Gilmore v. Courtney
41 N.E. 1023
Ill.
1895
Check Treatment
Mr. Justice Phillips

delivered the opinion of the court:

By thе amendment to section 35 of the law in relation to liens, approved January 16, 1887, in force at the time this contract was entered into and the work done thereunder, it was incumbent on the contractor to render the statement under oath, as required by that amendment, as a condition precedent to the right of action against the owner. No compliance therеwith being shown, the motion to find for defendant, made at the close of plaintiff’s case, should have been allowed. That motion renewed at the close of all the evidence should also have been allowed.

When parties to a building contract agree upon an arbitrator to settle disputes, and where the contract provides that no money is payablе thereon except upon the certificate of the architect, the decision of the arbitrator is final, in the absence of fraud or mistake. In Snell v. Brown, 71 Ill. 133, this court laid down the rule as to what is sufficient fraud to reject an architect’s decision under such a contract. It was there held, that where a party voluntarily enters into an agreement that a third person shall estimate work done and pass upon its quality, with power to reject and condemn all material which, in his opinion, does not conform to the contract, he cannot avoid or disregard it except for fraud clearly proved. As to what is necessary to constitute sufficient fraud to reject the architect’s decision the court says (p. 143): “It is true, his conduct may be impeached and his estimate set aside for fraud; but fraud cannot, as is assumed in the instructions for appellees, be presumed merely because his estimates for work done pursuant to the terms of thе ‍‌​‌​‌​​​​‌​‌‌​‌​​‌‌‌‌​‌​‌‌​‌​​‌​‌‌‌‌‌‌​‌​‌‌​​‌‌​‍contract are less than the measurement of the quantity actually done. Even if he, by mistake in judgment, erred in condemning or rejecting work, it would be no ground to impeach his estimate. (Herrick v. Vermont Central Railway Co. supra.) To prove that the estimate is fraudulent, it is not sufficient merely to show that work was rejected or condemned which in the opinion of others should not have bеen rejected or condemned. This may, indeed, be proved as a circumstance tending, in some degree, to establish fraud, but it is not conclusive. The evidence must show that the engineer knоwingly and willfully disregarded his duty, and rejected or condemned work which he knew, or at least should have known, fully conformed, in all respects, to the terms of the contract.”

In Canal Trustees v. Lynch, 5 Gilm. 521, the court says (p. 526): “The contract between the parties, so far as the record shows, was voluntarily and fairly entered into. Neither party is at liberty to disregard it, nor can the court make for the parties a сontract different from that which the parties have made for themselves. By the terms of the contract under which the work was done, the determination of the chief engineer as to the amount or quantity of the work done is made final and conclusive. In an action for work done under the contract, the estimate of the chief engineer furnishes the only evidence of the amount of work done, and neither party is permitted to show such estimate to be erroneous, or to impeach it except for fraud. If the board of trustees should unreasonably refuse tо cause the work to be estimated by their chief engineer, the contractor would then have the right to resort to other evidence to show the amount of work done, (Hotham v. East India Cо. 1 T. R. 639,) but neither party can resort to such other evidence while the other observes and insists upon the contract. Such we believe to be the law of this case, as made by the partiеs themselves.”

In McAuley v. Carter, 22 Ill. 53, it was held that where parties to a building contract agree that a superintendent should pass upon the work and certify as to the payments to be made, his decision is binding, unless frаud or mistake on his part shall be shown. In this case the court says (p. 57): “This being the contract of the parties, the case on the part of the appellees was made out by producing and proving the final certificate of the superintendent. That was the condition, and the only one, on which their right to recover rested, and when produced it must be held, in the absence оf fraud, conclusive. No evidence of the amount of work done, or of its character, was admissible,—both parties are concluded by the certificate of the superintendent.” It was also held that the same party might lawfully act as the agent for the owner and as arbitrator for the disputes.

In Michaelis v. Wolf, 136 Ill. 68, it was said (p. 71): “Where, in a building contract, provision is made for the payment of thе price, or a portion or portions of such price, upon the certificate or certificates of the architect in charge of the construction of the building, the obtаining ‍‌​‌​‌​​​​‌​‌‌​‌​​‌‌‌‌​‌​‌‌​‌​​‌​‌‌‌‌‌‌​‌​‌‌​​‌‌​‍or presentation of such certificate or certificates is a condition precedent to the right to require payment, and such condition must be strictly complied with, or else a good and sufficient excuse shown.” To the same effect are McAvoy v. Long, 13 Ill. 147; Coey v. Lehman, 79 id. 173; Barney v. Giles, 120 id. 154; Arnold v. Bournique, 144 id. 132.

