A coal and railway company contracted with C. to construct a
building for it in the Indian Territory. After the work was begun a
receiver of the property of the company was appointed under
foreclosure proceedings. This building was not covered by the
mortgage. C. was settled with for work up to that time, and all
further work was stopped except such as might be necessary for the
protection of the building, which was to be done under order of
court. An order was issued for roofing, which C. did, and then
continued work on the building without further authority from the
court. The receiver, on learning this, notified him to stop and
make out his bill to date of notice, said that he would furnish
designs for further work to be done, and asked C. to name a gross
sum for doing it. C. stopped as directed, the designs were
furnished, and C. named the desired gross sum. No further order of
court was named nor was any contract signed by the receiver, but
the architect employed by the receiver drew up a contract and
specification, and the work was done by C. in accordance therewith
with the knowledge and approval of the receiver. The receiver
having declined to sign the contract, or to make payments
thereunder, C. filed a petition in the foreclosure proceedings for
payment of the amount due him. Thereupon a reference was made to a
master, who reported in favor of C. The court adjudged the claim to
be a valid one, entitled to preference, and the receiver was
ordered to pay the amount reported due, which decree was, on
appeal, affirmed by the circuit court of appeals.
Held
that there was no error in the court's ordering C.'s bill to be
paid as a preferred claim, as the work had been commenced before
the receivership and was done in good faith for the benefit of the
company and the receivers, and as the building must either have
been finished or the work already done become a total loss to the
company; that it appeared to have been constructed for the
accommodation of the officers of the road, and in other respects in
furtherance of the interests of the road, and was an asset in the
hands of the receivers which might be sold, and the money realized
therefrom applied to the payment of the claim, and that the fact
that it was not covered by the mortgage rendered it the more
equitable that the proceeds of the sale should be applied to the
payment of the cost of its construction.
This was a petition by the firm of W. H. Cooper & Son,
originally filed in the United States court for the Indian
Page 162 U. S. 530
Territory, against Edwin D. Chadick and Francis I. Gowen,
receivers of the Choctaw Coal and Railway Company, a corporation
created under the laws of the State of Minnesota, with a right,
among other things, to build and operate railways and to own and
develop coal mines, and which had been authorized, by Acts of
Congress approved February 18, 1888, and February 13, 1889, to
construct a railway within the Indian Territory.
The company having become embarrassed, Chadick and Gowen were,
on January 8, 1891, appointed co-receivers, and continued to act as
such until August 28, 1891, when an order was made giving said
Chadick a leave of absence for one year, and in the meantime
vesting all the power of both receivers in Gowen for the period
named. In connection with the building and operation of its
railway, and the development of its mining industries, the company
in May, 1890, undertook the erection at South McAlester, in the
Indian Territory, of a building to be used as an hotel and offices
for the company, and on May 23, 1890, Chadick entered into a
contract with Cooper & Son for the furnishing of the greater
part of the work and material needed in the erection of the
building, which was called the "Kali-Inla Hotel." This contract was
signed by W. H. Cooper & Son, and by H. W. Cox, architect, for
E.D. Chadick.
It seems that Chadick, at the instance of the board of
directors, had gone before the Judiciary Committee in Congress and
said that, if Congress would locate a United States court at South
McAlester, the company would provide accommodations for the court
and its officers free of cost to the United States, and that
Congress, accepting the proposition thus made, designated South
McAlester as one of the points for holding court in the
territory.
At the beginning of the receivership (January 8th), Cooper &
Son were settled with in full, and all work was to be stopped
except such as was necessary to protect the building, which work
was to be carried on under the order of the court. Shortly
thereafter, a petition was presented to the court for permission to
enter into a contract for the roofing of the
Page 162 U. S. 531
building, to protect it from the weather, and an order to that
effect was obtained from the court before the work was begun. This
appears to have been the only order obtained for any further work
upon the building, but, after this job had been finished, Cooper
& Son continued their work without further authority from the
court.
