Of course it’s fair. Your grade is not better than other person. Your definition of ‘fair’ seems very, very different from what Webster dictionary uses.
If you are so, so incensed by this “injustice”, take it to the head of department. As @austinmshauri stated, your 2nd exam is neither better nor worse than your 1st exam, making you ineligible for dropping the first exam score.
AND, your final score 112/150 is less than your two previous test score. Once again, you are not eligible for dropping other two test scores. You get what you earned: 84.8%
And you are not sure why he didn’t drop the first exam test score?
Your friend may have had 88% by dropping 1st test, which can easily be A or A- by a good curve. 84.8%, on the other hand, barely gets you an A.
In conclusion, your grade wasn’t good enough to get a possible curve.