Coburn v. Cedar Valley Land Cattle
These cases, as stated in substance by counsel, may be descried  as follows: (1) On October 10, 1885, the Cedar Valley Land & Cattle Company, Limited, an English corporation, filed its bill against William N. Ewing and James M. Coburn in the circuit court of the United States for the western district of Missouri, alleging that Stewart and others, having ascertained that the defendants were willing, in conjunction with them, to subscribe to the capital stock of the corporation when formed, agreed among themselves to become the promoters of a corporation for the purpose of purchasing a ranch with the cattle and horses thereon, then the property of one Munson, and situated in the state of Texas; that the name of the corporation was to be the Cedar Valley Land & Cattle Company, Limited, and that plaintiff is the identical corporation in contemplation; that the corporation was formed January 7, 1885, and in the preceding December, Stewart, Burnett, Camphell, and Fisher, styling themselves plaintiff's directors, and acting as plaintiff's promoters, believing that defendants were willing to undertake and assume the trust in behalf of the proposed corporation, directed and requested defendants to buy the ranch, land, and cattle from Munson for plaintiff at the very lowest terms, and deiendants accepted the trust; that on December 31, 1884, defendants, in the name of Ewing, in pursuance thereof, concluded negotiations with Munson for the ranch, and purchased it for plaintiff, and Ewing entered into a written contract with Munson, which is set out at length in the bill; that this contract was made for and in behalf of plaintiff, in contemplation of corporate existence, as was the employment of Ewing by the promoters and the contract of purchase, and with the intention that the contract should be adopted by the corporation when formed, and inure to its benefit; that said contract was so adopted, and the corporation proceeded to carry the same out, and complied with all the terms and conditions of the contract, including the payment of the sums of money therein provided, being $100,000 remitted December 31, 1884, $140,000, May 5, 1885, and $180,000, June 188 1885, which moneys were in trusted to the defendants to make such payments; and that Ewing, on the 31st of December, 1884, May 5, 1885, and $180,000, June 18, to be paid on that day was the property averred that in August, 1885, it learned that averree that in August, 1885, it learned that Coburn and Ewing had secretly agreed with Munson for a commission for selling said property, and had received about $40,000 from him on that account, which was retained out of the moneys remitted, and that defendants agreed to pay Munson for some of his cattle about $18,000 more than he had at first been willing to sell for; and, further, that defendants, out of the cash sent them by the company with which to pay Munson, had retained the sum of $60,000, and in lieu thereof had conveyed to him a lot and building in Kansas City, belonging to them, worth not more than $45,000. The bill prayed for a decree for such amount as defendants might be found to have received, upon an accounting, etc. The defendants answered, denying that they were promoters of said corporation, and alleging that all their agreements and arrangements as to the character in which they should act in the purchase of said ranch property were made with Burnett, one of the persons named as a promoter and director in the bill, and that Burnett knew that the defendants would be paid a commission by Munson, and that the defendants were openly engaged in the business of selling such property for a compensation, and that the services rendered by defendants involved much labor; and were reasonably worth a larger amount than was received. The answer also alleged that plaintiff acquired said ranch for $100,000 less than its actual market value; and that the only connection which defendants had with said corporation was that after it had been organized Ewing subscribed to its capital stock, pursuant to a contract by which he was appointed its manager for the term of five years. Exceptions werefil ed to the sufficiency of this answer, which were referred to a special master for examination and report. This report was made and the exceptions set for hearing. The appeal in this case is No. 139.

(2) On December 8, 1885, Coburn and Ewing filed a cross-bill against the cattle company, by leave, which alleged that they for a number of years had been partners in the business of selling property as brokers and for a commission, and that at all the times mentioned in the plaintiff's bill they had the ranch in their charge for the purpose of selling the same under an agreement for a reasonable compensation to be paid them by Munson; that Burnett, knowing this fact, made an agreement with them to procure a purchaser for said property if they would share their commission with him; that afterwards they were directed to Burnett to buy the property upon terms and conditions and at specified prices known to him; that they entered into the contract with Munson pursuant to directions from Burnett, and expended a large amount of time and labor in the transaction, a reasonable compensation for which was alleged to be $50,000; and that some months afterwards, the corporation, having been organized in the mean time, entered into an agreement with Coburn and Ewing that, if they would subscribe $100,000 to its capital stock, it would appoint Ewing its manager for the period of five years at a stipulated salary, which proposition was accepted, the sum of $50,000 paid on account of such subscription, and the appointment accordingly made. The cross-bill further alleged that said corporation had attempted to annul the contract so made with Ewing, and without offering to cancel said subscription, or to return any part of the money paid on account thereof, or tendering or offering to pay the reasonable and expected profit arising from said contract, had sought to sequester said stock, and had refused to permit its transfer on its books; and that the market value of said stock was $125,000, and the reasonable and expected profit arising out of said contract was $20,000. The cross-bill prayed for an answer to certain separate interrogatories directed to matters peculiarly within the knowledge of the corporation, and that upon it appearing to the court that Coburn and Ewing were entitled to be paid a reasonable compensation, and that it was the duty of the corporation to pay the same, the court might decree it to Coburn and Ewing, and that the corporation might be required to pay them the value of their stock, less any sum that might be unpaid thereon, and to pay to Ewing the sum of $20,000 on account of his contemplated profit out of the contract appointing him manager of the corportaion, and also for general relief. To this cross-bill the cattle company filed a demurrer. The appeal in this case is No. 142.

