Miller v. O'Boyle

• Decision Date: 26 August 1898
• Citation: 89 F. 140
• Parties: MILLER v. O'BOYLE et al.
• Court: U.S. District Court — Western District of Pennsylvania

89 F. 140

MILLER v. O'BOYLE et al.

United States Circuit Court, W.D. Pennsylvania.

August 26, 1898

Watson & McCleave, for complainant.

Warren & Knapp and Knox & Reed, for defendants.

ACHESON Circuit Judge.

In the fall of 1897, the plaintiff, Lemuel E. Miller, and M. W O'Boyle, one of the defendants, associated themselves together for the purpose of procuring a contract for building a sewerage system in and for the city of Guadalajara, in the state of Jalisco, Mexico; and they submitted a proposal for such contract to the government of the state of Jalisco. That proposal was accepted on December 27, 1897, in and by letter of that date, addressed to Miller & O'Boyle, signed by Luis C. Curiel, the governor of Jalisco. The contract thus entered into was of a preliminary character, and stipulated for 'such modifications as government may deem necessary' in the engineer's 'plans and details,' submitted with the proposal of Miller &amp O'Boyle. On January 18, 1898, an agreement in writing, in respect to 'the Guadalajara contract,' was entered into and signed by the plaintiff and the two defendants, M W. O'Boyle and John H. Foy, whereby it was agreed between them that the defendants should 'do all the financiering to carry on the work to completion,' and make the stipulated deposits required by the government of Jalisco to secure the faithful performance of the contract, and that the plaintiff should have 34 per cent. of the net proceeds of the contract, and that the defendants should have 66 per cent. thereof.

Undoubtedly, the plaintiff and the defendants became and were partners in this enterprise. In respect to this sewerage contract the plaintiff and the defendants stood in confidential relations to each other, and they owed to each other the most scrupulous good faith. Bates, Partn. Sec. 304; Oil Co. v. Densmore, 64 Pa.St. 43-50; Yeoman v. Lasley, 40 Ohio St. 190.

In the latter part of January, 1898, the defendant O'Boyle went to the city of Guadalajara to make the required deposits of money, and to execute the final agreement with the government of Jalisco for the work. The plaintiff had previously left his power of attorney with his attorney at law, Luis Perez Verdia, of the city of Guadalajara, authorizing him to sign and execute the final contract for him (the plaintiff); and this was known to O'Boyle. Verdia acted on behalf of the defendant O'Boyle in all that afterwards took place at Guadalajara with respect to the contract for this work. About the time O'Boyle reached the city of Guadalajara, or shortly thereafter, Luis C. Curiel, the governor of Jalisco, received two letters from J. Henry Edmunds, of Cape May, N.J., inquiring into the plaintiff's connection with this sewerage contract, representing that the plaintiff was indebted to him, and signifying his intention to attach or proceed against the plaintiff's interest in the contract. At an interview between the governor, Luis C. Curiel, and O'Boyle and his attorney and representative, Verdia, held on the evening of February 8, 1898, the governor announced that, on account of the claims of the plaintiff's creditors, he had decided not to close the contract with the plaintiff as a party thereto, and therefore declared that the preliminaries had come to an end with Messrs.Miller & O'Boyle as associates. On the day following this announcement, namely, February 9, 1898,negotiations were commenced between the governor and O'Boyle, through the medium of Verdia, for a contract for the contemplated sewerage work, to be taken by O'Boyle in his own name. From exhibits attached to the answer it appears that on February 10th Verdia addressed a letter to O'Boyle, stating that the governor 'has written to me, offering the business to you only'; and on February 12th O'Boyle wrote to Verdia, expressing his consent to this disposition of the matter. These negotiations proceeded until March 12th, when the contract for this work between the governor and O'Boyle was definitely settled. Subsequently the contract was formally awarded to O'Boyle. This contract is substantially the same as the contract of December 27, 1897. O'Boyle claims to hold the contract for himself and his co-defendant, Foy, to the exclusion of the plaintiff.

The evidence shows that the representations contained in the letters of J. Henry Edmunds to the governor of Jalisco were untrue. The plaintiff was not indebted to Edmunds. On the contrary, Edmunds was indebted to the plaintiff. There was no just reason whatever for excluding the plaintiff from the Guadalajara contract. Had the real facts been known to Gov Luis C. Curiel, it is not to be doubted, upon the proofs now before me, that the original contract of December 27, 1897, would have been carried out. That the plaintiff was not afforded timely opportunity of defending himself against unjust aspersions was due to O'Boyle's inexcusable neglect of the duty he owed to his absent partner. So much, at least, must be said. Neither O'Boyle nor Verdia took any step to procure the presence of the plaintiff at Guadalajara. They did not inform the governor that Verdia held a power of attorney, authorizing him to act for the plaintiff in this matter. Thus, they left the plaintiff's absence unexplained, confirming the governor in his impression that it was due to pecuniary embarrassment. They failed fully to apprise the plaintiff as to the true situation. They gave him no hint whatever that new negotiations between the governor and O'Boyle individually had been opened and were pending. According to the plaintiff's affidavit, the only information he received was a telegram under date of February 11th, sent to him at Philadelphia, from Pittston, Pa., reading thus: 'O'Boyle just telegraphed that the contract is lost. Have no mail. (Signed) John H. Foy. ' The defendants state in their answer that on February 11th Verdia sent a telegram from Guadalajara to the plaintiff, at Philadelphia, as follows: 'Governor absolutely refuses to make contract. See letter. O'Boyle met all conditions required. Your creditors the cause. (Signed) L. P. Verdia. ' If this telegram was sent, it was a very misleading message, for, while announcing that the 'governor absolutely refuses to make contract,' it suppresses the fact that...