text:
    Boggs v. Boggs & Buhl.

      Corporations — Stockholders’ agreement — Purchase of member’s stock.

    An agreement among stockholders of a corporation providing that the holders of a majority of the common stock may declare that a stockholder has ceased to be a desirable associate either on account of incompetency, or personal conduct, and thereupon appraise and take his stock at its cash value, is a valid contract and binding upon all the parties to it; and if a majority after proper consideration and in good faith find that a particular member has ceased to be a desirable associate, and have also in good faith appraised such member’s stock, the majority may by a bill in equity enforce the specific performance of the agreement, and compel a transfer of the member’s stock at the appraisement fixed by the majority without any addition for good will.
    In such a case where it appears that the common stock when issued had no value, that the persons owning it were required to be actively engaged in the management of the corporation, that the common stock was never sold on the market, and the preferred stock was subject to redemption at any time, the cash value of the common stock is the price shown by the value of the assets of the corporation applicable to it, when the appraisement was made.
    Argued Nov. 1, 1906.
    Appeal, No. 183, Oct. T., 1906, by George B. Boswell, from decree of O. P. No. 2, Allegheny Co., April T., 1906, No. 12-1, on bill in equity in case of Russell H. Boggs et al. v. Boggs & Buhl, a corporation of the State of New Jersey, and George B. Boswell.
    Before Mitchell, O. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for specific performance. Before Frazer, P. J.
    From the record it appeared that Russell H. Boggs and Henry Buhl, Jr., were partners carrying on a dry goods and notion business in the city of Allegheny. On May 28,1899, they organized a corporation under the laws of New Jersey under the name of Boggs & Buhl. This corporation took over the property and business of the firm, and preferred and common stock was issued therefor. Messrs. Boggs & Buhl, who received all the stock, transferred certain portions of it to some of their principal employees, including the defendant, George B. Boswell. All of the holders of the common stock onApril 20, 1899, entered into an agreement which is quoted below in the opinion of the court. On April 28, 1905, a meeting of the common stockholders was held at which all the common stockholders were present, except the defendant. At this meeting the following resolutions were offered and unanimously adopted :
    “ Resolved that the stock of Mr. George B. Boswell be appraised and redeemed in accordance with the agreement signed by all of the holders of the common stock of said corporation dated April 20, 1899, on account of his incompetency in overbuying and otherwise mismanaging departments under his control and because he by reason of his personal conduct has ceased to be a desirable associate.
    “Kesolved that the common stock of Boggs & Buhl Corporation held by Mr. George B. Boswell be appraised at $149.71 cash per share, which is the gross value of the stock as shown by the books of the corporation, and that said stock be redeemed and purchased at that price.”
    Other facts appear by the opinion of Frazer, J., which was as follows :
    The agreement upon which this proceeding is based is a valid contract and binding upon all the parties to it: Boswell v. Buhl, 213 Pa. 450. The portion of the contract particularly applicable to the question here involved is as follows:
    “If in the opinion of the holders of the majority of the common stock of said corporation a holder of any common stock of said corporation should cease to be a desirable associate either on account of incompetency or personal conduct or if a holder of any common stock of said corporation shall voluntarily resign from his or her position, the holders of the majority of said common stock shall be at liberty and they are hereby empowered to appraise the cash value of said stock and redeem or purchase the same from said party, and said stock so purchased shall be divided or distributed among the holders of said common stock in proportion to the amounts of stock hold by each.”
    The clause quoted confers upon the holders of the majority of the common stock power to determine (a) whether the holder of common, stock has ceased to be a desirable associate either on account of incompetency or personal conduct; and (b) to appraise and purchase the stock held by a stockholder who may become an undesirable associate. In this case on April 28, 1905, after notice to all holders of common stock of the company, a meeting was held for the purpose of determining whether or not the common stock held by defendant should be appraised and taken under the agreement of April 20, 1899, defendant being at that time no longer “ actively engaged in the management” of the company either as an officer or employee. At that meeting it was unanimously resolved that defendant had ceased to be a desirable associate, and his stock appraised by more than a majority in interest of the stockholders at $149.71 per share in cash. Whether the making of the agreement of April 20, 1899, was judicious, is not a question for us to determine. The parties to the document had a right to make it, and having executed it with full knowledge of its contents, its terms are the law of the case and as such must be enforced against them and be observed by them: Boswell v. Boggs, supra. The contract being a binding obligation upon the parties, it seems to us the sole question for determination is, did complainants act in good faith; if they did, defendant must acquiesce in and submit to the action taken by them. Whether a holder of stock shall retain his common stock in the company depends entirely upon the opinion honestly exercised by his associates. Defendant had been with the company since its organization and the testimony shows no objection to him on the part of his associates until within the last two years of his association with them. During a portion of that time he was in ill health, which fact may have induced some of the acts his associates now complain of. However that may be, his associates by a unanimous vote determined that in their opinion he was no longer a “ desirable associate,” and that he should dispose of his stock in the manner provided by the agreement of 1899. Each stockholder called as a witness gave his reasons for voting as he did. The reasons given were in some respects trivial, but as a whole were, in our opinion, sufficient to negative bad faith upon their part. While many of the reasons given by the witnesses to support their action were either refuted by defendant, or to some extent explained, it is apparent there was feeling among the small stockholders occasioned by defendant’s conduct toward them, his absence from the store, and his refusal to acquiesce in the proposed transfer of the 1,500 shares of common stock by Messrs. Boggs and Buhl, and it is also apparent that the discontent of these stockholders, who were heads of the largest and most profitable departments of the store, would, if continued, act to the detriment of the company. All the stockholders were particularly interested in the success of the company, Messrs. Boggs and Buhl, not only on account of their large holdings, but also the pride they had in the business, and the other stockholders because of their investment in the preferred stock, which was no doubt large to them, and also in the future promise to them from the business. It was therefore vitally important to the interest of all that there should be harmony among the holders of the stock, and that all should be in constant attendance at the store and exercise their best efforts to extend and increase the business. Whether defendant was discharged from the company’s service or quit voluntarily, we think is immaterial so far as this proceeding is concerned. He ceased to be actively engaged in the management of the company’s business, and was, in the opinion of the other stockholders, deemed to be an “undesirable associate.” They, therefore, had a right under the agreement of April 20,1899, to appraise and redeem his stock.
    In the event of the stock of a member being appraised and taken, the agreement provides that the appraisement shall be made by the holders of the majority of the common stock “ and they are hereby empowered to appraise the cash value of said stock.” In this case the cash value was fixed at $149.71 per share and was arrived at by ascertaining the value of the company’s assets and deducting therefrom its liabilities and the par value of preferred stock, the difference representing the value of the common stock. The amount thus fixed was the value at the end of the fiscal year of the company, February 3, preceding. By bringing the statement down to date of appraisement the value was increased to $159.20 per share, against which was a claim of the commonwealth for bonus amounting to $117,000, or about $12.00 per share. Defendant’s contention is that this appraisement is unreasonably below what it ought to be in view of the - profits applicable to the stock, and also because it does not include any allowance for good will, which was valued at $1,000,000 at the time of the formation of the corporation. At the organization of the company the common stock was not represented by any tangible property. It was valueless, and whether it should in the future have a value depended entirely upon an increase of the company’s assets over and above the value of the preferred stock. This latter stock has preference at all times over the common stock, and in the event of the winding up of the corporation, no part of the funds realized from sale of the property can be applied to the common stock until all liabilities and the preferred stock and its. accrued dividends have been fully paid. The testimony of both Mr. Boggs and Mr. Buhl is that the common stock represented nothing of value at the time it was issued and was given free of costs to the purchasers of the preferred. As the contract empowers a majority of the stockholders to appraise the value of a retiring holder’s stock, and that having been done in this case, the appraisement must stand unless the testimony shows bad faith on the part of those who made it. Owing to the conditions attached to the stock, it has no market value; no one outside of those actively engaged in the management of the corporation could be induced to purchase it, and, while the earnings of the company have been large, the value of the stock can hardly be based upon the dividends declared upon it, for the reason that dividends may be discontinued at any time and the earnings used for other purposes. While what was intended by the words “ appraise the cash value ” of the stock is capable of more than one interpretation, it seems to us, taking the agreement as a whole and also considering the fact that the stock must always be held by a person engaged in the management of the company’s business, the intention of the parties to the agreement was that “ cash value ” should be the sum shown by the value of the assets of the company applicable to the stock. This, it seems to us, is a fair and equitable standard for arriving at the common stock’s value, and the rule which under all circumstances will most nearly do justice between the parties, in the event of an appraisement and redemption as in this case. . .