(3) On October 6, 1885, Coburn and Ewing filed their bill against the cattle company and George D. Fisher in the circuit court of Jackson county, Mo., which alleged that, in March, 1885, Ewing proposed to the defendant company, on behalf and in the name of Coburn and Ewing, to subscribe for 2,000 shares of its capital stock, of the par value of $50 each, upon the condition that Ewing should be appointed manager of the company for the period of five years; that this proposition was accepted, and Ewing appointed accordingly by the directors of the corporation, and thereupon Coburn and Ewing subscribed for the 2,000 shares and paid $50,000 in full of all assessments or calls which had been made on said stock, and certificates had been issued to them accordingly; that Ewing entered upon the duty of manager, and had been continuously employed therein ever since; and that on September 7, 1887, the corporation attempted to cancel and terminate the appointment of Ewing as such manager by written communication, setting forth that, 'in consequence of the facts which have come to the knowledge of the board of directors connected with your purchase from Mr. Munson,' they had decided to annul his appointment, and that Fiser  was authorized to take charge of the company's property, and requested the delivery of the same to him accordingly. The bill also alleged that there were peculiar reasons of fitness, etc., for the employment of Ewing, and that Coburn and Ewing would not have subscribed or taken any shares in the capital stock but for the contract to appoint Ewing manager; that Ewing had faithfully performed all his duties, and had at no time given the company any just cause for terminating his appointment; and that the contract was of great value of Ewing, and would yield him a sum aggregating $20,500 for the unexpired portion thereof. And the bill further alleged that Fisher was undertaking to prevent Ewing from performing his functions as manager, and to take out of his possession all property in his hands as such, without offering to pay or refund the value of the stock to Coburn and Ewing, or the reasonable damages accruing to Ewing by reason of the refusal of the company to further perform its contract with him, and without releasing or indemnifying him for certain liabilities he had incurred, and for which he was personally liable, on account of the company, to all of which compensation, reimbursement, and indemnity Coburn and Ewing alleged themselves entitled before Ewing could be discharged from said appointment and an injunction was prayed accordingly. This cause was removed to the United States circuit court for the western district of Missouri, and the corporation answered, alleging that no such contract was made for the appointment of Ewing, but that the subscription of Coburn and Ewing to the capital stock was unconditional; and that Ewing was appointed as manager, but as an entirely separate and distinct transaction. It was admitted that said appointment was canceled and terminated by the notice mentioned in the bill, and the grounds for such action were set forth as resting practically on the same facts alleged in the bill of the company in No. 139. The appeal in this case is No. 140.

(4) On November 23, 1885, the cattle company filed a cross-bill setting forth the alleged employment of Coburn and Ewing on behalf of the intended corporation; the making of the contract with Munson; that Coburn and Ewing had received a commission from Munson secretly; the transactions as to the property in Kansas City, and the alleged overpayment in the purchase of cattle; the cancellation of Ewing's appointment by reason of the premises; and alleging that Ewing had done acts in hostility to the interests of the corporation, which would be imperlied if he were allowed to manage the same. An injunction was prayed restraining Ewing from acting as such manager and in any wise interfering with the property of said corporation. Coburn and Ewing answered, averring substantially the same facts disclosed in their answer in No. 139, their cross-bill in No. 142, and their original bill in No. 140. The application of Coburn and Ewing and of the cattle company for temporary injunctions came on for hearing in December, 1885, and the circuit court made an order granting the temporary injunction prayed for in the cross-bill of the cattle company. The appeal in this case is No. 141. The record in No. 141 discloses that upon the cross-bill there was filed an affidavit and exhibits, which showed that a suit had been commenced by Coburn and Ewing against the cattle company in a state court of Texas, and an injunction obtained, which, upon the removal of the cause to the circuit court of the United States for the northern district of Texas, was dissolved by Judge MCCORMICK, upon the ground that, where it appeared that plaintiffs had been employed to purchase a ranch and cattle, and had secretly received from the seller a commission, and where one of them had afterwards obtained employment from the company as the manager of the ranch and herd, without disclosing the facts, the company had good cause for removing him from a position obtained under such circumstances. The opinion is reported in 25 Fed. Rep. 791.

