Pittsburg Construction Company v. West Side Belt R. Company

• Decision Date: 14 February 1910
• Docket Number: 132
• Citation: 227 Pa. 90,75 A. 1029
• Parties: Pittsburg Construction Company v. West Side Belt Railroad Company, Appellant
• Court: Pennsylvania Supreme Court

75 A. 1029

227 Pa. 90

Pittsburg Construction Company v. West Side Belt Railroad Company, Appellant

No. 132

Supreme Court of Pennsylvania

February 14, 1910

Argued November 1, 1909

Appeal, No. 132, Oct. T., 1909, by defendants, from judgment of C.P. No. 4, Allegheny Co., Fourth Term, 1907, No. 398, on verdict for plaintiff in case of Pittsburg Construction Company v. West Side Belt Railroad Company and Francis H Skelding et al., Receivers. Affirmed.

Assumpsit upon an award of arbitrators as well as on a quantum meruit. Before SWEARINGEN, P.J.

The facts are stated in the opinion of the Supreme Court.

The court gave binding instructions for plaintiff.

Verdict and judgment for plaintiff for $396,471.78. Defendants appealed.

Error assigned was in giving binding instructions for plaintiff and in refusing judgment for defendants non obstante veredicto.

It is unnecessary to pursue the inquiry further. The plaintiff having complied with all the provisions of the act of 1874 it was in position to enforce by action at law the contract between it and the defendant. In what we have said the several assignments of error have all been considered. They are overruled and the judgment is affirmed.

Thomas Patterson, of Patterson, Sterrett & Acheson, for appellant. -- This suit was res adjudicata: United States v. Leffler, 36 U.S. 86; Roney v. Westlake, 216 Pa. 374.

The final estimate made up by Douglas, the chief engineer, was conclusive: Martinsburg & P.R.R. Co. v. March, 114 U.S. 549 (5 S.Ct. Repr. 1035); Werneberg v. Pittsburg, 210 Pa. 267; Hartley v. Henderson, 189 Pa. 277.

A case much like the one at bar and illustrating the principle, is that of Baltzer v. R.R. Co., 115 U.S. 634 (6 S.Ct. Repr. 216).

We cite the following authorities sustaining the position that the award cannot vary or depart from the terms of the original submission: Johnston v. Brackbill, 1 Penrose & Watts, 364; Carnochan v. Christie, 24 U.S. 446; Mitchell v. Staveley, 16 East, 58.

Samuel McClay and Edwin W. Smith, of Reed, Smith, Shaw & Beal, for appellees. -- The railroad company was the principal debtor: Taylor v. Preston, 79 Pa. 436; Elkin v. Timlin, 151 Pa. 491; Weber v. Bishop, 12 Pa.Super. 51; Bodey v. Thackara, 143 Pa. 171.

An award is not subject to revision by the court, unless there is an allegation and proof of bad faith, or a mistake or negligence so gross as to justify the inference of bad faith: United States v. Gleason, 175 U.S. 588 (20 S.Ct. Repr. 228); Martinsburg, etc., R.R. Co. v. March, 114 U.S. 549 (5 S.Ct. Repr. 1035); Wilson v. Wilson, 18 Col. 615 (34 Pac. Repr. 175); Hartupee v. Pittsburg, 131 Pa. 535; Lucas Coal Co. v. Canal Co., 148 Pa. 227; Bowen v. Cooper, 7 Watts, 311; McManus v. McCulloch, 6 Watts, 357; North Lebanon R.R. Co. v. McGrann, 33 Pa. 530.

The conclusive character of a judgment extends only to identical issues, and they must be such, not merely in name, but in fact and in substance: Steele County v. Erskine, 98 Fed. Repr. 215; Palmer v. Hussey, 87 N.Y. 303; Mercer v. Watson, 1 Watts, 330; Hess v. Werts, 4 S. & R. 356; Bleakney v. Bank, 17 S. & R. 63; Wrought Iron Bridge Co. v. Town of Attica, 23 N.E. Repr. 542; Gross v. United States Mortgage Co., 108 U.S. 477 (2 S.Ct. Repr. 940); Richman v. Muscatine County, 77 Iowa 513 (42 N.W. 422); Donley v. Pittsburg, 147 Pa. 348; Coleman's App., 62 Pa. 252; New England Bank v. Lewis, 25 Mass. 113; Darlington v. Gray, 5 Wharton, 487.

Before FELL, BROWN, MESTREZAT, POTTER and STEWART, JJ.

