Johnston v. Cincinnati, N. O. & T. P. Ry. Co.

146 Tenn. 135
CourtTennessee Supreme Court
DecidedSeptember 15, 1921
StatusPublished
Cited by115 cases

This text of 146 Tenn. 135 (Johnston v. Cincinnati, N. O. & T. P. Ry. Co.) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnston v. Cincinnati, N. O. & T. P. Ry. Co., 146 Tenn. 135 (Tenn. 1921).

Opinion

Mr. Chas. C. Trabue, Special Judge,

delivered the opinion of the Court.

II. H. Thrasher is a railroad contractor in Knoxville. A general creditors’ hill was filed against him, and Hu M. Johnston, complainant, was appointed receiver of his property and assets, and in that capacity brought this suit against the Cincinnati, New Orleans & Texas Pacific Railway Company and the Director General of Railroads to recover a balance alleged to be owing Thrasher under a construction contract, and a further sum for the alleged wrongful use of Thrasher’s equipment and supplies. There was a decree below for $118,594.36 with interest from the filing- of the bill, and both sides appealed.

[141]*141On June 27, 1917, Thrasher entered into a contract with the railroad company to construct ten and six-tenths mile's of railroad in Morgan county on a unit price basis; that is to say, he was to be paid different unit prices for earth, loose rock, soft rock, and hard rock. War conditions and Other circumstances caused the contract to become very burdensome, and in January, 1918, Thrasher went to Washington with Judge Lindsay, one of the attorneys representing him in this suit, and announced to Mr. Spencer, vice-president of the railroad, that he could not go on under existing conditions, and had determined to abandon the contract.

The present suit is not based on the original contract, but on a new agreement alleged to have been entered into orally on the occasion of this visit of Thrasher in Washington, by which new agreement it is claimed that the road bound itself to pay Thrasher the cost of the work from its beginning until its completion.

When complainant filed his bill in this cause he based his claim to a recovery on two grounds: First, upon an alleged custom of the defendant railroad company to pay all contractors for construction work who might be losing-money on their contracts the cost of the work plus a reasonable profit; and, second, upon the alleged oral agreement of January, 1918, to pay him- actual cost — and in his prayer he asked to be allowed the actual cost, “together with a reasonable profit.’’ However, there was no proof in support of the alleged custom to pay cost and profit, and that ground of the bill was abandoned. Later complainant, in his answer to a cross-bill in the cause, stated that the oral agreement of January was “to allow him cost and profit,” but nothing was shown in the proof to have been said [142]*142about any profit, and the suit at last resolved itself into one' of whether defendants had agreed to pay him actual cost.

Defendants likewise claimed that an oral agreement was had in Washington at that time, but they denied that it was an agreement to pay cost; and the question of what that oral agreement was is the fundamental question in the case.

There were present at this conference in Washington Mr. Thrasher and his attorney on the one side, and on the other Mr. Spencer and his chief engineer of construction, Mr. Wells, and assistant chief engineer, Mr. Durham. After some discussion Mr. Spencer asked Mr. Thrasher to make him a definite proposition, and Mr. Thrasher and his attorney withdrew and prepared and submitted to Mr. Spencer a letter containing several propositions looking to the completion of the work. When they came back the next day Mr. Spencer declined these propositions, and there Avas a general discussion, in which complainant’s attorney stated that complainant was having to remove a large quantity of material, such as blue slate, which was classed under his contract as soft rock, with a twenty-eight-cent unit price, but which was as hard and expensive to remove as hard rock, and should, he claimed, be classed as hard rock with a sixty-cent unit price.

Mr. Spencer asked his engineers if this was so, and they answered in the affirmative, and thereupon he stated that he would like to confer with them privately. After this conference, and when the parties again came together, Mr. Spencer stated that he thought complainant ought to go on with the work and leave the matter to the engineers; whereupon complainant’s attorney asked that he and com[143]*143plainant be permitted to talk privately'with the engineers, and the four of them retired to an anteroom for that purpose.

Up to this point both sides agree about what occurred, and they further agree that, in the meeting" that then ensued of the two engineers and Thrasher and his attorney, an understanding was reached. Thrasher and his attorney say that they asked Wells, the chief engineer, what Mr. Spencer meant by his suggestion that the matter should be left to the engineers, and that Wells replied that Spencer had authorized him to classify or estimate the materials according to cost, which meant, they say, that the railroad would pay the actual cost of the work; and they go on to say that, after this agreement was reached, they went back into Mr. Spencer’s room and told him that, since talking with the engineers, Thrasher was willing to go on with the work.

On the other side, Wells had died, so that the only witness was Durham. He testifies that, when .the engineers met with Thrasher and his attorney in Mr. Spencer’s anteroom, Wells, the chief engineer, stated to Thrasher that the railroad was willing to reclassify the blue slate as hard rock from the beginning, and to pay hard rock prices for it; and he says that this was assented to by Thrasher, and that this was the agreement and the only agreement that was made.

A singular thing is that the agreement, which on either theory involved an increase of probably over $100,000, was not put in writing then or thereafter. Nor were the terms of it repeated in Mr. Spencer’s presence when the parties came back into his office.

[144]*144Complainant asked for a jury, and the parties formulated a large number of issues, which were reduced by the chancellor to four, and these four issues were without objection submitted to and determined by the jury. The first issue was whether the agreement of January 5th was, as contended for by complainant, “to pay I-T. H. Thrasher actual cost for the work already done and to be done,” and the jury answered this in the affirmative; the second issue was whether that agreement was, as contended for by the railroad, namely, to “classify all material which was as expensive to move as solid rock and pay the contract price of solid rock therefor,” and the jury answered this issue in the negative.

Defendants asked for a peremptory instruction in their favor upon both of these issues, but their request was refused, and this refusal is made the basis of one of their principal assignments of error in this court.

After the jury had thus determined that the railroad had bound itself to pay actual cost (and both sides agreed that the understanding then had was to govern and be effective from the very beginning of the contract in May, 1917) the chancellor directed a reference to the master to take and state an account.

Thrasher had gone on with the work from the time of the neAV agreement in January, 1918, until September 80, 1918, at which time he had abandoned the work altogether, and his equipment and supplies had been taken over by defendants for the purpose of completing the work, and some six or seven months later had been returned to Thrasher or his receiver.

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Cite This Page — Counsel Stack

Bluebook (online)
146 Tenn. 135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnston-v-cincinnati-n-o-t-p-ry-co-tenn-1921.