APPEAL from an order of the Circuit Court of St. Mary's County, overruling a motion to dismiss an appeal to the Court in banc. Re-ing of the court in banc was made exclusively versed. on the bills of exception, our decision refers only to them. Order reversed.

This was an action of ejectment brought by the appellants against the appellee. At the trial in the court below, before a single judge, BALTIMORE & OHIO R. R. CO., Appt., exceptions were taken to the ruling of the court on prayers offered for the instruction of the jury.

7. This court has no power, in a common-ery, who were employees and agents of the aplaw action, to review conflicting evi- pellant, and to be delivered into the tenders of dence in order to determine whether the appellant's locomotive engines, at such the jury have made proper deductions from it.

8. A question of motive or intent is always one of fact for the jury.

times as the appellant might require, etc. The contract was dated the 17th of May, 1875, but was not to take effect until the 15th of July following. Coal had been delivered to the ap9. The rule of damages, in an action for pellant by the appellee, from the same mine, not accepting articles agreed to be deliv- from September, 1874, to the time when the ered, is the profit which the one furnish-contract went into operation, but only under ing them would have made if they had special orders; and the appellant continued to receive coal from the appellee, from the same been accepted and paid for. mine, and for the same purpose, that is, for 10. Evidence of the knowledge and ex- generating steam for locomotive engines, until perience of the agent designated to May the 6th, 1876, with occasional suspensions. accept the article is admissible, to show The appellee, in his declaration, assigned as the good faith of the agent in rejecting breaches of the contract: 1, that the appellant it. Evidence of a decline of the price improperly refused to receive the coal tendered of the article is also admissible on that by the appellee; and 2, that although the appoint. pellee was ready and willing to deliver to the appellant daily the stipulated quantity of coal, of such quality as was required by the contract, and which in fairness and truth was and should have been satisfactory to the masters of transportation and of machinery of the appellant, the latter falsely pretended that the coal thus offered to be delivered was not of the quality contemplated by the contract, and was not satisfactory to the masters of transportation and of machinery, and therefore refused to accept such coal of the appellee.

11. Declarations of the president of the appellant, authorized to bind the corporation by contracts in its ordinary business, recognizing the contract as subsisting, and, as to what should be done in the matter, are admissible in evidence.

12. Where the appellant had sought to show the unfitness of the appellee's coal for the use contemplated by the contract, by showing that it contained red or rusty coal, it was competent for the appellee to show that the rust did not affect its steam generating power, and that the appellant in its subsequent purchase of coal for its engines, did not reject coal similarly affected.

(Decided June 24, 1886.)

MOTION for reargument of case reported in

3 Central Reporter, 213. Overruled.

Alvey, Ch. J., delivered the following opinion:

When this case was decided, after full argument, I concurred with the other judges in the conclusion that the judgment of the court below ought to be affirmed. This was my conclusion upon full examination of the record; it appearing that the case had been carefully tried and fully submitted to the jury upon correct principles of law.

After the decision of the case in this court, there was a motion by the appellant for reargument; and, in support of that motion, quite an elaborate brief was filed, urging several matters and questions supposed to have been overlooked by the court, or not fully considered by it, in arriving at the conclusion announced in its opinion.

That motion has been considered and overruled by the court; and while I concur in overruling the motion for reargument, I deem it due to the reasons assigned in support of that motion, to state briefly the grounds of my judgment.

The contract, upon which the action was brought, contains the condition that the quantity of coal to be furnished, during the three years for which the contract was to run, was to be of such quality as should be satisfactory to the masters of transportation and of machin

It was upon these alleged breaches of the contract that the issues were formed.

Such then being the issues for trial, one of the most prominent questions of fact presented for the determination of the jury was: At what particular time did the master of transportation and the master of machinery really determine to condemn the coal supplied under the contract, because it was not satisfactory to them?

On the part of the appellee it was contended, and sought to be maintained by his proof, that it was not until the 6th of May, 1876, that the appellant ceased accepting the coal under the contract, and that it was not then stopped because it was in truth unsatisfactory to the agents named, but because of the fall in price of a superior grade of coal, and because those agents were unduly influenced by, and yielded to, the dictation of their superior officers in the Corporation, in disapproving the coal, so that their determination, in condemning the coal, was not in fact fairly and bona fide made.

But while such was the contention on the part of the appellee, it was contended, and strongly supported by proof, on the part of the appellant, that the taking of the coal under the contract was stopped on the third of August, 1875, because it was in fact unsatisfactory to the agents designated by the contract to pass upon its quality; and that all the coal taken of the appellee after that date was taken, as had been all the coal furnished by the appellee prior to the 15th of July, 1875, only occasionally, under special and limited arrangements, and for purposes of making tests as to the feasibility of using the coal on the road. No coal was in fact taken after the 6th of May, 1876; and the appellee immediately thereafter ceased operation of his mine; but he says that was in consequence of the refusal of the appellant to proceed with the execution of the contract.