June 19, 1886, thecat tle company filed in each of said causes the following 'petition for a decree:' 'Now comes the Cedar Valley Land and Cattle Company, Limited, a party to the above-mentioned suits, and petitions as the court to enter an order or decree in each of said cases showing that the matters in controversy therein have all been settled and compromised by the parties, and are decreed and adjudged to be finally settled, and ordering that all the said cases be dismissed, the plaintiff in each to pay costs therein, and that the sureties on the injunction bond given by this petitioner be discharged. And in support of this application the petitioner files herewith true copies of the written correspondence between the parties, embodying their agreement of compromise, and on the hearing of this petition will produce the originals thereof; also affidavit of George Dixon Fisher.' The correspondence was as set forth in the margin. 

The affidavits of Messers. Fisher, McCrary, and Field were also filed on behalf of appellees.

Fisher stated that about the 29th of April, 1886, he called upon Coburn, and submitted to him the form of a bond to be given by Coburn and Ewing in pursuance of the terms of the compromise, to bind said firm not to buy up or otherwise molest any of the range privileges of the company. The form of the bond had been changed by striking out the words 'as part and parcel of the' in the second line, and inserting in place thereof, 'in accordance with the terms of our letter of date February 27, 1886, accepting terms of compromise,' and Coburn added the following words: 'of all pending litigation.' The first sentence of the proposed bond was therefore amended so as to read as follows: 'That for a good and valuable consideration, and in accordance with the terms of our letter of date February 27, 1886, accepting terms of compromise of all pending litigation between us and the Cedar Valley Land and Cattle Company, Limited,' etc. Affiant added that he was present as a mamber of the board of directors of the cattle company when the proposition of compromise was agreed upon, and that it was intended that the same should be a full and final settlement of all pending litigation between the parties. The original paper referred to was attached.

Mr. McCrary testified that he had principal charge on behalf of the company of the negotiations for compromise and settlement between the parties; that the company and its counsel throughout the negotiations insisted that any settlement made should end the litigation, and the final proposition made by the company February 11th and 12th was not intended to be any departure from this condition, but, on the contrary, was submitted by this affiant as a proposition 'to end the litigation,' as appears by the letter transmitting the same; that neither he nor the company ever for a moment intended to settle the claims of the company against Coburn and Ewing, leaving their claims against it to be further litigated, and, if Coburn and Ewing or their counsel had such an intention, it was unknown to this affiant at the time the settlement was entered into; that as soon as affiant heard an intimation that it might be claimed that the settlement did not cover all the matters in litigation, he write Coburn and Ewing the letter of February 27, 1886, which was written the same day the acceptance of the proposition of compromise was received, and before any steps were taken on behalf of the company by affiant to carry the same out; that, if affiant had then been notified that Coburn and Ewing would insist that only one side of the controversy was settled, he would have tendered back the stock certificate, and declined to go on with the compromise; and that, receiving soon after the paper, filed with Mr. Fisher's affidavit, in which Coburn described the proposition accepted as one to settle 'all pending litigation,' affiant felt free to go on and perfect the compromise, believing that if Coburn and Ewing intended to attempt to reserve any right of action against the company it must be no sme  cause of action not involved in the present litigation.

Mr. Field said that he was one of the attorneys of the cattle company, and on the 27th of February, 1886, presented to Mr. Karnes a paper prepared after consultation with his associate counsel, which was destroyed or misplaced by affiant after Mr. Karnes declined to sign the same; that the principal purpose in presenting such writing was to obtain the speedy and formal discharge of the sureties on the injunction bond, which purpose was explained to Karnes, though such paper did contain stipulations as to dismissing the bills and cross-bills at the costs of each party, respectively, all of which counsel for the cattle company understood was already included in the settlement; and that, when such paper was presented to Mr. Karnes, he replied that Mr. Coburn had gone to St. Louis, and that he would make no other agreement of settlement for Coburn and Ewing, but he assured affiant that the sureties on the injunction bond were not to be harmed or disturbed, and affiant dropped the matter, and did not further urge Mr. Karnes' signature to such writing.

