Court Opinion

ID: 8798942
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:23:38.814076+00
Date Added: 2024-06-11T17:03:47.632743
License: Public Domain

WOODS, Circuit Judge
(dissenting). In this case there was a conflict of evidence. The majority of the court are of opinion that the conflict is immaterial, and that in no view of the facts was there any issue for the jury. To this conclusion I am unable to assent. The Eastern Cement Gun Company made a contract on October 25, 1912, with the Western Maryland Railway Company to cover with gunite, a cement preparation, certain exposed steel work on its new roundhouse under construction at Hagerstown, Md. The work was to be begun within 2 days and completed within 55 working days. The contract provided:
“For the failure to prosecute the work with an adequate force for noncompliance with his instructions in regard to the manner of executing the work, or for any other omission or neglect of the requirements of this agreement and specifications on the party of the first part, the said chief engineer may, at his discretion, declare this contract, or any portion or section embraced therein, forfeited, which declaration and forfeiture shall exonerate the said Railway Company from any and all obligations and liabilities arising under the contract the same as if this agreement had never been made; and the reserve percentage of 10 per cent, upon any work done by the party of the first part may be retained forever by the Railway Company. It is mutually agreed and understood that the decision of the chief engineer shall be final and conclusive in any dispute which may arise between the parties of the agreement relative to or touching the same.”
*625The agreement also contained these provisions:
“If it shall he necessary or expedient to stop the work, or any portion of it, or that the forces employed thereon should be diminished, the party of the second part shall have the right, and power to stop said work, diminish said force, and the party of the first part shall have no claim for damage by-reason thereof. But the time herein specified for the completion of the work shall be extended for a period equal to that during which the work is suspended.”
This action is for damages for repudiation of the contract and preventing the plaintiff, the Cement Company, from completing the work. The Cement Company began work, but found it was operating to its disadvantage because of the difficulty of keeping out of the way of contractors for other portions of the work, and the cold weather which prevented the placing of cement by the plaintiff’s process. Under these conditions, according to the evidence on behalf of plaintiff, Mc-Causland, the assistant engineer of the railway company, in immediate charge of the work at the roundhouse, agreed with the plaintiff on December 18, 1912, that it would be better to stop temporarily and resume work in the spring. Pierce, the manager in charge of the cement work, testified that at the time plaintiff was ready, able, and willing to complete the work and could have done so within the time required by the contract. Jordan, who became manager of the work in the latter part of the year 1912, testified that the company was ready, able, and willing to do the work in the spring; and Warner, the president, testified that in March he gave notice to Pratt, the chief engineer of the Railway Company, of his readiness to proceed. McCausland denied that he agreed for the work to be stopped and resumed in the spring, and he and Pratt testified that its progress was very unsatisfactory. It was not disputed, however, that McCausland notified Pratt that the Cement Company had stopped work with the intention to resume in the spring, and that Pratt made no objection nor protest. He explained his failure to object or protest at the time by saying that he supposed the Cement Company had already stopped and thereby broken the contract. He did not declare the contract forfeited until March, 1913. There was testimony from both sides to the effect that it would have been almost impossible for the Railway Company to use the roundhouse for its engines, had they allowed the Cement Company to continue its work in the spring. On December 20, 1912, the general manager of the Cement Company wrote to Pratt, setting forth the situation, indicating the company’s intention to complete the work later, and asking for financial assistance. Afterwards other letters of the same purport were written by officers of the Cement Company to Pratt, as well as McCausland. The correspondence with McCausland admitted of the inference that he did not regard the contract relations of plaintiff and defendant ended by the suspension of the work. Pratt made no response to letters sent him on the subject of later completion of the work or allowance of compensation for the labor and expenses incurred, until February 19, 1913, when he wrote:
“Absence from the office and pressure of other matters has prevented my being able to make earlier acknowledgment of your of the 10th inst. I hope *626to be Able to communicate with you at an early date, setting a time for a conference on the matter referred to in your letter.”
On April 14, 1913, he wrote as follows:
“Referring to your communications of March 20th and April 7th, 1 have to advise that in accordance with my statement to you» when you called at the office some little time ago, the work at Hagerstown was not stopped on instructions from the Railway Company, but by your manager, Mr. Pearson, who, I understand from a statement of your representative, was handling matters in a very unsatisfactory manner. The Railway Company does not consider that you have any claim in connection with the Hagerstown work, but we are willing to discuss with you your actual expenditures at that point.”
This statement is sufficient, without further narrative, to make clear the issues made by the testimony. The District Judge instructed the jury on behalf'of the defendant that McCausland, the assistant engineer, could not bind the Railway Company by consent to the suspension of work with the understanding that it was to be resumed in the spring. He refused instructions tendered by the defendant, which under the evidence would have required a verdict for the defendant, and gave at the request of the plaintiff the following instruction as the issue on which the verdict should depend:
“Tbe plaintiff prays the court to instruct the jury that if they find from the evidence that the plaintiff believed in good faith that it had the consent of the defendant to suspend the work on the Hagerstown roundhouse until the following spring, and that the chief engineer of the defendant knew that the plaintiff so believed, and shall further find that the defendant did not notify the plaintiff promptly that it was in default under the contract and that it would treat the contract as forfeited, and if the jury further/ find that the work required to be done by the plaintiff'cbuld have been completed by it within 55 working days from the time when three stalls of steel or the equivalent thereof were in place on the work, had the plaintiff been so promptly notified, then their verdict shall be for the plaintiff.”
