Court Opinion

ID: 8060186
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:37:25.061435+00
Date Added: 2024-06-11T16:38:01.700426
License: Public Domain

*11The opinion of the court was delivered by
Beasley, Chief Justice.
A comprehension of the facts stated in the summary of the declaration prefixed to this opinion will make it manifest that the question to be decided is, Can the defendant cheat the plaintiff bv due course of law?
The case, in brief, is this: The plaintiff has done work for the defendant to the value of $600, which work was additional to that specified in the written contract; the money was payable on the certificate of the architect, whose decision was to be final; such architect fraudulently decided that the work in question was not additional, but was embraced in the contract, and the defendant, being notified of the facts, refused to pay the demand. As the demurrer confesses the truth of this statement, it will be observed that the defendant stands now before the court saying: I admit that this money is due for additional work; I admit that the architect fraudulently certifies to the contrary; and I claim, that by a correct application of legal principles, I have the right to take advantage of this fraud, and to appropriate to myself the moneys that are its fruits. The inquiry is, Does the law, in reality, justify this immoral attitude ?
It should be premised to the inquiry, that if this action will not lie, neither will any action lie against the defendant, founded on the facts stated, either at law or in equity. As such a result would be one much to be deprecated, and would stand as a blot on the jurisprudence of the state, it would seem that the most cogent reasons should be forthcoming to afford a satisfactory answer to the interrogatory: Why should a man be permitted to take advantage of the fraud of another ? The only known reply is, that the plaintiff has covenanted to that effect; that he has agreed that the action of the architect, whether honest or dishonest, shall be conclusive.
It is proper to say, in limine, that it is not by any means deemed certain that this contract, if to be read in the sense just specified, is sustainable in law. It is assumed that a man cannot contract that he himself may commit a fraud; for example: this defendant could not have agreed that this money *12should not be payable except on his own written certificate, and that he might fraudulently withhold such certificate. If such a stipulation would, as it is thought, be expurged from the instrument on grounds of public policy, how can the party legally stipulate that another may commit this same crime for him ? The capacity of parties to a contract to provide that one or the other, as the case turns out, may be cheated, does not appear to be a faculty requisite in the transaction of any legitimate business; while, at the same time, its existence is palpably offensive to good morals, and, consequently, may well be said to be adverse to the public welfare. The consequence is that it is, in my opinion, doubtful whether such an agreement can be legally made; but it is not deemed necessary to pursue the inquiry, inasmuch as, by proper rales of construction, applied to the facts set forth in this record, the proper conclusion is, that the contract existing between these parties does not contain this stipulation, so highly questionable.
The inquiry is: What did these parties mean ? Did they intend, or by reason of the language employed must it be concluded de jure, that they intended, to be bound by the award of the architect, even though such award was the creature of fraud ?
The clause thus referred to is in the common form, that has loug been in frequent use; and yet, it may be safely said, that it is most improbable that it would have been adopted in a single instance if it had expressed in plain terms the meaning that it is now contended lies latent in its expressions. It is hard to believe that any self-respecting man would put his name to an agreement that a third party might do in his favor a fraudulent act. Nor- does it seem probable that to the ordinary mind any suggestion of so extraordinary a purpose would be made by the generality of the expressions of this clause of the contract under criticism. And this last is an important consideration, for it is truly remarked by Chief Justice Gibson, in Schuylkill Nav. Co. v. Moore, 2 Whart. 477, 491, that in the interpretation of contracts “ the best construction is that which is made by viewing the subject of the contract, as the mass of *13mankind would view it, for it may be safely assumed that such was the aspect in which the parties themselves viewed it.” Tested by this standard, it would seem to be certain that the construction of this term of the contract insisted on by the defence in this ease cannot prevail.
But the adverse argument is, that the agreement of the parties is to be ascertained from the plain language used by them, and such agreement is to be enforced, no matter what the intention may have been.
