Phelps v. George's Creek & C.R. Co.

• Decision Date: 06 July 1883
• Citation: 60 Md. 536
• Parties: WILLIS PHELPS and John W. Phelps, Trading as Phelps & Company v. THE GEORGE'S CREEK AND CUMBERLAND RAILROAD COMPANY.
• Court: Maryland Court of Appeals

60 Md. 536

WILLIS PHELPS and John W. Phelps, Trading as Phelps & Company v. THE GEORGE'S CREEK AND CUMBERLAND RAILROAD COMPANY.

Court of Appeals of Maryland

July 6, 1883

Appeal from the Circuit Court for Washington County.

The case is stated in the opinion of the court.

First sixth, and eighth exceptions, abandoned.

Second and tenth exceptions sufficiently stated in the opinion of the court.

Third and fourth exceptions taken to the rejection of proof offered by the plaintiffs, the nature of which is stated in the opinion of the court.

Fifth and ninth exceptions taken to the admission of proof offered by the defendant, the nature of which is stated in the opinion of the court.

Seventh Exception.--The plaintiffs as part of their proof offered in evidence the following letter, to which the writer testified that he never received any reply:

"Springfield Feb'y 18th, 1880.

To Henry Loveridge, Esq.,

President George's Creek and Cumberland R. R. Co.

Dear Sir:--On account of the long delay of the company in furnishing the right of way and lands for the R. R., which I and my son agreed to build for your company, I shall not be able to complete the road by the 1st of March next, and I have thought it only right I should notify you as president of the company about it.

Since the suits have been ended about the right of way, I have gone on with the work of building the road, and will go on as fast as I can reasonably, but it will take some time beyond the 1st of March to complete it. It has been a great delay and loss to me in not having the right of way and lands upon which the road was to be built furnished as we agreed in the contract, immediately after the contract was signed, as the title to the lands and right of way to a considerable portion of the line was involved in a lawsuit, and it was uncertain whether, or not, you would ever get the title. I did not feel safe in going ahead and making too great an expenditure until this question was settled, particularly, as I was to take two-thirds of my pay in bonds on the road, and the bonds would have been worthless nearly, if you didn't get the right of way for the whole line until this was settled, and you were able to turn over to me a clear right of way as the contract called for. I didn't feel safe in buying the rails and iron for the road, and this delay will be a great loss to me, as the rails have nearly doubled since last June. I think the company ought to take this into consideration and do what is fair with me about it, and stand their share of this loss. I will try and see you in a few days, and talk all this over with you. I only want what is right and fair in the whole matter.

Sig'd Yours,

Willis Phelps."

Subsequently as part of its proof the defendant offered in evidence the following letter:

"Office of the

George's Creek and Cumberland R. R. Co.,

New York, March 2nd, 1880.

Messrs. Willis Phelps and John W. Phelps,

Dear Sirs:--Referring to the recent interview of Mr. Willis Phelps, with Treasurer Lloyd and ourselves, we beg to say, that upon a full consideration of the subject, we are unable to perceive why your engagements under the contract for the building of our road, etc., should not be carried out in good faith and in all its details, except as to the time of the completion of the work. In this respect we shall cheerfully make such further allowance of time as may be reasonably expected by reason of the failure of our first efforts to acquire possession of certain portions of the right of way, and will be pleased to confer and agree with you as to what extensions of time is required or should be made.

We are satisfied, that the provision of ballast as called for in our contract, is of great importance and necessity to our work, in view of the character of the traffic it will be required to sustain. Mr. John W. Phelps agreed with us some months ago, that the size of the ballast should be such, as would pass through a four-inch ring for the bottom ballast, and such as would pass through a two-inch ring for the top dressing and for distribution between the ties. A neglect of this preparation of the road-bed would expose the company to a heavily increased cost of maintaining the track in proper condition. The substitution of iron rails for steel upon the sidings of the road, would be satisfactory to us upon reasonable conditions, which we would be pleased to consider with you, but in the event of such substitution, we would require the iron rail to be of the same section as that of the steel rail used in the main track, and of which you have been furnished a pattern.

