20 Or. 603 | Or. | 1891
— This action was brought by the plaintiffs against the defendant for work and labor performed by them under three separate contracts set out in the complaint, and also for damages alleged to have been sustained for breach of these contracts by the defendant. All the contracts contain the same provisions, and are identical except that they cover different times for their performance, and different portions of the railroad to be constructed. They are minute in detail, specifying the prices to be paid for the various kinds of work to be performed, and prescribing what is solid rock, what is loose rock, what is cement gravel, what is hard-pan, etc., and providing also that the work done by the plaintiffs
The contention for the defendant is, that under these contracts, neither party could claim the benefit of them upon any point in dispute or difference arising between them in estimating or classifying the work done, unless the same was submitted to the divisional engineer for his decision, which would be binding upon them in the absence of fraud or gross misconduct evidencing bad faith. Hence, the defendant claims that the plaintiffs are precluded by such stipulation in their contracts from bringing or maintaining any action unless they can allege and show that the matters in dispute in respect to the work done under them have been submitted to the divisional engineer, and that his decision in the premises was fraudulent, or characterized by such gross mistakes or misconduct as would amount to fraud or bad faith. Within this view, a complaint would fail to state a cause of action that omitted to allege the submission of the matter in dispute arising out of the contract to the decision of the divisional engineer, and the misconduct on his part, which operated to avoid the conclusive effect of
Assuming this to be true, the occasion would seem to be an appropriate one to invoke the decision of the arbiter selected by them to settle such differences, without resort to litigation, unless he was privy to the fraud or practiced it himself. The reference to him was intended to correct any wrong or unfair measurement or classification of the work done by the engineers in charge, and Kis decision is binding and conclusive on both parties to the contract unless he in some way practiced fraud or was privy to it. It is fraud on his part or refusal to act when alleged, that gives the right of action. Now, there is a total absence of any allegation that the incorrect estimates or classifications of the work made bjr the company’s engineers, and alleged to be so gross and unfair that an intent to defraud is charged, were or have ever been submitted to the divisional engineer, so that this
Nor is there any allegation that he practiced or was privy to any fraud. All that is alleged is that the engineers who made the measurements and classifications committed gross errors or acted unfairly and unjustly, but this is no allegation of fraud which would excuse the reference of such disputed questions to the divisional engineer. It is owing to the supposed competency and fairness of such officer to properly classify the work performed, and to accurately estimate it in case of dispute or difference, that he has been selected, and his decision made final and conclusive. A submission to him of the matter alleged, in the absence of any imputation of fraud or bad faith on his part, we have a right to assume would have resulted in correcting any mistake or wrong, either in the estimates or classification of the work performed, and thus avoided the matter now in dispute. It is in this way that the plaintiffs would have received the just compensation to which they were entitled under the terms of their contract, or at least the kind of evidence to prove their right to it, in case of refusal after its submission and decision.
It is, therefore, incumbent on the plaintiffs to allege and show a compliance with this condition of their contract, or at least a reasonable effort to comply with its condition, before any action can be maintained. In Howard v. Railroad Co. 69 Pa. St. 494, there was a contract for the construction of a railroad, containing among other things a stipulation of this character, and the court says: “It is agreed that to prevent disputes, the engineer of the work shall in ail cases determine the amount or quality of the several kinds of work which are to be paid for under the contract, and decide every question which can or may arise relative to the execution of the contract on the part of the contractors; that his decision has been uniformly held tp be final and conclusive.
In D. S. P. & P. R. Co. v. Riley, 7 Col. 494, the action was brought to recover a balance claimed to be due for grading seven sections of the defendant’s railroad. The appellee claimed that the total amount of work done by him was underestimated by the engineer, and that consequently his compensation was less by several thousand dollars than it should have been. In this regard the grievances were like the case at bar. But the court says: “ His position is and must be that the aggregate amount of grading done under the contract is not one of the matters as to which the engineer’s decision was to be final and conclusive. Upon this view alone could he have maintained his action; for the engineer had passed upon the measurement and fixed the amount of work performed. Appellee charged no fraud against the officer, nor does he aver or attempt to
In the case at bar, the matter alleged, affecting the plaintiffs’ right of compensation, is that the estimates of the work performed by them was grossly underestimated and wrongly classified by the company’s engineers, the identical matter as to which the divisional engineer’s decision was to be final and conclusive. The plaintiffs charge no fraud against the divisional engineer, nor do they aver any, or any excuse for not resorting to him, and yet attempt to maintain the action in disregard of their stipulation. Where parties standing upon an equal footing deliberately select a person as fit and competent to decide, and by whose determination they have agreed to abide, it is but reasonable and proper that the contractor should be held to the performance of his agreement. (Hudson v. McCartney, 33 Wis. 331.) The divisional engineer was selected and the stipulation entered into for the sole purpose of settling all differences which might arise in estimating the work done, its classification and matters of that kind, making his decision final, so that litigation — the present action — might be avoided. It is on account of these alleged erroneous measurements and classifications that a dispute or difference exists, whereby the plaintiffs claim they have not received as much money as was their due under the contract. This is the foundation of their grievance. Their contract provides the person to whom shall be referred such disputes or differences as to the calculation and classification of the work performed; and until such reference is made, there is no performance of this condition, and no right of action exists. It is intended to prevent the parties to it from resorting to the law to settle their differences when the contract has provided the person to determine the matter, and whose
The plaintiffs are as much bound by this part of their contract as any other, and it is necessary for them to allege and show compliance with it, or at least some excuse for not doing it, before they can maintain an action. As the allegation is insufficient in the view expressed to show a breach, or give a right of action, it results that the overruling of the demurrer, the admission of the evidence, and the giving of the first instruction excepted to, was error, for which the judgment must be reversed, and the cause remanded for such further proceedings as may be proper not inconsistent with this opinion.