      CONCLUSIONS OF LAW.
    Under all the circumstances of this case, and viewing the testimony in its most favorable light to defendant, we conclude :
    1. That plaintiffs in determining the advisability of continuing defendant as a business associate acted within the terms of the agreement of 1899, and in good faith.
    2. The value of $149.71 per share placed upon the common stock in the Boggs & Buhl Company held by defendant, is, under the circumstances, the fair cash value of the same, and should be accepted by the defendant as provided in the agreement.
    Plaintiffs are entitled to a decree as prayed for.
    Exceptions to the adjudication were dismissed by the court, Ebazeb, P. J., filing the following opinion:
    We have examined the exceptions in connection with the testimony and are not convinced that any of our findings or conclusions should be changed. All the findings and conclusions excepted to were fully considered at the time of their being prepared, and the argument of counsel has not satisfied us that any changes should be made.
    The exception most seriously argued was the one relating to the price per share at which the common stock was appraised. Whether we were right in finding that the value fixed by the stockholders at $149.71 is correct, depends entirely upon whether $1,000,000 for good will should be added to the value represented by goods and tangible property applicable to that stock. If that amount should be added, the appraisement is entirely too low; if not, in our opinion, it is not unfair. At the time of preparing our findings and conclusions, we carefully considered this question and concluded that the agreement of April 20, 1899, contemplated in the event of the stock of a member being purchased by the other members, the purchaser should only be required to pay for it according to its real value as represented by tangible property. We have not been convinced that we were in error in reaching this conclusion. At the time the stock was issued it was not represented by any property and had no value, and to-day its value depends entirely upon the value of the corporation’s property over and above that necessary to pay debts and liquidate the preferred stock. As that surplus property fluctuates, so does the actual value of the common stock rise or fall. When we consider all the circumstances, that is, that the stock when issued had no value, that the persons owning it must be actively engaged in the management of the corporation, that it is never sold on the market, and that the preferred stock is subject to redemption at any time, it seems to us that its cash value is the price shown by the value of the assets of the corporation applicable to it, which in this case at the time of the appraisement was approximately $149.71 per share. The argument that the offer of Messrs. Boggs and Buhl to sell 1,500 shares of their common stock holdings to employees at $200 per share is evidence of a greater value than $149.71, is not sound, in our judgment. In that offer Messrs. Boggs and Buhl agreed to sell with no other security for the purchase money than the stock itself, and to accept payment at such times and in such amounts as might suit the purchaser. Such terms would not indicate a cash value.
    January 7, 1907:
    After giving full consideration to the agreement of 1899 and the testimony of the various witnesses we are unable to reach any other conclusion than that the value fixed at the stockholders’ meeting is in accordance with the terms of the agreement, and is just. The remaining exceptions, it seems to us, are sufficiently answered in the argument which is a part of our findings of fact and conclusions of law.
    Exceptions dismissed.

      Error assigned was the decree of specific performance.

      William B. Rodgers with him J. Rodgers Mo Or eery and Edwin 8. Graig, for appellant, cited as to the appraisement:
    Lindsay’s Est., 210 Pa. 224.

      Willis F. McCooh and J. 8. Ferguson, with them E. G. Hartfe, for appellees, cited as to the appraisement:
    New England Trust Co. v. Abbott, 162 Mass. 148 (38 N. E. Repr. 432).
   Per Curiam,

Decree affirmed on the opinion of the court below.


source: Caselaw Access Project

author: Mr. Chief Justice Mitchell,

license: Public Domain

text:
    Sawyer v. Pittsburg, Appellant.

      Municipalities — Municipal contracts — Bidding—Fraud.
    A court of equity will not enjoin the carrying out of a municipal contract merely because the highest of the three bidders was a subsidiary company of the successful bidder, where there is no fraud shown, and the only evidence of the fact alleged was the testimony of one witness based upon hearsay.
    The mere fact that a company is called “subsidiary” to another company, and that it is controlled by the same interest, does not in itself show fraud, where both companies are bidders for a municipal contract.
    Fraud is never presumed, and suspicion is not proof, nor is opportunity guilt.
    Argued Nov. 1, 1906.
    Appeal, No. 186, Oct. T., 1906, by
    Welsbach Street Lighting Company of America, from decree of C. P. No. 1, Allegheny Co., June T., 1906, No. 149, on bill in equity in case of Harry C. Sawyer and E. H. Stoner v. City of Pittsburg, William B. Hays, Mayor of City of Pittsburg, and E. M. Bigelow, Director of the Department of Public Works of said City of Pittsburg, and Welsbach Street Lighting Company of America, a corporation of the state of Illinois.
    Before Mitchell, C. J., Pell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Bill in equity for an injunction.
    The opinion of the Supreme Court states the case.

      Error assigned was decree awarding an injunction.

      Charles F. Morgan and Alex. A. Patterson, of Lyon, Me.Kee c& Mitchell, with them Joseph M. Swearingen and Wm. Findlay Brown, for appellant.
    The court is not bound by the finding of fact of the court below: Semple’s Est., 189 Pa. 385; Brown’s Est., 210 Pa. 493; McConomy v. Reed, 152 Pa. 42; Grauel v. Wolfe, 185 Pa. 83; Lancaster v. Flowers, 198 Pa. 614.
    Even if it be true that the Sun Vapor Company is subsidiary to, and controlled by, the Welsbach company, the court is not warranted in concluding that the contract, between the latter and the city of Pittsburg, is void: Potts v. Philadelphia, 195 Pa. 619.
    January 7, 1907:

      George R. Wallace, with him Thomas Watson, for appellee.
    The bid was fraudulent: Hoffman v. McMullen, 28 U. S.C.C.A. 178 (83 Fed. Repr. 372); Hannah v. Fife, 27 Mich. 172; Gibbs v. Smith, 115 Mass. 592; Curtis v. Aspinwall, 111 Mass. 187; Atcheson v. Mallon, 43 N. Y. 147; Doolin v. Ward, 6 Johns. 191; Wilbur v. How, 8 Johns. 444; Thompson v. Davies, 13 Johns. 112; Hunter v. Pfeiffer et al., 108 Ind. 197 (9 N. E. Repr. 121).
   Opinion by

Mr. Chief Justice Mitchell,

This was a taxpayer’s bill to enjoin the municipal authorities of the city of Pittsburg from carrying out a contract for lighting the streets of that city. The basis of the bill was fraud, charged in every detail that the ingenuity of suspicion could suggest, including, inter alia, that the ordinance under which the contract was made was illegal and void, that the specifications advertised for the work to be done were made so vague, indefinite, uncertain and illegal that it was impossible for a prospective bidder to form an accurate idea of what would or might be required of him, and therefore free and open competitive bidding was rendered impossible. The particulars of these defects in the specifications were set forth in detail in separate ■paragraphs of the bill. As, however, the learned court below found that none of these allegations were true, it is unnecessary to do more than to refer to them in this general way to show the nature of the,controversy.

The bill then set out that when the bids were opened there was one by the Welsbach company at $27.50 per light, one by the Cleveland Yapor Light Company for $25.50 per light and one by the Sun Light Company at $28.50 per light, and the contract was awarded to the Welsbach company. It then averred that there was collusion with reference to said specifications and bids and the award to the Welsbach company; that the collusion was evidenced not only by the specifications themselves, which were so drawn as to discourage bidders, but also by the fact that the bid of the Sun Light Company of $28.50 was a collusive bid, the said company being in fact a subsidiary company of the Welsbach company and controlled by it; that the said bid was evidently made for the purpose of producing the impression that there was competition and that the contract was not let to the highest bidder. A further evidence of collusion was averred in the matter of the bid of the American Street Lighting Company of Baltimore which did not arrive in time to be considered. But the court found against this charge, and also found that the contract was let to the Welsbach company as the lowest responsible bidder, and “ there was no sufficient evidence that it was not such.”

The court did find, however, that the contract was void, and the bid of the Welsbach company was collusive because the higher bid was by the Sun Light Company, a “ subsidiary ” company, and under the control of the Welsbach. The whole case turns on this finding, and the most searching examination fails to show that it has any substantial basis to rest upon. It is said by the court below the only testimony upon the subject was that of Mr. Newbold.” His testimony thus referred to was as follows: “ Q. Isn’t it a fact, Mr. New-bold, that practically competition for street lighting and contracts such as is let by the city of Pittsburg, is limited to the Welsbach company, the Cleveland company and your company ? A. Yes, I think that is so. Q. So that when those three bidders bid, you could not look for much competition outside? A. No, sir, I do not think you can. Q. Either heretofore or the present time ? A. I will say at the present time.”

By Mr. Wallace:

“ Q. What do you mean by saying that there are only three competitors, when you mentioned the Pennsylvania Globe and Sun Light Company as other companies in this business ? A. We understand that the Pennsylvania Globe, the Sun company and the New York and New Jersey Gas Light Company are really companies that are subsidiary to the Welsbach company, controlled by the same interests.”

The whole case rests upon that testimony. The witness was the secretary of The American Street Lighting Company, the rival company whose bid failed to get in soon enough, and he was not only not shown to have any competent knowledge of the facts as to the Sun Light Company, but it affirmatively appeared that he had not. In another part of his testimony he was asked : “ Q. Do you know anything about the Sun Light Company ? A. Only from hearsay. Q. Do you know anything about its relation to the Welsbach Street Lighting Company of America ? A. I have heard it was a subsidiary company.”

But assuming that the witness had knowledge and that what he testified to was true, the fact that there were only three companies who could be considered as active competitive bidders for that work, is not unprecedented, as there are many kinds of large business undertakings in which the field of competition is necessarily limited. Nor do calling a company subsidiary ” and the fact that it is controlled by the same interests show fraud: Potts v. Philadelphia, 195 Pa. 619, (632, 633).

There was no question in the case as to the weight of a responsive answer, or whether it was overcome by testimony of the witness Newbold brought out by appellant itself. The case never got that far. If there had been no answer at all the complainant’s case would have failed for want of evidence. Fraud is never presumed, and suspicion is not proof nor is opportunity guilt. The case depended on collusion in fact and of that there was no proof at all, nothing but an unwarranted inference from insufficient evidence.

The decree is reversed, the injunction dissolved and the bill dismissed with costs.


author: Mr. Justice Elkin,

text:
    Mahoney, Appellant, v. Park Steel Company.

      Practice, G. P. — Amendment—Statement of claim — Trespass—Statute of limitations.

