168 Wis. 298 | Wis. | 1919
Lead Opinion
The question of ranking importance is whether the court erred in reading out of the contract the provision that “In the interpretation of these specifications and the contract and upon all questions concerning the execution of the work the decision of the commissioners shall be final.” Whether this provision of the contract is valid should be met at once', because of its commanding influence on the rights of the parties hereto.
This provision differs from the ordinary provision of like tenor found in nearly every building or construction contract only in the personnel of the arbitrators or umpires appointed to decide upon the contract, specifications, and work. If the word “architect” be substituted for the word “commissioners,” we will have here a provision that is usual and customary in construction contracts. The effect of a provision of this kind is not doubtful. It is well settled in the law. It is not void because it ousts the court of jurisdiction, as earnestly contended by respondents. This court, in Hudson v. McCartney, 33 Wis. 331, gave full scope and effect to a provision of this nature in no uncertain terms, and the
Given the premise that one may lawfully contract to perform certain work according to plans and specifications to ■the satisfaction of a third party, and that contracts to be ■executed to the satisfaction of one of the contracting parties will be enforced, it is difficult to appreciate the logic which condemns a contract to be pérformed according to plans and •specifications to the satisfaction of the other contracting party. Certainly no consideration of public policy, calls for the condemnation of one that does not also condemn the
Such considerations, however, do not constitute the underlying reason for upholding the contract. That reason is well stated in Delaware & H. C. Co. v. Pennsylvania C. Co. 50 N. Y. 258, as follows:
“When the parties stand upon an equal footing, and intelligently and deliberately, in making their executory contracts, provide for an amicable adjustment of any difference that may arise, either by arbitration or otherwise, it is not easy to assign at this day any good reason why the contract should not stand and the parties made to abide by it, and the judgment of the tribunal of their choice.”
Whether this is a wise or provident contract is entirely beside the question. That is something with which courts are not concerned. There is no doubt that parties may contract in such cases to submit such .differences to an umpire or arbiter and agree that his decision shall be final. The validity of that agreement is not dependent upon the relation which the arbiter bears to the parties. They may agree to partial as well as impartial arbiters if they see fit to do so. Courts have no reason to interfere with the rights of parties to voluntarily contract in the one case that they do not have in the other. We therefore hold that this provision of the contract is valid and operates to confer upon the commissioners the same powers that are conferred' upon architects by similar provisions in building-contracts. .
But this does not settle the case, as the trial judge seemed to think, as indicated by the suggestion in his opinion that if the provision be thus construed there was nothing left -for the court to do but to render judgment on defendant’s coun
The plaintiffs urge numerous reasons for the avoidance of the rather disastrous effect of the findings of the commissioners upon their right to recover, which we will now consider.
As we proceed, it is necessary to bear in mind certain facts not yet appearing. As set forth in the statement of facts, it was found necessary to prosecute a considerable portion of the work by the use of a floating dredge. The proper and efficient way of using a. floating dredge is to dig down stream. The water from above tlien fills the ditch and is held back by the lower end thereof against which the dredge is working. Thus sufficient water is maintained to keep the dredge afloat and up with its work. The water, too, carries the loose material and débris down stream ahead of the dredge and the ditch cleans itself. In digging up stream it is necessary to build dams below the dredge for the purpose of holding' water to enable it to continue its progress up stream. In such case the slush and mud stirred up by the dipper of the dredge floats under the dredge and back down the ditch where it lodges somewhere along the course and fills up the ditch. The dams must be removed and, when that is done, slush, mud, and débris are let down the ditch below the dam and tend to fill up the lower stretches of the ditch.
