210 Pa. 267 | Pa. | 1904
Lead Opinion
Opinion by
W. E. Howley & Company by a contract in writing dated September 16, 1896, agreed with the city of Pittsburg to construct a street in the city, known as Grant Boulevard, beginning at Seventh avenue and extending to Center avenue, a distance of about three miles. Howley & Company failed to begin the work, and on November 19, 1896, the contract, with the consent of the city and the surety of Howley & Company, was assigned to Werneberg, Sheehan & Company, the legal plaintiffs and appellants, who began the work on November 23, 1896, and completed it on March 26, 1901. The contract provided that the work should be commenced October 1, 1896, and be completed on or before May 1, 1898 which was subsequently extended until October 1, 1898. During the progress of the work, the plaintiffs were paid by the city from time to time according to the contract price on estimates of the amount due made by the director of the department of public works. On the completion of the street, March 26, 1901, the director made a final estimate of the entire work done and materials furnished under the contract and found a balance of $6,715.29 due the plaintiffs.
The contract contains two clauses relating respectively to arbitration and to measurements which bear upon the questions raised on this appeal. The arbitration clause provides that “ in case any question or dispute shall arise between the parties of the second part hereto and the said city of Pittsburg, party of the first part hereto, under the said plans, drawings, descriptions, general specifications, general conditions or terms of this contract, respecting the quality, quantity, or value of the work or labor done, or materials furnished or to be done or furnished, or any of the terms, stipulations, covenants or agreements herein contained, or respecting any claim for extra work, or respecting any matter pertaining to this contract, or
At the time of the execution of tl e contract Edward M. Bigelow was the director of public works of the city of Pitts-burg and continued in office until June 11, 1900, when he was succeeded by George W. Wilson, who held the office until June 11, 1901, when he was removed by the recorder of the city and was succeeded by his predecessor, Mr. Bigelow, who continued in office until November 25, 1901, and was then succeeded by J. Guy McCandless, who held the office until April 1, 1903, when he was succeeded by Mr. Bigelow who was again appointed and has since continued to ¿old the office.
On the completion of the work in March 1901, the plaintiffs submitted to George W. Wilson, then director of the department of public works, a claim against the city for damages growing out of the contract and over and above the contract price of the work, aggregating $384,944.07. On April 6,1901, director Wilson, after notice to the parties, satas arbitrator under the terms of the contract and heard the claims of the plaintiffs and defendant. Before the director made his award, however, he was removed from office by the recorder of the city on June 11, 1901, and thereafter Reclined to complete the arbitration by rendering a decision up<jm the matters submitted to and heard by him. On May 12, 1902, more than a year after the work had been completed and i;he final estimates of the
The plaintiffs brought this action July 31, 1901, to recover the claim for damages which they had submitted to director Wilson for adjustment under the arbitration clause of the contract. A verdict was rendered for the plaintiffs for $134,427.64, increased by agreement to $140,040.41, subject to the question whether there was any evidence which entitled the plaintiffs to recover. Subsequently, the trial court entered judgment non obstante veredicto in favor of the defendant, holding that the arbitration clause vested jurisdiction in the director of the department of public works and that the proceedings before director Wilson were incomplete at the time he was removed from office and that thereafter he had no authority to make a decision; and further that the adjudication of director McCandless was final and conclusive on both parties and estops the plaintiffs from maintaining this action. The learned judge further held that if he were in error as to the effect of the arbitration clause of the contract, the final estimate clause would prevent the plaintiffs from recovering in the action. These are the two reasons assigned by the court for entering judgment for the defendant.