    An amendment to a statement of claim will not be allowed if a new cause of action is thereby introduced which is barred by the statute of limitations.
    In an action of trespass by a minor against his employer to recover damages for personal injuries, where the only matter complained of is a defect in a particular machine, the court will not permit the plaintiff after he has arrived at age, and more than three years after the accident happened, to amend his statement by charging a defect in another and different machine, failure to instruct as to the dangers incident to his employment, and failure to inspect.

      Practice, C. P. — Trespass—Minor—Intervention.
    Where an action of trespass has been brought by a minor through his father as next friend, and pending the action, the minor comes of age, there is no necessity for petition and an order of court allowing him to intervene but the record on motion may be amended so that the plaintiff may appear in his own right, instead of through his father as next friend.
    Argued Nov. 1, 1906.
    Appeal, No. 184, Oct. T., 1906, by plaintiff, from order of C. P. No. 2, Allegheny Co., July T., 1900, No. 127, refusing motion to amend statement in case of Garrett Mahoney for himself and as father and next friend of William Mahoney, a minor, v. The Park Steel Company.
    Before Mitchell, C. J., Pell, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Trespass to recover damages for personal injuries.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned were as follows:
    1. The court below erred in its conclusion, as follows:
    It is proposed now to amend the narr., and the amendments are herewith submitted. After an examination of the same we are of opinion that several new and distinct allegations of negligence are set up.
    2. The court below erred in not allowing the amended statement to be filed.
    3. The court below erred in not allowing William Mahoney to intervene as plaintiff.

      L. C. Barton, for appellant.
    Under all the authorities the cause of action is the particular matter for which the suit is brought, and when the object of an amendment is not to forsake this, but to adhere to it, and effect a recovery upon it, it is the duty of the court when the merits of the case cannot be otherwise reached to permit the amendment: Erie City Iron Works v. Barber, 118 Pa. 6; Stover v. Erisman, 206 Pa. 600; Taylor v. Canton Twp., 30 Pa. Superior Ct. 305; Jackson v. Gunton, 26 Pa. Superior Ct. 203; Thompson v. Chambers, 13 Pa. Superior Ct. 213; Adam v. Moll, 6 Pa. Superior Ct. 380; Fricke v. Quinn, 188 Pa. 474; Clark v. National Gas Co., 184 Pa. 188.
    January 7, 1907:
    The test is, is the damage claimed the same, not, is the evidence of the damage claimed the same: Cunningham v. Day, 2 S. & R. 1; McAdam v. Orr, 4 W. & S. 550; Coke v. Tilghman, 1 Wh. 282; Wilhelm’s App., 79 Pa. 120; Ins. Co. Clinger, 10 Pa. Superior Ct. 92.
    In trespass the plaintiff may add a new count substantially different, so that the original cause of action be adhered to: Becker v. Watts, 9 Lane. Bar. 105; Knapp v. Hartung, 73 Pa. 290.

      John S. Wendt, with him Johns McCleave, for appellee
    An amendment to a declaration will not be allowed if a new cause of action is thereby introduced which is barred by the statute of limitations: Wright v. Hart, 44 Pa. 454; Smith v. Smith, 45 Pa. 403; Frauenthal v. Derr, 3 Kulp, 379; Sener v. McCormick, 15 Pa. Superior Ct. 588; Trego v. Lewis, 58 Pa. 463; Fairchild v. Dunbar Furnace Co., 128 Pa. 485; Grier v. Northern Assurance Co., 183 Pa. 334; Philadelphia v. Hestonville, etc., R. R. Co., 203 Pa. 38; Barclay v. Barclay, 2 W. N. C. 478; Tyrill v. Lamb, 96 Pa. 464.
   Opinion by

Mr. Justice Elkin,

This case is somewhat belated in coming here. The suit was instituted April 27, 1900, by the father in his own behalf and as the next friend of his minor son, who was injured while in the employ of the defendant company. The accident from which the injuries resulted for which damages are claimed, occurred January 24, 1900. The original statement of claim was filed October 23, 1901, and the case came on for trial April 29, 1903, at which time a judgment of compulsory non-suit was entered against the father and the case was continued as to the son, for the purpose of permitting his counsel to move to amend the statement of claim. The bar of the statute of limitations could be interposed against any new cause of action after January 24, 1902. The minor son, appellant here, became of age April 27, 1903, and on May 2, following, through his counsel moved the court for leave to intervene as a party plaintiff and to file an amended statement. This motion was refused on the ground that the amended statement set up new and distinct allegations of negligence after the statute of limitations had run. The case was still at issue as to appellant, however, on the original statement when it came on for trial the second time, October 17, 1905. A jury was called and sworn but no testimony was taken, whereupon the learned trial judge directed a judgment of compulsory nonsuit to be entered.

The first two assignments of error relate to the refusal of the court below to allow the amended statement of claim to be filed. It is conceded, as it must be under our authorities, that if the amendment set up new causes of action, it was properly refused. An amendment to a declaration will not be allowed if a new' cause of action is thereby introduced which is barred by the statute of limitations: Wright v. Hart’s Adm’r., 44 Pa. 454; Smith v. Smith, 45 Pa. 403. A party cannot be permitted to shift his ground or enlarge its surface by introducing an entirely new and different cause of action when by reason of the statute of limitations it would work an injury to an opposite party: Trego v. Lewis, 58 Pa. 463. To the same effect is Fairchild v. Dunbar Furnace Co., 128 Pa. 485; Grier v. Northern Assurance Co., 183 Pa. 334.

The real question to be decided on this branch of the case is whether the proposed amendment introduced new causes of action. In the original statement the negligence charged was, that the defendant company had failed to maintain the rest or guide attached to the rolls at which appellant was working in a reasonably safe and secure condition, but had allowed it to become loose so that when he stepped upon the guide, as was his duty, it turned or slipped by reason of which he was thrown upon the rolls which caught and crushed his leg and foot. The statement set out in detail the duties of the appellant in the performance of his work; the manner in which the accident occurred and the defective machinery which caused it, charging in specific terms that the negligence relied on was the defective step or guide to the rolls. The proposed amended statement, not allowed by the. court below, added four additional and distinct charges of negligence, to wit: (1) that the spanner, or handle, attached to the screw at the housen was in a defective condition; (2) that the defendant company-through its employees, had proceeded to change the rolls while they were revolving, which was so dangerous as to make the attempt negligence; (3) that appellant had not been sufficiently instructed as to the dangers and risks incident to his employment ; (4) that the defendant had neglected to properly inspect the rolls and machinery before appellant was put to work in operating the screw. It is quite apparent that the plaintiff was attempting to shift his ground by introducing new causes of action, which cannot be done. He was not willing to go to trial upon the negligence charged in the original statement ; nor did. he confine himself to a substantial restatement of the original cause of action as in Stoner v. Erisman, 206 Pa. 600; nor did the amended statement specify and define what the original claim left general and indefinite as in Fricke v. Quinn, 188 Pa. 474. An amendment may define or specify in different form the original cause of action or one substantially and generally the same, but cannot shift or enlarge the ground by adding causes of action, substantially different from that originally specified. The only notice to the defendant company contained in the original statement was the defect in the rest or guide plate on the rolls. In the proposed amended statement defendant is charged with a defect in another and different machine, failure to instruct as to the dangers incident to his employment and failure to inspect. These were not charged in the original statement of claim and certainly new causes of action are set up on which the appellant now relies to recover. The amendment comes too late.

The third assignment of error relates to the refusal of the court to permit the plaintiff to intervene. We do not see that there was any necessity for a petition and formal order of court allowing him to intervene. Under the Act of May 12, 1897, P. L. 62, the right of action for such a wrongful injury accrues to the child and also to the parent. It is therein provided that the “action shall be redressed in only one suit brought in the names of the parent and child.” This action was properly instituted as provided by the Act of Assembly. Hpon the air-rival of the minor at full age, the action did not abate, but he had the right to move the court to amend the record, so that he could appear in his own right as a party plaintiff instead of through his father as next friend, if he so desired. This could be done on motion and the court should allow it when asked. It must not be overlooked, however, that in this case, appellant was a party to the record from the date of the institution of the suit and was a party at the time judgment of nonsuit was entered against him and since the entry of this judgment has not been assigned for error, it stands against him and is the end of his case. At the time of the trial he could have proceeded on the original statement, but having failed to do so and the judgment of nonsuit having been entered and not assigned for error, he is precluded thereby.

Judgment affirmed.


author: Per Curiam,

text:
    White v. Turner, Appellant.

      Bankruptcy — Preference—Equitable assignment — School board.

