Cent. Union Stock Yards Co. v. Uvalde Asphalt Paving Co.

• Decision Date: 06 June 1913
• Citation: 82 N.J.Eq. 246,87 A. 235
• Parties: CENTRAL UNION STOCK YARDS CO. v. UVALDE ASPHALT PAVING CO.
• Court: New Jersey Court of Chancery

87 A. 235

82 N.J.Eq. 246

CENTRAL UNION STOCK YARDS CO.

v. UVALDE ASPHALT PAVING CO.

Court of Chancery of New Jersey.

June 6, 1913.

wrong if a decision of a majority of the arbitrators construing a clause in the building contract was the result of partiality on the part of the arbitrators, a preliminary injunction restraining the contractor from offering the award in evidence in any suit at law against the owner or from suing the owner on the award will be issued.

Suit by the Central Union Stock Yards Company against the Uvalde Asphalt Paving Company. Heard on bill, amended bill, and affidavits. Preliminary injunction granted.

See, also, 86 Atl. 425.

Carrick & Wortendyke, of Jersey City, for complainant.

Collins & Corbin, of Jersey City, and R. Floyd Clarke, of New York City, for defendant.

GRIFFIN, V. C. The bill in this cause is filed to set aside an award of arbitrators appointed under a contract between the complainant and defendant, which contract and the specifications provide for the preparation of a foundation, grading and paving in the new stock yards of the complainant situated at Communipaw, Jersey City, and are in the usual form for such improvements, containing clauses providing for the manner of payment, and which virtually make the owner, through its engineer, the arbiter of the sufficiency of the work and materials done and furnished during the progress of the work, and whose direction as to the manner of doing the work must be followed. These clauses are so framed that it is difficult to perceive how the owner on the completion of the work could be dissatisfied if the power of direction and supervision possessed by it and its engineer were properly exercised during its progress.

The sixth mutual covenant binds the contractor to make any repairs, renewals, or replacements made necessary at any time during one year from and after completion of the work because of or growing out of defective materials used or workmanship done, at its own expense, on demand by the complainant; but it was understood that any defect in the work due to any settlement which might take place in the paving because of a settlement of the ground upon which the paving was laid should not be considered defective workmanship.

The seventh and eighth mutual covenants are as follows:

"Seventh. No certificate given or payment made under this contract, except the final certificate or final payment, shall be conclusive evidence of the performance of this contract, either wholly or in part, and no payment shall be construed to be an acceptance of defective work or of improper materials.

"Eighth. In case of any disagreement or dispute between the contractor and the stock yards company respecting the true construction or meaning of any specification, map, profile or plan, the same shall be referred to and decided by the engineer, and his decision shall be final and conclusive; but should any disagreement or dispute arise relating to the true performance of any covenant or agreement, or the true value of extra work, because of a written requisition under the third mutual covenant, then and in either of such cases such disagreement or dispute shall be referred to three arbitrators, one to be selected by each of the parties, and the third to be selected by the two selected by the parties, and the decision in writing by a majority shall be final. Each party hereto shall pay one-half of the expense of such reference."

Under the title "Grading" the specifications provide that the then present surface of the area to be paved should be brought to a uniform grade conforming to a plane parallel and distant sufficiently below the established grade of the pavement to allow the stone block to be laid on the ground so that the top of the block should conform to the desired grades shown on the drawings.

Under the title "Pavement" it is provided as follows: "The proposed pavement shall consist of selected blocks, laid so as to form a fairly uniform level top; they shall be laid on a sand bed one inch thick; after the paving is completed, it shall be rammed to a uniform even surface, satisfactory to the engineer or his inspector, and after having been so rammed it shall be immediately covered with a Portland cement grout consisting of one part Portland cement and two parts clean, sharp sand. This shall be spread dry over the pavement, leaving a surplus of at least one-eighth inch to one-quarter inch in thickness. Water shall then be added, and with the aid of brooms this grout shall be swept over and all about on the paved surface until the joints and interstices between said blocks shall be completely filled. No blocks with badly broken faces will be accepted."

