Chism v. Schipper

• Decision Date: 10 December 1888
• Parties: CHISM v. SCHIPPER.
• Court: New Jersey Supreme Court

16 A. 316

51 N.J.L. 1

CHISM

v. SCHIPPER.

Supreme Court of New Jersey.

December 10, 1888.

(Syllabus by the Court.)

Case certified from circuit court, Union county; before Justice VAN SYCKEL.

The declaration was founded on a building contract, under seal, whereby it was alleged the plaintiff agreed to "erect and finish" a certain dwelling-house "agreeably to the drawings and specifications by Oscar S. T., architect, within the time aforesaid, in a good, workman-like, and substantial manner, to the satisfaction, and under the direction, of said architect, to be testified by a writing or certificate under the hand of said architect; that the plaintiff was to furnish all materials, etc.; and that for his work and materials he was to be paid the sum of $6,050; that, if the defendant requested, alterations, additions, or omissions, at a reasonable valuation, were to be deducted from or added to the contract price; that the defendant did request certain alterations, (which were specified,) which were made, to the value of $600; that it was further provided that, in case of a dispute arising as to the true construction or meaning of the drawings or specifications, the said architect was to decide the same, whose decision should be final and conclusive. Full performance on the part of the plaintiff is alleged. The breach is that the said architect "willfully and fraudulently decides that the aforesaid alterations, deviations, and additions are within the true construction of said drawings and specifications referred to in the said contract, and that the plaintiff is not entitled to be paid the fair and reasonable value thereof, and willfully and fraudulently withholds from the plaintiff, and refuses to sign the certificate required by said contract for the fifth and last payment called for thereby; which fraudulent and willful decision of the architect, and fraudulent and willful withholding of the said certificate, have been brought to the knowledge of the said defendant by the said plaintiff, but the said defendant, though often," etc., "hath not paid the said sum of $600," etc. This count was demurred to, and the issue thus raised was certified for the opinion of the supreme court.

S. M. Colie, for plaintiff. Craig A. Marsh, for defendant.

BEASLEY, C. J., (after stating the facts as above.) A comprehension of the facts stated in the summary of the declaration prefixed to this opinion will make it manifest that the question to be decided is, can the defendant cheat the plaintiff by due course of law? The case, in brief, is this: The plaintiff has done work for the defendant to the value of $600, which work was additional to that specified in the written contract. The money was payable on the certificate of the architect, whose decision was to be final. Such architect fraudulently decided that the work in question was not additional, but was embraced in the contract; and, the defendant being notified of the facts, refused to pay the demand. As the demurrer confesses the truth of this statement, it will be observed that the defendant stands now before the court, saying: "I admit that this money is due for additional work; I admit that the architect fraudulently certifies to the contrary; and I claim that, by a correct application of legal principles, I have the right to take advantage of this fraud, and to appropriate to myself the moneys that are its fruits." The inquiry is, does the law, in reality, justify this immoral attitude? It should be premised to the inquiry that, if this action will not lie, neither will any action lie against the defendant founded on the facts stated, either at law or in equity. As such a result would be one much to be deprecated, and would stand as a blot on the jurisprudence of the state, it would seem that the most cogent reasons should be forthcoming to afford a satisfactory answer to the interrogatory, why should a man be permitted to take advantage of the fraud of another? The only known reply is that the plaintiff has covenanted to that effect; that he has agreed that the action of the architect, whether honest or dishonest, shall be conclusive. It is proper to say, in limine, that it is not by any means deemed certain that this contract, if to be read in the sense just specified, is sustainable in law. It is assumed that a man cannot contract that he himself may commit a fraud. For example, this defendant could not have agreed that this money should not be payable except on his own written certificate, and that he might fraudulently withhold such certificate. If such a stipulation would, as it is thought, be expunged from the instrument on grounds of public policy, how can the party legally stipulate that another may commit this same crime for him? The capacity of parties to a contract to provide that one or the other, as the case turns out, may be cheated, does not appear to be a faculty requisite in the transaction of any legitimate business; while, at the same time, its existence is palpably offensive to good morals, and consequently may well be said to be adverse to the public welfare. The consequence is that it is, in my opinion, doubtful whether such an agreement can be legally made; but it is not deemed necessary to pursue the inquiry, inasmuch as, by proper rules of construction, applied to the facts set forth in this record, the proper conclusion is that the contract existing between these parties does not contain this stipulation so highly questionable. The inquiry is, what did these parties mean? Did they intend, or, by reason of the language employed, must it be concluded de jure that they intended, to be bound by the award of the architect, even though such award was the creature of fraud?

The clause thus referred to is in the common form that has long been in frequent use, and yet it may be safely said that it is most improbable that it would have been adopted in a single instance, if it had expressed in plain terms the meaning that it is now contended lies latent in its expressions. It is hard to believe that any self-respecting man would put his name to an agreement that a third party might do in his favor a fraudulent act; nor does it seem probable that to the ordinary mind any suggestion of so extraordinary a purpose would be made by the generality of the expressions of this clause of the contract under criticism; and this last is an important consideration, for it is truly remarked by Chief Justice GIBSON in Navigation Co. v. Moore, 2 Whart. 491, that in the interpretation of contracts "the best construction is that which is made by viewing the subject of the contract as the mass of mankind would view it; for it may be safely assumed that such was the aspect in which the parties themselves viewed it." Tested by this standard, it would seem to be certain that the construction of this term of the contract insisted on by the defense in this case cannot prevail.

But the adverse argument is that the agreement of the parties is to be ascertained from the plain language used by them, and such agreement is to be enforced, no matter what the intention may have been. This is the general rule, beyond a doubt, but such required literalism is not to be pushed to the preposterous length of requiring that by its operation the general intention of the parties, as evidenced by their contract itself, shall be frustrated or perverted, either in whole or in part. The terms employed are servants, and not masters, of a perspicuous intent; they are to be interpreted so as to subserve, and not to subvert, such intent. As an illustration, it plainly appears on the face of this instrument that it was the evident and sole purpose of the provision in question to provide for the fair and definite decision of certain matters; and it is now said that, by force of the terms used, the decider is empowered to cheat either party at will; and yet it is obvious that the existence of such a power in the agent has no tendency to effectuate the object in view, but, so far as it can operate, is destructive of it. The stipulation giving the quality of finality to the action of their agent is part of a contrivance of these parties to insure fair dealing between them in certain particulars; there seems to be no reason why they should impart to such a contrivance a fraudulent potency. It was quite reasonable for these parties to say to their agent, decide honestly between us, and your decision shall be final; but it was utterly unreasonable for them to agree to abide by such award, if it were fraudulent. For my own part, I do not believe that in the history of the human race the transaction has occurred in which a man has consciously agreed that another should be clothed with the power to cheat him, and that the decision of the fraud-doer should be conclusive on the subject; and in the present instance such a stipulation can be constructed only by an abstract interpretation of the conventional terms; for if such language be construed as a part of an integer, and in the view of purpose in hand, it can be made to produce no such result. There is no more important rule of construction than that which requires that words shall be interpreted in the reflected light of the context in which they are found; and, applying this rule to the case in hand, it is not perceived how it can be reasonably said that these parties have given to the provision in question that noxious efficacy that is sought to be imparted to it. That the clause under discussion cannot be, out and out, construed literally, appears to be undeniable. This and similar engagements are never so read. Undoubtedly, if we construe these terms with entire literalness, the builder is required to produce, before he can claim the money due him, the certificate of the architect. There are no exceptions provided for nor indicated, if the language is thus alone regarded. But suppose the money be earned, and the architect die before the signing of...