74 F. 707 | 8th Cir. | 1896
after stating the facts as above, delivered the opinion of the court.
A provision in a contract to perform work or to furnish material, that the report, of an engineer, inspector, or arbiter as to the amount and quality of the work done or material furnished under the contract shall be conclusive upon the parties to the agreement, is a legal and binding stipulation, and can only be set aside for fraud, or for such gross mistakes as imply bad faith or a failure to exercise an honest judgment. Kihlberg v. U. S. 97 U. S. 398; Sweeney v. U. S., 109 U. S. 618, 3 Sup. Ct. 344; Railroad Co. v. March, 114 U. S. 549, 553, 5 Sup. Ct. 1035; Railroad Co. v. Price, 138 U. S. 185, 11 Sup. Ct, 290; Lewis v. Railway Co., 49 Fed. 708; Williams v. Railway Co., 112 Mo. 463. 20 S. W. 631. The contracts in this case provided that the railway company should appoint an inspector to inspect: and classify ihe ties; that his inspection and judgment of said classification should be binding upon the appellant; that no ties should be considered delivered under the contracts until they were inspected, passed upon, and received by this inspector; and (hat the railway company
Before entering upon tbe consideration of tbe question whether tbe charge of gross error in tbe inspector’s classification, on which this decree rests, is established by tbe evidence in this case, we will dispose of a preliminary objection to bis report and classification. This objection is in the nature of a demurrer to tbe report. It is that bis classification is of no binding force because it was made without authority. Tbe argument is that tbe only error claimed in this case was in estimating tbe dimensions of the first-class ties, — that tbe dimensions of these ties were fixed by the contract, that they were capable of accurate ascertainment by actual measurement, that the dimensions of each tie necessarily classified it, that there was no room for tbe exercise of tbe judgment of the inspector, and hence that, in every case in which he reported as a first-class tie one that was not eight feet long, eight inches wide, and six inches thick, bis action was ultra vires, and without binding forced Tbe answer to this argument is that these parties agreed that Brewton’s inspection and judgment of this classification should be conclusive upon them. They evidently supposed, when they made these contracts, that disputes might arise between them over matters as easy of ascertainment as the number and dimensions of 75,906 cross-ties, and they provided an arbiter to settle these disputes, and covenanted to abide by his decision. Their supposition proved to be in accordance with the fact. The contracts and appointment accordingly invested the inspector with the power, and imposed upon him the duty, to ascertain the dimensions of these ties, and to classify them under the contracts in accordance-with these dimensions and their other qualities, and his classification, when made, was as conclusive as to their dimensions, as it was as to their other qualities. There is no moral law and no rule of public policy which forbids parties to submit to another for determination or decision questions of count, measurement, or distance, although these questions may be capable of accurate ascertainment. In Kihlberg v. U. S., 97 U. S. 398, 400, 401, an action was brought against the United States upon a contract for the
It will not be futile to call to mind, before we review the evidence in this record, that it is not every gross mistake that will avoid the finding of such an arbiter. In Railroad Co. v. March, 114 U. S. 549, 553, 5 Sup. Ct. 1035, an action was brought upon a contract for grading a railroad, which contained the provision that the final estimate of the work done, material furnished, and the amount due therefor, made by the engineer of the company, should be final and conclusive upon the parties. The trial court charged the jury that the final estimate of the engineer was conclusive unless it appeared from the evidence that he was guilty of fraud or intentional misconduct or gross mistake. The supreme court declared that this charge was erroneous, because the court did not inform the jury that the mistake must be so gross or of such a nature that it necessarily implied bad faith on the part of the engineer. In delivering the opinion of the court, Mr. Justice Harlan said:
“We are to presume from the terms of the contract that both parties considered the possibility of disputes arising between them in reference to the execution of the contract. And it is to be presumed that in their minds was the possibility that the engineer might err in his determination of such matters. Consequently, to the end that the interests of neither party should be put in peril by disputes as to any of the matteis covered by their agreement, or in reference to the quantity of the work to be done under it, or the compensation which the plaintiff might be entitled to demand, it was expressly stipulated that the engineer’s determination should be final and conclusive. Neither party reserved the right to revise that determination for more errors or mistakes upon his part. They chose to risk his estimates, and to rely upon their right, which the law presumes they did not intend to waive, to demand that the engineer should, at all times, and in respect of every matter submitted to his determination, exercise an honest judgment, and commit no such mistakes as, under all the circumstances, would imply bad faith.”