    The contractors for a school building gave to a subcontractor an order on the school board, -which the board accepted. Subsequently the contractors went into 'bankruptcy, and their trustee demanded the money represented by the order on the ground that the order was an illegal preference. The board paid the money into court. A feigned issue was framed between the subcontractor as plaintiff, and the trustee in bankruptcy as defendant. Held, (1) that as the board by payment into court had declined to raise questions between itself and the subcontractors, the trustee was riot in a position to do so; and (2) that the only question before the court was whether the contractors were insolvent when they gave the order, and whether the subcontractor knew it at that time.
    Argued Nov. 1, 1906.
    Appeal, No. 103, Oct. T., 1906, by defendant, from decree of C. P. No. 1, Allegheny Co., Dec. T., 1902, No. 700, on verdict for plaintiff in case of Scott A. White v. A. M. Turner, Trustee.
    Before Mitchell, C. J., Fell, Mesteezat, Elkin and Stewart, JJ.
    Affirmed.
    Feigned issue to determine the ownership of a fund paid into court.
    At the trial it appeared that Jackson & Fulton were general contractors for the building of a schoolhouse, and that Scott A. White was a subcontractor for the roofing of the building. On October 7,1901, Jackson & Fulton gave to Scott A. White an order on the school board for $4,000. This order was accepted. Within four months from the giving of the order Jackson & Fulton went into bankruptcy, and A. M. Turner was appointed their trustee. The latter demanded the amount of the order from the school board, but was refused. The board paid the money'into court. At the trial counsel for plaintiff offered in evidence the records of common pleas court, No. 3, at No. 266, February Term, 1903, in the case of Scott A. White v. The Homewood School Board on this order, for the purpose of showing that the result of this conditional order was litigation against the Homewood School Board.
    Objected to as incompetent and irrelevant.
    Objection sustained and bill sealed for defendant. [2]
    Mr. Dalzell: I propose to show by witness that he had a contract for the roofing of the Homewood school, and further, that he completed that contract. That he received an order from the parties with whom he had the contract on the school board for the contract price of the roof; that the order was presented to the school board and by it accepted. And I propose to offer in evidence the contract between this witness and Jackson & Fulton, the general contractors, as well as the accepted order. This for the purpose of showing Mr. White’s right to the fund which has been paid into court.
    Objected to first, as incompetent, irrelevant and immaterial generally. Second, it sets up a new contract between the school board and the plaintiff that is without consideration, and which by the pleadings has been the cause of litigation against the school board. The school board had no authority to make the contract, and its acceptance, therefore, was ultra vires and void. Third, because under the pleadings the offer raises a mixed question of law and fact, and is, therefore, too general.
    Objection overruled and bill sealed for defendant. [3]
    Yerdict and judgment for plaintiff. Defendant appealed.

      Errors assigned were (1) in refusing binding instructions for defendant, and (2, 3) rulings on evidence, quoting the bill of exceptions.

      January 7, 1907:

      Robert B. Ivory, of Ivory, Kiskaddon c& Moore, for appellant.

      R. H. Hawkins, of Dalzell, Fisher, Young & Hawkins, for appellee, was not heard.
   Per Curiam,

This was a feigned issue to determine the right to a fund in court. The general contractors for a school building made a subcontract with plaintiff for part of the work, and gave him an order on the school board which the board accepted. Subsequently the general contractors went into bankruptcy and their trustee demanded the money for plaintiff’s work on the ground that the order was an illegal preference. The board paid the amount into court. The questions of consideration and of a new contract by the board, ultra vires, argued by appellant are not in the case. The board by payment into court declined to raise them and the appellant is not in position to do so. And the evidence as to litigation against the school board was irrelevant for the same reason. At the trial, therefore, there was nothing in issue but the alleged illegal preference. That depended on whether the contractors were insolvent when they gave the order, and whether plaintiff knew it at that time. The jury found these facts in plaintiff’s favor.

Judgment affirmed.


author: Mr. Justice Stewart,

text:
    North Braddock Borough v. Monongahela Street Railway Company, Appellant.

      Street railways — Boroughs—Contract with borough — Bridge.
    A railway company contracted with a borough to build a bridge with the necessary approaches in such a way that the bridge and approaches would be a municipal street paved and curbed. Under the physical conditions existing at one of the approaches, adequacy of surface could only be secured in one of two ways; either by extending the base of the embankment beyond the limits of the street, thereby encroaching on private land, or, if the base was to be restricted to the street limits, by building a retaining wall for lateral support. The railway company widened the base so as to encroach upon private land. The city had not acquired by condemnation proceedings any land for such extension, and there was nothing in the ordinance that gave any reason to suppose that such a proceeding was contemplated. Held, (1) that the railway company was bound under its contract to build the retaining walls; (2) that if it failed to do so, the contract was not completed, and the borough could construct the walls at the company’s expense; (3) that the question whether the company was to construct a sewer drop on the bridge approaches was a question which fell within the common intent and understanding of the parties, and was for the jury.
    January 7, 1907:
    In construing a contract the situation of the parties at the time is to be considered, and the object in view. If the latter is evident, the law will imply that the party engaging to do the work engaged to do what was within the common intent with respect to it, and that it made such agreement as under the circumstances disclosed, it ought in fairness to have made.
    Argued Nov. 1, 1906.
    Appeal, No. 154, Oct. T., 1906, by defendant, from judgment of O. P. No. 3, Allegheny Co., Nov. T., 1904, No. 593, on verdict for plaintiff in case of North Braddock Borough ,v. Monongahela Street Railway Company.
    Before Mitchell, C. J., Fell, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit to recover the cost of building retaining walls for an approach to a bridge. Before Evans, J.
    The facts are stated in the opinion of the Supreme Court.
    Yerdict and judgment for plaintiff for $3,203.86. Defendant appealed.

      Errors assigned were various instructions.

      James H. Beal, of Reed, Smith, Shaw <& Beal, and Geo. W. Herriott, for appellant.

      William Yost, for appellee.
   Opinion by

Mr. Justice Stewart,

There can be no dissent from a number of the positions taken by the appellant in the argument of this case; the rights and duties of the appellant are those of a contractor; the same rules of construction apply to contracts with boroughs as with individuals ; the acts of the parties during performance have the same weight in determining questions of intention, estoppel, etc. This concession, however, advances us but little in determining the real questions in this case. Appellant, by the acceptance of the borough ordinance, and in consideration of the privileges granted, engaged to build a new bridge over Tassey’s Hollow which would connect Hawkins avenue with Swissvale, and to reconstruct an old bridge, known as East or Sixth street bridge, forming part of Hawkins avenue. The ordinance indicated, specifically enough to avoid dispute, the work required to be done in the construction and reconstruction of these bridges. It stipulated in addition, that appellant should also build the approaches to the bridges, but did not specifically state how, or in what manner these were to be constructed. Embankments were necessary, and these were constructed of sufficient height, supported laterally by concrete retaining walls, running back an average of some forty feet from the abutments of the East street bridge, with an average height of about twenty feet. These walls were adequate so far as they extended, but they did not extend along the entire embankment. Beyond where the retaining walls stopped the required support was obtained by enlarging the embankment at the base. This extended it beyond the limits of the street, and was an encroachment upon private property at the side. Appellant left the work in this condition, and upon its refusal to construct the retaining walls any further, the plaintiff proceeded to finish the work. If this supplemental work done by the plaintiff, fell within the appellant’s engagement under the accepted ordinance, the recovery in this behalf was proper, since the actual amount expended in connection therewith is not questioned ; nor is the necessity for the work questioned, if the embankment was to be otherwise maintained than by the extension at the base over and upon private property. It is not denied that the approaches as constructed by appellant, afforded a surface space corresponding to Hawkins avenue in the condition it then was, and the contention of the plaintiff is that this was all that was required under the contract. The provisions of the ordinance with respect to the construction and maintenance of the company’s road, both on bridges and highway, and the situation generally, show conclusively enough, wo think, that the improvement of Hawkins avenue, so as to make it a municipal street, curbed and paved, was in contemplation, and that the parties contracted with that in view. In construing the contract the situation of the parties at the time is to be considered, and the object in view. If the latter is evident, and we think it clearly is in this case, the law will imply that the party engaging to do the work engaged to do what was within the common intent with respect to it, and that it made such agreement as under the circumstances disclosed it ought in fairness to have made. No other conclusion is warranted, than that the parties here were contracting for the kind of approaches that would be suitable under the improved conditions of the avenue. Adequacy of surface could only be secured in one of two ways, either by extending the base of the embankment beyond the limits of the street, or, if the base was to be restricted to the street limits, by building a retaining wall for lateral support. "While it is true the plaintiff had the right to acquire by condemnation the private property adjoining for purposes of the bridge, it had not acquired it, had taken no steps looking to its acquisition, and nothing in the ordinance gave any reason to suppose that such proceeding was contemplated. Under such circumstances it is idle to contend that the embankment, as built, was full compliance with appellant’s obligation. It is not denied that the continuation of the retaining wall was necessary to meet conditions as they existed. It could, therefore, be fairly and legitimately required of the appellant under its contract. The learned judge might very properly have so ruled upon the admitted facts in the case. That he submitted it as a question of fact, gave appellant company a larger advantage than it had a right to expect. What we have said disposes of the first and second assignments of error.

Exception is taken to the answer to the plaintiff’s fourth point, which was as follows : At the time the contract was made, Hawkins avenue had no surface sewerage system and no sewer drops had been constructed, and, therefore, the defendant was not bound to construct sewer drops on the bridge approaches.” The answer was: That point is affirmed as matter of law. Defendant was not bound to construct sewer drops there, but, as I have charged you, the defendant was bound to construct an approach which would not contain the elements of its own destruction; if it became necessary to take care of water that came on that street, then it was the defendant’s duty to do so.” The point as stated should have been refused. It is not correct to say as matter of law, that because at the time the contract was made, Hawkins avenue had no surface sewerage system, no obligation rested upon appellant to construct sewer drops. As we have said already, this contract was made in contemplation of certain proposed changes in the street, and it is to be construed accordingly. The obligation of appellant was to so construct the approaches as to meet the end in view. The only question with respect to the sewer drops is, whether they fell within the common intent and understanding. In deciding this regard is to be paid to the object to be accomplished and the method of construction. In the state of the evidence with respect to the matter it was a question for the jury, and it was properly submitted.

