Werneberg v. City of Pittsburg

• Decision Date: 31 December 1904
• Docket Number: 80
• Citation: 210 Pa. 267,59 A. 1000
• Parties: Werneberg, Appellant, v. Pittsburg
• Court: Pennsylvania Supreme Court

59 A. 1000

210 Pa. 267

Werneberg, Appellant, v. Pittsburg

No. 80

Supreme Court of Pennsylvania

December 31, 1904

Argued October 25, 1904

Appeal, No. 80, Oct. T., 1904, by plaintiff, from judgment of C.P. No. 2, Allegheny Co., Oct. T., 1901, No. 300, for defendant non obstante veredicto in case of Werneberg Sheehan & Co. to use of Peoples National Bank of Pittsburg v City of Pittsburg. Reversed.

Assumpsit on a municipal contract. Before FRAZIER, P.J.

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

Errors assigned were (1) in entering judgment for defendant non obstante veredicto; (2) in admitting the award of Dr. J. Guy McCandless.

The judgment is reversed with a venire facias de novo.

Thomas Patterson of Patterson, Sterrett & Acheson, with him Wm. W. Wishart and John W. Kephart, for appellants. -- The whole purpose and effect of the decisions in Pennsylvania upon a contract of this sort is to hold that the parties may, by their contract, refer their disputes either to a particular person or to a particular tribunal, which is determined on in advance, and this becomes a part of the contract. These persons or this tribunal become vested with as ample jurisdiction as the courts would have in determining disputes which may arise, if the contract has so provided. The certainty of the person or tribunal, however, is essential. Where a person is named, and he dies, resigns, or refuses to act, unless the contract has provided for the filling of his place, the provision becomes nugatory, and the jurisdiction of the court revests. Where a tribunal is named, that is, a person who, by virtue of a certain office is to decide the dispute, then the person who occupies the office which is named at the time the dispute arises becomes the judge under the contract, and takes jurisdiction of the case. This latter point appears to be squarely ruled in the case of North Lebanon R.R. Co. v. McGrann, 33 Pa. 530.

We submit that the court blended two very ordinary and customary clauses in contracts, giving to each the effect of both, when, in point of fact, the arbitration clause is and always has been the place for settlement of substantive disputes which grow out of the construction of the contract, breaches of the contract, or any act of one of the parties to the contract which has caused loss or damage to the other. This is the clause which, in other jurisdictions, is stricken down as ousting the jurisdiction of the courts. It is the clause which determines the question of liability. The measurement or appraisal clause is an entirely different thing. Its purpose is to have the work properly measured, and that measurement must be taken as final. This appraisal or measurement clause, dealing only with the numerical details of the work is held in all other jurisdictions to be a competent provision in the contract.

We submit that if the foregoing reasoning is correct, and the court had jurisdiction of this case, the award of Dr. McCandless had no more place on the record and no more relevance to any issue than would a letter or oral expression of opinion by that gentleman, as to the merits of the controversy at hand.

William Watson Smith, with him T. D. Carnahan, assistant city solicitors, for appellee. -- The director's final estimate and other plain provisions of the contract specifically preclude a recovery: Hartupee v. Pittsburg, 97 Pa. 107; Bryant v. Stil-well, 24 Pa. 314.

The arbitration clause is a bar to the action: Monongahela Navigation Co. v. Fenlon, 4 Watts & Sergeant, 205; Jenks v. Fritz, 7 Watts & Sergeant, 201; McGheehen v. Duffield, 5 Pa. 497; Faunce v. Burke & Fonder, 16 Pa. 469; Lauman v. Young, 31 Pa. 306; North Lebanon R.R. Co. v. McGrann, 33 Pa. 530; Reynolds v. Caldwell, 51 Pa. 298; Mentz v. Insurance Co., 79 Pa. 478; Hartupee v. Pittsburg, 97 Pa. 107; Hostetter v. Pittsburg, 107 Pa. 419; Commercial Union Assurance Co. v. Hocking, 115 Pa. 407; Kennedy v. Poor, 151 Pa. 472, 474; Gowen v. Pierson, 166 Pa. 258, 264.

The removal of director Wilson was not a waiver of the arbitration clause of the contract: Houseman v. Com., 100 Pa. 222.