In June, 1891, Mr. Gowen, learning that Cooper & Son had
continued working upon the building, wrote Mr. Cooper the following
letter, addressed to Cooper & Son, and signed by both
receivers:
"South McAlester, Ind. Ter., June 3, 1891"
"Messrs. W. H. Copper and Son"
"
South McAlester, I.T."
"Gentlemen: Under direction of the court, we notify you to stop
all work on the Kali-Inla Hotel from this date, and make out your
bill for the work done up to and including today."
"We will then furnish you with designs and directions as to the
work to be done, and you will name a gross sum for the performance
of the same, which we will submit to the court for their approval
or disapproval."
"Edwin D. Chadick"
"Francis I. Gowen"
"
Receivers Choctaw Coal and Railway Co."
Upon receipt of this letter, Cooper & Son ceased work upon
the building and made out a bill or statement of the sum then due
them, which was approved by the auditor of the receivers.
On or about June 7, H. W. Cox, who acted for the receivers as
supervising architect, furnished Cooper & Son with details and
specifications of the work required to be done to fit the building
for occupancy by the court and officers of the company, which
Cooper & Son agreed to do, by letter written to Mr. Chadick
June 24, 1891, for the sum of $10,250, allowing the company $2,500
for the value of material on hand. Their proposition was not
formally accepted by the receivers, and
Page 162 U. S. 532
no order of court was obtained authorizing it, but, on July 7,
1891, a contract was prepared by Cox, to which were attached
certain plans and specifications. The contract was not signed by
anyone, but the plans and specifications were signed by W. H.
Cooper & Son, and by "H. W. Cox, Supervising Architect," and
the contractors proceeded with the work therein called for, with
the knowledge and approval of Chadick, the receiver who then had
immediate charge of the work being done on the railway line.
At the hearing, the master, who was also clerk of the court,
stated that the plans and specifications were submitted to him and
to the judge of the court to see if the court apartments suited
them and whether they had any suggestions as to the arrangement of
the rooms, but no order was made by the court as to the price to be
paid for the work or as to the manner of payment, and that neither
he nor the court knew anything as to what the price of the work
was. The contract of July 7th was not signed, accepted, or approved
by either receiver, and was not submitted to Mr. Gowen until the
29th day of August, 1891, which was the first knowledge he had that
any such contract was in existence. Cooper then presented his
contract to Mr. Gowen as a prerequisite to his permitting the
marshal to take possession of the rooms which had been fitted up
for the clerk and marshal's offices. At this time, Cooper did not
ask for any pay, and was not promised any payment, and all that he
insisted upon was that his contract should be signed. Mr. Gowen
refused to sign the contract, because the work had not been
authorized by the court and because he was not satisfied that the
price named in the contract was proper and reasonable, but promised
Mr. Cooper that he would undertake to ascertain whether the price
named was a proper one, and to this end he secured the services of
an architect, and had him make a thorough examination of the
building with a view of determining the value of the work done and
materials furnished.
Cooper & Son made out their bills for the amount claimed to
be due them for work done since June 3, which was certified as
correct by the architect having supervision of the work
Page 162 U. S. 533
done in remodeling the building. For the purpose of securing
payment of the sums claimed to be due them, the contractors filed a
petition in the foreclosure proceedings setting forth the facts and
praying for an order upon the receivers directing them to make
payment of the sums claimed to be due, and further praying that a
lien in their favor be put upon the building, and for other relief.
To this petition, Gowen, as receiver, and the Girard Life
Insurance, Annuity and Trust Company, as trustee, filed answers,
and thereupon the court, on October 13, 1891, entered an order,
which was drawn and consented to by the receiver and the trustee of
the bondholders,
"that the claim of W. H. Cooper & Son be referred to the
master to take testimony thereon, and to ascertain the amount
justly and equitably due, as the true value of the work done and
the materials furnished by them upon and for the Kali-Inla Hotel
building at South McAlester, and that receiver's certificates,
bearing seven percent interest, be issued and delivered to them for
one-third of the amount so found to be due, and to send and
deliver, in settlement thereof, lumber at the market price thereof,
for one-third of said amount, and the balance in cash, to be
borrowed on certificates, as hereinafter authorized."