It will be observed that the language quoted is negative, and prohibits the commissioners from accepting any ditch until completed for its entire length. This language might justify an inference that upon such completion the ditch was to be SO' accepted, if such an intent could find support in other provisions of the contract or the conduct of the parties. We fail to discover any such intent revealed in the written contract, and the conduct of the parties in fact
But a brief review of the situation, we think, will demonstrate that the construction contended for by plaintiffs would not result to their material advantage. Even though the commissioners were obliged accept a given ditch upon its completion, it must be conceded that they were under no obligation to do so until the ditch tendered for acceptance was completed throughout its entire length. It appears that in digging the East main ditch they started at the head and dug as far as the Northwestern Railway Company’s tracks,' in 1912; that the 870 feet lying between that company’s right of way and Lake Monona were excavated in the latter part of the year’ 1913, and that the 100 feet across said right of way were not' excavated until July, 1915. This ditch, therefore, was not completed throughout its entire length until about the time the contractors claimed to have completed the contract, it being- about the last work they did. Clearly, there was no' time when the contractors could have demanded acceptance of this ditch, thereby relieving them from the 'duty of keeping the same clear. As to the West main ditch, the court found that it never was dug deep enough and that there were 10,000 yards of unexcavated material-in the bottom thereof, the cost of the removal of which he deducted from the' contract price. It would seem
“I stated to the commissioners that a one-to-one slope could not be dug with a floating dredge, and after the ditch was constructed I stated that the slope of the ditch would approach an angle of forty-five degrees, that is one to one, due to the effect of erosion and frost, and that dirt does not support itself. I explained to- the commissioners that by digging the ditches wider at the bottom the banks in sloughing in would approximate a one-to-one slope. I made that explanation twice. The second time was when Sacket and I went to Mr. Riley after receipt of the commissioners’ letter of December 19, 1911. Early in 1913, when we purchased the small dredge, I stated that we would dig the laterals with that machine, making them wider at the bottom and with more perpendicular slope; that we would do the best we could to get a one-to-one slope. I made that explanation to show why they were not getting a one-to-one slope. They had it in their specifications and they were ignorant.”
The record discloses nothing more nearly approaching a modification of the contract' than the testimony quoted. There is no evidence whatever that the commissioners waived the one-to-one slope, or that there was any agreement as to the increased width or the increased depth that should be given these ditches in lieu of the one-to-one slope. Keachie represented that by digging the ditches in this manner they would eventually take the one-to-one slope, and the district would get the ditches called for by the specifications. This was an important matter, because it appeared that a
The contractors further contend'that the commissioners waived their right to' object that the work was not done according to plans and specifications, by reason of the fact that payments were made from time to- time as the work progressed under the provisions of the specifications that “intermediate payments based upon approximate estimates for work performed during the preceding month will be made during the first week of each succeeding month during the progress of the work, and will be payable on or about the 15th day of each succeeding month. Such payments shall be eighty per cent, of the contract price for the work that shall be completed to the satisfaction of the commissioners or such other portion or percentage thereof as may be agreed upon between the parties hereto, and the remainder of the contract price shall be paid within ten days after the completion of the contract to .the satisfaction of the commissioners.” It is settled in this state that
“Where a building contract provides that the building shall be constructed according to certain plans and specifications to the satisfaction of the supervising architect, who shall inspect all material and work as the building is constructed, with power to reject any material or work not deemed by him to be in compliance with the contract, and to require unsatisfactory constructions to be removed and the work done over in a satisfactory manner, the manifest intent*311 is that unsatisfactory material or construction shall be promptly rejected, and that the architect shall not, by silence, allow unsatisfactory construction to proceed to a point where its removal from the building will be attended with serious loss to the builder, and then reject it; that a failure to reject material or work seasonably, and in the manner contemplated by the contract, operates as a waiver of defects in regard thereto and an irrevocable acceptance of such material or work as satisfactory under the contract, in the absence of some clear, unmistakable provision in such contract to the contrary.” Ashland L., S. & C. Co. v. Shores, 105 Wis. 122, 127, 128, 81 N. W. 136.
This rule applies where the work of construction proceeds under the supervision of the architect who is required to inspect all material and work as the building is constructed and has power to reject any material or work not deemed by him to be in compliance with the contract. The rule simply gives effect to the intention of the parties as expressed by their contract. In other words, it derives its force from the contract, and applies only where the work and material are to be inspected as the construction proceeds. While the construction work here was not that of a building, no reason is perceived why the same rule might not apply if such appeared to be the intention of the parties. Manifestly, inspection as the work proceeds should be a prerequisite to the application of the rule. The contractor should be charged with some responsibility. Where he contracts to do a certain thing in a certain manner and in accordance with certain specifications it is his duty to make his work comply with the .contract and specifications unless he is relieved from thát duty' by the terms of the contract itself. The contract here does not provide for inspection. The intermediate payments were to be based upon approximate estimates. On the assumption that the ditch was dug to the required prism, these estimates were very simple, in the computation of which the only factor to be ascertained was the distance dug or traversed during the month. As a matter of practice, the estimates were approx
The contractors further claimed a waiver on the part of the commissioners by reason of the following circumstances: In an annual report filed by the commissioners with the circuit court on July 1, 1914, occurs this paragraph:
■ “Said commissioners do further report that the work of excavating and construction of ditches according to plans approved by the court is progressing in a satisfactory manner, with the exception that the contractor seems to be unable to do. the work as rapidly as the property owners and commissioners wish it done.”
