Flint v. Gibson

Colt, J. The defendant, by two .similar contracts, agreed to deliver two vessels to the plaintiffs, fitted for sea for a specified voyage, under the inspection and subject to the approval of Mr. Frazar, the agent of the American Lloyd’s, acting in behalf of the plaintiffs; the vessels to be fitted in conformity with the memoranda annexed, and all questions arising under the contracts be referred for final decision to the same person. It is not denied in the declaration, and it was admitted at the argument, that these vessels were inspected and approved by Frazar, and delivered to the plaintiffs under the contracts. The question raised by the demurrer is, whether the plaintiffs can now maintain an action upon the mere allegation that they were not [394] seaworthy when delivered, or were not fitted in accordance with the specifications. This depends upon the relation which by the true construction of the contracts Frazar holds to the parties. On the part of the plaintiffs, it is contended that, under the clauses providing for the inspection and approval, he acted only as agent of the plaintiffs, to see that the work was done according to the specifications, and not as referee agreed upon, whose judgment was to be binding; that, if the work was not in fact done according to the terms of the contracts, they may now show it, and recover, notwithstanding the agent’s acceptance, because one of the things to which the defendant was bound, namely, the delivery of the ships fitted to perform the required voyage, has not been done. On th-e other hand, the defendant contends that, as the approval and acceptance of Frazar was a condition precedent to the right to recover the agreed compensation, so, after his approval and acceptance, the plaintiffs cannot recover without proof of fraud, either on the part of the defendant or the referee. And we think the defendant’s position is well taken. It is evident, without going outside the contracts, that a correct estimate of the amount and character of the work, necessary to be done upon these ships to fit them for the contemplated voyages, could only be made by a man of judgment and experience in such matters. It is to be considered that they were “ doubleender gunboats,” in their original construction, and had been employed in the United States service ; that the contracts required their alteration and refitting for use as sailing vessels with four masts; and that the contract and memorandum in each case plainly indicate that much must be left to judgment and estimate. Under such a state of facts, a person, whose official station indicates that he is fit for the duty, is selected to supervise, inspect and approve the work, and is expressly enjoined to be “guided by the spirit of the agreement.” He is, in the opinion of the court, thus made an arbitrator between them, and his approval is binding upon them as an award, however much he may have erred in iudgment. The statement that, in this, he is to act in behalf of the plaintiffs, does not take from him the character of an arbitrator, so far as his judgment affects the plaintiffs’ rights. The [395] defendant at least had the right to conclude that, when the ships were inspected and approved in good faith, his part of the contract was performed; and the fact that Frazar was acting in some sense as the agent of the plaintiffs affords the plaintiffs no ground to avoid his award. The allegations of the declaration therefore fail to show a good cause of action. The decision of the arbitrator is binding, unless impeached for fraud or shown to have been made under a mistake by which he was misled and so far failed to apprehend the case submitted to him that he did not in fact exercise his judgment upon it. This is not charged by the plaintiffs. Palmer v. Clark, ante, 373. Grafton v. Eastern Counties Railway Co. 8 Exh. 699. Demurrer sustained.