Upon a hearing by the master in pursuance of this order, he made
a report, finding a balance due Cooper & Son of $14,919.37, and
also made certain findings of fact and law, printed in the margin,
* to which report
appellants filed exceptions.
Page 162 U. S. 534
Cooper & Son thereupon moved the court to strike out these
exceptions upon the ground that the report of the special master
was conclusive upon the facts involved and binding upon the
receiver, and also because the Girard Life Insurance, Annuity and
Trust Company was not a party to the proceeding, and had no
interest therein.
Upon the hearing of this motion to strike the exceptions
Page 162 U. S. 535
from the files, the court held that the order of October 13,
1891, was conclusive as to the validity of the claim of Cooper
& Son, and the court, having referred the claim to a special
master with instructions to find the amount due, and having further
ordered that the receiver should pay the amount so found to be due,
granted the motion and entered a final decree in favor of Cooper
& Son against the receivers in the sum of $14,749.45, costs,
and interest.
A rehearing having been demanded by the receivers, and also by
the Girard Life Insurance, Annuity and Trust Company, and denied,
they appealed to the Circuit Court of Appeals for the Eighth
Circuit, by which court the case was heard and the decree of the
court below affirmed with costs insofar as it awarded judgment for
the sum therein named, and the case was remanded with
directions
"to enter an order directing the mode and time of payment such
as the court may be advised is required by the equities of the
case, in conformity with the opinion of this Court."
51 F. 332.
Whereupon the life insurance company and the acting receiver
appealed to this Court.
Page 162 U. S. 537
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
There can be no doubt of the correctness of the master's finding
with regard to the work done by Cooper & Son prior to June 3,
1891. This work was done under a contract, made May 23, 1890,
between Cooper & Son and Chadick, who was at the time general
manager of the Choctaw Coal and Railway Company, and who, by
authority of the board of directors, had arrange with the judiciary
committees of Congress for the location of the United States court
at South McAlester upon condition that the company would provide
the officers of the court, free of all cost, with suitable
quarters. While the contract was not signed by Chadick, but by Cox,
the architect, it was so signed under special authority from
Chadick, and it provided that the work was to be done to the
satisfaction and under the supervision of the architect. Bills were
rendered for this work, which were certified by the chief engineer
and assistant manager of the company. Mr. Chadick
Page 162 U. S. 538
testified that the appellees' claim for this work is just and
correct, and in a letter of June 19, he says that he is unable to
settle the amount due, but expects to be able to do so early in
July. It is true that the company, in December, 1890, was put into
the hands of receivers, but, with full knowledge of all that was
being done, they allowed the work to continue without interruption
until June 3, 1891, and were justly held to be liable for what had
been done up to that time, according to the terms of the contract.
A settlement appears to have been had on January 8, and some of the
subsequent work was done without a prior order of the court, but no
objection was ever made to it by the receivers, upon that ground,
prior to June 3, when the work was stopped.
The principal matter in dispute relates to the proper
interpretation of the order of October 13, 1891, referring the
claim of Cooper & Son to the master, "to ascertain the amount
justly and equitably due as the true value of the work done and
materials furnished" and to the refusal of the master, under the
terms of this order, to permit the appellants to prove the cost and
value of the building, without reference to any contract. In this
connection, the master found that the contract under which the work
was done was executed by agents of the receivers, having authority
so to do, and under special direction and approval of the receivers
themselves, and of the court; that the work was performed and
materials furnished in reliance upon this contract; that the
receivers knew of this, and with such knowledge approved of this
work, received the benefit of it, and took possession of the hotel,
and also that the work was done in strict accordance with the plans
and specifications. While the findings of the master in this
particular are not absolutely binding upon the Court, there is a
presumption in their favor, and they will not be set aside or
modified in the absence of some clear error or mistake.
Camden
v. Stuart, 144 U. S. 104,
144 U. S.
118.
On June 3, the receivers ordered the work to be stopped, and a
bill to be rendered for what had been done up to that time, saying
that the receivers would
"then furnish you with designs and directions as to the work to
be done, and you
Page 162 U. S. 539
will name a gross sum for the performance of the same, which we
will submit to the court for their approval or disapproval."
