FEDI£RAL REPORTER.
vol. 50.
:ChnCAGO,
M. &
ST. P.
R1'. Co.
'11. PULLMAN PALACE-CAR CO.
(Oircuit Oourt" N. D·. Illinois. Maroh 28. 1892.) EQUITY' PAAOofJ<lE-OBJECTlONS TO
A bill tor anaOCiounting oharged that complainant and defendant entered into a oontract, in. of a partnershill agreement, that the defendant was to keep the bocks and render monthly acoounts to. the oomplainant, and that the defendant fraudulentlY 'misstated such acooUnts.' The defendant answ/lred, denying the charges, but that it did not object to an acoounting. , lletd" that it was too late, ondlotion for a reference, for the .defendant to insist that the oharges in the bill wlke:llot sUfficiently specific. '
'WAIVER-AcCOUNTING.
.' InEquity'. ,:Bill by the Chicago, Milwaukee & St.Pa-ul Railway Comp!my Palace.Car Company for an accounting. Johrl. W.,:(Vary'and Edtoin Walker, .for c'omplainant. Isham" Lincoln Beale and J L. Runnels, for defendant. "
GRESHAM! Circuit Judge. 'l'hisis 8 suit by the St. Paul Company againsttliei J?Ullman Company for an accounting. On'September 22, 1882, the .parities entered into a written ,agreement {or the operation of sleeping-cars, parlor and dining cars. by defendant on the lines of the complainant,forjoint account. ,The complainant had previously operated it!! own sleeping, parlor,and dining-room equipment, and, by the .terms of tbe agreement, the defendant acquired a one-fourth interest in the carson the lines. It was contemplated that additional equipmentwQuldbeneeded, a.nd that it should be acquired and owned jointly, upon the Same terms. It was made the duty of the defendant "to keep frill and complete books of account, showfng all the expenses, receipts, loSses, iind.profitsarising from the operation" of the cars; and so much of the general expenses of the defendant were to be added to the specific expenses of the cars, operated under the contract, as the number of such cars hore to the whole number of cars run by the Pullman Oompany, on aU lines operated by it. It was made the duty of the defendantto ,balance tbe accounts as often as once a month, and pay to the complainant three·fourthsof the profits, thus ascertained, on or before the end aLtha month following. Losses were to be borne, one-fourth by :the' defendant and by the complainant. The complainant was given the option to terminate the partnership relation on six: months' written notice to the defendant before three stated periods, which right was:exercisedby giving the necessary notice that the agreement would terminate on September 30, 1890. The parties thereupon agreed that the fair cash value of the defendant's one-fourth interest in theequipment was worth $105,000, which the complainant refused to pay, for the alleged reason that an accounting would show it was entitled to a mucb larger sum from the defendant. After setting out the terms of the agreement, the bill, on information and .belief, avers that, although the defendant rendered monthly statements purporting,:to show the earnings and expenses, in gross, for each of the sleeping-cars operated for joint benefit, the charges for expenses,
CHICAGO, M. & ,$1f.
P.
BY. CO.
v.
PtmL¥AN 'PALACE-CAR CO.
25
were grossly excessive and fraudulent; that the defendant retained out of the joint eamings870,452.96 for cost of cleaning cars,and $49,289.89 for laundry work,for,the entire term of the contract, ,which amounts were grossly in excess of actual payments by the defendant for those purposes; that the defendant retained out of the gross earnings $11,863.16 for money claimed. to have been paid for car supplies, which amount was grossly in excess of the actual expenditure for that purpose; that for the month of April, 1890, the defendant retained, for division and district expenses, $838.72, and for administration expenses, $524.48; that the amounts retained for such expenses during each ofthe preceding months were substantially uniform; that the aggregate amount retained on account of division and district expenses for the entire term of the contract.was $100,677 .45, and for a<lnUnistration expenses, $58,806.36, and that such charges were grossly ,excessive; that the defendant obligated itself, at its own expense, to maintain the equipment of the cars, carpets, upholstery, bedding, fittings, and other appointments incidental· to a sleeping-car, and not essential to an .ordinary first,class passenger-car, in good and cleanly condition, and renew the same whennecessary, and that the defendant wrongfully and fraudulently retained forthia purpose, out of the groSS earnings, $73,353.61; that in December, 1888, the defendant constructed