superior grade of coal, and because those agents were unduly influenced by, and yielded to, the dictation of their superior officers in the corporation, in disapproving the coal, so that their determination in condemning the coal was not in fact fairly and bona fide made. But while such was the contention on the part of the appellee, it was contended, and strongly supported by proof, on the part of the appellant that the taking of the coal under the contract was stopped on the third of August, 1875, because it was in fact unsatisfactory to the agents designated by the contract to pass upon its quality; and that all the coal taken of the appellee after that date was taken as had been all the coal furnished by the appellee prior to the fifteenth of July, 1875, only occasionally, under special and limited arrangements, and for purposes of making tests as to the feasibility of using the coal on the road. No coal was in fact taken after the sixth of May, 1876; and the appellee immediately thereafter ceased operation of his mine; but he says that was in consequence of the refusal of the appellant to proceed with the execution of the contract.
That term or condition of the contract which required the coal to be of a quality satisfactory to the agents designated was certainly a leading and important one to the appellant, and was intended exclusively for its protection, and without which we may suppose the contract would never have been made. The appellant, therefore, had the right to insist that the condition should be allowed its full and complete effect in determining the rights of the parties under the contract.
In cases where it is stipulated that an article to be furnished shall, unqualifiedly, be satisfactory to the party to whom it is to be supplied, the right to reject the article, as not being satisfactory, cannot be inquired into; but the party's own determination must be taken as final and conclusive. In such case it is supposed, and such is the construction, that the party has reserved to himself an unqualified option, and is not willing to leave his freedom of choice to any contention, or to be subject to any investigation whatever. It is quite permissible to parties to enter into such contracts; and where the approval or satisfaction of the party is made a condition precedent to the right to receive compensation, or the contract price, for the article to be delivered, the court has no right or power to dispense with the condition, and say that the article was of a quality or character that ought in reason to have been accepted as satisfactory. If the plaintiff thinks proper to enter into such conditional contract, it is not for any one else than the defendant himself to say that he ought to be satisfied. That is a matter expressly reserved to the defendant to decide for himself; and the reasons or motive for the decision, whether reasonable or unreasonable, good or bad, are placed by the contract beyond question or investigation. For instances of this class of contracts, and as illustrations of the application of the principle here stated, I may refer to the cases of Andrews v. Belfield, 2 C. B. (N. S.) 779; McCarren v. McNulty, 7 Gray, 139; Brown v. Foster, 113 Mass. 136; Zaleski v. Clark, 44 Conn. 218; Rossiter v. Cooper, 23 Vt. 522; Hart v. Hart, 22 Barb. 606; Gibson v. Cranage, 39 Mich. 49; Wood Reaping & Mowing Machine Co. v. Smith, 50 Mich. 565, 45 Amer. Rep. 57, 15 N.W. 906.
But this principle does not apply in its unqualified form in a case where the contracting parties have expressly stipulated that the article to be supplied shall be such, in respect to the quality or otherwise, as shall be approved by, or be satisfactory to, some third person, though that third person may be an agent or an employe of one of the parties to the contract. In such case, though it be made a condition precedent that the article shall be approved by the party designated, yet, if it can be shown that the approval has been withheld from motives of selfish interest, bias, partiality, or corruption, the party prejudiced by such action may, notwithstanding the absence of such approval, recover on the contract for the non-acceptance of the article furnished. In such contracts it is an implied condition that the person designated to approve shall act with entire good faith to both of the contracting parties. Both parties have the right to insist upon such good faith, and the want of it will dispense with the condition requiring the approval. The court will not allow a defendant to avail himself of the condition precedent to defeat the right of the plaintiff to recover for a violation of the contract, where there has been fraud or mala fides on the part of the person appointed to approve or disapprove. But in the absence of fraud or bad faith in the conduct of such party, in respect to the fact of his approval, or the withholding it, his judgment or determination is to be accepted as final and conclusive. No mere error or mistake of judgment will vitiate his determination. The very object of his appointment is to prevent and exclude contention and litigation; and hence nothing short of fraud or mala fides in the exercise of his power to reject or approve the article contracted for will dispense with the strict legal effect of the condition precedent. This is now the settled doctrine, in respect to this class of contracts in the courts, both of this country and of England. Wilson v. Railroad Co., 11 Gill & J. 58; Lynn v. Baltimore & O. R. Co., 60 Md. 404; Sweeney v. U. S., 109 U.S. 618, 3 S.Ct. 344; Martinsburg & P. R. Co. v. March, 114 U.S. 549, 5 S.Ct. 1035; Sharpe v. San Paulo R. Co., L. R. 8 Ch. 597. And this principle, with the proper conditions under which it was applicable, and could be applied in the consideration of this case, appears to have been fully and clearly set forth in the hypothetical instructions given by the court to the jury.
Such then, being the settled law as applicable to this case, the principal question...
To continue reading
Request your trial