The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-01-08

I
/ and himself The letter did not reach
Mr.. Markell until May when he answered
/ accepting the suggestion and with his
son and partner and private secretary
| visited the Isthmus about the first Of
July. returning to this country after a
/ months stay upon the Isthmus, and af-
/ ter an absence Of something like six
/ weeks Inc contract was awarded to
DIR. Market as the lowest bidder on the
/ 4th or September. When notes Of the
! contract reached the Isthmus. MI
| Stephens by cable objected to it as fix
/ ing too high a price, and thereupon a
| clause was introduced into the contract
| by the consent of Mr.. Markell, by which
| the company was permitted to cancel
| the contract at any time in the discretion
/ a the president. In view of the new
cancellation clause, Mr.. Markell took
only four persons to the Isthmus, and
others were directed to remain in New
/ York until the matter in respect to the
contract was definitely settled. On the
/ 22nd of September Mr.. Shonts and Mr..
Markell sailed for the Isthmus and did
not return until the 18th Of October.
Contract Concluded.
During this time after a conference
! between Mr.. Shonts, Mr.. Stevens and
Governor Magoon the notice of cancel
lation, in accordance with the new clause
was given and accepted and Mr.. Shonts
and Governor MagOon then stated that
Mr. Markell ought to be and would be
compensated for his loss of time and
money and for services which had in
ured to the benefit of the government.
The reason for cancellation of the con-
tract was that in carrying it out Mr..
Markets recommendation the railroad
under Stevens had been able 20 furnish
food to its employees and those of the
commission at a less price than that
fixed in the contract. Markell still in
sists that the estimate OF cost made by
him was reasonable and that the results
obtained by the company were due to
two circumstances-on that all the ele-
nents of cost to the contractor were not
included in the railroad company's esti-
mate for the cost of first class meats
and the other that the specifications of
the contract required for meats for the
second class Of employees a more ex-
pensive meat than the company was act
ually furnishing. In view of the cancel
/ lation of the contract it is unnecessary
| to consider this issue further. At a
meeting of the railroad directors Novem-
/ Der Mr.. Markell presented his claim for
/ his actual outlay, amounting to S., 1857
and also a claim for the value of his
| time and services. The directors at the
instance of Mr.. Shonts voted to allow
Mr.. Markell for his expenses and $10-
745.07 was paid.
This action was taken without con-
sulting either you or me- and was not
/ brought to my attention until some time
! after my return from Panama on the
I a
purely and strictly legal standpoint, If
! the amendment of the contract with re-
| spect to the cancellation at the discre-
/ ton of the president was to be con-
! strued as cancellation it would end the
! obligations of both parties under 1t and
/ leave them without any claim for dam
/ ages by either against the other and
| therefore Mr.. Markell would seem to
/ have no claim for either his expenses or
his services against the railway COM
pany after the right of absolute cancel
! latiOn had been accepted by the presi-
dent. In other words, it would appear
| that the payment ordered by the direc-
tors was gratuitous and without legal
/ consideration.
1t Was Morally Right.
ION the other hand the moral and
meritoriOus consideration arising from
the fact that Mr.. Markell had actually
! rendered valuable expert services to
/ the railway company had made an act
ual outlay of more than $4,000, all in
] anticipation of securing the contract
/ and relying on the permanency of the
contract would justify a good business
man with whom such transaction was
! had in compromising him for his loss of
money time and services.
1T is perfectly plain from Mr. Mar
kel's own evidence that if he had been
permitted to carry on the contract, in
deed if he had bid and not been award
ed the contract, he never would have
considered the railroad company indebt-
ed to him for anything. The directors,
however, thought that the circumStan-
ces under which the final cancellation
clause had been obtained and the ben
eft which they had actually derived
from Mr.. Markers services required that
/ they should make him whole.
THAT they acted in this regard in
good faith and with a due regard to
their trust I have no doubt. In reply
to my criticism and my disapprOval in
these two cases the president of the
/ roll
taken was plainly in the corporate pow
or of the directors and was supported
by advice Of counsel. I think how
ever. that these were issues of such inn
portance and doubt that they should
have been submitted to you or me as
your representative for approval I'm
doubleday a board of directors, acting
for a corporation with individuals as
stockholders might exercise discretion
which was exercised by the directors
but as between the government the
president and the directors of the com
nany the exercise of such a discretion is
only safe when approved by the presi-
dent or his representative. I have so
advised the president and directors of
the company in order to prevent a de-
parture from this principle in the fu-
ture.
Taft Has the Papers.
II have deemed it 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 tho facts. I
have received a written statement of
the matter from Mr.. Shonts I have
subjected Mr.. Markell to n long ex-
animation; have secured from him all
the correspo ndence throwing light on
the subject and have requested from
him the vouchers for such of his ex-
penses as he viii 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. If complete vouchers are not
forthcoming it will not be significant
because when expenses were incurred
Markell did not suppose they would
form the basis of a claim against the
government and moreover, a large part
of the money was expended for travel
ing for which it is unusual 70 obtain