Under these instructions the jury found a verdict for the plaintiff.. Whether action or nonaction or mere silence will operate as estoppel depends upon the facts of each case, under the application of some general principles by which they are to be tested. Here reliance is placed upon the silence of the chief engineer of the Railway Company' when he was informed of the purpose of the Cement Company to suspend work temporarily and resume and complete the work in the spring. For the silence of the chief engineer to be available as estoppel, the Cement Company was under the burden of showing: (1) Such relationship between the parties as imposed the duty upon the .chief engineer to speak to prevent loss; (2) tire misleading of the plaintiff to its damage by the silence of the chief engineer; (3) the expectation chargeable to the chief engineer that the plaintiff would probably be misled by his silence; (4) facts indicating that a different course of conduct would have been taken and the loss averted but for the silence of the chief engineer. Wiser v. Lawler, 189 U. S. 260, 23 Sup. Ct. 624, 47 L. Ed. 802; Brinckerhoff v. Lansing, 4 Johns. Ch. (N. Y.) 64, 8 Am. Dec. 538; Bank v. Lee, 13 Pet. 107, 10 L. Ed. 81; Carmine v. Bowen, 104 Md. 204, 64 Atl. 934, 9 Ann. Cas. 1135; Eareckson v. Rogers, 112 Md. 160, 75 Atl. 513; Carroll v. Manganese Co., 111 Md. 252, 73 Atl. 665.
*627The Supreme Court of Maryland thus states the principle in Carmine v. Bowen, supra:
“Where a person with actual or constructive knowledge of the facts induces another by his words or conduct to believe that, he acquiesces in or ratifies a transaction, or that he will offer no opposition thereto, and that other, in reliance on such belief, alters his position, such person is estoxrped from repudiating the transaction to the other’s prejudice.”
In Bigelow on Estoppel, 564, it is said:
“A representation in the nature of a negative of one’s rights may, as we have seen, arise from pure silence; and from pure, but misleading, silence with knowledge, or passive conduct joined with a duty to speak, an estoppel will arise.”
From this statement of the evidence and the law it seems clear that these issues of fact were involved in the decision of the cause: (1) Did the assistant engineer in charge of the work consent that the work should be suspended and resumed and finished in the spring? (2) Did the chief engineer know, or should he have known from the telephone message sent him by McCausland, his assistant, from the letters to him, or from the circumstances, that the plaintiff believed Mc-Causland to be his representative, and that as such he had authority to consent to the postponement of the completion of the work, and that he had done so? (3) Was the plaintiff misled by the silence of the chief engineer, and was it for that reason that it failed to complete the work within the time limit provided by the written contract ? (4) I f it was so misled, and the chief engineer did not intend to acquiesce in the postponement of the work until the spring, did justice’ and good conscience impose upon him the duty of. notifying the plaintiff of his refusal to acquiesce in time for it to complete the work within the time limit?
As to this last question it seems important to observe that on the issue of estoppel from conduct, in a law case, it is generally for the jury to decide, not only what the facts are, but also the issue whether under the facts as found the party against whom the estoppel is set up has so misled the other party by his acts or omissions as to his legal rights, or as to his intention to assert them, that it would be unjust to allow him to avail himself of them. Maxwell v. Bay C. & B. Co., 41 Mich. 453, 2 N. W. 639; Snow v. Hutchins, 160 Mass. 111, 35 N. E. 315; Munroc v. Stanley, 220 Mass. 438, 107 N. E. 1012; Harlow v. Jaseph, 183 Mich. 500, 149 N. W. 1047; Tune v. Beeland, 131 Ga. 528, 62 S. E. 976; Columbia & C. R. R. Co. v. Laurens Cotton Mills, 82 S. C. 24, 61 S. E. 1089, 62 S. E. 1119.
There are some authorities which hold, on the contrary, that the question whether the inference of estoppel is to be drawn from ascertained facts is always a question of law for the court. Amarillo Bank v. Sanborn (Tex. Civ. App.) 169 S. W. 1075; Pittsburg C. Co. v. West Side R. R. Co., 227 Pa. 90, 75 Atl. 1029; Holt v. New England T. & T. Co., 110 Me. 10, 85 Atl. 159. We cannot doubt, however, that where reasonable men might draw different inferences from the facts proved or admitted it is for the jury to draw the inference whether *628acts, omissions, declarations, or silence of one party are of such character as to influence the other party to do to his detriment what he would not otherwise have done, and whether the person charged with, the acts, omissions, declarations, or silence ought in good conscience to bear the consequences. It is not easy to see why the inference of estoppel in a doubtful law case should be accepted or rejected by the court, and not the jury, any more than the like inference on the closely related questions of fraud and mistake.
On this reasoning I think the District Judge was right in rejecting the defendant’s request to charge, but I think he should have added the words, or their equivalent, which we have italicized, so that the instruction would read as follows:
If the jury find from the evidence that the plaintiff believed in good faith that it had the consent of the defendant to suspend the work on the Hagerstown roundhouse until the following spring, and that the chief engineer of the defendant knew that the plaintiff so believed, and shall further find that the defendant did not notify the plaintiff promptly that it was in default under the contract and that it would treat the contract as forfeited, and if the jury further find that the work required to be done by the plaintiff could and would have been completed by it within 55 working days from the time when three stalls of steel, or the equivalent thereof, were in place on the work, had the plaintiff been promptly notified, and if they find, further, that the Railway Company, or its chief engineer, ought wt justice and good conscience to have unformed the plaintiff that the xoorlo would not he accepted at a later date, then their verdict shall be for the plaintiff.
I therefore concur in reversing the judgment, though I am unable to agree to the reasoning or conclusion of the majority.