| Minn. | Feb 7, 1890
The parties to this action entered into a railroad construction or grading contract of the usual form, by which the defendants were to construct or grade a certain section of a railroad at a specified schedule of prices for the different classes of work, of-which 85 per cent, was to be paid monthly on the monthly approximate estimates of the chief engineer of the railway company, the remaining 15 per cent, to be retained until the final estimate after the work was completed. The contract contained the usual provision making the chief engineer of the railway umpire to decide all matters arising or growing out of the contract between the parties, and that*his decision should be final and conclusive. It also contained the further provision “that if the second party [defendants] shall at any time neglect or refuse to proceed with the work as fast as, in the opinion of said chief engineer or the first party, (communicated in writing to the second party,) may be necessary for the completion by the time specified herein, then the first party (plaintiffs) may declare this contract abandoned, and the amount which shall have been retained at the time out of the monthly estimates which have become due at the completion of this contract shall be forfeited to the first party; or the first party may, at their option, employ other parties to execute any part of the work, and charge the cost of the same to the second party, to be deducted out of such retained percentage, or out of any payment that shall have become due on any former estimates, or that, may become due on any subsequent estimate.” The only question presented by the record on this appeal is the correctness of the construction placed by the trial judge upon the last clause of this provision. The construction of the first clause is not here involved, although, as the law dislikes forfeitures, the courts would, if possible, regard it as mere machinery to enable plaintiffs to complete the work without delay at the risk and cost of the defendants. It undoubtedly contemplates the termination of the contract, and taking the whole work out of the defendants’ hands. But the last clause gives the plaintiffs the option of adopting another course, viz., of employing other parties
2. As the court reserved its decision upon the admissibility of the award of the chief engineer offered in evidence, and never in fact passed upon the question, there is nothing for us to pass upon on this part of the case. But, in view of another trial, it is proper to say that if the objection had been made, this award should have been excluded, on the ground of variance between the offered evidence and the allegations of the complaint. According to the complaint, the matter submitted to the umpire, and upon which he made an award, was a claim of plaintiffs for overpayment, made by mistake, for work done by defendants under the contract, while the award and accompanying papers show that what was submitted to and passed on by him was a claim for the cost incurred by plaintiffs in employing other teams, and men, in pursuance of the provision of the contract already quoted, to execute a part of defendants’ job, and which proved to exceed the amount due them at their contract price. A claim of the latter character would clearly be within the authority of the umpire, under the arbitration clause in the contract; and the validity of such stipulations in contracts of this character, and the conclusiveness of the arbitrator’s award in the absence of fraud, or such gross mistake as to imply bad faith or a failure to exercise
Order reversed.