On behalf of appellants the affidavits of Karnes and Coburn were filed. Mr. Karnes stated that on the 27th of February, 1886, Mr. Field brought to his office a statement to the effect that the settlement of that day was to be in full of all claims or demands between the parties, and he distinctly told Mr. Field that such paper would not be signed, but that Coburn and Ewing had settled their matters with the cattle company on the propositions of February 11th and 12th, and the unconditional acceptance of these propositions by Coburn and Ewing, and that this settlement would not be supplemented by any further agreement. He further said the letter of acceptance had been prepared with the understanding that the terms of the compromise would be accepted only just in the way they were proposed, and to cover nothing more; and that every letter and paper since, so far as his knowledge extended, had been prepared with the understanding that the settlement of February 27th spoke for itself, and that nothing was to be added thereto or subtracted therefrom. Coburn testified that when the propositions of February 11th and 12th were considered, all previous propositions had been rejected; that the compromise proposed by the company would not have been accepted had it not been supposed that it was left open to Coburn and Ewing to assert any claim they had for services rendered in the purchase of the ranch; that in the early correspondence this matter was referred to, but no mention was made in the later correspondence of this compensations, and consequently to avoid any misunderstanding, the terms proposed were unconditionally accepted; that the letter of Mr. McCrary of February 27, 1886, was received, and submitted to affidant's counsel, who advised him that he had distinctly informed Mr. Field that receipts in full were not to be passed, and that there was therefore no necessity of making any reply to Mr. McCrary's letter, for which reason he did not answer the same; that in every step taken in closing up said compromise, Coburn and Ewing had distinctly refused to sign any receipts in full, or acknowledge any settlement in full, and that in the many receipts passed language indicating a settlement in full was in each case stricken out, and in lieu thereof it was inserted that the receipt was given on the basis of the letters of February 11th and 12th and the acceptance of February 27th; that affiant had no recollection concerning the interlineation of the paper attached to Fisher's affidavit, but he knew that there was no intention to convey the impression that Coburn and Ewing intended to abandon their claim for services; and that every step taken in the purchase of the ranch was in the utmost good faith, and with strict regard to the interests of the company, and Coburn and Ewing had paid to it more than they ever received from Munson, and had received no compensation whatever for their services in th pu rchase of the ranch.

A hearing having been had, the court rendered a decree in each of the four cases, finding that there had been by the agreement of the parties a full compromise and settlement of all the matters in controversy in the case, and ordering, in pursuance of the agreement, that each of the bills be dismissed at plaintiffs' costs, to be taxed. The opinion of Judge BREWER will be found in 29 Fed. Rep. 584. On the same day Coburn and Ewing moved the court to set aside and vacate the decree entered in each of said causes, and to grant them a rehearing, which motions were overruled, the circuit court delivering an opinion reported in 29 Fed. Rep. 586. Thereupon the cases were brought to this court by appeal.

Henry N. Ess and L. C. Krauthoff, for appellants.

Morgan H. Beach, for appellees.

Mr. Chief Justice FULLER, after stating the facts as above, delivered the opinion of the court. 

Notes

'Karnes and Waters will recommend any one of the following compromises:

(1) C. & E. to be paid back the money for their stock, say $50,000. C. & E. to pay back the sum of $40,000. The company to enter its appearance in a suit to be brought by C. & E. to determine the value of their services and commission in purchase of property, leaving out all transactions between C. & E. and W. B. M. (2) The company to allow C. & E. $25,000 as their commissions for the purchase of the ranch, C. & E. to pay balance of $40,000, company to pay back amount of stock, each party to pay costs made by themselves. (3) Arbitrate by three persons, the impression that Burnett was not connected what their services shall be, and the company then to pay the amount set, C. & E. to pay $40,000 & company to pay amount of stock. Either proposition to be finality as to all the matters embraced in the bill filed by the Company vs. C. & E.'

Response to the proposition of Waters and Karnes, attorneys for Coburn & Ewing.

'Adams and Field and Geo. W. McCrary will recommend to their client, the Ceder Valley Land & Cattle Company, a settlement with Coburn & Ewing as follows: (1) C. & E. to be allowed for their stock what they have paid on it. (2) C. & E. to pay back to the company the sum of $40,000. (3) Ewing to surrender management. (4) This settlement to be a full and final adjustment of all the controversies between the parties and of all claims of either party against the other. (5) No delay of legal proceedings in consequence of these negotiations, unless by an agreement the controversies are ended. This proposition involves the surrender of the company's claim for the profit on the sale of the Delaware-Street property, to which we think it entitled, and which will, we suppose, amount to about the sum of $15,000, as well as other claims set forth in its bill. And it involves also the allowance for the stock of C. & E. of about $10,000 more than its present value. These are, therefore, the most favorable terms we can recommend, and under no circumstances can we advise the payment of commissions to C. & E. or any waiver of the company's right to defend against any claim that they may make on this account.'

From appellants' to appellees' counsel, December 28, 1885.

