Williamson v. Monroe

• Decision Date: 21 March 1900
• Parties: WILLIAMSON et al. v. MONROE et al.
• Court: U.S. District Court — Western District of Arkansas

101 F. 322

WILLIAMSON et al. v. MONROE et al.

United States Circuit Court, W.D. Arkansas, Fort Smith Division.

March 21, 1900

Ira D Oglesby and Hugh R. Garden, for complainants.

Hill &amp Brizzolara, S. R. Cockrill, and D. S. Alford, for defendants.

ROGERS District Judge.

The record in this case is so voluminous as to forbid a discussion of the evidence in detail. If time and other pressing work permitted, an effort to do so could prove of no valuable service. I must content myself by stating such ultimate findings of fact as are essential to a determination of the case, and by declaring the law applicable thereto. At the hearing the argument of both facts and law are unusually elaborate, showing not only great care and intense labor, but a wide research. The abstracts of the evidence and the printed and typewritten briefs cover several hundred pages and the oral arguments consumed several days. The eminent counsel who presented the case have given the court great assistance, and it has since examined the evidence of the important witnesses, that it might the better weigh and determine their credibility, made necessary by reason of the fact that the testimony on every vital point is irreconcilably in conflict. The bill was filed for the settlement of a partnership, and all that is necessary to be said of the facts will be found in the opinion to follow.

In the spring of 1894 the plaintiffs and defendants Monroe and Lee entered into a partnership as contractors for the construction of railroads, canals, streets, and other rock gravel, and earth works, under the firm name of Monroe, Strang, Lee & Co., and opened an office in the city of New York. On September 15, 1894, the firm made a contract with the Arkansas Construction Company, a Missouri corporation, domiciled at Kansas City, Mo., for the construction of 230 miles of the Kansas City, Pittsburg & Gulf Railroad. In that contract the plaintiff Williamson does not appear as a party, but one Marion Ford, a mere dummy for Williamson, appears in his stead as constituting the company. This contract covered the entire Kansas City, Pittsburg & Gulf line of railroad from Shreveport, La., to Ft. Smith, Ark., except 40 miles, beginning at Texarkana, Ark., and extending north, which part of the road was then constructed and in operation. In December, 1894, a controversy arose between the Arkansas Construction Company and Monroe, Strang, Lee & Co., as to the validity of the contract, the construction company refusing to be bound by it for alleged irregularities in its execution, and asserting its invalidity; while the firm of Monroe, Strang, Lee & Co. urged its validity, and insisted upon the right to carry it out. In the meantime, the name of Marion Ford, who had no interest in the contract (even if he had an existence at all), and whose name was, it appears, inserted as representing plaintiff Williamson,-- who, for reasons satisfactory to himself, did not care to be known as one of the partners at that time,-- dropped out and disappeared. The result of the controversy over this contract, as is usual in such cases, was an effort to compromise their differences by executing a new contract. This was accomplished at Kansas City, Mo., on January 14, 1895, and a contract was entered into by which the firm of Monroe, Strang, Lee & Co. were to construct 50 miles of the Texarkana & Ft. Smith Railway (which is a part of the Kansas City, Pittsburg & Gulf System), beginning at the north end of W. C. Merritt's work, about 14 1/2 miles north of Little river, to a point 50 miles north of the place of beginning, all in Arkansas. This 50-mile contract covered a part of the road embraced in the 230-mile contract, as was also a subsequent 70-mile contract; which latter, as we shall see hereafter, became the principal cause of controversy in this litigation. The consideration, in part, for this 50-mile contract, was the surrender of the 230-mile contract, and the Texarkana & Ft. Smith Railroad also made itself primarily liable to the said Arkansas Construction Company for the payment of all sums of money provided for in the 50-mile contract to Monroe, Strang, Lee & Co., according to the terms of the contract, and also made itself liable for all covenants therein contained. The fact is, however, that the controlling spirits-- the chief officers-- in the Kansas City, Pittsburg & Gulf Railroad Company, the Arkansas Construction Company, and the Missouri, Kansas & Texas Trust Company (the latter being a Missouri corporation, organized to finance the road, and the Arkansas Construction Company, organized to build it) were one and the same; that is to say, the management of each of these corporations was practically, and to all intents and purposes, the same.