The matter rested here until June 23, when, as the result of a
conference between Mr. Cox, the architect, and Major Nelson, the
master in chancery, the receiver addressed the following letter to
Cooper & Son:
"Gentlemen: We have been advised by Major William Nelson,
master, of the following order of the United States court:"
"You are hereby directed to finish up courtroom all the offices
on lower floor of hotel building, and also such rooms on the second
floor as may be necessary, in accordance with estimates to be
hereafter furnished."
In the meantime, and in consequence of the same conference,
Chadick instructed the architect, Mr. Cox, to make the plans and
specifications of what was required for the accommodation of the
court and send them up to Muscogee for the inspection of Major
Nelson, the master. He sent them there on June 6. The master
appears to have submitted them to the judge and marshal, who
approved of them and directed the work to be done, though no order
of court was entered to that effect and no question of price was
considered, this matter being left to the receivers. Upon the
return of these plans and specifications to Mr. Cox, the architect,
he drew up a contract in compliance with them, sent one copy to Mr.
Cooper, with specifications annexed, and another copy to Mr.
Chadick's office. Cooper & Son, who appear to have already seen
the plans and specifications, addressed Mr. Chadick a letter, under
date of June 24, agreeing to do the work for $10,250. Chadick
testified that his recollection was that the receivers accepted the
proposition, though he never seems to have formally answered the
letter. But however this may be, a contract was drawn up, bearing
date July 7 and signed by Cooper & Son and by Cox as
supervising architect, not at the foot of the contract itself, but
at the end of the specifications, which followed the contract. Mr.
Cox testified that Chadick ordered the work to go ahead, and,
knowing the amount, he inserted it in the contract; that Mr.
Chadick came
Page 162 U. S. 540
to the building after this, told him what the court wanted and
approved of, and ordered him to go ahead with it. In the same
connection, Chadick testified that the contract was drawn up by Cox
and submitted to him; that he approved it, not formally, because
Mr. Gowen was not there, but looked it over, and thought it was
just and right. Mr. Cox was the supervising architect, appointed
first by the manager and continued by the receivers, and all the
contracts for buildings and specifications for buildings before
this had been drawn by him. This was in the ordinary line of his
business and duty.
"I knew that Mr. Cooper was working upon this building in
reliance on this contract and in accordance with its terms. I
supposed these specifications would govern the settlement of it.
Mr. Gowen knew of this contract at the time. He was present when it
was given to me in the early part of July."
Mr. Cooper also testified that he made his bid in compliance
with directions from Mr. Chadick; that he (Chadick) accepted it,
and told him to go to work, which he did, and completed the work
according to the contract, plans, and specifications furnished him
by Mr. Cox. It further appears that, after the contract was
completed, a bill was made out showing an amount due of $11,092.74,
and that Mr. Cox certified to the correctness of the account.
In this connection Mr. Gowen, the principal witness for the
appellants, states that shortly after his appointment, permission
was asked of the court to enter into a contract for the roofing of
the building, and an order procured to that effect, and that he
concurred in the making of a contract for this work; that he gave
the matter no further consideration until March, when his attention
was called to the fact that the inside work was still going on;
that he then called Mr. Chadick's attention to the matter, who said
that nothing was being done beyond making the building
weathertight, and undertook to have authority procured to do the
necessary work in closing the building. Subsequently, upon
Chadick's representations that their offices were so cramped as to
greatly interfere with the efficient transaction of business, he
agreed to the fitting up of quarters in the hotel building, and,
after
Page 162 U. S. 541
consulting as to the amount of room required, Chadick undertook
to secure the necessary order of the court.
