PAULY JAIL BLDG. & MANUF'G CO. v. HEMPHILL COUNTY, 62 F. 698

LOCKE, District Judge (after stating the facts). The history of this case, as shown by the record, is that one board of county officers, county judge, and commissioners of the defendant, while in office, entered into a contract with the plaintiff for the building of a county jail, for which the county was to issue and deliver to it $13,000, in coupon county bonds.

Subsequently, and before the jail was built, a new board of county officers, being elected, considering, apparently, that the county did not need a jail, endeavored, if possible, to defeat the contract, hut the record fails to show what action they took, if any, to rescind it, or to notify the plaintiff of their rescission of it, if any was made. The first contention of defendant county, and which lias been ablv urged, is that the plaintiff had no right in law or justice to insist upon building the jail, and thus increase any expense or damage that might be suffered by the county.

While such contention would appear to be entitled to consideration, the record of the case is such, that, it is impossible to determine the facts connected with the rescinding of the contract. Such abrogation was pleaded and excepted to, and the exception sustained; and, although, the ruling appears to have been excepted to, yet, the exception being taken by the defendant, in whose favor judgment was given, we have before us no bill of exceptions or assignment of errors in that-behalf.

Admitting that the position of defendant in that particular point; is correct, and that notice of the rescission of the contract was duly given, and plaintiff had its remedy in an action for damages for a breach of the contract, such plea could not fully defeat the plaintiff’s action, hut might limit the damages. Tufts v. Lawrence, 77 Tex. 526, 14 S. W. 165.

The same may he said in regard to the ruling of the trial court upon the plea of defendant found in the fourth paragraph of its answer, wherein bribery and a corrupt and illegal conspiracy between the officers of said county and agents of the plaintiff company are alleged. The judgment being in favor of defendant, by whom such exceptions were taken, we do not consider that those questions are so before us that we are permitted to pass upon them.

In the case as presented for our judgment, the plaintiff was a nonresident corporation, acting entirely through its agents and subcontractors, and the provision in the contract which placed it within the power of the defendant county to select its own commis-siouer to act as inspector during tbe building, if honestly carried out in accordance with its terms, would necessarily have been of the greatest assistance and protection to both of the contracting parties, and would appear to be a wise and prudent precaution in the completion of such a work, the actual supervision of which must necessarily be delegated to the representatives of each party, and could not be scrutinized by the principals of either.

By it every opportunity in reason was given for the defendant to secure good materials and work, and the plaintiff would at the same time be protected from the faults and negligence of its own servants, by being immediately informed of, and enabled to correct them, and also from any complaints that might be subsequently made, too late to determine their truth or falsity.

The action of such an arbiter or supervisor, in the absence of any complaint made at the time and in the manner provided by the contract, is prima facie evidence of compliance with the contract, and should be conclusive, except upon clear and distinct proof of fraud. Railroad Co. v. March, 114 U. S. 549, 5 Sup. Ct. 1035; Kihlberg v. U. S., 97 U. S. 398; Sweeney v. U. S., 109 U. S. 618, 3 Sup. Ct. 344; Railroad Co. v. Price, 138 U. S. 185, 11 Sup. Ct. 290; Ogden v. U. S., 60 Fed. 725; Railway Co. v. Gordon, 151 U. S. 285, 14 Sup. Ct. 343.

In determining such question of fraud, the burden of proof is upon him alleging it. . Was such evidence of fraud given in this case as would justify the submission of that question to the jury, or was it sufficient to justify the jury in finding fraud? Fraud is something more than the expression of an opinion which may prove not to be true, with no intent or desire to wrong or mislead. Nothing but an actual intention to deceive — nothing but an actual fraud- — -would justify a finding impeaching the plaintiff’s compliance with the terms of the contract.

An intentional perversion of the truth, for the purpose of obtaining some advantage of another, would, we consider, be necessary to remove the presumption of the fairness of action in such a case as this.

The contract provided that the commissioner should be, a man qualified to judge of the work, and was to be selected by the defendant; and alleging in the answer that no such man was selected, but one not qualified for the duty devolving upon him, should have no weight as a matter of defense, find nothing but positive proof of mala fides on the part of the plaintiff or its representatives should be permitted to overcome the finality of the commissioner’s action.

Unquestionably, in the making of the contract, it was the intention of both the contracting parties that his action should, in the absence of fraud, be final.. With this view of the case, all questions regarding the character and nature of the work, except the brick complained of by him and the fraud of the plaintiff, are eliminated from the case. But these should be carefully considered at each step of the proceedings.

In the fourth paragraph of the learned judge’s charge, we find the instruction to the jury that, if they found the material and work did not substantially comply with the requirements of the contract and specifications, they should find for the defendant. In this, with no language of reference to or connection with any other portions of the charge, we do not consider that sufficient weight was given to that important provision of the contract providing for an inspection, but lhat the beneficial effects of all such supervision were eliminated from the case.

In this we consider an error was committed, to the injury of the plaintiff, Nor do we consider the testimony would have justified the jury in finding such evidence of mala lides of' the plain!iff in the representations regarding the brick, stone, cement, and tin as would have entirely defeated its claim, under the sixth

article of the charge, which was excepted to. The judgment of the court below is reversed, and the cause remanded, with instructions to grant a. new trial; and it is so ordered.