We sincerely trust, that you will be enabled to secure the rails for prompt delivery, in order that the whole work may be completed according to the spirit of our agreement with the least possible delay. We urge this from the standpoint of your own interest, not only in reference to the obligations arising from your contract with us, but with a desire to avoid the consequence of a failure on our part to furnish transportation according to our own contracts with other parties, who will, in that event, be exposed to large losses or damages, for which we shall doubtless be held liable.

You have cheerfully and properly recognized the fact, that you alone are responsible for the failure to buy rails for our road at a time when the condition and prices of the market were highly favorable to your interests, and you will certainly, not seriously expect us to assume any of the consequences arising from the exercise of your own judgment in the premises, and against our own frequently and earnestly expressed views upon the subject. Trusting that these expressions will be satisfactory, and command your approval, we are--

Yours, resp'y and truly,

Henry Loveridge,

Pres."

To the reading of this letter the plaintiffs objected. The court (Alvey and Motter, JJ.) overruled the objection. The plaintiffs excepted.

Eleventh Exception.--The plaintiffs offered seven prayers, which are omitted, as the grounds for their rejection sufficiently appear in the opinion of the court. The defendant offered ten prayers, of which the third and eighth are omitted, the same having been rejected. The others are as follows:

1. In order to enable the plaintiffs to recover, they must establish to the satisfaction of the jury, that the defendant by its agents, in the exercise of their employment, made the representations complained of in plaintiffs' declaration; that the representations were false; that the defendant by its agents so making the representations, knew they were false when they were made; that they were made with the intention to deceive the plaintiffs, by inducing them to enter into the contract given in evidence, and that plaintiffs were deceived by said false representations, and were thereby induced to enter into said contract, and did enter into said contract, and suffered damage and loss by said contract.

2. If the jury find that the representations complained of in plaintiff's declaration, were made by the defendant through its authorized agent, and that said representations were inaccurate and incorrect, but that when made, they were based upon estimates furnished them in good faith, and were believed to be accurate and correct, and were not made fraudulently, knowingly, and with intent to deceive, then the plaintiffs are not entitled to recover.

4. That fraud is not to be presumed, and the burden of proof is on the plaintiffs to overcome such legal presumption of good faith, by evidence satisfactory to the jury.

5. If the jury find, that Mr. Patterson was the engineer of the defendant, charged with the duty of locating defendant's road, and making up the estimates offered in evidence, and that after said estimates were made, and exhibited to the plaintiff, John W. Phelps, in New York, just before the plaintiffs made their bid for the contract to construct said road, the said Patterson was asked by the said John W. Phelps, whether his said estimates were correct, or big enough, and that in reply, said Patterson said, "I can't say they are absolutely correct; they are large enough; if they err at all, they err on the right side; they show more work than there is;" then the jury are instructed, that if they further find that said representations were made in good faith by the said Patterson, and were, at the time, believed by him to be correct, then the plaintiffs are not entitled to recover, by reason of such representations of the said Patterson, although the jury may believe such estimates were inaccurate and incorrect, and the burden of proof is upon the plaintiffs, to satisfy the jury that Patterson did not make the representations in good faith, but that they were false to his knowledge, or that he had no reasonable ground to believe them to be true at the time.

6. That if the jury find from the evidence, Mr. Patterson was employed as chief engineer by the defendant, to locate the line of its road, and to make an estimate of the quantities and classification of the materials to be moved or handled in the construction of said railroad, and the equipments required for the same, and that while he was engaged in making said location and estimates, John W. Phelps, one of the plaintiffs, visited the locality of the road, and examined the proposed line, and about a month afterward returned to said locality, where said line of railroad had been located, and procured a profile of the same, and made further examinations of said line, and found that said estimate was not at that time completed, and was informed by said Patterson, and his assistant engineers, that they had made the measurements and calculations for an approximate estimate of said quantities, and...