Upon the occasion of his next visit, which was in the latter
part of May, he learned that the work was still progressing, and
had an altercation with Mr. Chadick upon the subject in which he
reminded him that he had undertaken to have the work entirely
stopped, to which Mr. Chadick stated that he thought he would be
able to make an advantageous use of the building upon its
completion, and that he had assumed the responsibility for the
continuance of the work, although against Mr. Gowen's wish. The
result of this conversation was the stoppage order of June 3, which
was designed to prevent Cooper's entering into any further
arrangement without his concurrence, and the prior approval of the
court. He further stated that he never saw or heard of the letter
of June 24 of Cooper & Son, proposing to do the work for
$10,250, although he knew and saw that work upon the courtrooms and
offices was going on, and was informed by Mr. Chadick that this was
being done by direction of the court, and that he believed that
Cooper was going on with the work without furnishing an estimate or
making any contract, as had been the case heretofore, and felt
certain that Mr. Cooper would not be allowed any excessive sum;
that the first intimation he had of the existence of the contract
was on August 29, when he was asked to sign such contract as a
prerequisite to Mr. Cooper allowing the marshal to take possession
of the rooms fitted up for the court and its officers. He declined
to sign the contract -- never promised to pay Mr. Cooper the amount
claimed, because he was not satisfied that the price named therein
was a proper one, and that he subsequently obtained an appraisement
by builders of his own employment, who reported that the charges
were grossly excessive. He further stated that he never gave Mr.
Cox authority to bind the receivers by estimates or contracts such
as this.
It seems that near the end of August, when Mr. Cooper had this
conversation with Mr. Gowen, he was told there was going to be a
change in the administration; that Gowen was going to take charge
as managing receiver; that he was
Page 162 U. S. 542
reluctant to turn over the building until he had some assurances
of his money, and so notified the receivers, but, as he says, upon
the assurance of Mr. Gowen that it would be only a matter of a few
days when he would have his money, he allowed them to take
possession of the building. The statement in this particular is
confirmed by McLoud, the attorney of the insurance company, who
advised Mr. Cooper that he would lose no right by giving up
possession of the building.
On October 8 this petition was filed, alleging that the work
subsequent to June 3 was done by virtue of direct authority from
Messrs. Chadick and Gowen and Major Nelson, the master in chancery,
and in compliance with the specifications signed by Cooper &
Son and Cox. The answer of Gowen denied the contract of July 7,
though it admitted an arrangement made with Mr. Chadick, with the
approval of the judge and special master, to make certain
alterations and additions to the hotel building, to fit it up for a
courtroom and the rooms necessary for the officers of the
court.
In this state of the case and on October 13, Mr. Gowen, as
receiver, and the life insurance company, by its attorney, appeared
before the court and submitted to it the so-called Ardmore order,
which was entered by the court with the consent of all the parties.
This order, upon its face, is undoubtedly susceptible of the
interpretation put upon it by the appellants, and authorized the
master to receive testimony as to the actual value of the work done
and materials furnished, irrespective of any contract between the
parties, and yet, in view of the antecedent facts, it does not seem
probable that the court thereby intended to rule out all evidence
of the contract. The petition of Cooper & Son relied upon their
arrangement with Chadick as a contract. The answer denied the
contract, and under these allegations it can scarcely have been
intended by Cooper & Son to waive entirely the benefit of such
contract, if it existed. In fact, it would appear that prior to
this order it had been determined by the court that such contract
was made, since in the final decree, which was entered on January
19, 1892, it is said
"that, in the order there made, October 13, 1891, the court,
upon the evidence then
Page 162 U. S.
543
adduced, recognized and declared the validity of the
claim of W. H. Cooper & Son,"
and that it was not the intention of the court to confine Cooper
& Son to a
quantum meruit is patent from the further
clause of such decree;
"that, it being stated by receivers that they were entitled to
certain credits upon said account, the court referred the said
claim to the special master, with instructions to ascertain the
amount due upon said claim,
the validity of which had been
adjudged by the court."
If such contract existed, was within the competency of the
parties, and was proven to the satisfaction of the court, it
superseded the necessity of introducing testimony as to the actual
value of the work done.
