Thompson-Starrett Co. v. La Belle Iron Works

• Decision Date: 14 February 1927
• Docket Number: No. 144.,144.
• Citation: 17 F.2d 536
• Parties: THOMPSON-STARRETT CO. v. LA BELLE IRON WORKS.
• Court: U.S. Court of Appeals — Second Circuit

17 F.2d 536 (1927)

THOMPSON-STARRETT CO. v. LA BELLE IRON WORKS.

No. 144.

Circuit Court of Appeals, Second Circuit.

February 14, 1927.

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Eidlitz & Hulse, of New York City (Charles H. Tuttle, Harry N. French, and Frederick Hulse, all of New York City, of counsel), for plaintiff in error.

Louis Marshall, of New York City, W. D. Stewart, of Pittsburgh, Pa., and Leonard Acker, of New York City, for defendant in error.

Before HOUGH, MANTON, and HAND, Circuit Judges.

HAND, Circuit Judge (after stating the facts as above).

This cause was upon written stipulation referred to a referee, to hear the evidence and report it back for the action of the District Court. When the judge, upon the coming in of the report, adopted the findings of the referee as his own after an examination of the evidence, he tried the cause under Revised Statutes, § 649 (Comp. St. § 1587), quite as though the written stipulation had merely waived a jury. Pneumatic Scale Co. v. Mainwaring, 286 F. 378 (C. C. A. 2); Philadelphia Casualty Co. v. Fechheimer, 220 F. 401, Ann. Cas. 1917D, 64 (C. C. A. 6); Board of Com'rs v. Sherwood, 64 F. 103 (C. C. A. 8); Cleveland v. Walsh Cons. Co., 279 F. 57 (C. C. A. 6). It is quite true that a reference "to hear and determine," even on written stipulation, is not such a trial. Chic., Mil. & St. P. Ry. v. Clark, 178 U. S. 353, 20 S. Ct. 924, 44 L. Ed. 1099; David Lupton's Sons v. Auto. Club of America, 225 U. S. 489, 495, 32 S. Ct. 711, 56 L. Ed. 1177, Ann. Cas. 1914A, 699; Roberts v. Benjamin, 124 U. S. 64, 71, 74, 8 S. Ct. 393, 31 L. Ed. 334; Paine v. Central Vermont R. R., 118 U. S. 152, 158, 6 S. Ct. 1019, 30 L. Ed. 193. Such cases are in fact tried by an arbitrator, a practice known to the common law. Hecker v. Fowler, 2 Wall. 123, 17 L. Ed. 759.

Moreover, though the referee does not decide the cause, but only reports to the court, if the consent is not by written stipulation as provided in section 649, while the court decides the cause, it too acts as arbitrator, and the trial is not under section 649. Shipman v. Straitsville Mining Co., 158 U. S. 356, 361, 15 S. Ct. 886, 39 L. Ed. 1015. It is only when the two conditions coexist that section 649 applies. It has indeed been held that a cause may be referred under the local statute (Tiernan v. Chicago Life Ins. Co., 214 F. 238 C. C. A. 8), a practice apparently recognized by us in Parker v. Ogdensburgh, etc., Co., 79 F. 817; but how far this can be reconciled with the decisions of the Supreme Court we need not consider.

Steel v. Lord, 93 F. 728 (C. C. A. 2), Steger v. Orth, 258 F. 619 (C. C. A. 2), and Demotte v. Whybrow, 263 F. 366 (C. C. A. 2), were cases of references to hear and determine; in each we said that no question was presented but of the sufficiency of the findings. They were not therefore trials under section 649. Any language to the contrary in Fifth Nat. Bank v. Lyttle, 250 F. 361, 363 (C. C. A. 2), was an inadvertence. Hudson, etc., Co. v. Warner & Co., 99 F. 187 (C. C. A. 2), was a case like that at bar, where the stipulation was in writing and the reference was only to report. So far as it held by implication that the action of the District Court upon the report was not a trial under section 649, it was overruled by Pneumatic Scale Co. v. Mainwaring, supra. As the case at bar was therefore a trial by the court under section 649, Revised Statutes, § 700 (Comp. St. § 1668), applies to it.