'In the matter of controversy between the Cedar Valley Land and Cattle Company and Mess. Coburn & Ewing it must have been observed that I have not seemed quite in accord with those associated with me. I have always felt inclined to some amicable adjustment, and regretted when I was

directed to terminate rather summarily the negotiations to that end undertaken a few weeks ago. I have now taken the liberty of addressing you this not en tirely upon my own responsibility, and I am induced to do so by a statement made to me by Mr. Gage, a mutual friend of both parties, to the effect that he understood Mr. Fisher that the terms proposed by you in our former negotiation were still open for acceptance. If such be the case I say frankly to you that in my judgment the terms then proposed contain substantially the correct basis of settlement, and I would like again to move in the direction of ending all this interminable litigation. I do not wish to trespass on your valuable time, and hence I have not called to present these views in person, but if this letter receives a favorable response I will see my clients and at some time when agreeable to you will call at your office to canvass the matter more in detail. If it is thought best by you not to negotiate further I would be glad that no mention be made of this letter.'

From appellees' to appellants' counsel, December 28, 1885.

'Yours of this date received. Mr. Fisher is out of town, and will not return until the last of the week. I think, however, he is still disposed to settle, and if you can bring your clients to agree to the terms proposed by us let me know, and as soon as he returns I will see him and advise you. P. S. I will not mention the matter to any one until I hear from you further.'

From appellants' to appellees' counsel, December 28, 1885.

'Upon the receipt of your communication of today I at once sought an interview with my clients. Maj. Ewing is out of the city, and I only saw Mr. Coburn, who thinks Maj. Ewing will agree to any arrangement that he may make. He has much to say of the company's injustice to them in seeking to appropriate without compensation the result of their labor and skill in the purchase of this property. He contends that Munson was taken at a time when for several reasons he was very anxious to sell, and that they drove an unusually good bargain with him. Of course, I have sought to impress upon him that the case must be tried squarely upon the law. I have brought myself to believe that there is not much probability of your recovering on account of the house and the bulls, but as to the commission of $40,000 I have frankly said that I believed the chances were against my clients. This amount represents the whole sum your company has lost, while it has received the benefit of valuable services at no expense whatever. Any settlement made must involve an entire withdrawal of the interests of Coburn and Ewing. They insist that their stock is worth a premium, while, on the other hand, Mr. Fisher claims that it has depreciated. I am aware that you have the impression that Burnett was not connected with this sale, but in this it is more than probable that you are in error, and

Coburn and Ewing have in their possession the proportional part realized coming to Burnett, amounting to $16,800. All these phases of the case I have gone over carefully with Mr. Coburn, and he has become willing to settle in a way approximately as follows: (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 C. & E. 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 understood, this is substantially your proposition to us. In a conversation with you I think you stated that you would favor the indemnity for the $16,800. I believe there is a controversy between Mr. Ewing and Mr. Fisher as to whether the company owes Ewing about a month's balance on salary. This, however, of course, can be settled by the books. If I have not made my proposition clear I ill  be glad to state it more fully, and upon Mr. Fisher's return I much hope a satisfactory adjustment can be made.'

From appellees' to appellants' counsel, January 5, 1886.

'We were advised by the counsel of the Cedar Valley Land and Cattle Company in London that the company has no right either to purchase or provide for the cancellation of the stock now held by Coburn and Ewing. In view of this advice, Mr. Fisher does not feel at liberty to conclude the settlement upon the basis of taking back the stock. If we could agree upon any settlement which would leave the stock in the hands of Coburn and Ewing, or which would not require the company to take it, Mr. Fisher would feel at liberty to act in the matter; but, as I assume that this cannot be accomplished, I have advised Mr. Fisher, who leaves for London in a few days, to lay the whole matter before the board and give us instructions which will, I hope, enable us to agree with you upon some disposition of the stock and upon a final satisfactory adjustment of the matters between the parties.'

From appellants' to appellees' counsel, January 8, 1886.

'Your note of the 5th instant was duly received, stating that no further action could be taken in the matter of settling the dispute between the C. V. L. & C. Co. and Mess. Coburn and Ewing until Mr. Fisher had additional instructions from his company. I have delayed answering until I could confer with Mess. C. & E., which I now have done. They greatly regret

the delay that will be necessarily occasioned, as they hoped for a speedy termination of the controversy. I have urged upon them that they allow me to continue my efforts for an adjustment. This they have done, with the understanding that I request you to ask Mr. Fisher to report by cable at the earliest possible moment whether the proposition will be accepted. This is a matter involving so large an amount and requiring the taking of testimony at so many and such remote points that I assume that we are agreed as to the importance of determining this negotiation one way or another as soon as the same can be reasonably done. Awaiting your further advice, I am, very truly.'

From appellees' to appellants' counsel, January 11, 1886.

'I have arranged with Mr. Fisher to cable me instructions from London as to compromise of the controversy between Coburn and Ewing and the C. V. L. & C. Company. I will advise you promptly when instructions are received.'

From appellants' to appellees' counsel, January 26, 1886.