We think the testimony fully justified the master in his finding
that a contract had been made with Mr. Chadick for the work. The
stoppage order of June 3 indicated an intention on the part of the
receivers to furnish Cooper & Son with further designs and
directions as to the work to be done, for which work they
anticipated a bid, and agreed to submit the same to the court for
its approval or disapproval. Within a few days thereafter, plans
and specifications, furnished by the architect of the receivers,
with a notice that the court had ordered the courtroom, all the
offices on the lower floor of the hotel building, and also such
rooms on the second floor as might be needed, to be finished up,
were sent to Cooper & Son, and after an examination of the
plans and specifications, they made a bid for a certain amount,
which Chadick, acting for the receivers, accepted verbally. Cooper
& Son thereupon signed the plans and specifications with the
architect and proceeded to do the work in reliance upon the
contract. Whether the contract was actually signed by the receivers
was quite immaterial so long as the terms of the contract were
agreed upon and understood between the parties, and, as observed by
the court below,
"when Cooper & Son were directed to proceed with the work
called for by the plans, the contract between the parties was
closed, and the preparation and signing of a formal writing would
only have called into existence additional evidence of the fact.
"
Page 162 U. S. 544
It is said, however, that the contract, being for the
construction of a large building not necessary to the company in
the conduct of its regular business and upon land which did not
belong to the company and was not covered by the lien of the
mortgage, was such a one as required a prior order of the court,
and that no such order was given in this case. Assuming this to be
so, the objection is a purely technical one. It appears that the
plans and specifications were laid before the judge and other
officers of the court, were approved by them, and the work directed
to be done, though no order of the court was formally entered.
Subsequently, the court, with full knowledge of the facts, and
"upon evidence then adduced," declared the validity of the claim,
and referred it to the master to ascertain the amount due. We think
this is a sufficient ratification of the act of Mr. Chadick in
directing the work to be done, and, so far as the price is
concerned, his action, or that of his authorized agent, Cox, is
binding, in the absence of fraud or mistake. It certainly would
have been more satisfactory if the court had been fully informed of
the terms of the contract, and especially of the price to be paid,
and had given the receiver the requisite authority before he
entered into it, but it was a question for the court whether it
should not leave the price to be determined by the discretion of
the receiver.
In the very case of
Vanderbilt v. Central Railroad Co.,
43 N.J.Eq. 669, so strongly relied upon by appellants, it was
remarked in the opinion of the court, p. 684:
"It must have been contemplated that, in the performance of
those multifarious duties, some degree of discretion might be
accorded to the receiver. Whether the power to exercise such
discretion would not be assumed to exist in every case without a
special order need not be considered, for it is clear that the
chancellor may accord such discretionary power to a receiver by a
general order such as was made in this cause. . . ."
"If the contract has been completely performed and its
performance accepted by the receiver, and the claim is merely for
compensation, relief of that nature would seem necessarily
Page 162 U. S. 545
to be awarded unless the applicant should appear to have dealt
fraudulently or collusively with the receiver to the detriment of
the trust. Even if, in the judgment of the chancellor, the contract
was improvident and unreasonable, unless the contractor should
appear to have contracted with notice of the improper character of
the contract, no just reason could be given for debarring him from
the agreed-on compensation, which the receiver might, for his
negligence or misconduct, be required to repay to the fund."
The work done having thus received the sanction and approval of
the court, it can make no difference, so far as the legal aspect of
the case is concerned, whether the contract was executed by one or
both of the receivers. Indeed, in view of the fact that two or more
receivers of a railway are frequently appointed who sometimes
reside at considerable distances from each other, we are unwilling
to say that a contract may not lawfully be made by one of such
receivers which shall be binding upon the estate. The necessities
of the case may sometimes require that contracts of a local
character shall be made where it is inconvenient or perhaps
impossible to obtain the consent of the other receiver. So if, by
arrangement between themselves, one is constituted managing
receiver, his authority may have a broader scope, and may
approximate to that of a sole receiver. Mr. Chadick may have made
an injudicious bargain in agreeing to pay $10,250 for the job, but
so long as no bad faith is imputed to him, and no fraud or mistake
is charged, it is difficult to see how the company can escape
payment. The contract having been fully performed, evidence of the
actual value of the work and materials was irrelevant, and in this
view of the case, the master did not err in ruling it out and
holding the receivers to the contract. "The true value of the work
done and materials furnished" may be with entire appropriateness
said to be the value which the parties have deliberately and
knowingly put upon them, and "the amount justly and equitably due"
the contractor under such circumstances is the amount which the
receiver has promised to pay him. In addition to this, there was
extra work performed
Page 162 U. S. 546
by Cooper & Son, the amount of which was to be determined
upon the principles of
quantum meruit, as to which work
this language was especially applicable.