It further appears that on April 11, 1914, George Riley, one of the commissioners, wrote to. the plaintiffs that he was instructed by the commissioners to- request that a renewal bond be furnished. The surety company, as a condition
“Stipulated by George R. Keachie and Howard L. Dessert of Madison, Wisconsin, principals, the Title Guaranty & Surety Company of Scranton, Pennsylvania, surety, and the commissioners of Starkweather drainage district, Dane county, Wisconsin, obligee, on that certain bond or undertaking, dated on or about the 19th day,oí March, 1913, in the sum of nine thousand ($9,000) dollars, conditioned for the performance of a contract, dated the 3d day of February, 1913, between said principal and said obligee, for the construction of ditches, drains, and laterals at the Stark-weather drainage district:
“First. That said contract has been satisfactorily performed to date hereof in accordance with its terms and to the satisfaction of said obligee, except in so far as the time for completion is concerned;
“Second. That the time for the completion of said contract be, and hereby is, extended to and including the 1st day of January, 1915;
“Third. That the time within which any action may be brought against the surety on said bond is hereby extended to June 1, 1915.
“Signed and sealed this 27th day of May, 1914.
“Keachie & Dessert,
“By George R. Keachie.
“The Title Guaranty & Surety Co.,
“By (signed but name not readable)
“Attest: J. H. Law, Secretary.
“Starkweather Drainage District,
“By-George C. Riley, Treas.”
In view of the undisputed facts, it is difficult to under-, stand the reason, motive, or purpose of the commissioners in making the (quoted) observation in their report to the court. The same is true of the stipulation above set forth. As to- the stipulation, the evidence is clear that the commissioners did not authorize it to be signed by Mr. Riley, who purported to sign it on behalf of the commissioners. In fact, it satisfactorily appears that the whole matter was
In the statement of facts we have set forth the only new provision of the second contract which provides for the payment of damages for failure to complete the contract within the specified time. The trial court construed this provision as one calling for a penalty instead of liquidated damages. In this we think the court was in error. The amount allowable thereunder, and which defendants claimed, is $2,163.04. A more difficult situation for the computation of actual damages could hardly be imagined. It was pre-eminently a case justifying a provision for stipulated damages. The parties so designated it in the contract, and while such designations are not given effect by courts, if they appear to have been used ill-advisedly and not to' express the real intention of the parties (Grant M. Co. v. Marshall & Ilsley Bank, 166 Wis. 547, 165 N. W. 14) we see no indication that the parties
We think the court erred in refusing to credit the defendants with $100 advanced to the Chicago, Milwaukee & St. Paul Railway Company, as security for the expense of opening the railway bridge over lateral E-2 and in allowing $61.62 to the plaintiffs for the cost of the removal and replacement of the bridge at the point where lateral E-2 crosses the right of way o f the railway company. It wi^l be unnecessary to prolong this opinion by a recital of the evidence bearing upon these items.
We are impressed that there is another very troublesome barrier to plaintiffs’ recovery. The plaintiffs are seeking to recover on the contract. It is an entire contract, and in order to recover they must show substantial performance. The court found that the cost of completing the contract was $1,875, even ignoring the findings of the commissioners. We do not decide whether, under the circumstances, a finding that the contract had been substantially performed could be sustained. We do no more than suggest that it would require rather generous consideration to do so. This feature should have the serious attention of the trial court on a new trial.
We appreciate that there is little left of the case, yet we do not feel that we can or should render judgment. We think the plaintiffs should be accorded the opportunity of impeaching the findings of the commissioners, if they can. No attempt to this end was made, and in fact was not necessary, in the view the court took of the case. Justice requires that they be not deprived of the opportunity now. Another reason why we cannot render judgment is that we have no way of estimating the expense of completing the contract, unless we be governed by the unit cost of excavation applied by the trial judge to the 10,000 yards which he found to remain unexcavated. There is no evidence that this applies to other portions that must be excavated. However, it will not be
By the Court. — Judgment reversed, and cause remanded for further proceedings in accordance with law and with this opinion.
Dissenting Opinion
(dissenting). I concur with the construction given by the majority opinion to the provision in the contract as to liquidated damages and as to the small items mentioned.
I think, however, that the doctrine invoked by defendant as to the controlling and final effect to be given to the commissioners’ determination upon all questions concerning the execution of the work and interpretation of the specifications while, as held by the majority opinion, applicable here upon questions which they answered in their own favor, is equally applicable and binding upon questions arising during the work and answered in effect by the commissioners in plaintiffs’ favor. In other words, that in fairness such a sword placed in their hands by the contract should be two-edged and cut both ways. It was expressly so held in Chicago, St. F. & C. R. Co. v. Price, 138 U. S. 185, 194, 11 Sup. Ct. 290.
