Marsch v. Southern New England R. Corp.

• Citation: 230 Mass. 483,120 N.E. 120
• Parties: MARSCH v. SOUTHERN NEW ENGLAND R. CORP.
• Decision Date: 26 June 1918
• Court: United States State Supreme Judicial Court of Massachusetts

230 Mass. 483

120 N.E. 120

MARSCH

v.SOUTHERN NEW ENGLAND R. CORP.

Supreme Judicial Court of Massachusetts, Suffolk.

June 26, 1918.

Report from Superior Court, Suffolk County; John F. Brown, Judge.

Separate actions by John Marsch against the Southern New England Railroad Corporation, against the Grand Trunk Railway Company of Canada, against the Central Vermont Railway Company, and against the Southern New England Railroad Corporation, the Grand Trunk Railway Company of Canada, and the Central Vermont Railway Company, wherein a justice of the superior court made an order overruling defendants' demurrers, and denying their motions to strike out parts of plaintiff's pleadings, from which order defendants appealed, and wherein the justice granted defendants' motions for leave to file motions to strike out certain parts of plaintiff's pleadings, and made an order denying the motions to strike out so filed, from which order defendants appealed. On report to the Supreme Judicial Court. Motions to strike out allowed, and demurrers sustained.

Whipple, Sears & Ogden, Edwin H. Abbot, Jr., and Lothrop Withington, all of Boston, for plaintiff.

Henry F. Hurlburt and Carroll A. Wilson, both of Boston, for defendants.

PIERCE, J.

These are four actions of contract, founded upon the alleged failure of the several defendants to perform its part of an unsealed written contract entered into on July 20, 1912, between the plaintiff and the defendant in the first action, for the construction by the plaintiff of a railroad from Palmer, Mass., to the Rhode Island state line at a point in Blackstone, Mass. In each action the plaintiff claims he has constructed the roadway according to the terms of the contract in conformity with the plans and specifications furnished him, and seeks to recover payment for the work done in accordance with the provision of the contract; which contract, among other things, provides in substance by clauses 1 and 19 that the chief engineer of the Southern New England Railroad Corporation, the defendant in the first action shall be ‘sole umpire to decide all such questions, matters, and disputes,’ should any misunderstanding arise between the parties ‘regarding any of the stipulations and provisions contained in this contract, or the true intent and meaning thereof, or the manner of performance thereof, or of any part thereof,’ including ‘any arising regarding the amount and quality, character and kind of work performed and material furnished by the contractor.’

By clause 20 the corporation agreed to pay the plaintiff the amounts set down in the schedule thereto, only upon condition he did and performed all things to be done and performed on his part ‘in strict accordance with the plans and specifications and to the entire satisfaction and approval of the engineer.’

Clause 21 provides for monthly payments as the work progressed and for final payments upon the completion of the whole work; such payments--

‘less any sums which under any of the provisions of this contract the corporation may be entitled to deduct therefrom, shall be made * * * upon presentation of written certificate of the engineer showing the value of such work computed as aforesaid and stating that the work for or on account of which such certificate is granted has been duly performed and executed to his satisfaction and in accordance with the plans and specifications. * * * The presentation of such certificates * * * shall be a condition precedent to the right of the contractor to receive or be paid the amount so certified as due and unpaid or any part thereof, and such certificate shall be conclusive as to the amount to be paid to the contractor.’

Clause 23 provides in substance:

That such certificate shall be final and conclusive between the parties as to the measurements and valuations appearing therein and shall not be questioned by either party or set aside ‘on account of any legal defect therein or in this contract, or on account of any informality, omission, delay or error in proceeding in or about the same or on any other ground or for any other reason, or upon any pretense, suggestion, charge, or insinuation of fraud, coercion, collusion or confederacy, * * * and actual fraud only shall disqualify him [the engineer] from acting as aforesaid.’