The question, then, is, has the railway company proved such gross mistakes in the classification of the ties made by its inspector as imply bad faith or a failure to exercise an honest judgment on his part? The burden of proof was upon the railway company to establish these mistakes. Not only this, but the legal presumption was that the measurements, inspection, and classification of ihis inspector were accurate and just. Lewis v. Railway Co., 49 Fed. 708, 710; Torrance v. Amsden, Fed. Cas. No. 14,103; Bumpass v. Webb, 4 Port. (Ala.) 65; Pleasants v. Ross, 1 Wash. (Va.) 156. The general presumption is that an officer or agent has faithfully discharged his duty. But the presumption here is stronger than that. These parties chose this inspector to count and classify these ties for them, and agreed to be bound by his report. They knew him, and they would not have selected him unless they believed him to be competent and trustworthy. Their selection raises the presumption that he was so. He was appointed by the railway company, and was employed and paid by it. The charge 1he company now makes is that he made gross mistakes against its interests, and in favor of a contractor who, the evidence proved, never solicited him to do so. It is not a common experience to find a disinterested employé making mistakes against his employer and in favor of a contractor. Thus it will be seen that the railway company is met at the threshold of this case with adverse presumptions on every side. It ought to present very convincing evidence to sustain the burden of proof, and to overcome all these presumptions. What, then, is the evidence on which it relies? It consists of two items of proof: First, the fact that all the witnesses for the appellant, as well as those for the railway company, conceded and testified that there were a great many of the ties that were classified as first-class by Mr. Brewton, that were not exactly eight feet long, eight inches wide, and six inches thick: and. second, the fact that Brewton classified 70,262 out of 75,906 ties in dispute, or 93 per cent, of them, as first-class ties, while the agents of the railway company, in a subsequent inspection, classi'fied only 38,567 out of 75,792 of them, or only 51 per cent, of them, as first-class ties.
The concession that the ties did not literally and exactly comply with the specifications of the contracts is without probative force, when these specifications, the character of the subject-matter to which they relate, and the evidence in this record are carefully considered. The contract by its terms required these ties to be “eight (8) feet long, no more and no less, six (6) inches thick, and fully eight (8) inches wide at the narrowest end; must be.full
The only evidence, then, to support this ciiarge that Brewton committed such a gross mistake, is the fact that he classified about 42 per cent. more of the ties as first-class than did the agents of the railway company, who subsequently inspected them. It goes without saying that the mere fact that a clerk in a railroad office, who never made an
It has not escaped our attention that it is claimed by counsel for appellee that the employés who made the second inspection also accepted as first-class all ties that were not more than one inch short, but a careful examination of this record has satisfied us that this claim is not sustained by the evidence. Only two witnesses testify that these employés took this course, and the evidence conclusively shows that neither of them knew anything about it. These two witnesses followed after Stevens during a portion of the time when he was making' his inspection, and measured the width and thickness of the ties which he had not already chalked and rejected as first class. One of them testifies that he never measured the length of the ties, and that he knew nothing about whether the measurements of Stevens were accurate or not, and the other testifies that he did not
No discussion is necessary to show that such an inspection and classification as this is utterly incompetent to establish a gross mistake by a presumably competent inspector. Much less is it sufficient to overcome the presumptions of honesty, trustworthiness, and faithful discharge of duty which surround the report of the chosen arbiter of the disputes of these parties, or to establish a mistake so gross as to imply bad faith or the failure to exercise an honest judgment on his part. It tends rather to establish incompetence to inspect ties on the part of the purchasing chirk who made the second classification as to length, or instructions from the railway company to niake an unfair inspection and an unjust classification. The railway company failed, in our opinion, to prove its case. The decree below must accordingly be reversed, with costs, and this case must be remanded to the court below, with directions to dismiss the bill, and it is so ordered.