The specifications also provide as follows: "Sand. Sand shall be clean, hard, sharp and course, or a mixture of fine and coarse of an approved quality. Clean, sharp sand, free from loam, now on the premises may be used."

Under the title "Engineer" it says that the said word "engineer" used in the specifications is understood to mean the engineer of the stock yards company, unless otherwise mentioned, or his duly authorized agents limited by the particular duties intrusted to them.

The work thus contemplated by the contract and specifications was the bringing of the surface of the proposed way to a uniform subgrade, spreading thereon sand to a depth of one inch, and ramming so as to produce a uniform surface, and filling in the joints and interstices between the blocks with a cement grout composed of one part Portland cement and two parts clean, sharp sand. The apparent purpose of the grouting was not only to produce a surface from which the water would flow readily, preventing percolation between the joints, but also to form a binder between the blocks, which, when the grout thoroughly set, would so bind the pavement together as to form a solid mass covering the whole area, to the end that the impact from travel would not be borne by a single block, but be resisted by a wide area, apparently a character of construction deemed necessary in view of the nature of the foundation, which consisted largely of a very deep sand fill dredged from the river, which fill was not compacted and thus did not afford a solid base. The work was proceeded with, and one intermediate payment made without the certificate of the engineer, which payment, however, did not constitute a waiver of the right to demand the production of the final certificate. The defendant finished the work on July 22, 1909, and on the same day rendered a bill with what purported to be a final certificate of one J. E. Walker, written at the bottom of the bill or estimate of quantities as follows: "Work complete and satisfactory June 22/09, O. K., J. E. Walker." The date "June 22/09," it is conceded, should have been "July 22/09." This certificate is not the certificate provided by the agreement, which requires the certificate of the engineer. Walker was not the engineer, nor does it appear that he was the inspector appointed by the engineer, but was merely an employéa of the stock yards company, who, in the absence of the inspector, seems to have acted as overseer of the work.

About August 17, 1909, the first use was made of the pavement, and the complainant alleges that it broke up under the traffic due to the failure to grout the joints and interstices between the blocks in accordance with the specifications, and refused to pay the balance of the contract price, whereupon the defendant here commenced its suit in the Hudson circuit court for the balance due upon the contract. To the declaration the complainant pleaded that an arbitration under the eighth mutual covenant was a condition precedent to the bringing of suit, and that none was had; to this plea the defendant here demurred, and the court, in an opinion filed, overruled the demurrer, whereupon the defendant here discontinued its suit and proceeded to arbitrate, each party selecting one arbitrator and they selecting a third, all of whom were engineers.

The arbitrators met and heard the parties. From the evidence offered it appears that the joints and interstices between the blocks were filled with sand before grouting; that the defendant used a broom to sweep the sand from the interstices so as to permit the entry of the grout, but removed it only to a depth of about an inch. The grout was then spread over the pavement and naturally did not penetrate to any great depth; the result being that this grout, which was intended to form a binder between the blocks, was of little or no value in maintaining the stability of the pavement under traffic, in consequence of which it broke and the paving blocks settled, presenting an uneven surface which filled with water and other matter, rendering it difficult to clean and maintain in a sanitary condition, and also resulting in making the way incommodious for travel.

Before the arbitrators the complainant urged that, under the first clause of the eighth mutual covenant, the arbitrators were bound to accept the interpretation of the specifications as to grouting which was placed upon it by the engineer. The engineer testified that during the progress of the work he discovered that grouting was done over the pavement with the interstices filled with sand, and vigorously condemned the work, and the superintendent of the defendant here agreed that it was bad construction and promised to rake out the sand from the interstices before grouting. This statement was denied by the superintendent. The issue thus presented was for the arbitrators to determine, and they decided against the complainant's contention. The arbitrators, with one dissenting, found in favor of the defendant here on all points and awarded the full balance due upon the contract, with interest from July 22, 1909, the date of the completion of the work.

After the publication of the award the defendant here sued the complainant in the Hudson circuit court upon...