That term or condition of the contract which

required the coal to be of a quality satisfactory | himself of the condition precedent to defeat the to the agents designated, was certainly a lead right of the plaintiff to recover for a violation ing and important one to the appellant, and of the contract, where there has been fraud or was intended exclusively for its protection, and mala fides on the part of the person appointed without which, we may suppose, the contract to approve or disapprove. But, in the absence would never have been made. The appellant, of fraud or bad faith in the conduct of such therefore, had the right to insist that the con- party, in respect to the fact of his approval or dition should be allowed its full and complete the withholding it, his judgment or determinaeffect, in determining the rights of the parties tion is to be accepted as final and conclusive. under the contract. No mere error or mistake of judgment will vitiate his determination. The very object of his appointment is to prevent and exclude contention and litigation; and hence, nothing short of fraud or mala fides in the exercise of his power to reject or approve the article contracted for, will dispense with the strict legal effect of the condition precedent. This is now the settled doctrine, in respect to this class of contracts, in the courts both of this country and of England. Wilson v. Y. & Md. Line R. R. Co. 11 Gill & J. 58; Lynn v. Balto, & Ohio R. R. Co. 60 Md. 404; Sweeney v. United States, 109 U. S. 618 [Bk. 27, L. ed. 1053]; Martinsburg & Potomac R. R. Co. v. March, 114 U. S. 549 [Bk. 29, L. ed. 255]; Sharpe v. San Paulo R. R. Co. L. R. 8 Ch. App. 597.

In cases where it is stipulated that an article to be furnished shall, unqualifiedly, be satisfactory to the party to whom it is to be supplied, the right to reject the article, as not being satisfactory, cannot be inquired into; but the party's own determination must be taken as final and conclusive. In such case it is supposed, and such is the construction, that the party has reserved to himself an unqualified option, and is not willing to leave his freedom of choice to any contention, or to be subject to any investigation whatever.

It is quite permissible to parties to enter into such contracts; and where the approval or satisfaction of the party is made a condition precedent to the right to receive compensation or the contract price for the article to be delivered, the court has no right or power to dispense with the condition, and say that the article was of a quality or character that ought in reason to have been accepted as satisfactory. If the plaintiff thinks proper to enter into such conditional contract, it is not for anyone else than the defendant himself to say that he ought to be satisfied; that is a matter expressly reserved to the defendant to decide for himself, and the reasons or motive for the decision, whether reasonable or unreasonable, good or bad, are placed by the contract beyond question or investigation. For instances of this class of contracts, and as illustrations of the application of the principle here stated, I may refer to the cases of Andrews v. Belfield,2 C. B. N. S. 779; McCarren v. McNulty, 7 Gray, 139; Brown v. Foster, 113 Mass. 136; Zaleski v. Clark, 44 Conn. 218; Rossiter v. Cooper, 23 Vt. 522; Hart v. Hart, 22 Barb. 606; Gibson v. Cranage, 39 Mich. 49; Wood Reaping & M. Machine Co. v. Smith, 50 Mich 565; S. C. 45 Am. Rep. 57.

But this principle does not apply, in its unqualified form, in a case where the contracting parties have expressly stipulated that the article to be supplied shall be such, in respect to the quality or otherwise, as shall be approved by, or satisfactory to, some third person, though that third person may be an agent or an employee of one of the parties to the contract. In such case, though it be made a condition precedent that the article shall be approved by the party designated, yet if it can be shown that the approval has been withheld from motives of selfish interest, bias, partiality or corruption, the party prejudiced by such action may, not withstanding the absence of such approval, recover on the contract for the nonacceptance of the article furnished. In such contracts it is an implied condition that the person designated to approve shall act with entire good faith to both of the contracting parties. Both parties have the right to insist upon such good faith, and the want of it will dispense with the condition requiring the approval.

The court will not allow a defendant to avail

And this principle, with the proper conditions under which it was applicable, and could be applied in the consideration of this case, appears to have been fully and clearly set forth in the hypothetical instructions given by the court to the jury.

Such then being the settled law, as applicable to this case, the principal question presented for investigation, under the issues framed, was one of fact purely; and that question was whether the rejection or disapproval of the appellee's coal by the masters of transportation and of machinery was mala fide and fraudulent, or otherwise.

To entitle the appellee to recover, it was incumbent upon him to establish to the satisfaction of the jury that there was want of fairness and good faith on the part of those agents in the disapproval or rejection of the coal, or that the coal was rejected by the appellant, notwithstanding its quality was in fact satisfactory to those agents. It was to this question that the greater part of the large mass of conflicting testimony, contained in the record, was directed. The evidence produced on the part of the appellee was all of an inferential character, merely; and most of it had but a remote and indirect bearing upon the question at issue.

The coal contracted to be supplied was of a well known grade or quality in the coal region. It was mined or to be mined from what is known as "the six foot vein," and is of a comparatively inferior grade of coal to that mined from what is known as "the big or fourteen foot vein," in the same region. Its grade and general characteristics were well known to the appellant's officers and agents, before the contract was made, and it was in fact contracted for as an inferior grade of coal, the price being less than that paid for the standard grade of coal obtained from the fourteen foot vein. In judging of its quality, therefore, it should be judged according to its grade and class, and not as of a superior grade.