The failure to apply for a certificate to the architeсt by the contractor being a condition precedent, he had no right to assume the architect would refuse to act, or, in acting, would do so fraudulently. On these several grounds we are of opinion there was error in refusing the instruction asked by the court to find for the defendant. Where the contractor had complied with the requirements of the contract and applied for a certificate, and it was refused wrongfully, or there were fraudulent acts on the part of the architect, or mistakes which he refused to correct, in such case such facts might bе shown. It is not sufficient that for a fear of a wrongful refusal or fraudulent act or mistake one of the parties may altogether refuse a compliance or attempted compliance with the contract. The second instruction given for plaintiff was therefore erroneous. That instruction was:

“The court further instructs the jury, as a matter of law, that by the terms of the contrаct, which makes the architect sole arbitrator as to all questions of dispute that might arise under the performance of the same, is not meant that the architect may willfully, capriсiously or arbitrarily decide disputes, but that he should ‍‌​‌​‌​​​​‌​‌‌​‌​​‌‌‌‌​‌​‌‌​‌​​‌​‌‌‌‌‌‌​‌​‌‌​​‌‌​‍exercise his judgment fairly and equitably between the parties; and if the jury believe, from the evidence, that the architect in this case decidеd disputes hastily or capriciously, it must be presumed he did so willfully, and the plaintiff is not bound, by law, to accept such willful decision so made by the architect.”

The question, materially one of law, wаs, whether, under the contract, the plaintiff could elect that he would not apply for a certificate, fearing the architect would be unfair.

The third instruction for plaintiff is also erronеous. It is as follows :

“The court instructs the jury, as a matter of law, that if they believe, from the evidence in this case, that during the progress of the work in question the parties to the contract offеred in evidence in this case agreed to submit matters of dispute to arbitration, and waived that clause in the contract making the architect sole arbitrator and umpire, then the jury may disregard such portion of the contract," and ‍‌​‌​‌​​​​‌​‌‌​‌​​‌‌‌‌​‌​‌‌​‌​​‌​‌‌‌‌‌‌​‌​‌‌​​‌‌​‍the plaintiff is entitled to have and recover in this case for the balance of the contract price and the-cost of the extrа material and labor, and damages for delay, as the evidence in this case shows such balance on said contract, extra labor and material and delay was fairly and reasonably worth, less damages, if any, caused by plaintiff’s delay, if, from the evidence, they believe he has caused any delay.”

The instruction excludes from consideration by the jury damages claimеd by appellant for a failure to comply with and complete his contract on the part of appellee, which was the largest item of defendant’s claim and which was shown by dеfendant’s witnesses.

A discussion of the modification of instructions asked by the defendant would unnecessarily extend this opinion.

The motion entered by the appellee to dismiss this appeal for want of jurisdiction in this court, it appearing of record that said appeal was prayed from a judgment of the Appellate Court against appellant for less than §1000, exclusive of costs, can not be sustained. By section 8 of the Appellate Court act it is provided: “In all cases determined in said Appellate Court in actions ex contractu, wherein the amоunt involved is less than §1000, exclusive of ‍‌​‌​‌​​​​‌​‌‌​‌​​‌‌‌‌​‌​‌‌​‌​​‌​‌‌‌‌‌‌​‌​‌‌​​‌‌​‍costs, * * and the judgment is affirmed or otherwise disposed of, * * * the judgment * * * shall be final, and no appeal shall lie or writ of error be prosecuted therefrom. * * * In аll other cases appeals shall lie,” etc. This case, when the appeal was taken to the Appellate Court, involved, exclusive of costs, §1550, and the sum involved in the judgment on the appeal to the Appellate Court determines the right of appeal from that court. (Kaiser v. Cox, 116 Ill. 26.) The motion to dismiss the appeal is denied.

The judgment of the Appellate Court for the First District and the judgment of the Superior Court of Cook county are each reversed, and the cause is remanded to the latter court for new trial.

Reversed and remanded.