The fact that the court did not direct the computation to be
made irrespective of the contract and that it subsequently
recognized the validity of the claim and directed it to be paid is
inconsistent with the idea that it did not intend that the contract
should be respected. If Mr. Gowen, who appears to represent more
particularly the interests of the bondholders, and knew the work
was being done, had desired to know the terms upon which Cooper
& Son were doing the work, he might easily have informed
himself, as he had done before, and called the attention of the
court to the matter, when, it may be assumed, the court would have
protected his rights. His testimony that he did not suppose the
work was being done under contract is somewhat inconsistent with
his stoppage order of June 3, which plainly contemplated a contract
for future work.
There was no error in the court's ordering the bill of Cooper
& Son to be paid as a preferred claim. The work had been
commenced before the receivership, and was done in good faith for
the benefit of the company and the receivers. The building must
either have been finished or the work already done become a total
loss to the company. It appears to have been constructed for the
accommodation of the officers of the road, and in other respects in
furtherance of the interests of the road, and is an asset in the
hands of the receivers, which may be sold, and the money realized
therefrom applied to the payment of the claim. The fact that it is
not covered by the mortgage renders it the more equitable that the
proceeds of this sale shall be applied to the payment of the cost
of its construction.
The decree of the court below is therefore
Affirmed.
*
"
Findings of Fact"
"1. I find that the vouchers above mentioned are valid, and were
issued in good faith by agents of the receivers, having authority
so to do, and that W. H. Cooper & Son were given credit upon
the books of said company for the amounts so vouchered, and were
charged with such vouchers, and that said amounts constituted and
became a debt from the receivers to W. H. Cooper & Son, due and
payable upon date of issuance."
"2. I find that the contract under and by virtue of which all
work was done and materials furnished upon Kali-Inla Hotel from and
after June 3, 1891, and the specifications, plans, and drawings
furnished therewith were executed, furnished, and delivered by
agents of the receivers, having authority so to do, and under the
special direction and approval of the receivers themselves, and
this honorable court."
"3. That the work performed and material furnished were so
furnished and performed by W. H. Cooper & Son under and by
virtue of, and in reliance upon, the contract aforesaid, and that
the receivers knew that said W. H. Cooper & Son were so
performing work and furnishing materials under and by virtue of
said contract, and in full reliance thereon, and with such
knowledge approved of the work of said Cooper & Son, and
managed and directed said Cooper & Son in the progress of said
work, and have now received the benefit of said work and are in the
possession of said hotel."
"4. I find that said W. H. Cooper & Son did all of the work
done under the contract of July 7, 1891, in strict accordance with
the details, plans, and specifications furnished them with said
contract by said receivers, and are entitled to the contract
price."
"5. Further, that the extra work charged for was done under and
by virtue of a provision in said contract, and at the suggestion of
the supervising architect, furnished by the receivers and with his
approval, and that the prices charged for such extra work and
materials furnished are reasonable and true."
"
Findings of Law"
"1. I find as a matter of law that the vouchers hereinbefore
mentioned are in the nature of accounts stated, and, having been
acquiesced in by both parties, cannot now be impeached by either
party except through allegation and proof of fraud or mistake."
"2. I find as a matter of law that the receivers having had full
knowledge of the fact that W. H. Cooper & Son were doing work
and furnishing materials on Kali-Inla Hotel, in reliance upon
contract of July 7, 1891, and that the receivers having encouraged
and countenanced their work thereunder, and furnished them with a
supervising architect to superintend the same, and that the
receivers having received and gone into possession thereof, are now
estopped from denying their obligations to said Cooper & Son
under said contract, and that their only defense to that part of
the claim of said Cooper & Son is in showing that the work
performed by said Cooper & Son and materials furnished by them
were not in accordance with the details, plans, and specifications
attached to said contract."
"William Nelson"
"
Special Master"