'Mess. Coburn & Ewing have 2,000 shares in the C. V. L. & C. Co.,  5 each paid, amounting to about $48,800. They will settle the controversy with the company (1) by returning the $40,000 commission and the company's taking their stock at the actual amount 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 to buy up or otherwise molest any of the ranch 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 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.'

From appellees' to appellants' counsel, February 2, 1886.

'I inclose herewith a letter just received from Mr. Fisher from New York, which explains itself. Mr. F. carries with him to London the several propositions of settlement which have been under discussion. Will you kindly advise me what response Coburn & Ewing have to make to the terms suggested in this letter? If possible I should like to be advised in time to write Mr. Fisher to-morrow, as requested. Please return Mr. Fisher's letter.'

From Fisher to appellees' counsel, 29th January, 1886.

'As I wired you yesterday, I am unfortunately here till to-morrow, at 2 P. M., in consequence of the steamer I intended sailing with yesterday being disabled. I am sorry at this, as I am anxious to get to London to consult with my co-directors. I have been thinking a good deal over the best way to arrange a compromise with C. & E., but in every shape I take it it is always saddled with the difficulty of dealing with their stock. No one, of course, would be fool enough to take their shares at par when it is so generally known, and by one better than by C. & E. themselves, that the value of all cattle shares are not within 20 per cent. of what they were; and, as the company itself can neither buy nor cancel, it is most perplexing. The following is a proposition that has occured to me that C. & E. might submit to the board: C. & E. agree to pay Co. the $5,000 commission, with interest thereon at the rate of 8 per cent. per annum for the time they have had it; C. & E. to retain their stock in company by the directors getting for them an advance on it for $40,000, at the rate of interest of ten per cent. per annum, said advance to go to liquidate the debt to the company, C. & E. besides paying the company's expense in connection with this litigation. This arrangement would enable C. & E. to hold their stock, which they appear to value so highly, until such time as they could sell it at par, or possibly, in two years, at a premium, and at the same time refund the $40,000. The company would in this case not commence proceedings for damages caused by turning back the cattle. If you think well of this project you can see Karnes about it, and, if C. & E. are disposed to make the above proposition, cable the word 'consent' on 8th February, the day I expect to get to London. Frankly, I must say this is a more favorable settlement than I would give them, as I am satisfied there is more in the real estate than $15,000, but under the circumstances might be accepted by the board. Of course, if there is no cablegram, I will understand they will not make this proposition; in any case, write not later than Wednesday.'

From appellants' to appellees' counsel, February 2, 1886.

'I am just in receipt of your letter of to-day, including a letter from Mr. Fisher from N. Y., which I herewith return to you. You have heretofore seen fit to express your appreciation of what I had done and was doing to get this controversy settled, and hence I need not restate my endeavors in the matter. I am only sorry to see Mr. Fisher taking the position indicated by his letter. I am convinced that Mr. Gage was correct in his opinion that he, F., was unfavorable to any settlement. The terms proposed in his letter I have not submitted, nor will I submit, to my clients. I have been satisfied from the beginning, and am still satisfied, and have so stated to Mess. C. & E., that they are liable in law for the return of the $40,000,

but I don't believe they are liable any further. This they ought to repay. On the other hand, this company had received the benefits of their labor without any expense. There ought to be some recognition of the equities of the case. On such a basis I have tried to have an adjustment made; but if it is the determination of Mr. Fisher to drive these men to the wall, then there is no alternative left but to fight. I shall still hope, however, that through the co-operation of yourself and Mr. Gage a fair and just settlement may be made, and that the damage to the interests of all concerned, to which Mr. Fisher's rashness will lead, may be avoided. As Mr. Fisher mentioned my name in his letter, I would be glad to have him furnished a copy of this.'

Cablegram.

'From London. Kansas City. Ewing's proposals declined. Letter posted to-day, inclosing complete answer to cross-bill, and conveying the only terms which will be accepted. Inform Ewing.'

From appellees' to appellants' counsel, February 24, 1886.

'I inclose copy of letter, just received from the secretary of the Cedar Valley Land and Cattle Company, sumit ting the only terms upon which the company will settle with Coburn and Ewing. 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. & E. at par, I am in hopes your clients will consider it better to accept than to continue the litigation. If this proposition is accepted, please advise me before March 4th.'

From Coburn and Ewing to appellees' counsel, February 27, 1886.

'On February 4th, 1886, you handed to J. V. C. Karnes, Esq., one of our counsel, a copy of a letter which you had just received from the secretary of the Cedar Valley Land and Cattle Company, which is as follows: 'The Cedar Valley Land and Cattle Company, Limited, Moorgate Street Chambers, London, E. C., Feb. 11, 1886. Dear Sir: The board have had under their very careful consideration Mess. Karnes & Waters' letter, dated the 26th of January, 1886, containing two alternative offers by Mess. Coburn and Ewing for the settlement of the claims made by the Cedar Valley Land and Cattle Company upon them. I am instructed to inform you that neither of these propositions is acceptable, and that the action against Mess. Coburn and Ewing must proceed. With that view the answer to Mess. Coburn and Ewing's cross-bill has been forwarded to Mess. Adams and Field, along with a letter from the solicitors of the company.