It could not have been the understanding or the expectation of the parties to the contract that the coal to be furnished should be tested

inadvertently referred to in the opinion. But, while I think the text of the opinion ought to be modified so as to avoid making reference to evidence not before this court, I am of opinion that the general conclusion arrived at is in no mannerdependent upon the consideration of that evidence, and that the result must be the same irrespective of the evidence improperly referred to in the opinion.

that preceded and led to the making of the contract of the 17th of May, 1875; and which were offered and admitted for the purpose of showing knowledge by those officers and agents, of the nature and qualities of the coal, and the inducements to the making of the contract, as those circumstances might reflect upon the bona fides of the two agents named, in the subsequent disapproval or rejection of the coal, as not being satisfactory to them.

It is also urged, as a ground for reargument, that there was error in granting the third prayer The question, we must bear in mind, was not of the appellee, in respect to the measure of as to the interpretation of the terms of the condamages, and that this court has failed in its tract, but as to the good faith of the agents of opinion to advert to that instruction at all. It the appellant in repudiating the coal furnished is said that the court ought to have directed the under it; and, as bearing upon that question, jury to deduct the amount of profit to the ap- any circumstance, though slight in itself, was pellee, whatever it was, on the coal delivered to admissible. It was material to the inquiry that the appellant by the appellee, under the con- the jury should be informed as to the extent of tract, and which had been paid for, so that such the knowledge and practical experience of the profit should not be included in the general es- officers and agents of the appellant, in the use timate of the damages. of the coal (and especially those agents intrusted with the power of rejection) prior to the date of the contract, and under what inducements the contract was made, as those circumstances might, to some extent, aid the jury in determining the question of good faith. I think, therefore, there was no error in the rulings upon these exceptions.

That such profit was not proper to be included in the verdict is certainly true; and there is nothing in the third prayer that justifies us in assuming that it was included. That instruction did not require the jury so to find and estimate the damages; but it only stated the rule or principle upon which the damages were to be ascertained. The court simply instructed the jury that the measure of damages was the profit which they should find the appellee would have made, if the contract had been fully performed.

The sixteenth exception does not appear to be relied upon by the appellant, and clearly it is not tenable. The seventeenth and eighteenth exceptions were taken to the admission of evidence to prove the price of the big vein coal at That was the correct general rule, applicable the date of the contract, or the time when it to the case, according to the principle enunci- went into operation, and the subsequent decline ated in Phila. etc. R. R. Co. v. Howard, 13 How. of that price. The object of this evidence was 307, 344 [54 U. S. bk. 14, L. ed. 157, 173]; and to show a motive in the appellant's officers and we are not to suppose or conjecture that the agents for rejecting the appellee's inferior grade jury included profits that had been already re- of coal. This evidence would appear, clearly, ceived by the appellee. If the instruction, to have been admissible, and the court, therewhile stating a correct general rule, was sup-fore, committed no error in allowing it to be posed by the appellant not to be sufficiently ex- given. plicit in reference to a matter of abatement, it should have asked an instruction by which its rights would have been more fully and clearly guarded. Failing to do this, I do not think it can now object to the court's instruction, which, as a general proposition, was clearly correct.

The nineteenth exception has not been pressed; but the twentieth, twenty-second, twenty-third, twenty-sixth and twenty-seventh exceptions have been strongly pressed upon the attention of the court, in the reasons assigned for reargument.

With respect to the twentieth exception, the question thereby presented is not, in my judgment, altogether free from doubt. I think, however, upon the best reflection that I have been able to give the matter, the ruling of the court below ought to be sustained.

Then again; in the reasons assigned for reargument it is insisted that some, at least, of the numerous exceptions taken to the admissibility of evidence were well taken, and that they have not been fully considered in the opinion of this court. It is true, all that is said in the opinion, in respect to these exceptions, is that "After a The appellee's contention was that the concareful examination of these exceptions we dis- tract was still existing and operative at the time cover no error." It would certainly have been of the conversation referred to, and therefore more satisfactory that some reasons, however any act or admission of the appellant by those brief, should have been assigned for this gen-authorized to act for it, whereby the contract eral conclusion. The important question, however, is: Was the court right in its conclusion in regard to these exceptions?

I shall not attempt a detailed consideration of these numerous exceptions to evidence. Many of them present the same class of facts or offers of facts, and substantially the same general question as to their admissibility. The first fifteen of these exceptions were taken to the overruling of objections to offers, and to the admission of evidence, consisting of acts and declarations (oral and written) of the officers and agents of the appellant, in the exercise of their employment, and of all the circumstances

was recognized as still open and subsisting, would appear to be admissible, under the restrictions imposed by the court below. Such ruling would seem to be within the principle of the case of Chicago v. Greer, 9 Wall. 733 [76 U. S. bk. 19, L. ed. 769].

Mr. Garrett was the president and chief executive officer of the appellant; and as such he was authorized to bind the corporation by dealing or contracting in reference to matters arising in the ordinary course of its business. It was competent to him, acting for the appellant, to direct the presumption of the receipt of coal under the contract, although it had been pre