and added to the joint equipment five new sleeping-cars, at a uniform charge to the complainant of $17,180.38, and demanded payment therefor; that this amount is grossly in excess of the actual cO!'t of construction, plus 10 per cent. thereon, which the defendant was entitled to under the ternlS Of tne agreement, and that the complainant expended $25,000 for upholstery and repairs with which it was not chargeable under the contract, no part ()f whicl:J. has beenrefJ.mded by the defendant. The bill also charges t}:1at, 'during the term of the contract, both written and verbal notice was given to the defendant by the Complainant that the bills rendered of ing expenses and maintElnance of equipment were excessive, and that thecomplainl:!-nt. protesteg. against the «;:orrectness of such bills. The charges in the bill, except tpe last one, are expressly'denied by the answer,. If this charge is denied, it is only done inferentially. The answer avers that the complainant received monthly statements showing the full amount of earnings and expenses; that monthly .settlements were made upon the basis ofthese statements; and that, with the knowledge of all the facts now known to the complainant, it xegulady received its full of the joint earnings. Other averments in the bill and answer need not here be noticed. The case is at issue, but the parties are not able to agree as to what questicllls shall be referred to the master. Although the answer avers that the defendant does not object to an accounting, it now in.sists that the master should be reqtiired to take testimony, and report 0) whether ,or not the defendant kept books of account as required by the contrllct, and (2) whether or not the accounts were stated and settled monthly, the complainant all the time knowing the facts relied on in the bill. 'The bill was not demurred to, and iUs now too late for the defendan,t's
26
j"
"J'E.D1i:nAL REPOR'l'ER;' 'Vol. 50.
tlounsel, to' insist 'that the, charges are; lnot 'sufficientlyspeciflQ. If they are ,trtie;:theloomplainarit' has riot full' earnings'lWEvb:ldMhe boob appear to have been 'properly 'kept, (and it is nottlisp'tlted that the kept: books of account,} and the com· plainan,Hecei\'ed its fuUshare oNhe joint thus !shown, it has the,righUo establish by competent evidence, if there hesueh, that the bobksare:not correct, and that the defendant took credit'f@rmore money thandtex,pended or ,was entitled to retain. It was staled at the argu. D1ent't:batthei CQmplllinarit would, be satisfied witn '. a reference covering thelsix"DJoriths prior to the termination 'of. the agreementj'snd, if unable to ,establiSlb, its charges for that time, it would not ask a reference cover· ing any.of"the preceding will thel'efore be entered reJemWg:tbe,ease to.Mr. HenryW.Blshop;oneof:themasters, to take ,teshimicmYiiand report to' tb6'courtwblrther, during"the months of April, May.,June, July,: Ilnd Notember, 1890, . w ithout: th,e[ knowledge or of theeOll plsinant, the ,defendant deducieti';ft<»;Jlr:therg,ross earni,ngs amtltmtsin exceSll i of actual expenses, or ine:Xcessi of what it . waS i en,thled t'odElduet and retain under the agreet' that the· accoiuntbetween the parties be stated, siowing:tliebalance due from one to the other for said months. . ii':'; ;: : .: : "
,i :',
lAND Co. t,
(Olrcu1.t Coun, D. South ,'. ,', '" .
Oarolina.
April '111i 1899.) I
;"d',!"1
,I
!, "
manUfacturillg company promising that, If a factory their p.roparty, they WjJI, donate to thllm acertaiu amoul,1t of land, and will promptly bUlld OF cause to he built to it a side track, sets ,,"forth in terms sum.cl.ently certaiu to ailp'Port a b111 for specific pel', !"
klette'l' from a'land oomplh.y to
PJ:llFORMA,NCE-WJi[EN MAINTAINABLE-CERTAINTY OP AGREEMENT.
."Bill ,Pine Fi.breeompany against the North for the specdic performance of aeontract.. Heard ol{demurr'et to the complaint. Demurrer overruled. . Flcriting,<ftJ1.1exand"er; fbt'complaililant. . for defendant. -.; J,";: ;., j ' ,
SnrbNToN;'DistrictJudge. The case comes up on bill and demurrers. Tbe b1llseeks' specific perforrnaJ}ce of a contract. The defendant, owner of a tract of lllpd on or near the Savannah river, opposite ,the city of inducements to the plaintiff to erect and put in operatil)h' a factory on 'said land. The bill sets out certain negotiations in a letter by the president of the defendant· Cbinpany to'the president of the complainant company in these "'NEW YORK, June 20th. 1891. "iT. B. N. Ber1'1/' Pres't. Southern 'Pf,neFibre Oompany-DEAR SIR: The North·Augullta Land Company will donatl:lto your company 3 acres of land,