Coburn v. Cedar Valley Land Cattle/Opinion of the Court

by Melville Fuller

United States Supreme Court

138 U.S. 196

Coburn  v.  Cedar Valley Land Cattle

We are entirely satisfied with the conclusion of the circuit court, upon the evidence, that all the matters in controversy between the parties had been fully compromised and settled. The litigation was being prosecuted upon two bills and two cross-bills when the negotiations commenced, and involve the claims of the company against Coburn and Ewing, and the claim of Coburn and Ewing for compensation for services rendered in the purchase of the ranch. No reason appears for the saverance of claims so intimately connected, and the reservation of the latter while the former were settled. The proposition from Coburn and Ewing's solicitors of November 12th embraced three distinct offers, and each offer included compensation for services in and about the purchase. The response to this proposition stated what the counsel for the cattle company would recommend, the settlement so recommended 'to be a full and final adjustment of all the controversies between the parties, and of all claims of either party against the other,' and that counsel would under no circumstances 'advise the payment of commissions to C[oburn] and E[wing,] or any waiver of the company's right to defend against any claim that they may make on this account.' It is ingeniously argued by appellants' counsel that by this last clause it was intended to so exclude from the settlement this claim for compensation as to leave it outstanding to be litigated. But we think, on the contrary, that it was expressed with sufficient clearness that the company would not be advised to consider any offer of settlement except upon the condition of the surrender of this claim, and that it was for this reason that the negotiations were at that time terminated. Upon the 28th of December the negotiations were renewed upon the basis of the terms suggested by the cattle company, and the first letter of appellants' solicitor of that date declares that 'the terms then proposed contain substantially the correct basis of settlement,' and expresses the desire 'again to move in the direction of ending all this interminable litigation.' Appellees' counsel at once replied that, 'if you can bring your clients to agree to the terms proposed by us let me know.' On the same day appellants' solicitor, after going over the matter carefully with Mr. Coburn, wrote, proposing: '(1) That the stock of Coburn and Ewing be taken at $50,000; (2) that Coburn and Ewing pay back to the company the $40,000 received from Munson; (3) that the company, with American securities, indemnify Coburn and Ewing against any claim of the representatives of Burnett as to the $16,800; (4) that all suits be dismissed, each party paying his own costs, all claims for damages or compensation be waived, and full receipts passed; (5) that the salary of Ewing up to the time of his discharge be paid to him, amounting to about one month's pay, and that there be paid a few small items of expenses, amounting in all to a very small sum. As I understand, this is substantially your proposition to us.' To this appellees' counsel responded, on January 5, 186, that London counsel had advised that the company could not purchase or provide for the cancellation of the stock held by Coburn and Ewing, and therefore that Fisher did not feel at liberty to conclude the settlement upon the basis of taking back the stock, though he would, if a settlement could be agreed on which would leave the stock in the hands of Coburn and Ewing, or which would not require the company to take it; and that he had advised Fisher, who was leaving for London, to lay the whole matter before the board for instructions, which he hoped would enable 'us to agree with you upon some disposition of the stock, and upon a final satisfactory adjustment of the matters between the parties.' On the 26th of January appellants' solicitors wrote that Coburn and Ewing would settle 'the controversy with the company (1) by returning the $40,000 commission, and the company taking their stock at the actual price paid by them; or (2) they will turn over to the company 1,600 shares and retain 400; (3) in any event, C. & E. are to be protected against any claim by Burnett's estate, either by a release or indemnity. (4) Mess. C. & E. agree not to buy up or otherwise molest any of the range privileges now enjoyed by the company. (5) This settlement in no way to affect the arrangements heretofore made concerning the W. & L. cattle, but the same to be carried out by both parties in good faith as agreed upon, but not to enter into this arrangement in any other way whatever. In other words, the W. & L. cattle are in no way taken into consideration in this settlement. (6) The balance of salary as compensation to be paid to Mr. Ewing.' This letter should be read in connection with that of December 28th, for its apparent object was to accommodate the objection in relation to the stock, as well as to except the W. & L. cattle. The language in respect to the waiver of all claims for damages or compensation and the passing of full receipts was not repeated, but, taken in connection with the original response of the cattle company, and what had followed thereon, the cattle company and its counsel could not have understood that there was an intentional reservation of the question of compensation. The controversy referred to on January 26th, was the same controversy referred to in the letter of January 8th of the same counsel, and must be held to have covered the entire controversy in respect to which the parties were treating. On the 2d of February appellees' counsel inclosed the letter received from Mr. Fisher from New York, in answer to which appellants' counsel, referring to the suggestions of Fisher in relation to certain details of the settlement growing out of the difficulty in dealing with Coburn and Ewing's stock in the company, replied, saying, among other things, that Coburn and Ewing ought to repay the $40,000; but, 'on the other hand, this company has received the benefits of their labor without any expense.' Fisher carried with him to London, as appellants were informed, 'the several propositions of settlement which have been under discussion,' and which bore upon their face the concession that Coburn and Ewing no longer claimed to be entitled to compensation. Upon the 24th of February the copy of the letter from the secretary of the cattle company was sent to appellants, stating that the board of directors had had under consideration the two alternative offers of the 26th of January for the settlement of the claims made by the cattle company, and that neither of these propositions was acceptable. These alternative offers related to the company's taking Coburn and Ewing's stock, at the actual amount paid by them, or taking 1,600 shares and retaining 400. The secretary then proceeded to state 'the only terms upon which the board can agree to compromise the claim of the company,' which terms required the payment by Coburn and Ewing of 10,000, 4,000 in cash or in L. & W. cattle, and the remainder by a sufficient number of shares on the basis of par value, and the giving of securty by Coburn and Ewing not to interfere with the company's range privileges; and agreed to the indemnifying of Coburn and Ewing against any claim from Burnett's or his partner's executors. And the letter says that in view of the facts 'that the issue has practically been decided against Mess. Coburn and Ewing by the same judge before whom the case will ultimately be tried,' the amount of money received by them from Munson, and the difficulty in placing any of the shares, etc., the board is of opinion that the offer is favorable to Coburn and Ewing, but 'is induced to offer these easier terms with the object of settling the matter before the general meeting of the 4th of March.' This would repay the company $50,000, instead of $40,000, but only $20,000 would be paid in cash or cattle, and the remainder in shares.