[1] The liability of the defendant is made conditional upon the presentation of the engineer's certificate, which presentation is expressly made ‘a condition precedent to the right of the contractor to receive or be paid the amount’ certified by the engineer. The allegation in the declarations in the several actions ‘that he [the plaintiff] has done and performed all acts and things which by the terms of said contract and agreement he was required to do and perform’ is insufficient upon which to found a right of action. In addition thereto, it must be averred specifically that the condition precedent was performed or the want of that performance excused. R. L. c. 173, § 6, cl. 11; Newcomb v. Brackett, 16 Mass. 161;Newton Rubber Works v. Graham, 171 Mass. 352, 50 N. E. 547;National Contracting Co. v. Commonwealth, 183 Mass. 89, 66 N. E. 639. As his reason for the nonperformance of the conditions precedent, the plaintiff alleges in his several declarations:

That ‘said engineer did not act in good faith and according to his duty, * * * but that he acted willfully, capriciously, fraudulently, unreasonably and without excuses in refusing to give certificates containingthe proper amounts and quantities under a proper classification as provided under the terms of said contract.’

[2] The defendant in each action moved to strike from the several counts of the several declarations the words ‘willfully,’ ‘capriciously,’ ‘unreasonably’ and ‘without excuse,’ each of which plainly is a characterization of the conduct of the engineer, and when proved is averred to be sufficient to excuse the nonperformance of the condition precedent.

The defendant in each action also moved to strike out the paragraph of the several declarations commencing ‘And the plaintiff further says that said engineer was prevented’ and ending with the words ‘any other person to act in his stead.’

Also to strike out the paragraph of the several declarations beginning with ‘And the plaintiff further says that the defendant has wholly failed’ and ending with the words ‘under the terms of said contract.’

Also to strike out the paragraph of the several declarations between the words ‘and the plaintiff further says that although he was at all times ready’ and the words ‘to abandon the construction and completion of said roadway.’

Also to strike out that part of the plaintiff's several declarations between the words ‘and the plaintiff further says that the defendant has failed’ and the words ‘as required by the terms of said contract.’

Also to strike out that paragraph of the several declarations which commences with the words ‘And the plaintiff further says that certain portions of the work’ and ends with the words ‘under the terms of said contract.’

Each of these motions was an irregular and anomalous way of raising for decision a pure question of substantive law, which under the common law and our practice act can be determined only on demurrer or by an objection to the admission of evidence when offered in proof of the alleged facts. R. L. c. 173, § 14, and section 16, cl. 2; Montague v. Boston & Fairhaven Lron Works, 97 Mass. 502;Saco Brick Co. v. J. B. Eustis Manuf. Co., 207 Mass. 312, 315, 93 N. E. 629. The granting of such a motion may result in legal error; the denial thereof never can. Gardner v. Webber, 17 Pick. 407;Gately v. Taylor, 211 Mass. 60, 65, 97 N. E. 619,39 L. R. A. (N. S.) 472; Powers v. Bergman, 197 Mass. 39, 83 N. E. 7; Golding v. Wharton Salt Works Company, [230 Mass. 492]1 Q. B. D. 374; Duncan v. Hargrove, 22 Ala. 150, 161. The motions were denied; and the issues raised thereby, together with certain other distinct issues raised by demurrers to the several counts of the declaration and hereinafter considered, were reported to this court under R. L. c. 173, § 105.

The questions of law attempted to be raised by the motion to strike out have been fully argued, and we therefore consider such questions on the footing of a demurrer to the allegations of fact in the declarations which the plaintiff asserts constitutes a sufficient excuse for his failure to secure the written certificates of the engineer before bringing his action. A comparison of the facts, alleged in the declaration in excuse of the nonperformance of the condition precedent with the terms of the contract, limiting the right of either party to the contract to question the conclusiveness of the certificates of the engineer upon any ground other than ‘actual fraud,’ affords a sufficient demonstration that each of the alleged facts, if allowed to be proved, adds to the terms of the written contract a new and substantial ground or reason less than ‘actual fraud’ for the disqualification of the engineer as quasi arbitrator. At the trial, against the substantive rule of law that evidence is not admissible to vary the terms of a written instrument, evidence could not be received to prove facts which would change the terms of the contract. It is therefore plain that a demurrer must be sustained to the parts of the several declarations which are specifically indicated in the several motions to strike out, unless the contract itself, in so far as it relates to the conclusiveness of the certificates and to the qualifications of the engineer as arbitrator, shall be held to be void, because the engineer is an officer or agent of one of the parties to the contract or because the provisions referring disputes to the engineer as an arbitrator whose decision shall be final are broader than are permitted by the court. It would seem to be settled that the engineer or architect of one of the contracting parties may legally act as arbitrator of all disputes...