OPINION

MR. JUSTICE STEWART:

In considering this case it is necessary first of all to determine the legal relation inter se of the parties to the controversy. The defendant company, here the appellant, having determined upon an extension of its railroad, accepted the bid of one Petrie, who had been secretary of the company but had resigned to enter into new relation towards it, for the entire completion of the proposed work according to the plans and specifications prepared by the company, for the sum of $400,000 in cash, and a like amount in the mortgage bonds of the company. A formal contract was thereupon entered into between Petrie and the company by which the former engaged to construct and complete the proposed work in the manner and within the time called for by the specifications, and the latter agreed to pay for the work accordingly. This contract is dated April 25, 1901. On May 24, following, Petrie, with the consent and approval of the railroad company, entered into a written contract with the Pittsburg Construction Company, here the appellee, which contract, except as it differs with respect to the consideration to be paid for the work, is simply a transcript of the contract between Petrie and the railroad company, and was an undertaking by the construction company to do the work which Petrie by his contract with the railroad company had engaged to do, but upon which he had not entered. Immediately following the signature of the parties to this later contract this appears, "For value received the Westside Belt Company and John S. Scully and F. S. Barnsdall do hereby guarantee and become surety for the payment of the money mentioned in the within contract as the same becomes due and payable." This is followed by a due execution by the parties named. The authority of the president of the railroad company to enter into this obligation on behalf of the company is conceded. With Scully and Barnsdall we have no present concern; our inquiry relates only to the railroad company, and the measure of its liability. In this action it is sought to charge it as a principal, primary debtor, notwithstanding by the written terms of the obligations, the liability expressed is that of guaranty and surety. This presents the first question for our consideration. On behalf of appellant it is claimed that the obligation it incurred was that of guarantor, and that its liability, therefore, is secondary. Much depends on the answer to be given. Assuming a secondary liability on the part of the railroad company, the argument derives conclusions most prejudicial to the construction company's present demands, as will appear later on. The assumption, however, takes account of but a single covenant in the obligation, whereas there are two distinct covenants, one of guaranty and one of suretyship. There is no contention that the obligation is to be considered in any other way than in accordance with its express terms. It is not even suggested that the clear distinction that exists in law between the two relations of guarantor and surety was overlooked, and that all that was intended was a contract of guaranty. The assumption is palpably without warrant. Having once entered into a covenant of both guaranty and suretyship, it could not thereafter be optional with the covenantor to determine in which of the two relations it would stand; it was, however, for the other party to elect under which it would pursue its remedy for any default. As surety, the railroad company here took upon itself a direct and immediate liability. Suretyship always implies original undertaking, and the measure of liability in such case is the extent of the principal's liability. A surety assumes to perform the contract of the principal debtor, if the latter should not, and the undertaking is immediate and direct that the act shall be done, which if not done, makes the surety responsible at once: Reigart v. White, 52 Pa. 438; Riddle v. Thompson, 104 Pa. 330; Phila. & R.R. Co. v. Knight et al., 124 Pa. 58. If regard be had to the situation of the parties and the object they had in view, it would require no strained construction of the obligation to impose on the railroad company the obligations of a principal debtor. So far as concerns this dispute, the distinction would come to nothing, for the liability to the appellee would be the same whether principal or surety. The appellant under either contract was to pay the money. It contracted with Petrie that it would pay to him. Petrie, under his later contract with the construction company, contracted that the railroad company would pay directly to the construction company. The debt incurred in building the railroad was in either case to be paid by the railroad company. It is somewhat anomalous for one to become surety for the payment of money due from himself; and yet if we confine ourselves to the strict letter of the obligation, that is what the railroad company did in this instance. When it signed the obligation of suretyship "for the payment of the money mentioned in the within contract as the same becomes due and payable," since the money was due from itself, it might well be argued that it was an assumption of liability as principal debtor. The subsequent dealings between the parties show very conclusively that both so understood the relations between them. We conclude on both grounds that the written contract between Petrie and the construction company is the law governing the present case, quite as much as though the appellant's name appeared therein as a contracting party.

The contract between Petrie and the construction company, as well as the earlier contract between Petrie and the railroad company, contained the following provision: "When this agreement, in all its parts and in the manner herein provided, shall have been completely performed on the part of the contractor, and such performance shall have been accepted and so certified in writing by the said chief engineer, a final estimate of the quantity, character and value of the work done and materials furnished, according to the terms of this agreement, shall be made by the chief engineer, and thereupon and not otherwise sooner, except at its own election, the railroad company shall within thirty days...