Johnson v. City of Prineville

• Decision Date: 05 April 1921
• Citation: 100 Or. 105,196 P. 817
• Parties: JOHNSON ET AL. v. CITY OF PRINEVILLE.
• Court: Oregon Supreme Court

196 P. 817

100 Or. 105

JOHNSON ET AL.
v.
CITY OF PRINEVILLE.

Supreme Court of Oregon

April 5, 1921

Department 2.

Appeal from Circuit Court, Crook County; J. U. Campbell, Judge.

Suit by E. T. Johnson and another against the City of Prineville, a municipal corporation. From decree for plaintiffs, defendant appeals. Affirmed.

See, also, 196 P. 821.

The plaintiffs sue to set aside an engineer's award on a contract made between them and the city of Prineville for the construction of a railroad grade from that city to a junction with certain main line railways. The contract opens with this clause:

"This agreement, made and entered into this 30th day of March, A. D. 1917, between city of Prineville, Crook county, Oregon, by its city council, party of the first part, and E. T. Johnson and H. M. Johnson, 305 Commercial Building, of Portland, Oregon, parties of the second part, witnesseth."

It closes thus:

"In witness whereof, said city of Prineville by its city council executes this contract and the said E. T. Johnson and H. M. Johnson do sign and seal the same the day and year in this contract first above mentioned.

City of Prineville Council,

By D. F. Stewart, Mayor.

Attest: Geo. F. Euston, Recorder.

(Corporate Seal)

Party of the First Part.

E. T. Johnson & Son

By E. T. Johnson

Pacties of the Second Part."

No question is made but that the plaintiffs performed the work in manner and form required. Their contention is that the award of the engineer in charge of the work was so grossly erroneous in regard to the classification of materials excavated, as to operate upon them fraudulently, and they seek to set aside that award and recover as upon a correct classification of the materials removed.

The following provisions appear in the agreement:

"It is further agreed, that said plans, proposals, specifications and stipulations shall be a part of this contract, and have the same force and effect as though all of the same were fully inserted herein. All of said work is to be done under the supervision and direction of the city engineer, and all of the work shall be accepted and approved by the said city engineer. Said city engineer shall have the right to fully decide on all questions arising as to the proper performance of said work, and if at any time said city engineer shall be of the opinion, and shall so certify in writing, that the work under this contract, or any part thereof, is unnecessarily delayed, or that said contractor is willfully violating any of the same in bad faith, or the work not commenced within the time specified in this contract, or if the said contract be not fully completed within the time named in this contract for its completion, he shall have the power to notify the aforesaid contractor to discontinue all work, or any part thereof under this contract, by written notice to be served upon the contractor, and thereupon the said contractor shall discontinue said work or such part thereof; or he may enter upon the premises and complete said work and adjust any difference in price or the damage if there be any, which the parties of the second part shall pay to party of the first part, on account thereof, and on all such matters the decision of the city engineer shall be final, except in case the parties of the second part do not accept the ruling of the city engineer as to quantities, classification or interpretation of this contract, such appeal from said ruling must be made in writing to the city engineer and the city council before the date for the payment of the next partial payment; neglect or failure to make such written appeal within the time specified all claims shall be forfeited; all such differences that cannot be adjusted by and between the contractor and the city engineer shall be adjusted by arbitration, the contractor and the city engineer to select a third person, and the decision of these three shall be final and binding upon both parties. The expense of such arbitration shall be borne equally by the parties to this contract. Unless such written appeal is made the acceptance of the partial payment shall be construed as an acceptance of the ruling of the engineer."

After stipulations as to time for completion, and extension thereof, as to liquidated damages to be paid by the contractor for failure to begin on time, to prosecute the work with diligence and to complete it when and as prescribed either by the contract of within such extension, together with the dates of payment to be made, and the medium of payment, we find the following clause:

"The city engineer shall, as soon as practicable after the completion of this contract, make a final estimate of the amount of work done thereunder and the value of such work, and the party of the first part shall, at the expiration of thirty days from and after the completion of the work, pay the entire sum so found to be due thereunder, after deducting therefrom all previous payments and all amounts to be retained under the provisions of this contract. All prior partial estimates and payments shall be subject to correction in the final estimate and payment."

Many other conditions appear, which are not here involved. It is admitted in the pleadings that the contract was executed as stated in the complaint and that attached thereto were stipulations, among others, in the following tenor:

"The engineer shall determine the amount or quantities to be paid for, under this contract, and to decide all questions which may arise relative to the fulfillment of these specifications, and his estimates and decisions shall be final and conclusive.

"It is mutually agreed between the parties to the contract, that to prevent disputes and misunderstandings between them in relation to any of the stipulations contained in these specifications, or their performance by either of said parties, the engineer shall be an umpire to decide all matters arising or growing out of said contract between them."

The complaint avers that promptly after signing the contract the plaintiffs entered upon and prosecuted the work with diligence and completed it within an extension of time agreed upon; and that the same was accepted by the defendant as completed. The following allegation appears in the complaint:

"That all of said work was done by the plaintiffs under the supervision, direction and control of the engineer of the defendant, who exercised sole supervision over the same and the whole thereof, and over the plaintiffs in the performance thereof; that all of the said work was done by the plaintiffs in accordance with the directions of said engineer, and in accordance with the terms of said contract and said specifications, all of which plaintiffs faithfully followed."

Substantially, it is stated in the complaint that no dispute exists between the parties as to quantities and classifications of material moved by the plaintiffs on that portion of the work beyond station No. 343, but that there is a dispute as to those matters, on the remainder of the work.

It is said that at the completion of the work the defendant's engineer delivered what purported to be a final estimate thereof, which so far as it affects the portion in dispute awarded plaintiffs $24,949.11. The complaint criticizes this estimate, pointing out certain items which plaintiffs say are grossly incorrect. After a long...