The company being liable in a large sum of costs, which will not be recovered from Mess. Coburn and Ewing, the only terms upon which the board can agree to compromise the claim of the company are as follows: (1) That the amount payable to the company by Mess. Coburn and Ewing be  10,000, the amount paid by them for the 2,000 shares now standing in their names. (2) That this amount, 4,000, shall be paid in cash, or, in lieu thereof, that the cattle of the L. & W. herd now upon the Cedar Valley ranch shall be accepted as cash, when counted over this spring, upon a valuation to be made by two valuers, one chosen by Coburn and Ewing and one by the company, the valuers appointing a referee. (3) That the balance then remaining due to the company will be discharged by the transfer to such person or persons as may be named by the board of a sufficient number of Mess. Coburn & Ewing's shares on the basis of a par value, the shares then remaining in the hands of Coburn & Ewing to be held by them for a period of not less than two years. (4) Mess. Coburn & Ewing to give security that they will not buy up or otherwise molest any of the range privileges now enjoyed by the company. (5) That the company agree to protect Coburn & Ewing against any claim from the executors of the partner of the late Geo. Burnett. When the board consider (1) that the issue has practically been decided against Mess. Coburn & Ewing by the same judge before whom the case will ultimately be tried; (2) that Mess. Coburn & Ewing have received from Mr. Munson the sum of $75,000 for a property which, in the written estimate of six of the eminent valuers in Kansas City, is worth from $45,000 to $50,000; (3) the almost insuperable difficulty which the board will have in placing any of the shares transferred by Mess. Coburn & Ewing, in consequence of the non-payment of a dividend, resulting from Mr. Ewing's vindictive or ill-judged action in ordering the beeves back to the ranch; and (4) the interest upon the amount of commission obtained in various ways from Mr. Munson from the period of its receipt up to the present date, which, we are advised, would be recoverable from them by an action at law, the board is of the opinion that the foregoing offer is more favorable to Mess. Coburn & Ewing than the latter had any right to expect. The board, however, is induced to offer these easier terms with the object of setting the matter before the general meeting of the 4th of March. It is therefore to be distinctly understood that this proposal only remains open until the 3d of March, and that failing the receipt on or before that date of a telegram announcing that Mess. Coburn & Ewing have signd a n agreement embodying the above terms, the offer now made by the board is withdrawn on that day. It will suit the company infinitely better to receive the amount of their claim in cash, as would be the case when a judgment has ben recovered in their favor, than to have to deal with any large num-

ber of shares transferred by Mess. Coburn & Ewing. It is to be understood that the offer is to be made without prejudice to any claim for damages which the board may have against the executors of the partner of the late George Burnett. The directors desire me to add that in the event of the foregoing offer being refused they will feel it their duty in the interests of the shareholders to claim full compensation for damages which the company have sustained under various heads, which are clearly attributable to the account of Mess. Coburn & Ewing. I am, dear sir, yours truly, JAMES E. WEBB, Sec'y. Geo. W. McCrary, Kansas City, Mo., U.S. A.'

'And on February 26, 1886, you sent to Mr. Karnes the original letter you had on that day received from the same party, and which was as follows: 'The Cedar Valley Land and Cattle Company, Limited, Moorgate Street Chambers, London, E. C., 12th Febr., 1886. Dear Sir: In reading over the letter which I had the pleasure to address to you yesterday I noticed two points in reference to which I would like to make some observations. The sum of 10,000 is fixed as the damages to be paid by Mess. Coburn and Ewing, and it is added that this sum was the amount paid by Mess. Coburn and Ewing for their shares. Seeing that there is no connection whatever between the claim for damages and the payment of shares, it is advisable that the words 'the amount paid by them for the 2,000 shares now standing in their names' be eliminated from the letter, if you think advisable to read it or give a copy of it to Mess. Coburn and Ewing. The words 'vindictive or illjudged,' on page 3 of the letter, should also be eliminated, as Mr. Ewing, in his letter of 24th October last, stated that he was acting for the best interests of the stockholders in turning back the beeves. These words are unnecessary, although the directors could not possibly approve a step which precluded the possibility of paying a dividend, the non-payment of which would have, as had been fully explained to Mr. Ewing, such an injurious effect on an English company. If Mess. Coburn and Ewing should prefer to deliver the cattle of the L. & W. herd, now on the Cedar Valley ranch, the transfer of the  12,000 would be accepted by the board at present, leaving the balance of  4,000 to stand over in the mean time. If the valuation of the L. W. herd shall eventually fall short of that sum, the balance of such valuation to be made up to the company by the transfer of an equivalent number of shares in the company on the basis of a par value, the boarding of the above cattle to be paid for at the time of transfer at the agreed-on rate, $1.50 per head.

