Phaneuf v. Corey

| Mass. | Jan 5, 1906

Hammond, J.

Although the record is voluminous, only two questions are raised here.

The first respects the validity of the award of Sayward, the referee named in the agreement of December 15, 1898. Under the original contract the time set for the stores and basements was “ not later than the first day of December, 1898,” and that set for the completion of the whole building was “ not later than January first, 1899.” Under the agreement of December 15, 1899, these times were changed respectively to the first day of March, and the first day of April, 1899. One of the questions referred to Sayward is stated in the agreement as follows: “The question of what, if any, amount under and by virtue of the terms of said contract should justly and fairly be deducted from the contract price by reason of the said delay, which it is now agreed and admitted is inevitable, and such amount shall be deducted from the next instalment hereafter paid under said contract. And the said Sayward shall consider whether the contractors have suffered because of any fault or delay on the part of the owners in furnishing plans, or in making payments, and if so, shall make proper allowances therefor. But such allowance made to the owners shall not include any such damages to the owners as are referred to in Art. VIII. of the original contract, for which the contractors shall, continue to be liable.”

The referee heard the parties, and in an elaborate report in which he goes very carefully over the whole matter awards no damages to the owners for this delay.

It is strongly argued by the owners, these present defendants, that the award is invalid upon the ground that it was outside the scope of the submission. It is familiar law that an award made within the scope of the submission is not made invalid by a mistake of the arbitrator as to law or fact. An inspection of the report shows that the arbitrator was guided, as he should have been, by'the terms of the contract as he understood them. In the first, paragraph of his report he states that the question for him was to determine what amount, if any, under and by virtue of the terms of the contract and this agreement “should be justly and fairly deducted from the contract price by reason of said delay.” At the threshold of the hearing he ruled clearly that “ the terms of the contract could not be waived, for the agreement rested distinctly upon them, and further that a proper conclusion could only be arrived at by using the terms and conditions of the contract as a guide, for they alone indicate what was in view when the contract was made.’’ Further inspection shows that with the contract as his guide he reasoned to his conclusions. He kept within the scope of the submission. Even if he was mistaken in his interpretation of the legal effect of the contract, the award does not thereby become invalid. The parties received what they agreed to take, the honest judgment of the arbitrator as to a matter referred to him.

The second question arises upon the contention of the defendants that for delay in the completion of the building, allowance should be made to them at the rate of ten dollars per day from May 20, 1899, the time to which the auditor computed the allowance, until October 6, 1899, the day upon which the defendants terminated the employment of the plaintiffs and took possession of the building.

The sixth article of the contract, as amended by the agreement of December 15, 1899, required that the stores and basements should first be “completed and delivered, ready for occupancy by tenants,” on March 1, 1899, and the whole of the work “ fully completed ” on April 1, 1899; and it is further provided in this same article as follows: “In case of the failure of the contractor to deliver said stores and basements ready for said occupancy, or to complete the building as aforesaid . . . [at these respective times] . . . the contractor shall forfeit to said owner the sum of thirty dollars per day for each and every day of delay in the delivery of said stores and basements, and ten dollars per day for each and every day of delay in the completion of the remainder of the building,” “ the forfeits to be deducted from the contract price.”

As to the condition of the work of May 20,1899, the auditor finds that in many places in the walls and ceilings of the first and second stories the plastering was crooked and uneven, that this crookedness was visible to the eye without the aid of a “ straightedge,” or other tools, and was “ greater than it should be in good work”; that in other respects “the plastering work was reasonably well done and resulted in a fairly good piece of work.” He also finds that “the amount by which the building is less valuable on account of such crookedness is less than would be the cost of making the plastering straight and even.” He further finds that an allowance of $700 should be made to the defendants by reason of this defective work. The owners’ superintendent was not satisfied with this plastering and ordered the contractor to remove it and replaster, and the auditor finds that “ the defendants never waived or abandoned their right to have the plastering made even and straight prior to October 6, 1899, when they terminated the employment of the plaintiffs and took possession of the building,” and he further finds that “ negotiations between the parties with a view to a settlement of the controversy as to the plastering continued up to said October 6, 1899.” On this date, when the defendants took possession, “ certain painting work, to wit, the second coat of varnish on the office floors, the painting and tinting of the walls and ceilings of the offices in the second story, the tinting of the ceiling of the second story corridor and the painting of the shutters and outside fire doors had not been done.” This work was required by the contract. After taking possession the defendants had this work done by persons other than the plaintiffs, at a cost of $883.18, “ which sum fairly represented the value of the work.” This sum was deducted by the auditor from the contract price of the building.

The auditor finds that the stores and basements were substantially complete though not, as appears above, in all respects in accordance with the contract, on April 1, 1899, and that the remainder of the work was substantially completed, with the same qualification, on May 20, 1899. In other woi’ds, the auditor finds that at the latter date, except as hereinbefore stated, the building was substantially completed. He allows the per diem forfeit of $30 per day from March 1 to April 1, and $10 per day from April 1 to May 20. As to the claim for the forfeiture after May 20, the auditor proceeds as follows:

“I find that while, as above stated, the stores and basements were substantially completed on April 1st, 1899, (or 81 days after the date fixed for their completion as extended by the agreement of December 15, 1898,) and the remainder of the building was substantially completed on May 20, 1899, (or 50 days after the date fixed for its completion by said agreement of December 15, 1898,) the stores, basements and remainder of the building were not entirely or absolutely completed in strict accordance with the specifications until later dates, and indeed were never so completed. That is to say, the plastering, fire-pi’oofing and store entrance platforms have never been made to conform to the requirements of the specifications, and certain comparatively small items,—certain lanterns, and certain painting in the second story offices and corridor and on the outside shutters and fire doors, — have never been furnished by the plaintiffs. Moreover certain shutters and Mason treads were not furnished until some time in July, 1899. Deductions from the contract price on account of all these defects and omissions have been made in this report, and I rule that as the building was substantially completed and ready for occupancy on the above dates, liquidated damages for a delay or failure in completion extending beyond those dates, should not, under the provisions of the contract, be allowed.”

In considering this matter it is to be noted that under Article IV. of the contract the owners’ superintendent had the authority to condemn the plastering work as unsound and improper, and that it was the duty of the contractors to “ take down ” the portion of the work so condemned. It is further to be noted that painting to the amount of nearly $400 which was required by the contract never was done by the plaintiffs. Some of this perhaps could not have been done until the question whether the order of the superintendent about the plastering work should be carried out. Instead of insisting that the building was complete and delivering it to the defendants, the plaintiffs retained possession of it and waited until ejected by the defendants. Under these circumstances it is plain that the building, although near completion, was not wholly completed within the meaning of the contract, but was held by the plaintiffs for the purpose of going on if required by the contract. And the auditor’s finding must be taken to mean only that the building with these exceptions was substantially completed on May 20.

We see no reason why the defendants are not entitled to have the forfeit of $10 a day allowed them to October 6, 1899. There is nothing in Hall v. Crowley, 5 Allen, 804, upon which the plaintiffs rely, inconsistent with this view.

Exceptions sustained.