This new 50-mile contract, made at Kansas City on January 14 1895, after much bickering between Monroe, Strang, and Lee on the one side (Williamson being at that time in New York), and the officers of the Arkansas Construction Company on the other, was finally made by Monroe and Lee, in the absence and without the knowledge or consent of the plaintiffs, although Strang was then in Kansas City. The bone of contention between the contending parties to the contract was an effort on the part of Monroe, Strang, and Lee to induce the Arkansas Construction Company to agree to give them more than 50 miles of work, or, if not, then, at least, a written guaranty that they should have additional work if they completed the 50-mile contract to their satisfaction. This the construction company refused. There is much evidence, pro and con, as to whether Martin, the president of the Arkansas Construction Company, and Gentry, its chief engineer, did not make an oral promise to give additional work before the 50-mile contract was entered into. It is not important whether they did or not. At the time Monroe and Lee made the 50-mile contract, Strang, as stated, was in Kansas City, and had been in daily conference with them for several days, but he was not present when that contract was made, and did not ascertain, until after he had left Kansas City for New York, that any contract had been made. Williamson was in New York, and took no part in the negotiations for the new contract. While en route to New York, Lee informed Strang of the new contract, and told him that Martin, the president of the Arkansas Construction Company, had taken umbrage at something Strang had said or done pending the negotiations for the contract, and had expressed a desire that, in the execution of the work under the contract, he should not be brought in contact with Strang. At this Strang became offended, and refused to surrender the contract or execute the bond required, and, on reaching New York, at once began negotiations by wire to Monroe, at his home in Lawrence, Kan., to sell his interest in the contract to Monroe and Lee. Monroe objected to this, and insisted that Strang, and who, the proof shows, was authorized to represent Monroe when he was not present, in all such matters as affected his interests in the partnership, urged Strang to execute the bond to the construction company, and, among other things represented, in substance, that the officers of the construction company had promised the firm additional work, and he felt sure that they could be trusted, and that the firm would get it. He also represented that he (Lee) stood well with Gentry, the chief engineer of the construction company, and that if he (Lee) was put in charge of the work, and Monroe left to look after matters with the company, he was satisfied they would get the additional work. He also agreed with his partners to go on the work in person, and promised Strang and Williamson because of the old contract, or the stand they had taken in not delivering it up, that he would take the work in the name of Monroe and Lee for the benefit of the firm. Upon these assurances Strang yielded, and he and Williamson signed the bond, and agreed to close the 50-mile contract, and to surrender the 230-mile contract, both of which were accordingly done. By agreement between the partners, Monroe, Strang, and Lee met at Texarkana, Ark., about the middle of February, 1895, and there sublet the work. The weight of the evidence shows that in letting the work an effort was made to get the best class of contractors on the line, in order to expedite the work so that the firm would stand a better show for the additional work, and to accomplish that end agreed to pay better prices to the subcontractors than the work could have been sublet for to other responsible contractors. Steps were at once taken to get the subcontractors, with their outfits, on the line, and commence work. After one or more had reached the line, and others were getting their outfits ready, the construction company, on the 2d of March, suspended the work on the road indefinitely. When this occurred, Monroe was at his home in Lawrence, Kan., and Lee was at Texarkana. Williamson and Strang were in New York. The object in suspending the work was to relocate the line, and secure a better and cheaper route. Gentry called Monroe to Kansas City by wire on March 2d, and there advised him of the situation, and Monroe at once wired Lee at Texarkana: 'Work suspended on account of route. Notify all contractors. We are promised work on the north end while waiting. Come here at once. ' On the same day he wrote Strang, then in New York, of the situation, and among other things said: 'He (Gentry) says while we are waiting he will give us 25 or 30 miles of work running towards Shreveport from Ft. Smith. Twelve miles of the 25 will be the line up to Ft. Smith. Any of this he could not give under 30 days. This is the situation at present. ' Two days later-- possibly three-- Lee reached Kansas...