The errors complained of on this appeal are the entering of judgment non obstante veredicto for the defendant and in admitting in evidence on the trial of the cause, against the objection of the appellants, the award of director McCandless. The appellants contend that as the dispute between the parties arose while George W. Wilson was director of the department of public works, and it having been submitted to, and heard by,- him and he having been removed from office by the city before making an adjudication and thereafter declin'
that as Wilson was re-his authority to act as Vhat he did. in the mat-1. The first and controlling question for determination is the effect to be given to the reference' of the matters in dispute to director Wilson and his failure to make a decision thereon. The learned trial judge held moved before he made an adjudication arbitrator was terminated, and that ter amounted to nothing and made no change in the rights of the parties.” It is well settled in this state that parties to an executory contract may agree to submit their differences arising out of the contract to a person or tribunal named, whose decision or award shall be final, and that when they do so they cannot seek redress elsewhere until the arbiter agreed upon has been discharged, either by the rendition of an award or otherwise : Commercial Union Assurance Co. v. Hocking, 115 Pa. 407. It is conceded that the arbitration clause in the contract under consideration is valid, and required a reference of the dispute to the director of the department of public works as a condition precedent to the right to sue at law. It must also be admitted that had director Wilson made an adjudication before his removal it would have been binding on both parties. Did his removal from office by the city recorder after the dispute had been submitted to, and heard by, the director deprive him of the authority to complete his duties as arbitrator by making an award? We think not. The arbitration clause provides, as we have seen, that “ In case any question or dispute shall arise between the parties, .... said question shall be referred to the director of the department of public works of the city of Pittsburg, whose decision thereon shall be final, binding and conclusive upon all parties.” In referring their differences to director Wilson, it is conceded that the parties complied strictly with this provision of their contract. It designates the official to whom the differences between the parties shall be referred, and he is the individual who holds the official position of director of the department of. public works of the city when the adjudication is demanded: North Leba
The dispute having been properly submitted to director Wilson, it was his duty to adjust the differences of the parties and make an award, and having failed or declined to do so, the power to make an adjudication under the clause of the contract was exhausted and the jurisdiction of the courts attached. Thereafter, if either party desired to enforce against the other a claim for a breach of the contract, he was compelled to resort to an action at law.
If the contention of the court below and the appellee be correct that the decision must be rendered by a person at the time holding the position of director, it would be in the power of the city authorities to control the award by making the necessary changes in the office of director of the department of public works. In this case there is no allegation that Wilson was removed for any cause connected with his duties as arbitrator. But the city charter authorizes the mayor at his pleasure to remove the director and it requires no stretch of the imagination to see how this power may be wielded so as to do great injustice to the other party to contracts of this character. The facts as stated above will disclose how frequent have been the changes in the individuals who have held the office of director of the department of public works in the city of Pittsburg. In less than three years four incumbents of that office have resigned or have been removed and their places filled by an appointment made by the mayor. Justice and fairness therefore require that unless the agreement between the city and its contractor expressly or by clear implication shows such to be the intention of the parties, the contract should not be construed so as to afford the mayor an opportunity to control the award provided for in the arbitration clause of the agreement by exercising his statutory authority of removal from office of the director of the department of public works.
We are of the opinion that the disputes between the parties here were properly referred to director Wilson under the arbitration clause of the contract and that he having hoard
2. The learned trial judge placed an erroneous construction upon the measurement clause of the contract. His interpretation of the clause in question, as suggested in the argument, entirely eliminates the arbitration clause from the contract and renders it wholly ineffective and useless. We cannot presume that such was the intention of the parties and unless the language of the instrument forbids, we must hold both clauses to be operative. Under the measurement clause, it was the duty of the director to measure the work and upon that measurement to estimate, according to the contract price, the amount of compensation due the contractors for the work performed. This the director did from time to time during the progress of the work and the estimates were paid the contractors, except the last, which was made after the completion of the boulevard. The clause of the contract in question provides that “ the estimate and certificate of the director of the department of public works shall be final and conclusive evidence of the amount of work performed by the said contractor under and by virtue of this agreement, and shall be taken as a full measure of compensation to be received by the contractor, without the right of exception or appeal.” What is final and conclusive on the parties under this clause are the estimate made by the director from his measurements and his certificate as to'the “ amount of work performed ” and “ the compensation to be received ” therefor by the contractors according to the contract price. There is no “ right of exception or appeal ” by either party to or from the decision of the director on these matters. Both parties are concluded. But save as to these matters, the jurisdiction of the director under this clause does not extend to “ any question or dispute ” between the parties growing out of the contract. The arbitration clause, unless otherwise stipulated in other clauses of the contract, must be invoked for the adjustment of such questions by the director in his capacity as arbitrator. There is no conflict between the two clauses. They are entirely consistent with each other. The duty and authority of the director under each clause are clearly defined and the purpose of each is plainly disclosed. We therefore
B. On the theory on which the case was tried in the court below, the award made by director McOandless, more than a year after this action was brought, was clearly irrelevant to the issue being tried and should not have been admitted as evidence. The learned judge having held on the trial of the cause that the court had jurisdiction, the award and its findings were not admissible in evidence for any purpose. And under our view of the legal effect of the reference proceedings before director Wilson, as expressed above, the McOandless award should have been excluded from the consideration of the jury. It was wholly immaterial whether an award had been made by him as director of the department of public works or what his findings were. The jurisdiction of the court having attached, the matters in dispute between the parties were to be adjudicated by a court and jury as though the arbitration clause of the contract had never had any existence.