Even if this court decides the law of this case in favor of plaintiffs, a new trial should not be granted but judgment should be entered on the verdict: Freiler v. Kear, 126 Pa. 470; Fisher v. Scharadin, 186 Pa. 565; Ellis v. Guggenheim, 20 Pa. 287; Farrington v. Woodward, 82 Pa. 259; Galbraith v. Zimmerman, 100 Pa. 374; Lerch v. Snyder, 112 Pa. 161; Vulcanite Paving Co. v. Ruch, 147 Pa. 251; Huling v. Henderson, 161 Pa. 553.

Before MITCHELL, C.J., DEAN, FELL, BROWN, MESTREZAT, POTTER and THOMPSON, JJ.

OPINION

MR. JUSTICE MESTREZAT:

W.E. Howley & Company by a contract in writing dated September 16, 1896, agreed with the city of Pittsburg to construct a street in the city, known as Grant Boulevard, beginning at Seventh avenue and extending to Center avenue, a distance of about three miles. Howley & Company failed to begin the work, and on November 19, 1896, the contract, with the consent of the city and the surety of Howley & Company, was assigned to Werneberg, Sheehan & Company, the legal plaintiffs and appellants, who began the work on November 23, 1896, and completed it on March 26, 1901. The contract provided that the work should be commenced October 1, 1896, and be completed on or before May 1, 1898 which was subsequently extended until October 1, 1898. During the progress of the work, the plaintiffs were paid by the city from time to time according to the contract price on estimates of the amount due made by the director of the department of public works. On the completion of the street, March 26, 1901, the director made a final estimate of the entire work done and materials furnished under the contract and found a balance of $6,715.29 due the plaintiffs.

The contract contains two clauses relating respectively to arbitration and to measurements which bear upon the questions raised on this appeal. The arbitration clause provides that "in case any question or dispute shall arise between the parties of the second part hereto and the said city of Pittsburg, party of the first part hereto, under the said plans, drawings, descriptions, general specifications, general conditions or terms of this contract, respecting the quality, quantity, or value of the work or labor done, or materials furnished or to be done or furnished, or any of the terms, stipulations, covenants or agreements herein contained, or respecting any claim for extra work, or respecting any matter pertaining to this contract, or any part of the same, said question shall be referred to the director of the department of public works of the city of Pittsburg, whose decision thereon shall be final, binding and conclusive upon all parties, without exception or appeal, and all right or rights of any action at law or in equity under and by virtue of this contract, and all matters connected with and relative to the same are hereby expressly waived by the parties of the second part." The measurement or estimate clause is, inter alia, as follows: "It being expressly understood and agreed by the parties hereto that the measurements shall be taken after the completion of the work, and the estimate and certificate of the director of the department of public works shall be final and conclusive evidence of the amount of work performed by the said contractor under and by virtue of this agreement and shall be taken as the full measure of compensation to be received by the contractor, without the right of exception or appeal."

At the time of the execution of the contract Edward M. Bigelow was the director of public works of the city of Pittsburg and continued in office until June 11, 1900, when he was succeeded by George W. Wilson, who held the office until June 11, 1901, when he was removed by the recorder of the city and was succeeded by his predecessor, Mr. Bigelow, who continued in office until November 25, 1901, and was then succeeded by J. Guy McCandless, who held the office until April 1, 1903, when he was succeeded by Mr. Bigelow who was again appointed and has since continued to hold the office.

On the completion of the work in March 1901, the plaintiffs submitted to George W. Wilson, then director of the department of public works, a claim against the city for damages growing out of the contract and over and above the contract price of the work, aggregating $384,944.07. On April 6, 1901, director Wilson, after notice to the parties, sat as arbitrator under the terms of the contract and heard the claims of the plaintiffs and defendant. Before the director made his award, however, he was removed from office by the recorder of the city on June 11, 1901, and thereafter declined to complete the arbitration by rendering a decision upon the matters submitted to and heard by him. On May 12, 1902, more than a year after the work had been completed and the final estimates of the amounts due according to the contract price had been made, J. Guy McCandless, then director of the department of public works, notified the parties that he would sit as arbitrator to determine the dispute between them under the arbitration clause of the contract. The plaintiffs denied his authority to sit as arbitrator and refused to appear before him. The director, however, proceeded with the arbitration and after hearing the testimony offered by the city and considering the proofs filed by the plaintiffs with director Wilson at the former arbitration, made a decision in writing on February 10, 1903, awarding to the plaintiffs the sum of $34,120.

The plaintiffs brought this action July 31, 1901, to recover the claim for damages which they had submitted to director Wilson for adjustment under the arbitration clause of the contract. A...