The board is quite ready to agree to Mr. Ewing's stipulation that he shall be paid his salary during such time as he remained in the service of the company, whatever amount may be found to be due to him upon a proper adjustment of accounts. Will you kindly bear these points in mind in dealing with the other side? I am, dear sir, yours truly, JAMES E. WEBB, Sec'y. Geo. W. McCrary, Esq., Kansas City, Mo., U.S. A.'

'Both of these communications, together with your two letters forwarding them to Mr. Karnes, he has placed in our hands. In connection with both our counsel we have fully considered the terms of this proposition. We wish to state emphatically that we regard the proposition as unjust and oppressive, but we have so much involved in this litigation that we agree to and accept the terms of the offer made. The  4,000 will be arranged for with the L. W. cattle, as suggested in the letter of February 12th, and the 1,200 shares of stock therein mentioned we herewith hand you, to be transferred to such parties as may be named. We have only two certificates of one thousand shares each, ad w e deliver both to you, and the company can return us a certificate for 800 shares. The bond called for by the fourth section of the proposition in the letter of February 11th we will give at any time. It will now soon be the season when the L. W. Cattle can be counted, and we will be ready at once to name valuers. Now that a settlement has been effected, we hope there will be no delay in carrying it out in al respects as agreed upon. We desire to express to you our thanks for the uniform courtesy with which you have treated us throughout this unpleasant matter. We are, dear sir, very truly, W. N. EWING. JAMES M. COBURN. COBURN & EWING.'

From appellees' counsel to appellants, February 27, 1886.

'Mr. Karnes has handed me your letter accepting the terms of compromise proposed by the Cedar Valley Land & Cattle Company, and has also placed in my hands the certificates for the two thousand shares of stock held by you in the company. I will wire Mr. Webb, secretary of the company, that you have accepted in writing the company's proposition, and have written him, requesting that the company take immediate steps to choose a valuer, and proceed with as little delay as possible to close up the matter of the compromise. Of course it is understood that the settlement embraces all the matters involved in the pending litigation in the several suits between the parties. The matter of costs and the balance due you on salary can easily be adjusted hereafter. Col. Karnes and I agree that each party pay its own costs.'

From appellees' to appellants' counsel March 18, 1886.

'I am just in receipt of a letter from James E. Webb, secretary of the Cedar Valley Land and Cattle Company, Limited, of date March 6th, of which I inclose you a copy. Mr. Webb sends me with this letter an assignment to be executed by Messrs. Coburn and Ewing, transferring to him 1,200 shares of their stock in said company. When Mr. Webb wrote this letter he had not received my communication written on the 27th of February, informing him that Messrs. Coburn and Ewing had placed in my hands their certificates for the whole 2,000 shares, and had requested that the company would issue to them a new certificate for 800 shares. That letter would reach London about the 7th inst, and an answer may be expected very soon. Probably it would be better to take no further action until it is received.'

From Webb, secretary, to appellees' counsel.

'London, E. C., 6 March, 1886. Dear Sir: I have to acknowledge the receipt, on the 27th February, of your cablegram of that date reading: 'Terms proposed accepted by Coburn & Ewing today in writing.' That telegram was laid before the board at their meeting on the 3rd inst., and I am directed to inform you that they are glad that a settlement has been arrived at upon terms which they believe will be found upon consideration to be satisfactory to all parties. The board is prepared to find that all the obligations entered into by Mess. Coburn and Ewing will be faithfully and honorable carried out by these gentlemen, and they trust that amicable relations will be resumed and will continue uninterruptedly for the future. With a view to the carrying out of the provisions of the agreement with Mess. Coburn & Ewing, I now inclose a transfer of 1,200 shares, to be executed in my favor, and the company undertake that if the value of the L. W. herd shall exceed the sum of  4, 000 the difference shall be adjusted by their transfer to Mess. Coburn and Ewing of shares to an equivalent value. Awaiting confirmation by letter of your cablegram of the 27th.'

From appellees' to appellants' counsel, March 27, 1886.

'I am now advised that the Cedar Valley Land and Cattle Company cannot issue the new certificates for eight hundred shares of stock to Coburn and Ewing, as per terms of compromise, until the latter have assigned the twelve hundred shares. They therefore wish Mess. C. & E. to execute the inclosed assignment, to be sent by me to London. This done, they will immediately execute and send over the new certificate for eight hundred shares. Please have the assignment executed, and return to me at the earliest time practicable, as I wish to forward it without delay.'
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