Howard v. Allegheny Valley Railroad

The opinion of the court was delivered, May 27th 1872, by Read, J. There are. two covenants in the articles of agreement, made the 18th day of December 1866, between the legal plaintiffs as partners as 0. Howard & Co., of the first part, and the Allegheny Yalley Railroad Company, copies of which are filed by the equitable plaintiff, and upon which this suit is brought, which, according to the uniform decisions of this court for the last thirty years, govern this case. After providing for monthly estimates by the associate engineer, and the payment of eighty-five per cent, of such monthly estimates, each article provides, “ and when all the work in this contract is completed, agreeably to the specifications, and in accordance with the directions, and to the satisfaction and acceptance of the engineer, there shall be a final estimate made by the chief or associate engineer of the quality, character and value of said work, agreeably to the terms of this agreement, w’hen the balance appearing due to said party of the first part, shall be paid to them upon their giving a release, under seal, to the said railroad company, from all claims or demands whatsoever against said second party, growing in any manner out of agreement.” And at the conclusion of each agreement is this further express covenant: “ And it is mutually agreed and distinctly understood, that the decision of the chief engineer shall be final and conclusive in any dispute which may arise between the parties to this agreement, relative to or touching the same; and each and every of said parties do hereby waive any right of action, suit’ or suits or other remedy, in law or otherwise, by virtue of said covenants, so that the decision of the said engineer shall in the nature of an award be final and conclusive on the rights and claims of said parties.” These two covenants, nearly verbatim, were passed upon by this court in Reynolds et al., Executors, v. Caldwell, 1 P. F. Smith 298, which was an action of covenant, and were held to be bind-^ ing upon the parties, and in O’Reilly v. Kerns, 2 Id. 214, the present Chief Justice said, p. 217, “ It is not necessary to cite authorities for what is so well settled as that where a railroad or canal company and its contractors, of in a contract between original and sub-contractors, * * it is agreed that to prevent disputes, the engineer of the work shall in all cases determine the amount or quality of the several kinds of work which are to be paid for [495] under the contract, and decide every question which can or may arise relative to the execution of the contract on the part of the contractor, that his decision has been uniformly held to be final and conclusive.” It would, therefore, appear that this suit cannot be maintained by all or any of the parties of the first part who are precluded by their own covenants. By the articles of agreement, the work was to be finished on or before the 1st day of July 1867, and by the evidence of the plaintiff section 26 was completed in August, section 42 in September, and section 85 October 1867, and he charges interest on his claim from the 1st of September in that year. It appeared in the evidence that a final estimate was made of all the work done under these- contracts, showing a balance due the contractors of $8845,58, and that-, Robert Henderson and Robert Ilosie, two of them, on the 20th October 1868, received and accepted from defendant the sum of $5897.05, being the two-thirds of the above-mentioned balance of $8945.58, payable to them as mem-, bers of -the firm of 0. Howard & Co., and did thereupon execute and deliver to the defendant a release under seal, and acquittance in full of all demands whatever which they might then or thereafter have against defendant for or by reason of anything in said contract mentioned, or in anywise growing out of the same relative to the work done by said plaintiff, on sections numbered 22, 35 and 42 as aforesaid. On the 5th October 1868, C. Howard notified the defendant that he claimed one-third of the whole amount due on said contract, both for work and damage; and on the 4th February 1849, wrote to the defendant, annexing a copy of an agreement dated the 14th January 1869, signed by Robert Henderson and Robert Ilosie, agreeing he may hold his interest of one-third against the company without interference from them, and also sending-the claim of C. Howard & Co., against the company, one-third of which claim is now owned by me (Howard), under the terms of said agreement. “ If any items of said claims are disputed by your company, you will please furnish me within forty-eight hours of this time the decision, in writing, of the proper referee, stating the ground of his decision as to the respective items not admitted, and showing also the amount which he decides to be now due me as the owner of one-third of the claim of C. Howard & Co.” This suit was then commeneéd and affidavits and bill of particulars and copies of agreements filed. The bill of particulars is dated February 16th 1869, and ends with a balance due of $31,787.70, one-third of which is claimed by the equitable plaintiff — $10,595.23; being $1649.75 more than the whole final estimate upon which his two partners settled. [496] The papers filed with the affidavits of claim, and making a fundamental part of the equitable plaintiff’s case, show clearly that Rule 5 in page 9 of the Appendix, has no application to the present suit. It is an action of covenant on two articles of agreement,-which were filed and put .in evidence by the equitable plaintiff, containing the two covenants mentioned in the beginning, both of which have been entirely disregarded, both as to the final estimate and the decision of the chief engineer, and therefore the court were right in saying “that the parties to said agreements expressly waive all right of action and remedy at law, in any dispute that may arise between them under their agreements, and mutually agree that the decision of the engineer shall be final, and conclusive on the rights and claims of both parties; the plaintiffs are bound by the provisions of their agreements, and having failed to prove that defendant prevented the submission of the matters in dispute to the decision of the engineer, they are estopped and precluded from a recovery at law, and cannot maintain this action;” arid in entering judgment of compulsory nonsuit against the plaintiffs. Judgment affirmed. Agnew and Williams, JJ., dissented.