It was argued that the work was done without objection from any source, or intimation that any other kind of material or mode of construction was intended or expected, and that, therefore, the plaintiff was concluded. The argument fails to make the proper distinction. The plaintiff’s contention is not that the work was defectively done in the sense that it was unworkmanlike, or that the materials were insufficient, or that the general scheme was departed from, but that the work was not completed. Can any reason be suggested why the plaintiff had not as much right to expect appellant to construct a retaining wall where it omitted to do so, as where it did construct such wall ? It is not protended that the plaintiff acquiesced in this incompleteness. It was evidently contemplated, so says the court in a portion of the charge not challenged, that whatever provision was to be made for carrying off the water was to be made after the construction of the bridge by appellant, since it had put in a drain to take the water off the tracks. If the fact be as here stated, here again is an incompleteness, not defectiveness in any other sense. There was no acceptance of the work by the plaintiff; and if incomplete and unfinished, nothing short of such acceptance would constitute a waiver.

The assignments of error are overruled, and the judgment is affirmed.


text:
    Schoyer, Appellant, v. Kay.

      Will — Devise—Dife estate — Limitation over — Testamentary power.

    A devise in a will was, “.to my daughter-in-law I devise and bequeath the rents, issues and profits of my warehouse .... for and during the term of her natural life. It is my will that she shall not have the power to sell, or encumber said property, but that she shall have power to devise the same by last will and testament.” Held, that the daughter-in-law took a life estate only.
    Argued Nov. 1, 1906.
    Appeal, No. 160, Oct. T., 1906, by plaintiff, from judgment of O. P. No. 3, Allegheny Co., Feb. T., 1906, No. 754, for defendant on case stated in suit of Lucy O’Hara Schoyer v. Frederic G. Kay.
    Before Mitchell, O. J., Fell, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Case stated to determine the marketable title to real estate.
    From the record it appeared that the plaintiff was formerly Mrs. Lucy Morrison, and a daughter-in-law of "William Morrison.
    The latter by his will directed as follows :

      “ 9. To my daughter in-law, Mrs. Lucy Morrison, I devise and bequeath the rents, issues and profits of my warehouse and lot situate on Wood street in the city of Pittsburgh, and novy in the possession of J. R. Weldin & Company, for and during the term of her natural life. It is my will that she shall not have power to sell or encumber the said property, but that she shall have power to devise the same by last will and testament. The devise is in lieu and stead of the annuity which I am now paying to my said daughter-in-law, and which on her electing to accept this provision of my will shall cease and determine. If the warehouse should be destroyed by fire, insurance to be expended in the reconstruction of building. The insurance premium to be paid from time to time by my executors. On settling their final account the executors may invest enough money in the name of the Safe Deposit & Trust Company to keep the premiums paid.”
    The plaintiff claimed an estate in fee simple under the will.
    The court in an opinion by Kennedy, P. J., held that the plaintiff took a life estate only, and entered judgment for defendant.
    January 7, 1907:

      Error assigned was in entering judgment for defendant.

      John P. Punter, of Schoyer dé Punter, for appellant.

      J. M. Shields, for appellee, was not heard.
   Per Curiam,

There is no room for resort to any rules of construction nor to any presumptions as to the testator’s intent. What he meant is as plain as language can make it. The devise was “ to my daughter-in-law, Mrs. Lucy Morrison, I devise and bequeath the rents, issues and profits of my warehouse and lot situate on Wood street .... for and during the term of her natural life.” If testator had stopped hero, the devisee would have taken a life estate and nothing more. But he did not stop there because he had not expressed his whole intent, which was that the devisee should have a power of appointment by will. Therefore, he added “ It is my will that she shall not have power to sell or encumber the said property, but that she shall have power to devise the same by last will and testament.” The first clause of this sentence was superfluous, but did no harm as it merely emphasized the intent that there should be no alienation except by will. If he had transposed the sentence so as to read “she shall have power to devise the same by last will and testament but shall not have power to sell or encumber,” there could have been no question about his intent, and yet the meaning would have been exactly the same. “ It is a rule of common sense as well as law not to attempt to construe that which needs no construction: ” Reck’s Appeal, 78 Pa. 432.

Judgment affirmed.


author: Mr. Justice Fell,

text:
    Graham v. Carnegie Steel Company, Appellant.

      Deed — Reformation of deed — Mistake—Mutual mistake — Evidence.
    In order to reform a deed on the ground of mistake, it must clearly appear by the testimony of witnesses who distinctly remember the facts that a mistake was made and that the writing does not express the agreement. The testimony must be clear, precise and indubitable, and of such weight and directness as to carry conviction to the mind.
    On a bill in equity to reform a deed, reserving a right of way, it was averred that by mutual mistake of the parties the words “nine degrees” were used instead of the words “nine per cent” in describing the grade of the way. The testimony established nothing except that the agents for the grantor were mistaken as to what a nine degree grade was, not that there was a mutual mistake in making the deed. Held, that complainants were not entitled to the relief sought.
    Argued Nov. 2, 1906.
    Appeal, No. 180, Oct. T., 1906, by defendant, from decree of O. P. No. 2, Allegheny Co., April Term, 1904, No. 375, on bill in equity in case of Harry J. Graham v. Carnegie Steel Company, a corporation, Union Railroad Company, Monongahela Southern Railroad Company and Carnegie Steel Company, Limited.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Bill in equity to reform a deed.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was decree reforming the deed.

      Samuel McClay, of Reed, Smith, Shaw & Beal, for appellant.
    In order to reform this deed, it was necessary that the appellee prove his contention by testimony, which was: “Clear, precise and indubitable; carrying conviction to the mind of the Chancellor, and that the witnesses remember the facts distinctly, truly and accurately: ” Cullmans et al. v. Lindsay et al., 114 Pa. 166; Edmond’s App., 59 Pa. 220; Boyertown Nat. Bank v. Hartman, 147 Pa. 558; Bunse v. Agee, 47 Mo. 270; Fulton v. Colwell, 50 C. C. A. 537 (112 Fed. Repr. 831); Hollenback’s App., 121 Pa. 322.

      January 7, 1907:

      John M. Freeman, with, him D. T. Watson and Chantler, McGill & McClung, for appellee.
    The law requires that evidence to reform a written instrument on the ground of mistake must be clear, precise and indubitable, and we think the evidence in this case clearly comes up to that standard: Highlands v. R. R. Co., 209 Pa. 286; White v. Black, 14 Pa. Superior Ct. 459.
   Opinion by

Mr. Justice Fell,

The bill filed in this case was to compel the removal of obstructions from the plaintiff’s right of way over the land of the defendant. An amendment was allowed in which it was averred that by mutual mistake of the parties to the deed reserving the right of way, the words “nine degrees” were used instead of the words “nine per cent” in describing the grade of the way, and there was a prayer added for the reformation of the deed. In 1896 Mary Oliver conveyed to the Carnegie Steel Company, Limited, one of the defendants, a tract of about thirty-nine acres of land, reserving the right to a private road over the land granted, from a public street to other land of the grantor which was entirely surrounded by private property and had no other outlet. She also reserved the right to grant rights of way over the street, either at or above grade, to any electric railway. Her grantee was “however, to have the right to change the grade of said road by filling or otherwise so long as said change of grade shall not prevent the ordinary use of said road or cause the grade of the same or any portion thereof to exceed nine degrees.”

It is averred in the bill that the company’s object in purchasing the land was to secure a place of deposit for slag and refuse matter from its furnaces; that it had made large deposits on the right of way, which had been so placed as to obstruct and prevent its use ; that in some places there are deep depressions and in others there are embankments which extend above the maximum grade permitted by the stipulation in the deed. The decree entered after final hearing directs the reformation of the deed and the removal of slag and refuse deposited in excess of a nine per cent grade. This decree is based on the findings that the right of way is appurtenant to the complainant’s land, and that the real intention and agreement of the parties to the deed was that the grantee should have the right to change the grade of the road, not to exceed nine feet in one hundred, and that the words nine degrees ” were inserted in the deed by mutual mistake.

"We have the bare findings on which the decree rests without the advantage of any discussion of them, and are left to search the record for testimony to support them. The conveyance was made in pursuance of a written agreement executed four months before the deed, in which the words “ nine degrees ” were used to indicate the grade. The' deed was delivered October 10, 1896 ; the deposit of slag was continuous and almost daily from 1898 to 1903, and until the filing of the amendment to the bill in 1904 there was no suggestion of a mistake. The negotiations for the purchase of the property extended over a period of six months. The agreement and the deed were both drawn by the grantor’s counsel, who, while unable to recall what instructions were given him in regard to the grade, testified that all the instructions he received were from the grantor’s sons, William and George Oliver, who represented her. The plaintiff’s case rested wholly on the testimony of these two men. Neither knew at the time of the agreement thát there was a difference between a nine degree and a nine per cent grade, nor did either remember that there was a written agreement of sale, though both signed it. Their testimony is vague and indistinct. They could not recall what was said in relation to the grade, but only that there was an understanding that there was to be a reasonably easy grade of about nine or ten feet to the hundred. One of these witnesses is directly contradicted by a witness who was present during a part of the negotiations, who testified that he explained to him that a nine degree grade meant a rise of nearly sixteen feet in one hundred and that the road would be of little practical use. The company was represented in the negotiations by its chief engineer and by its vice president, who was in charge of its real estate department. They testified that no mistake had been made in naming nine degrees as the grade agreed upon. Both of these witnesses knew what a nine degree grade was and how it would affect the property for the use for which it was bought. The vice president of the company, whose duty it was to affect the purchase, testified clearly and distinctly that it was agreed that the grade should be nine degrees; that he understood how a road of this grade would affect the property; that he consented to the reservation of the road at this grade as a concession because it would not be a serious objection, and that he would not have agreed to a nine per cent grade because a road of that grade would have involved a very heavy expenditure.