The learned counsel for the appellee contend that if we should hold with the appellants on the law of the case, that a new trial should not be ordered but that judgment should be entered for the plaintiffs on the verdict. We, however, do not intend to assume the duties of the trial court and the jury and determine the law and the facts of the case. The judgment we are reviewing was entered upon the verdict as an entirety and not upon the findings of the jury on the separate items of the appellants’ claim. This is not the city’s appeal and the record discloses no alleged errors of which it can complain here. But aside from these considerations, we think the error committed by the court in admitting in evidence the McOandless award requires us to direct the case to be tried again. We are by no means satisfied that the admission of
The judgment is reversed with a venire facias de novo.
Dissenting Opinion
dissenting :
If the wit of lawyers could possibly have framed a contract which would have made final the decree of the court below, the one before us ought to have been declared that contract. But it seems from the opinion of a bare majority of this court, a great municipality which of all corporations most needs the protection of the law to shield it from the litigation of un■founded claims, cannot by any possible contract avoid such result. I had earnestly hoped, from an observation extending over years in this court, that we had about reached a point where such contracts as the one before us would have been adjudged inviolable in the absence of fraud, accident or mistake in the making or procuring of it. But the judgment entered to-day forces me to the conclusion that I was mistaken. It throws wide open the door, which I had hoped was about to be effectually closed. The result is what is most to be deplored, not to the city alone for if that were all it would be the consequence of only a single judicial mistake, but it is to be deplored in its probable results to the hundreds of the three classes of cities in the state and the public at large. The notion,will now prevail that though a natural person may by
It is conceded, not a single order was given covering damages, or for extras, or for grading, by the city or by its director of public works. The contractors agree to furnish at their own cost anything necessary to complete the grading and construction of the boulevard, and further agree to receive a certain fixed price in full compensation therefor, then follows this stipulation, comprehensive, specific as to detail and sweeping in its language:
“ It being expressly understood and agreed by the parties hereto that the measurements shall be taken after the completion of the work, and the estimate and certificate of the director of the department of public works shall be final and conclusive evidence of the amount of work performed by the said contractor under and by virtue of this agreement, and shall be taken as the full measure of compensation to be received by the contractor, without the right of exception or appeal. And that the aforesaid prices cover the furnishing of all the different materials and labor and the performance of all the work mentioned in this agreement, and in case of any doubt or ambiguity touching any part of this contract, or any of the plans or specifications referred to or connected therewith, or any other matter involved therein, the decision thereon by the said director of the department of public works shall be deemed, taken and treated as final, binding, conclusive and obligatory upon all parties hereto, without the right of exception or appeal.”
Then there are the distinct stipulations that no charge shall be made by the contractor for any hindrance or delay from any cause whatever during the progress of the work, or from the action of the elements, and no charge for extra work except upon the written order of the director of public works.
After receiving all but a small part of the contract price, the plaintiffs made claim for $884,000 additional, although they had received on the contract $782,892.88, claiming that sum to be yet due them for delay, extras, and excess grading. The case went to trial before court and jury and plaintiffs got a
The court in an unanswerable opinion, it seems to me, decided that the arbitration clause inferred disputes to the director of public works who filled the office at the time the dispute was to be decided ; that it was not the individual but to the officer to whom the dispute was to be referred. The case of North Lebanon Railroad Co. v. McGrann, 33 Pa. 530, is cited to sustain him. We think it is to the point and squarely decides the case. The same principle is announced and applied in at least a dozen states of the union. It accords with both reason and authority. The reference is in no sense to an individual but to the officer. The majority of the court do not overrule Railroad v. McGrann, nor do they wholly disregard it, but they