The contention seems to be that, as the terms of compromise mentioned in the secretary's letter addressed to the cattle company's attorney did not specifically allude to the claim for compensation, both parties had made and received propositions in which that claim was left open to litigation, and therefore appellants could accept the proposition contained in the secretary's letter, and at the same time reserve the objectionable claim. But we do not agree with that view, as already indicated, and are of opinion that Coburn and Ewing must have known that the intention of the company was to settle the entire matters of difference between them, and that in no event would the company entertain any claim for compensation on their part. This must be so, since the whole theory of the negotiation renewed December 28th conceded the terms of the company's solicitors in response to the proposition of November 12th as the correct basis of settlement, and those terms embraced the rejection of the item of commission, which was so well understood that appellants' letter of December bath expressly said that all claims for damages or compensation were to be waived, and full receipts passed. What the board was considering, as appellants must be held to have known, was what appellants should pay and how they should pay it, and it was only in regard to the disposition of their stock that any difficulty arose in substantially arriving at a final conclusion before Fisher went to London. It was claimed by the company that the stock was not worth its par value, on account of certain action on Ewing's part, which turned out to be ill-advised, and the directors considered that, although they asked Coburn and Ewing to pay $50,000, instead of $40,000, as offered, yet, as the larger part of this was to be taken in their stock at par, it was a liberal offer on the company's part, in view of all the other facts and circumstances surrounding the transaction. And to this Mr. McCrary alludes in his letter of February 24th, when he says: 'The sum demanded is nominally larger than that offered by you; but, as it is proposed to receive payment in cattle and the stock of the company now held by C. and E. at par, I am in hopes your clients will consider it better to accept than to continue the litigation.' The secretary assumed, as we think he had a right to do, that the claim for compensation on the part of Coburn and Ewing had been dismissed as inadmissible, and that his letter to the counsel of the company need only name the terms upon which the company's claim was to be compromised. The attempt, by the letter of February 27, 1886, reciting the secretary's letters, to so limit the compromise as to reserve the right to litigate the question of compensation, is not commendable. Appellants could not in good faith restrict their settlement in this way, nor attribute the courtesy with which Mr. McCrary had acted as extending to a concession which he had refused to make at the very threshold. And when he notified Coburn and Ewing, on the 27th of February, that 'it is understood that the settlement embraces all the mattersinvolved in the pending litigation in the several suits betwen t he parties,' it was their duty, if that were not so, to have so advised him at once. What passed between Mr. Karnes and Mr. Field is in dispute, but it is clear enough that it could not control so important a difference, if it really existed. The letter of Mr. McCrary informed Coburn and Ewing that he should wire the company of its acceptance of the proposition, and his affidavit shows that this letter was written before he had taken any steps to carry out the compromise on behalf of the company. The subsequent letters in March of Mr. McCrary and of the company demonstrated their understanding that the entire controversy was settled, which indeed was the only motive of any negotiations at all. The grounds upon which the cattle company resisted the claim for compensation are too obvious to require comment, and were the same which justified the removal of their agent from his agency. We do not doubt that the compromise covered all the matters in controversy; that this was understood by the parties with whom they were dealing; and that the latter were bound, as the court held in the premises.