In order to reform a deed on the ground of mistake, it must clearly appear by the testimony of witnesses who distinctly remember the facts that a mistake was made and that the writing does not express the agreement. The testimony must be clear, precise and indubitable, and of such weight and directness as to carry conviction to the mind : Edmond’s Appeal, 59 Pa. 220; Boyertown Nat. Bank v. Hartman, 147 Pa. 558; Highlands v. Railroad Co., 209 Pa. 286. The testimony on which the finding of the court is based fell far short of this standard. It established nothing except that the agents of the grantor were mistaken as to what a nine degree grade was, not that there was a mutual mistake. The mistake shown was a mistake on their part in making the bargain, not a mutual mistake in making the deed.

The decree reforming the deed is reversed at the cost of the appellee. ¥e do not dismiss the bill because the appellant may be required to make the road fit for ordinary use at the grade named in the deed.


author: Mr. Justice Potter,

text:
    Donner v. Donner, Appellant.

      Equity — Accounting—Profits—Trusts and trustees — Corporations.
    Where a corporation is organized with a large capital, and the organizers pay in in cash only one-tenth of the capital stock, and thereafter one of the organizers sells to his brother a portion of his stock holdings at par, paying himself with moneys which he had received from his brother for investment, and subsequently the organizers develop the company by means of moneys borrowed on the company’s notes with their own indorsements, and not by paying up the capital, and thereafter the company, together with certain subordinate companies which it owned, are sold at a very large profit, the organizer who sold stock to his brother must account to him for profits received in proportion to their respective holdings of capital stock, and not in proportion to the funds furnished by the brother to all the money invested in the enterprise whether paid on account of stock, or borrowed on the company’s notes.

      Equity — Master’s findings of fact — Accounting—Review.
    On a bill in equity against a trustee for an accounting, the appellate court will not review a master’s findings of fact that the defendant sold certain bonds at par, and not at a discount, where such findings are confirmed by the court below, and are based upon admissions of the defendant, the papers in the case, and other competent evidence.
    Argued Nov. 1, 1906.
    Appeal, No. 177, Oct. T., 1906, by defendant, from decree of C. P. No. 1, Allegheny Co., Sept. Term, 1903, No. Ill, on bill in equity in case of Frank Donner v. William H. Donner.
    Before Mitchell, C. J., Fell, , Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for an account.
    The facts appear by the opinion of the Supreme Court and by the previous report of the case in 211 Pa. 409.
    The court, in an opinion by Brown, J., overruled certain exceptions to the report of J. M. Swearingen, Esq., master.

      Error assigned was the decree of the court.

      James H. Beal and William A. Stone, with them Reed, Smith, Shana de Beal and Robert J. Dodds, for appellant.
    The appellee’s interest in appellant’s interest in the Union Steel Company, Union Improvement Company and River Coal Company, should be fixed in the proportion that the amount of money contributed by appellee bears to the amount actually contributed by the appellant for his one-fourth interest: Donner v. Donner, 211 Pa. 409.
    If the accounting should be made upon the basis of the interlocutory decree» as affirmed by this court, then the appellee is entitled only to a share of the proceeds and profits accruing to the stock interest of appellant, and these proceeds and profits are to be ascertained by finding the amount of bonds remaining alter payment of the debts and obligations required to be paid by the Mellons and W. H. Donner under the contract of sale : Jackson v. Thomson, 215 Pa. 209; Reeder v. Trullinger, 151 Pa. 287; Hart v. Stribling, 25 Florida, 433 (6 So. Repr. 455); R. R. Co. v. Bixby, 57 Vt. 548.
    January 21, 1907:
    The amount of the indebtedness of the Union Steel Company, River Coal Company, Republic Coke Company and Donora Mining Company, assumed and paid by Mellons and W. H. Donner, was $15,746,938.15, and the amount of bonds remaining for distribution to the stock interest, after payment of this debt, was $2,975,115.20 of bonds at par value, of which W. H. Donner received one-quarter.
    Mellons and Donner accepted these bonds at $708.07 per bond in payment of the money obligations of the Union Steel Company to them, including the payments required to be made under the Sharon-Union and steel corporation agreements, and this ivas a fair price at which to take the bonds.

      John G. Bane, with him D. F. Patterson, for appellee.
   Opinion by

Mr. Justice Potter,

This case was here before on an appeal from the interlocutory decree of the court below, ordering an accounting: Donner v. Donner, 211 Pa. 409. In that decree it was determined that the plaintiff was entitled to four fifty-fifths of the interest of the defendant in the various companies named in the bill. Ye were of the opinion that the principle upon which the accounting was ordered, was sound, although we did not agree with the calculation by which the exact fractional interest was ascertained. But as no exception had been filed by the plaintiff, and no appeal taken by him, that feature of the case was not considered, and the decree was affirmed as it stood.

Upon the return of the record, the court below ordered defendant to state and present to the court his account as trustee of the plaintiff, with leave to plaintiff to file exceptions thereto. In pursuance of said order an account was filed by defendant, to which plaintiff filed exceptions. Thereupon, the court appointed Joseph M. Swearingen, Esq., master to state the account of "Win. II. Donner as trustee of Frank Donner in accordance with the findings of fact and law and the decree of this court and the opinion and decree of the Supreme Court therein, and to make report thereof to the court.”

The present appeal is taken by defendant from the dismissal of exceptions filed by him to the report of the master, and to the final decree, which confirmed the master’s report, with a single modification.

Counsel for appellant have argued at considerable length substantially the same questions with regard to the basis of the proportionate interests of the appellant and the appellee which were decided on the former appeal. Due respect for the ability and force with which the argument in this particular was presented has led us to carefully re-examine the basis of our former decision; but, as a result, it has not appeared that we were under any material misapprehension as to the facts in reaching our former conclusion. Nor can we see anything wrong in the theory upon which the main question in the former appeal in this case was decided. The argument of counsel and our own investigation have tended to emphasize the fact which appears clearly in the evidence, that the parties in control of the Union Steel Company did not pursue the ordinary and sound business policy of paying into the treasury of the company, in cash or its equivalent, the capital stock of the company. Instead of paying in the required fund's as capital, they chose to put their contributions to it, into the form of a loan to the company and took the demand notes of the company therefor. The result was, that instead of being amply provided with capital of its own, the company was placed in .the position of being heavily in debt to its own stockholders. It matters not whether the notes thus taken from the company were discounted in bank or not. That is wholly immaterial. The notes were given to W. H. Donner and the Messrs. Mellon, and afterwards the payment of this indebtedness was made the excuse for the creation of an immense bonded indebtedness, which would have been wholly unnecessary for the purposes of the company, if the cash which had been paid in had been applied to capital stock. Strange as it may appear, there is no evidence that of the immense issue of $20,000,000 of capital stock, anything more than an insignificant fraction was ever paid into the treasury of the company. The total investment in the properties was $17,853,534.34, so that- the amount of the capital stock finally issued, which was $20,000,000, would have been, if it had been paid up in cash or its equivalent, considerably more than enough to cover the entire amount. Or, to put it in another way, if the funds which were actually advanced by W. H. Donner and his associates, the stockholders of the company, had been paid into the treasury of the company as capital stock, there would have been no indebtedness, and no occasion for an issue of bonds to provide the necessary capital for the company, and the questions in dispute in this case would not have arisen. It was the deliberate withholding from the company of the proceeds of the capital stock, which made occasion for the bond issue. As a matter of fact, while the business was carried on under the corporate name of the Union Steel Company, the formalities of corporate management were dispensed with, and the methods followed were entirely those of a partnership. In his answer, W. H. Donner says, “No meetings of the stockholders, and no meetings of the directors as such (except for organization) of said Union Steel Company were ever held until after the arrangement for the sale of its capital stock to the United States Steel Corporation, as hereinafter described. The business affairs of said enterprise were carried on by Mr. A. W. Mellon, Mr. R. B. Mellon and myself.” The matter of the organization of the company and the peculiar methods adopted by its promoters to supply it with funds by lending the money to it, and taking its notes instead of its certificates of stock, is not directly before us, but it has been brought into the case, and we have felt obliged to take note of it, by reason of the zeal of counsel in rearguing questions which were considered and disposed of on the former appeal. We see no reason whatever to change the conclusions we then reached.

When the case was here before, it was admitted, that for the sale of the properties by W. H. Donner and the Mellons, they received bonds of the total par value of $25,214,288.41, and that the total investment in the Union Steel Company and its subsidiary corporations was $17,853,534.34. If the bonds be considered as worth par, this left a profit of $7,360,754.07, of which one-fourth belonged to W. H. Donner, and this amount, or $1,840,188.52, was paid or set over to him in bonds of the Union Steel Company, guaranteed by the United States Steel Corporation. These profits only arose or appeared after the payment of the indebtedness of the company.

That these profits were actually made, and paid over in the shape of bonds, to W. H. Donner, appears over and over again from the records of this case. It appears clearly from the admissions of the defendant in his answer, and it is also shown by the account filed by him, and by the statement of the settlement between him and the Mellons. The defendant admitted, in his statement, exhibit No. 55, offered in evidence upon the trial before the court, that his profits were $1,840,188.52. He testified that he had this statement prepared, showing accurately the profit made by the Messrs. Mellon and himself. In a prior statement rendered May 1, 1903, identified as exhibit No. 37, he had already admitted a total profit on the transaction of $7,316,229.27, of which his one-fourth would be $1,829,057.32.

