Vanderbilt v. Little

51 N.J. Eq. 289
CourtSupreme Court of New Jersey
DecidedJune 15, 1893
StatusPublished
Cited by1 cases

This text of 51 N.J. Eq. 289 (Vanderbilt v. Little) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vanderbilt v. Little, 51 N.J. Eq. 289 (N.J. 1893).

Opinion

The opinion of the court was delivered by

Magie, J.

The transactions out of which this controversy arose are set out in detail in the opinion delivered when the cause was previously before- this court. Vanderbilt v. Central R. R. Co., 16 Stew. Eq. 669.

But, to make the present conclusions intelligible, it is proper to briefly recount such of' the questions then presented as concern the present appeal'and what was decided thereon.

When Francis S. Lathrop was receiver of the insolvent corporation, the Central Railroad of New Jersey, and'empowered by the express order of the chancellor to operate- its railroad and contract, in his discretion, for materials and supplies therefor, he had large transactions with Vanderbilt & Hopkins, who dealt in such materials.

At the death of Receiver Lathrop, Vanderbilt & Hopkins claimed that contracts existed between them and the receiver whereby they were bound to furnish and the receiver was bound to take and pay for a large amount of materials.

Henry S. Little, who was appointed receiver directly after, repudiated the alleged contracts and refused to receive any materials offered thereunder’, because, among other reasons, he deemed the materials yet to be delivered to be greatly in excess of the needs of the railroad, and performance of the alleged [291]*291■contracts on his part to be a wasteful and improvident use of the fund in his hands as receiver.

"Vanderbilt & Hopkins filed a petition in the cause in which the receiver had been appointed and asked relief, either by a •direction to Receiver Little to perform the contracts of his predecessor with them or by permission to sue him at law upon the contracts. The petition contained a general prayer for relief.

By the answer of the receiver there was put at issue the existence of the alleged contracts and the liability of himself and the fund in hand thereupon.

The petition was dismissed by the court of chancery, and upon appeal this court, upon a review of the evidence, found (1) that Receiver Lathrop and petitioners had entered into contracts by which petitioners bound themselves to deliver and the receiver bound himself to take and pay for large amounts of materials ; {2) that the materials contracted for were in excess of the needs of the railroad, and the contracts were, on the part of the re■ceiver, improvident, but (3) that there was nothing to justify the ■conclusion that petitioners knew or were charged with knowledge •of the receiver’s improvidence.

It was further held that contracts made by a receiver were binding upon and could be enforced against a succeeding receiver •and the fund in his hands, but that such contracts were subject to the review of the chancellor, who, if he adjudged them .to be improvident, might direct the receiver to cease to perform them, or might approve the refusal of a subsequent receiver to perform them and decline to compel their performance.

These conclusions justified the refusal of the court below to compel Receiver Little to perform these contracts.

The question then arose whether the denial of any relief to petitioners was erroneous.

This was a novel question. Had petitioners’ contracts been made with a private individual his refusal to accept materials contracted for would have been a breach of the contract which would have rendered him liable to an action for damages.

The contracts in question, being subject to the reviewing power ■of the chancellor, were not broken by his adjudging that they [292]*292were improvident, and that their further performance would be injurious to the fund; they were simply annulled and put an end to. Being thus repudiated, petitioners who had entered into-them, presumed to know the power of the chancellor in that regard, could not enforce a claim for damages as against a private individual.

But the contracts were such as the receiver had discretion to-make. There was nothing to indicate that petitioners were made aware that the receiver had, in making them, exceeded his powers, and the annulment of the contracts left in petitioners’ hands materials rejected and materials in course of manufacture and contracted for, so that inevitable loss must ensue.

The peculiar problem thus presented was dealt with on equitable principles, and it was held that, while petitioners could not recover as for a breach of these contracts, yet that the repudiation thereof ought not to be made or approved except, upon compensation made from the fund to petitioners to the extent of the loss fairly fallen on them by reason of such acts as they had done in preparing to perform their contracts up to the time they were repudiated and in consequence of such repudiation, after having taken every reasonable precaution to save themselves-from such loss.

These conclusions were embodied in the previous decree of‘ this court, which was made the decree of the court of chancery,, and the question raised by the present appeal is whether the compensation awarded petitioners by the decree now under review has been fixed in conformity with the previous decree.

In reviewing the case as now presented, it is proper to state that the advisory opinion of the learned master indicates a most painstaking and exhaustive examination of the vast mass of .accounts and evidence- before him, and presents his conclusions on the law and facts with such perspicuity that our labors have been much lightened, and we have been enabled to deal with more satisfaction with the perplexing problems presented.

On the part of the receiver it is claimed that the master erred in his application of the former decree-to the facts before him, [293]*293in four particulars. The objections thus made will be first examined.

Counsel for the receiver directed his argument mainly to the effort to show that the methods employed by the master in making up the compensation awarded were in conflict with the former decree. While his brief specifies many items which he insists were improperly included in the decree now under review, it disclaims the purpose of pointing out all the errors claimed, and asks that the decree, if found erroneous, should be reversed and the cause remitted, to be again heard.

But we think it would be unjustifiable to protract this litigation if there is before us the material upon which a final decree can be made settling the rights of the parties. We can perceive no reason why such a decree cannot be now made. The whole evidence is before us and has been considered. If we once settle the application of the principles previously laid down, there is no difficulty (except the labor involved) in determining the amount which should be awarded.

It is first contended that there was error in the mode in which the master determined the loss of Vanderbilt & Hopkins, the petitioners, by reason of expenditures made in preparing t-o perform their contracts. It was insisted before him that each contract should be considered as a unit, and that he should inquire what it had cost petitioners in the whole, and from that cost should be deducted (1) what they had received from the receiver for materials which - had been accepted, and (2) what they had received from the disposition of materials rejected, less reasonable expenses of disposing of them.

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Related

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254 A.2d 313 (New Jersey Superior Court App Division, 1968)

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Bluebook (online)
51 N.J. Eq. 289, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vanderbilt-v-little-nj-1893.