Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-01-08

I VlsIted >,
| returning to this country after months
| stay upon the isthmus. and after alb
| sence of something like six weeks.
| During his stay upon the isthmus he met
| Mr. sShorts and Mr.. Stevens, Mr.. Wallaces
successor and Governor Magoon. He had
| brought with him plans for refrtgerators.
for laundries and for all the equipment
necessary to carry On the project In which
i he was interested. and he discussed the
1 subject and the proper course to be taken
1 with the members of the canal commits
sion on the ground, leaving with them a
/ written report and plans and specifications
1 which he had obtained in this country
| from provision houses, laundry Daanufac-
| turing establishments and other expert
| sources. He returned to New York on the
| Sth of August. Mr.. Shonts returned on
| August 14th and at once prepared specf-
| fications upon which bids to feed the en-
| poyes were invited. The contract was
| awarded to Mr.. Markell as the lowest bid
| der on the 7th of September. When news
| of the contract reached the isthmus, Mr..
Stevens by cable objected to it as fixing
| too high a price, and thereupon a clause
was introduced into the contract, by the
| consent OF Mr.. Markell, by which the COM
| pany was permitted to cancel the contract
| at any time in the discretion of the Presl-
| dent.
| The Contract Cancelled ---5
Heretofore the provision of the con-
| tract had been that after thirty days
| notice 1t might be Cancelled If the com
| tractor was not discharging, his duty to
the satisfaction of the general manager
| of the company. Mr.. Markell, IN anticipation
| of fulfilling the contract. and before the
| Introduction Of this new cancellation clause,
| had brought to New York twelve experts
cooks, hotel superintendents, clerks and
| others-with whom to begin at once the
work contracted for. In view of the new
cancellation clause, he took only four per-
sons to the isthn1s and the others were
directed to remain In New York until the
matter in respect TO the contract was def
nitely settled. On the 22d of September
Mr.. Shonts and Mr.. Markell sailed for the
isthmus, and did not return until the 18th
of October. During this time, after con-
ference between Mr.. Shonts. Mr. Stevens
and Governor Magoon the notice of cancel
lation, in accordance with the new clause.
was given and accepted. Mr.. Shonts and
Governor Magoon then stating that Mr..
Markell ought to be, and would be-, COM
pensated for his loss of time and money,
and for services which had Injured to the
benefit Of the government. The reason
for the cancellation of the contract was
that in carrying out Mr.. Markets recon-
mendations. the railroad company, under
Mr. Stevens, had been able to furnish food
to its employees and those of the commits
sion at less price than that fixed In the
contract. Markell still insists that the es-
innate of cost made by him was reason
able and that the results obtained by the
company were due to two circumstance
one that all the elements of cost to the
contractor We're not included in the rail-
road company's estimate for the cost OF
nrSt-claSS meals, ana the Otncr tndt the
specifications of the contract required Tor
meals for the Second-class of employees
more expensive meal than the company
was actually furnishing In view OF the
cancellation OF the contract, 1t Is unneces-
sary to consider this issue further.
Mr.. Markets Claim.
"At a meeting of the railroad directors
on November s Mr.. Markell presented his
claim for his actual outlay. amounting to
| al leo he
of his time and services The directors,
at the instance of Mr.. Shonts. voted to
allow Mr.. Markell for his expenses
and services the sum of $40 1887,
action was taken without consulting either
you me, and was not brought to my at
tention until some time after my return
from Panama on the 18th of November
Looked at from purely and strictly legal
standpoint, If the amendment of the con-
tract with respect to the cancellation at
the discretion of the President was to be
strictly construed. cancellation would end
the obliga tons of both parties under IT
and leave them without any Slain for
damages by either against the other, and
therefore Mr.. Markell would seem to have
no claim for either his expenses or his
services against the railroad company after
the right of absolute cancellation had been
exercised by the President In other words,
II would appear that the payment ordered
by the directors was gratuitous and with
out legal consideration.
torious consideration arising from the fact
that Mr.. Markell had actually rendered val
liable expert services to the railroad COM
pany, had made an actual outlay of more
than 5000. all in anticipation of securing
the contract and relying on the permanenee
Of the contract would Justify good bust
ness man, with whom such a transaction
was had in compromising him for his loss
of money, time and services 1t is perfectly
plain from Mr.. Markets own evidence that
If he had been permitted TO carry on the
contract. indeed If he had bid and not been
awarded the contract, he never would have
considered the railroad company indebted
to him for anything. The directors. however,
thought that the circumstances under which
the final cancellation clause had been OBJ
tanned and the benefit which they had
actually derived from Mr.. Markets services,
required that they should make him whole.
Directors Admonished.
THAT they acted in this regard in good
faith and with a due regard to their trust
have no doubt In reply to my criticism
and disapproval in these two cases. the
president of the railroad company has an
swered that the course taken was plainly
within the corporate power of the directors
and was supported by advice OF counsel.
think, however that these We're issue of
such Importance and doubt thatthey should
have been submitted to you or to me, as
your representative, for approval I'm
doubtedly a board of directors, acting for a
corporation with individuals as stockhold-
ers, might exercise the discretion which
was exercised here by the directors; but as 1
between the government and the president
and directors Of the company, the exercise
of such a discretion is only safe when ap-
proved by the president or his representa-
tive. have so advised the president and
directors of the company in order to pre-
vent a departure from this principle in flu |
ture
Il have deemed 1t my duty, in view of the |
fact that the matter was not submitted |
either to you or to me until after the final |
action of the board. to investigate quite |
fully the facts. I have received a written !
statement of the matter from Mr. Shonts |
have subjected Mr. Markell to long ex- |
animation; have secured from him all the |
correspondence throwing light on the sub |
jecf. and have requested from him the |
vouchers for such of his expenses as he will |
be able to furnish. The examination and |
the correspondence I append to this letter. !
The vouchers Mr.. Markell has not yet been
able to send me. II complete vouchers are |
fnrthcarains. II will he sic aca