That the profits of the defendant, embodied in bonds, were actually in his possession or control, was not disputed, on the former appeal. The dispute was as to the proportions only, into which these profits of defendant should be divided in the settlement with his brother. Now, in the present appeal, it appears that, for the first time in the history of the case, W. H. Donner set up before the master, the claim, that instead of the Union Steel Company being allowed par for the bonds taken from it by its stockholders in payment of the funds advanced to it, there was an arrangement made between themselves by which he and the Mellons took the bonds from the company at a valuation of about seventy cents on the dollar. This claim is entirely inconsistent with the theo'ry of the case when it was tried upon its merits in the court below, and when presented here before. If it is correct, the defendant could not have made the profit of $1,840,188.52 which he then reported and admitted over and over again. Whether they did or not take the bonds from the company at this reduced rate, instead of receiving them at par, is a question of fact; and both the master and the court below have found this fact against the contention of appellant, and have found that the bonds were issued and accepted at par.

The master, in his report, after referring to the fact that the attempted distribution of the bonds into capital and indebtedness by the defendant, was arbitrary, and not in accord with the actual transaction, says : I cannot find from the evidence that of the investment of $17,853,534.34, $2,106,596.19 was capital stock and the remainder, $15,746,938.15, indebtedness, and that the bonds received were distributed accordingly ; nor can I find that the price at which the bonds were taken was $708.0721.” (on each $1,000 bond); thus squarely negativing the contention of appellant.

We can find nothing in the facts of the case, or in the details of the transaction, from start to finish, to indicate that the bonds of the company were not considered as worth par, by its stockholders, when they accepted them in exchange for the properties of the company in what was to them a most profitable deal.

It must be remembered that the bonds 'were not sold or offered for sale by the company in the open market, but were placed by the defendant and his associates upon what was at the time their own property, and issued for the express purpose of enabling them to make sale of that property on satisfactory terms. Under sncli circumstances, the bonds were presumably worth much more to the stockholders than they would be to the outside public. Especially was this the case, when the transaction did not not call for new funds from these stockholders, but involved only the sale of properties in which their funds were already invested to a very large amount, and in an enterprise which they would bo compelled to carry to a successful issue, in order to save themselves from heavy loss. In other words, if the investment was for any reason undesirable, they were already committed to it, and to a very large extent.

The defendant never set up in his answer any claim that the bonds were accepted at less than par. Nor does his statement of accounts contain any such claim ; but throughout it constantly and consistently treats the bonds as being worth par. The statement upon which settlement was made between "W. H. Donner and the Mellons, also treats the bonds throughout upon the basis of par, and contains no indication that any part of them were taken, or were regarded, as worth less than par. That statement, shown as exhibit No. 4, contains a note as follows: “Note O. Profits shown are based on bonds at par.”

A further bit of corroborative evidence appears in the fact that the defendant gave to the plaintiff a rough statement, exhibit No. 36, in which he then estimated that plaintiff was entitled to a profit of sixty per cent upon the transaction. In this statement, no distinction is made between the bonds at par and cash. Frank Donner’s investment had been $25,000 in cash, and it was upon this amount that W. H. Donner then desired to make a settlement, on the basis of sixty per cent profit. This would be $15,000, which, added to the $25,000 of original investment, made $40,000; and, in pursuance of this calculation, W. H. Donner actually sent his brother forty $1,000 bonds, which had a total par value of just $40,000. This shows that at that time, March 10, 1903, which was only a few days after the bonds' had been received, with the guarantee of the United States Steel Corporation upon them, the defendant regarded them as worth par, and used them at that valuation in attempting to discharge an admittedly just and valid obligation payable in cash or its equivalent.

And another incident, showing the view then held as to the value of the bonds, is this. The bonds were received by W. H. Donner and the Mellons early in March, 1903, and on April 9, within a month thereafter, the defendant wrote to Frank Donner offering to send,hi™ $1,000 for one of his bonds, thus indicating in a very practical way that he then considered them worth par. Again, on June 6, 1903, ten days before this bill was filed,-the defendant sent to counsel for plaintiff a paper, identified as exhibit No. 37, which is entitled a “ general statement, showing selling price, investment and profits,” and in this statement the bonds are treated throughout as if they were taken as cash at their par value.

That these bonds were as a matter of fact issued and accepted by all parties concerned, at the par value, is strongly evidenced by the agreement with the United States Steel Corporation, and by the proposition of T. Mellon & Sons to the directors of the Union Steel Company, by which they agreed to purchase, and did purchase, at par and accrued interest, $3,000,000 of the bonds. Everywhere throughout the transaction it appears that the bonds were considered as worth par and as the equivalent of that much in cash. It is difficult to see any reason why this should not have been the case. The bonds were issued by the Union Steel Company, and payment of them is guaranteed by the United States Steel Corporation, one of the largest, richest and most powerful corporations in the world. They are of the denomination of $1,000 each ; are dated December 1, 1902; are payable at the expiration of fifty years after their date; are free of taxes; are redeemable after December 1, 1907 at 110 and interest; and bear interest from December 1, 1902, at the rate of five per cent per annum payable semiannually. They are secured by a first mortgage and collateral trust deed upon all the property of the Union Steel Company, including the stocks and after-acquired property; and said mortgage provides for an annual sinking fund of two per cent of the bonds outstanding and unpaid.

The suggestion of counsel for appellee seems to be well founded, that it was an afterthought on the part of the appellant, to claim that these bonds were issued in payment of the indebtedness of the company at a valuation of a little more than seventy cents on the dollar. The master finds that the position taken by the accountant in this respect was untenable, and the court below was much more emphatic in rejecting the suggestion that the accountant should have the benefit of the bonds at seventy cents on the dollar, and we see no reason to differ with its conclusion in this respect.

Several of the assignments of error raise questions as to certain credits claimed by accountant, and disallowed by the master and the court below, and as to the charge of $1,818.18 against the accountant in the matter of the Union Improvement Company. These were all purely matters of fact, and there was sufficient evidence to sustain the findings of the master, which are affirmed by the court, and we will not disturb them.

The assignments of error are all overruled, the decree of the court below is affirmed, and this appeal is dismissed at the cost of appellant.


author: Mr. Justice Brown,

text:
    Jonathan Clark & Sons Company v. Pittsburgh, Appellant.

      Municipalities — Municipal contract — ■Extra work — Advertisements— Acts of May 23, 1874, P. L. 230, and March 7, 1901, P. L. 20 — Arbitration clause.

    A municipal contract for the construction of a reservoir in a city of the second class may lawfully provide that the contractor shall do such extra work as the director of public works shall require, and that the compensation for such work shall be its reasonable cost to the contractor, plus ten per cent, for profits, use of tools, etc. Such a provision does not violate the Acts of May 23, 1874, P. L. 230, and March 7,1901, P. L. 20, which require municipal contracts to be awarded to the lowest responsible bidder after advertisement for proposals.
    Items of extra work which are clearly incidental to the general work, which have been recommended by the engineer in charge, and the cost of which is ascertained beforehand by an understanding with the contractor, may be ordered by the director, and if the work is done by the contractor, he is entitled to compensation therefor.
    Where an arbitration clause in a municipal contract provides that any dispute respecting the work, or materials “or respecting any pay for extra work,” shall be referred to the director of the department of public works, “whose decision thereon shall be final, conclusive and binding,” the decision of the director as to the amount due the contractor for extra work, is conclusive upon the city in the absence of fraud, accident or mistake.
    Where a municipal contract authorizes the director to pass upon “any question or dispute .... respecting any matter pertaining to” the contract, a decision of the director that the contractor should not be charged for any sum as liquidated damages for delay in completing the work, is binding upon the city.
    Argued Oct. 26, 1906.
    Appeal, No. 142, Oct. T., 1906, by defendant, from judgment of C. P. No. 2, Allegheny Co., April T., 1903, No. 812, on verdict for plaintiff in case of Jonathan Clark & Sons Company for the use of The Mercantile Trust Company v. City of Pittsburgh.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit on a municipal contract. Before Frazer, P. J.
    The facts are stated in the opinion of the Supreme Court.

      At the trial the court refused binding instructions in favor of defendant as to certain items of extra work. [8, 9, 10]
    Defendant presented, inter alia, this point:
    5. If the foregoing points are refused, the court is respectfully requested to charge the jury that, unless the jury finds that the items of extra work and materials referred to above in the second, third and fourth points were merely incidental to the work, such items or so much thereof as found not to be incidental cannot be recovered in this case. Answer: Refused. [11]
    The court charged in part as follows :
    [As I said a moment ago, gentlemen, as we understand the law, this award if made by the director is binding upon the parties; they having agreed to submit any differences or disputes that arose between them to the director of the department of public works, it was their duty if any differences arose to submit them to that officer, and if the director heard the parties and made his award they would be bound by it, unless the award was fraudulent in some respect, or was made by accident, or there was some mistake in it; something like an error in adding up the figures, or something of that kind; but so long as there was no fraud, accident or mistake in arriving at the amount due, by the director, the parties would be bound by the award. Of course, if there was fraud upon the part of the director, or upon the part of either of the parties to the contract, the award would be invalid ; but in this case, as there is no evidence of fraud, accident or mistake, as we understand the law, if the director of the department of public works made an award under the agreement and found in favor of either of the parties, both parties would be bound by it, so that is practically the question you have to determine in this case. Was Dr. McCandless the director of the department of public works of the city of Pittsburgh on February 24, 1903 * If he was the director of the department of public works at that time, were the disputes arising under the contract submitted to him ? Did he act upon them and did he make the award admitted in evidence and read to you ?
    The uncontradicted testimony is that he was the director, and that he heard the parties, or one party, after affording both an opportunity to appear, and that he made an award. If you find this is his award, made under these circumstances, the plaintiff is entitled to recover.] [12]
    [The sole question, as I said a moment ago, is : Is that award the award of the director of the department of public works of the city of Pittsburgh, and was it made in accordance with the terms of the contract between the parties % The testimony is that it was, and if you believe the testimony, plaintiff would be entitled to a verdict in its favor and entitled to recover, first, the sum of $102,232.30, with interest from December 4, 1902, and also the sum of $56,960.86, with interest from February 18, 1903, and the balance of $28,334.65, with interest from December 4, 1903. If the award is not an award of the director of the department of public works the verdict should be for the defendant.] [13]
    Yerdict and judgment for plaintiff for $219,013.08. Defendant appealed.