But, although the decision of the court was correct upon the merits, it is objected that the decrees in question were improperly rendered, for want of jurisdiction to proceed upon the petitions. Undoubtedly the ordinary rule would have required the matter of the settlement to be presented by a supplemental bill or cross-bill, or a bill in that nature; and these decrees were rendered upon petition only. But this objection was not raised until after a decision rendered. Appellants appeared in answer to the petitioners, and introduced affidavits to support their views of the meaning to be attached to the correspondence, and they insisted that their claim for compensation was not embraced in the compromise, and, therefore, that the dismissed of the bills should be without prejudice. The case of Kelsey v. Hobby, 16 Pet. 269, 277, is decisive against this objection. A release was filed in a chancery suit by the defendant, who moved to dismiss the bill, which motion was opposed upon the ground that the release was obtained by duress. The parties went on to take testimony as to the circumstances under which the release was given, and it was held by the court, speaking through Mr. Chief Justice TANEY: 'Some objections have been made as to the manner in which the release was introduced into the proceedings. It was filed in the cause, and a motion thereupon made to dismiss the bill; and it is said that, being executed while the suit was pending, and after the answers were in, and the accounts before the master, it should have been brought before the court by a cross-bill or supplemental answer, and could not in that stage of the proceedings be noticed by the court in any other way. It is a sufficient answer to this objection to say that it was admitted in evidence without exception, and both parties treated it as properly in the cause; and the complainant proceeded to take testimony to show that it was obtained from him by duress, and the defendants to show that it was freely and voluntarily given. It had the same effect that it would have had upon a cross-bill or supplemental answer, and the complainant had the same opportunity of impeaching it; and there is no propriety in requiring technical and formal proceedings, when they tend to embarrass and delay the administration of justice, unless they are required by some fixed principles of equity, law, or practice which the court would not be at liberty to disregard.' In Gilbert v. Endean, 9 Ch. Div. 259, 267, Sir GEORGE JESSEL, master of the rolls, uses this language: 'I think a court of appeal cannot refuse to decide on the merits where the parties in the court below argued the case on the merits without objecting to the evidence. They must be taken to have assented to having their rights decided on the motion according to the usual rules governing interlocutory motions. If they wished them to be decided otherwise they should have objected to he reception of the evidence. I think it is impossible for the appellant to succeed upon that ground, not having taken that course in the court below.' These cases are cited by appellees, together with Pryer v. Gribble, L. R. 10 Ch. App. 534; Tebbutt v. Potter, 4 Hare, 164; Askew v. Millington, 9 Hare, 65; Forsyth v. Manton, 5 Madd. 78; Wood v. Rowe, 2 Bligh, 595, 617; Rowe v. Wood, 1 Jac. & W. 315, 337; Tebbutt v. Potter, 4 Hare, 164; were referred to in Askew v. Millington, and Vice-Chancellor TURNER held, where the agreement of compromise went beyond the ordinary range of the court in the existing suit, and the right to enforce the agreement in that suit was disputed, that the proper course for proceedings to enforce it was by bill for specific performance, and not by motion or petition in the original suit to stay the proceedings, and he thought this must necessarily be so where the agreement itself was disputed. But, under the circumstances, we have already held that the petitioners, we have already upon the merits; and, as all parts of the agreement fell within the range of the suits, and appellants did not dispute the form of proceeding, we are of opinion that the decrees cannot be reversed upon this ground. They are therefore affirmed.

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