Revised Statutes, § 700, prescribes that in trials under section 649, when there are special findings the review is limited to the inquiry whether these support the judgment, and whether there were erroneous rulings in the course of the trial. The testimony cannot be regarded for any purpose other than as it is involved in such rulings, and we have therefore no concern with whether the findings are against the weight of the evidence. Norris v. Jackson, 9 Wall. 125, 19 L. Ed. 608; U. S. v. Fid. & Guar. Co., 236 U. S. 512, 527, 35 S. Ct. 298, 59 L. Ed. 696; Steger v. Orth, supra; Pneumatic, etc., Co. v. Mainwaring, supra; U. S. Fidelity Co. v. Board of Commissioners (C. C. A.) 145 F. 144, 150. The question whether there is any evidence whatever to support a finding, being, however, considered a question of law, may be reviewed, if presented to the court during the progress of the trial, and a ruling secured to which there is an exception. R. S. § 700. In the Eighth Circuit the practice has long been that the party aggrieved must request the court before its report is filed to make rulings of law. Mercantile Trust Co. v. Wood (C. C. A.) 60 F. 346, 348, 349; U. S. Fidelity, etc., Co. v. Board of Commissioners (C. C. A.) 145 F. 144, 151; Seep v. Ferris-Haggarty, etc., Co. (C. C. A.) 201 F. 893, 896; Wear v. Imperial Window Glass Co. (C. C. A.) 224 F. 60, 63; First National Bank of Ardmore v. Litteer (C. C. A.) 10 F.(2d) 447. We can only understand this as requiring the party to request a ruling that a specific finding has no evidence to support it. On the other hand, Chief Justice Taft, while Circuit Judge, said in Humphreys v. Third National Bank (C. C. A.) 75 F. 852, 855, 856, that to bring up the question whether a special finding had any evidence in its support, the party may except to it; it being an absurdity to ask a court to charge itself. This language has received the sanction of the Supreme Court in Fleischmann Co. v. U. S., 270 U. S. 349, 356, 46 S. Ct. 284, 70 L. Ed. 624, though, like the original, only in a dictum. It seems to us a needless and idle form to require the party aggrieved to request a ruling that putative future findings, or special findings already made, are without any evidence, and we regard an exception taken on that ground before final action of the court an exception to rulings made "in the progress of the trial."

Our review here would therefore be limited to whether the findings of fact justify the disposition of the cause, and, if the exceptions were adequate, whether there is any evidence to support any finding to which exception was taken on that ground. In passing on these questions we are confined to the findings properly so called, and may not look at the referee's opinion or the court's. Fleischmann Co. v. U. S., 270 U. S. 349, 355, 46 S. Ct. 284, 70 L. Ed. 624; British Queen Mining Co. v. Baker Silver Mining Co., 139 U. S. 222, 11 S. Ct. 523, 35 L. Ed. 147; Raimond v. Terrebonne Parish, 132 U. S. 192, 10 S. Ct. 57, 33 L. Ed. 309; U. S. v. Stockyards Co., 167 F. 126, 127 (C. C. A. 8); China Press, Inc., v. Webb, 7 F.(2d) 581 (C. C. A. 9).

The necessity of the rule could not be better illustrated than by the case at bar. The referee's opinion was not, and should not have been, a statement of the "ultimate facts." It was an extraordinarily impartial and capable discussion of the evidence, giving its substance, and weighing and balancing the inferences to be drawn from it. Such a document is exactly what the Supreme Court has set its face against as the equivalent of findings, even when there were no findings properly so called, and when the result was to leave nothing for review but the judgment roll. To treat such an opinion as part of the findings, when there are such, called by that name and expressly so intended, would be wholly unwarranted.

Strictly, the plaintiff took no exceptions which raise any question in this court. The exceptions to the referee's report were not exceptions to the rulings of the District Court, and the exceptions taken to the rulings of the District Court confirming the referee were taken after judgment, and can by no theory be regarded as made "in the progress of the trial." It seems to us, however, unduly strict not to treat the exceptions taken to the referee's report as exceptions to the rulings of the District Court in the progress of the trial, and we shall therefore consider them as such. The exceptions to the referee's findings respecting the superintendent's conduct do not raise the question whether they were without any evidence, in this respect differing from the exceptions taken, too late, to the action of the District Court in confirming the referee. In no view, therefore, have we before us more than the question whether the findings support the judgment.

Nevertheless, as to the findings regarding the superintendent's conduct and that he was not in good faith satisfied with the plaintiff's performance, both as respects method and construction, we think that there was supporting evidence. That he did express himself as generally dissatisfied is, indeed, not disputed. There were numerous imperfections of construction which might have been the occasion for his dissatisfaction with that, as well as with the general conduct of the work. These both the referee and the District Court were at pains to point out in their opinions. Given such a possible basis for dissatisfaction, it would be substantially impossible to disturb the finding on the theory that nothing supports it. It must in the end depend more upon personal observation than any other single factor, which is necessarily lost in print. That he may have been self-willed and prejudiced is not inconsistent with an actual belief that the work was not being done as the contract required. He was not in any sense, as the plaintiff appears to suppose, an arbiter chosen by both sides because of his presumptive impartiality. He was the representative of a party to the contract, the party itself for the occasion, which could only act by an agent. As such, impartiality could not be expected of him, though honesty could. Thus, even if the exceptions had justified an inquiry into the basis for the findings, we should not disturb them.

Coming then to the merits, if it were necessary, we should disagree with the referee in limiting the third article of the contract to the question whether the houses when completed conformed to the specifications, and excluding whether the methods employed resulted in...