      Errors assigned among others were (8-13) above instructions, quoting them.

      A. M. Thompson, assistant city solicitor, with him T. B. Carnahan, assistant city solicitor, and W. B. Rodgers, city solicitor, for appellant.
    The arbitrator exceeded his jurisdiction in allowing the extra work claims: Ayers v. New Castle, 10 Pa. Superior Ct. 559; Lauman v. Young, 31 Pa. 306; Somerset Boro. v. Ott, 207 Pa. 539; Chandley Bros. & Co. v. Cambridge Springs Boro., 200 Pa. 230; March v. Lukens, 214 Pa. 206.
    The law relating to contracts of cities prior to the act of 1901, will not support this award : Mazet v. Pittsburgh, 137 Pa. 548; Addis v. Pittsburgh, 85 Pa. 379; Filbert v. Philadelphia, 181 Pa. 530; Ayers v. New Castle, 10 Pa. Superior Ct. 559; Hague v. Philadelphia, 48 Pa. 527; Lehigh County v. Kleckner, 5 W. & S. 181; Frame v. Felix, 167 Pa. 47.
    In other jurisdictions, the courts have been zealous in their protection of municipalities from claims of this sort: McBrian v. Grand Rapids, 56 Michigan, 95 (22 N. W. Repr. 206); Brady v. New York City, 20 N. Y. 312; Bonesteel v. New York City, 22 N. Y. 162; Nelson v. New York City, 63 N. Y. 535; In re Merriam, 84 N. Y. 596; Dillon on Municipal Corporations, 4th ed., sec. 466.
    January 21, 1907:
    The Act of March 7, 1901, article XV, sec. 1, P. L. 36, a fortiori renders this award void : Singleton v. Benton, 114 Ga. 548 (40 S. E. Repr. 811); Hall v. Kimmer, 61 Mich. 269 (28 N. W. Repr. 96); South Carolina R. R. Co. v. Moore, 28 Georgia, 398; Hale v. Sharp, 44 Tenn. 275; Haley v. Long, 7 Tenn. 93.
    The contract on this point permits the city to retain $100 per day for delay from the sum which may finally be due the contractor and this sum is fixed and determined as liquidated damages : Chandley Bros. & Co. v. Cambridge Springs Boro., 200 Pa. 230; King Iron Bridge, etc., Co. v. St. Louis, 43 Fed. Repr. 768.

      Win. A. Stone, with him Stephen Stone, for appellee.
    Where a municipal contract provides that the decision of the director of the department of public works shall be final, conclusive and binding upon all parties, and the director signs and approves the estimate for the work done and material furnished by the contractor, the estimate is final, conclusive and binding upon the controller of the city, and he has no discretion to refuse to pay it: Com. ex rel. v. Pittsburgh, 204 Pa. 219; Hostetter v. City of Pittsburg, 107 Pa. 419; Malone v. Phila., 12 Philadelphia, 270; Com. ex rel. v. Philadelphia, 176 Pa. 588; Hartupee v. City of Pittsburg, 97 Pa. 107.
   Opinion by

Mr. Justice Brown,

Jonathan Clark & Sons Company, a foreign corporation, entered into a contract with the city of Pittsburgh for the construction of a reservoir in Highland Park. The Mercantile Trust Company became surety for the contractor for the faithful performance of its contract. The work was abandoned by the contractor, and the surety, with the consent of the city, undertook to complete it. Hpon its completion this suit was brought to recover the balance alleged to be due. The chief contention of the city is as to the amount recovered for extra work, and the reason assigned for asking that it be disallowed is that it had not been awarded to the lowest responsible bidder, as required by the Acts of May 23, 1874, P. L. 230, and March 7, 1901, P. L. 20.

It is not pretended that the contract for the construction of the reservoir was not awarded to the lowest responsible bidder. On March 18, 1897, public notice was given to contractors that sealed proposals would be received until April 6th following for furnishing materials for it and for its construction in accordance with the plans and specifications on file in the office of the Bureau of Water Supply and Distribution. On May 13, 1897, after due advertisement, the contract was awarded to Jonathan Clark & Sons Company. One of its provisions was that the contractor would do such extra work as might be required by the Director of the Department of Public Works for the proper construction and completion of the reservoir and its appurtenances; that it would not be entitled to payment for extra work unless the same should be done in obedience to a written order from the Director; that all accounts for extra work done in any month should have the original order attached to them and be filed in writing with the Director before the tenth day of the following month; and that the compensation to be paid for all extra work should be its reasonable cost to the contractor for labor and materials actually used, as determined by the Director, plus ten per cent, for profit, use of tools, etc. This provision, limiting the compensation to be paid for extra work, was known to all bidders, from the lowest responsible one to the highest, and was, of course, taken into consideration by them in submitting their proposals; and it contravenes neither the letter nor the spirit of the act of 1874 or 1901. The contract itself was awarded to the lowest responsible bidder, and, having been for the construction of a reservoir more than likely to require, from time to time, necessary extra work not definitely provided for in the contract, because not to be foreseen when it was executed, it would have been improvident on the part of the city not to have inserted the provision limiting the amount to be paid to the contractor for the same. By fixing the limitation on the amount to be paid for extra work that might be required the city did about all it could have done to protect itself from imposition by the contractor in doing such work. It announced to the bidders, through its advertisement, what would be the definite basis of compensation for the same, and in bidding on the general work they knew exactly what profit there would be in the incidents to it, designated as extra work. If a city should not be permitted to insert in a contract for municipal improvements a provision for the payment for extra work becoming necessary as the general work progresses, but must always award the same to the lowest responsible bidder, after advertisement for proposals, there would be inevitable delay in the completion of the work called for in the contract, with no certainty of any saving to the city, but with likelihood of greater cost than if the extra work were done under a provision similar to the one in this contract; and if each item of extra work should be awarded to a separate bidder, the confusion to follow in the general work may be well imagined, even if the imagination of the distinguished counsel for appellee is stretched in likening it in his brief to “ the confusion of tongues that occurred in the construction of the Tower of Babel.”

It is conceded by appellant that the Director of the Department of Public Works had authority to direct minor and incidental changes which became necessary in the construction of the reservoir. As he undoubtedly had such authority, did. he exceed it in ordering the extra work, to the payment of which the city, now objects? The three items were for strengthening a concrete layer by the insertion of ribs, for increasing the thickness of a cement finish, and for drainage for the protection of the embankment and slopes. These were required only after the engineer in charge of the construction of the reservoir had formally recommended each of them to the Director, and after that officer had satisfied himself that the recommendations were proper. But even then the contractor was not directed to do this extra -work until there was a definite understanding as to what it was to cost, in accordance with the terms of the contract providing for its payment. The items were clearly incidental to the general work. The appellant made no attempt to prove that they were not, but asked the court to instruct the jury that the appellee could not recover for such items of extra work as were not incidental. Prima facie, they were all incidental, and, without proof to rebut this, the jury ought not to have been allowed to find otherwise.

By one of the clauses in the contract it is provided : “ In case any question or dispute shall arise between the party of the second part hereto and the said city of Pittsburgh, party of the first part hereto, under the said plans, specifications or terms of this contract, respecting the quality} quantity or value of the work or labor done or materials furnished; or to be done or to be furnished, or any of the terms, stipulations, covenants or- agreements herein contained, or respecting any pay for extra work, or respecting any matter pertaining to this contract, or any part of the same, said question shall be referred to the Director of the Department of Public Works of the city of Pittsburgh, whose decision thereon shall be final, conclusive and binding upon all parties without exception or appeal, and all right or rights of any action at law or in equity under and by virtue of this contract, and all matters connected with and relative to. the same are hereby expressly waived by the party of the second part.” Under the authority conferred upon him by this clause the Director found the amount due the appellant for extra work, and his finding was final, conclusive and binding,” in the absence of fraud, accident or mistake. As •to this feature of the case, the instruction to the jury was so manifestly correct that we need say nothing in its vindication.

Another complaint of the appellant is that -the Director had no authority to pass upon the claim of the city for $100 per day for delay in completing the work. One of the provisions of the contract was that the city might retain from the contractor, as liquidated damages for the non-completion of the work within the time stipulated for its completion, the sum of $100 per day for each day’s delay. The arbitrator found that neither Jonathan Clark & Sons Company nor the Mercantile Trust Company had unduly delayed the construction of the reservoir, and that neither of the said parties should be charged the sum of $100 per day, nor any sum whatsoever, as liquidated damages for delay in completing the work. The delay may have been caused by the extra work required by the city; but, be this as it may, this claim was disputéd by the appellee, and its settlement came within the very broad powers conferred upon the Director, authorizing him to pass upon any question or dispute .... respecting any matter pertaining to” the contract. In Chandley Brothers & Co. v. Cambridge Springs Borough, 200 Pa. 230, cited by the appellant, the engineer attempted to go beyond the limited powers conferred upon, bim. II ere the arbitrator did what he was expressly authorized to do, for he passed upon a question or dispute respecting a matter pertaining to the contract.

The assignments are all overruled and the judgment is affirmed.