The contracts and specifications made parts thereof required plaintiffs to do this work “under the control, direction, and supervision of the commissioners and their engineer.”
The term “engineer” was defined as such person “as shall be employed by the commissioners to superintend, under the direction of said commissioners, the construction of said proposed work.” Such an engineer was appointed and acted.
The commissioners were defined as the persons appointed and “who are possessed of the powers and charged with the duties provided in chapter 419, Laws 1905,” etc.
Under this same chapter and by sec. 1379 — 15, Stats., the
This statutory provision as to the statements of the width and depth of the ditches dug was deliberately ignored and disregarded by the commissioners, and in none of the statements filed by them during this period was such requirement complied with, and in two of such annual statements they expressly say they have “made no detailed inspection of the ditches and laterals for the reason that none of the work has' been accepted, and under the contract the contractor is compelled to keep the ditches and laterals in repair until the work is accepted.”
The conclusion seems to me clear that these commissioners and their engineer were charged with the constant and continuous duty of inspection and supervision of the work as it progressed. The very fact that the statute required them to report to the court, for the benefit of those whose money was being expended, the width and depth of the ditches dug is an express mandate of the law under which they are acting, requiring that they inform themselves constantly as the work progressed, not only of the length of the ditches that were being dug, but of the equally important features as to the width and depth. It is evident from the testimony this could have been ascertained from time to time by the commissioners and the engineer as the work was progressing nearly if not quite as well as it was done in 1915 when the work was practically over. They could not interpret the
Payments were constantly being made by these commissioners to the plaintiffs for the work being done. Such payments were made under and pursuant to the provision in the specifications which has been cited in the majority opinion, but for convenience is here repeated and reads as follows:
“(3) Intermediate payments based upon approximate estimates, for work performed during the preceding month, will be made during the first week of each succeeding month during the progress of the work, and will be payable on or about the 15th day of such succeeding month. Such payments shall be eighty per cent, of the contract price for the work that shall be completed to the satisfaction of the commissioners or such other portion or percentage thereof as may be agreed upon between the parties hereto, and the remainder of the contract price shall be paid within ten days after the completion of the contract to the satisfaction of the commissioners.”
There is no' provision in the contract here involved, or in the specifications, which in any wise qualifies the language above quoted with reference to these intermediate payments. The situation, therefore, is totally different from that in many cases upon building contracts where provisions are ordinarily inserted to the effect that such intermediate payments shall not be construed as an acceptance of the work, a particular instance of which may be found in Siebert v. Roth, 118 Wis. 250, bottom of p. 251, 95 N. W. 118. Some such equivalent restriction as appears in that case can be found in the standard form of agreement between contractor and owner issued by the American Institute of Architects and under which a large number of building contracts are performed.
The provision above quoted authorized payments to be made by the commissioners for work that shall be completed to the satisfaction of the commissioners and the payments to be eighty per cent, of the contract price for such work.
I can see no grounds upon which it can be inferred that the satisfaction of the commissioners as to the completion of the work upon which they make partial payments is any different from the satisfaction of the commissioners when the remainder of the contract price is to be paid. It must be final and not subject to subsequent change or revocation. The nature of the work was such that it is self-evident that it would be a very expensive process for the contractor to return to a ditch or lateral upon which work had once been done and do further work therein. The commissioners had absolute control of the situation by their power to' direct and supervise, and when the work was not progressing to their satisfaction as to the requirements of length or width or depth they might refuse such partial payments until the work was so done, and their determination in that regard would be final and decisive on the plaintiffs. Having by their payments in effect recognized that the work in the ditches for whose length the payments were being made were completed to' their satisfaction, they ought to be bound thereby. How else could they comply with the statutory conditions for a faithful discharge of their duty and faithful accounting for an application of all the moneys received by them unless and except they saw to it that the work under their direction and supervision was being done to their satisfaction at the time they thus disbursed the money ?
I think also that their acts in entering into- the second contract, which would have been a perilous thing to do if at that time the contractors were committing such serious breaches of the first contract as it is now claimed they did; their statements filed with the clerk certifying in effect to the fact that the work was progressing satisfactorily except as to the question of speed; their obtaining the new bond from the surety company upon the stipulation signed by one of them, also- expressing satisfaction with the work, all are of weighty consideration in determining that the commissioners should be estopped from now going behind the indicated satisfaction with the work from time to time, as shown by their partial payments. I do- not think they should be permitted to take the stand that they, as trustees, have overpaid these contractors for work which was being done before their eyes and under their supervision on the claim that they are now not satisfied with the same.
Concurrence Opinion
I concur in-the foregoing dissenting opinion of Mr; Justice Eschweiler.
