Chapman v. Kansas City, Clinton & Springfield Railroad, 114 Mo. 542

Chapman v. Kansas City, Clinton & Springfield Railroad

114 Mo. 542 | Mo. | 1893

Black, P. J.

This is a suit to recover damages for an alleged breach of contract. The defendant railroad company, acting through its agent, H. P. Jacques, and William Chapman acting for himself, executed the following contract on January 26, 1886:

“Memorandum of agreement made with William Chapman, of Osceola, Missouri. ' The Kansas City, Clinton & Springfield Railroad Company agrees to take from William Chapman, during the year 1886, two hundred thousand ties, seven and eight-inch specifications. The eight-inch ties to be forty cents each, and the seven-inch ties to be thirty-five cents each, on right of way. *547Said Chapman agrees to deliver the ties at the rate of not less than fifteen thousand per month from this date. The ties subject to inspection by any inspector whom we may be pleased to send. Not more than twenty-five per cent of the ties to be seven-inch face.”

It appears William Chapman cut or had cut and delivered a portion of. the ties mentioned in this agreement, but he failed to make full compliance with its terms. He sold out his interest in the contract to J. H. Chapman and C. J. Harrison, the plaintiffs in this suit, who proceeded with the work. Mr. Jacques, still acting for the defendant, sent to the plaintiffs the following letter, the terms of which were accepted by them in writing on November 30, 1886:

‘ ‘ Gentlemen : Referring to the contract made with you January 26, 1886, for two hundred thousand ties, seven and eight-inch specifications, this contract will be extended until filled, provided that the remainder are put out at the rate of not less than ten thousand per month. If this contract is carried out as per above, and is satisfactorily filled, you will be allowed to continue to get out ties on the territory you now have for the year 1887, provided you will agree not to furnish less than ten thousand ties per month, first class ties, the price to be the same as under contract January 26, 1886.”

The plaintiff completed the first of these contracts about the month of March, 1887, and then proceeded to furnish ties under the renewed contract.

The breaches alleged are: First, that defendant failed and refused to accept and pay for forty thousand ties which the plaintiffs had placed on defendant’s right of way; second, that defendant refused to allow the plaintiffs to get out ties under the contract after the first of July, 1887, whereby they lost a profit of five cents per tie on one hundred and eighty thousand.

*548The evidence tends to show that the inspections made under the first contract were very liberal to the plaintiffs; that Mr. Jacques complained of the ties furnished as far back as February, 1887. The plaintiffs in a letter to him admitted that the ties furnished south of a stated point on the line of the road were below the average.

It appears the defendant made the contract for the purpose of increasing the freight receipts, and intended to sell the ties to other roads. Plaintiffs were informed of this fact; and on the eighth of March, 1887, Mr. Jacques gave them full warning that the ties before received were not up to the contract standard and they must expect a more rigid examination. In the month of July, 1887, the plaintiffs stopped getting out ties in view of a correspondence between them and Mr. Jacques, but ties then in the woods were hauled to the right of way for inspection and delivery.

A large number were inspected and accepted in January, 1887, again in April of that year, and again in November. The plaintiffs claimed that this last inspec-' tion was too close, and they refused to allow the inspectors to go over all the yards. There was a further inspection in March, 1888, by which some thirty-one thousand were received and others left as rejected. These rejected ties constitute the subject of the first alleged breach. It is conceded that defendant paid for all the ties that passed inspection. There was much evidence introduced as to what constitutes a seven and eight-inch specification tie.

The court gave the following instruction asked by the plaintiffs:

“If you believe from the evidence that, at the time the contract sued on was made, it was the understanding between the plaintiffs and the defendant, that the clause in said contract, to-wit: ‘The ties subject to *549inspection by any inspector whom we may be pleased to send/ was not intended to mean that the plaintiffs should be bound by the decision of the inspector, then the defendants were bound by said, contract to receive and pay for all ties delivered on the right of way of the Kansas City, Clinton & Springfield Railroad Company by the plaintiffs, in quantities not less than ten thousand per month, provided the same were eight and seven-inch specifications and not more than twenty-five per cent of the same seven-inch specification ties.”

And refused, among others, the following instruction asked by the defendant:

“That under said contract sued upon, and under the pleadings defendant was not bound or required to accept, receive or pay for any ties rejected or refused by inspectors sent or furnished by defendant to inspect such ties.”

The court erred in both of these rulings. The defendant’s instruction should have been given and the other one refused. The parties to a contract may agree that the classification, quantity or quality of work done or things furnished shall be left to the judgment of a third person, and that his estimate shall be final, and such a stipulation is valid and will be enforced. Neenan v. Donoghue, 50 Mo. 493; Dinsmore v. Livingston Co., 60 Mo. 244; Williams v. Railroad, 112 Mo. 463; Kihlberg v. United States, 97 U. S. 398. This principle of law is not seriously controverted here, but the plaintiffs insist that such a stipulation to be enforced must in terms provide that the decision of the third person shall be final. "We do not so understand the law.

In McAvoy v. Long, 13 Ill. 147, a case often cited, the contract - allowed the plaintiff twelve and one half cents per cubic yard for digging a ditch, and provided how the work should be measured, and contained this further clause: “The above measurement to be made - *550by David L. Hodges.” There was no express stipulation that his measurement should be final, and yet it was held that it was conclusive upon the parties, in the absence of fraud. _ A third person may be made the arbiter of the compliance with the conditions of a contract, and a promise may be made conditional upon the act of a third party, and such conditions are valid. It is not necessary that the contract say in express terms that the decision of the third person shall be final. It is enough that the condition which is to be performed before payment is stated. When stated it must be performed, if not waived, like any other condition precedent. Leake on Contracts, 639; 1 Wharton on Contracts, sec. 593.

Now there can be no doubt but the two agreements must be taken together for the purpose of ascertaining all the terms of the renewed contract for 1887. As to this there is no dispute. The plaintiffs, however, insist that the clause “the ties subject to inspection by any inspectors whom we may be pleased to send” means no more than this, that defendant had the right to have its inspectors examine the ties to determine for itself, but for no other person, that they were up to the contract standard. This construction simply eliminates the stipulation from the contract; for the ties were to be placed on the defendant’s right of way, and it had the right to examine them through inspectors or otherwise without the stipulation. This clause means that the ties found to be up to the contract by the inspectors and those only would be received and paid for. This is clear, whether we read the contract by itself or in the light of the interpretation placed upon it by the parties themselves; for the proof shows without contradiction or dispute that those ties and those only which were accepted by the inspectors were received and paid for. This was the practice from the. begin*551ning to the end. The correspondence between Mr. Jacques and plaintiffs shows that they at all times understood the ties must be inspected and by the inspectors accepted before payment.

The petition makes no charge of fraud or collusive conduct on the part of the inspectors. That the defendant did furnish inspectors for the purpose of examining all of the ties, stands conceded on the case made by the evidence, and this being so, before the plaintiffs can recover for any ties they must show that they were accepted by the inspectors. This they-utterly failed to do. It was for the court and not the jury to interpret the written contract.

This case was tried by the court on a misconception of the purport of the contract and of the law applicable to it from the first to last, and this being so it would be useless to go over the other branch of the case. The judgment is reversed and the cause remanded.

All concur.