This is the general rule, beyond a doubt, but such required literalism is not to be pushed to the preposterous length of requiring, that by its operation the general intention of the parties, as evidenced by their contract itself, shall be frustrated or perverted, either in whole or in part. The terms employed ’are servants and not masters of a perspicuous intent; they are to be interpreted so as to subserve and not to subvert such intent. As an illustration: it plainly appears on the face of this instrument that it was the evident and sole purpose of the provision in question to provide for the fair and definite decision of certain matters; and it is now said that by force of the terms used, the decider is empowered to cheat either party at will; and yet it is obvious that the existence of such a power in the agent has no tendency to effectuate the object in view, but so far as it can operate, is destructive of it. The stipulation giving the quality of finality to the action of their agent, is part of a contrivance of these parties to enforce fair dealing between them in certain particulars; there seems to be no reason why they should impart to such a contrivance a fraudulent potency. It was quite reasonable for these parties to say to their agent, decide honestly between us and your decision shall be final; but it was utterly unreasonable for them to agree to abide by such award if it were fraudulent. For my own part, I do not believe that in the history of the human race, the transaction has occurred in which a man has consciously agreed that another should be clothed with the power to cheat him, and that the decision of the fraudoer should be conclusive on the subject. And in the present instance such a stipulation *14cán be constructed only by an abstract interpretation of the conventional terms; for, if such language be construed as a part of an integer, and in the view of purpose in hand, it can be made to produce no such result. There is no more important rule of construction than that which requires that words shall be interpreted in the reflected light of the context in which they are found. And applying this rule to the case in hand it is not perceived how it can be reasonably said that these parties have given to the provision in question that noxious efficacy that is sought to be imparted to it.
That the clause under discussion cannot be, out and out, construed literally, appears to be undeniable. This and similar engagements are never so read. Undoubtedly, if we construe these terms with entire literalness, the builder is required to produce, before he can claim the money due him, the certificate of the architect. There are no exceptions provided for nor indicated if the language is thus alone regarded. But suppose the money be earned, and the architect die before the signing.of the certificate, is the claim lost or forfeited? Such a result, it is presumed, would not be claimed; and yet it is avoidable only in one way, and that is, to construe file terms of the contract reasonably as applied to their subject, and not literally. The exception can stand on no other ground than this, for the maxim, “ actus dei nemini faoit injuriam ” is never applied in violation of a contract. Looking to the letter alone, these parties have said that under all possible circumstances the certificate shall be a condition precedent to the right to payment. Admitting this as the true construction, the impossibility of the performance of such condition would not avoid it; and that such an effect has never been judicially given to such provisions, shows conclusively that they have been interpreted according to their spirit and not in subservience to their very letter.
And, indeed, in my view, the entire legal course that has been pursued in the construction of submissions to arbitration, in the common-law form, can be explained only on the ground that they have been construed liberally and not with literal *15narrowness. In all these submissions the stipulation is in the most unqualified form, that the award shall be final and conclusive; but if such award be tainted with fraud, it is set aside on the application of the party. And yet, it is plain that such party could not be permitted to make such application if his submission is to be read by its letter, and thus made to mean an engagement on his part to ¿bide by the award, whether honest or dishonest. In such cases it has never been pretended that the parties by the terms of their submission, reasonably understood, méant anything of the kind. The grounds of decision in that entire class of cases would seem to be precisely applicable to the present case.
As another illustration of the principle that a literal interpretation is out of place when its adoption will run counter to the expressed general object of the contract, reference may be made to the familiar case of clauses so frequent in leases, that if the rent is in an’ear for a certain time the instrument shall become void. In all these instances the courts have declared, notwithstanding the literal meaning of the terms, that the lease, on the happeniug of the event, is not absolutely vacated, but only becomes voidable at the option of the lessor.
In looking to the authorities, I do not find that the point now in question has ever been put under the consideration of any of the courts of this state. The subject was not discussed or considered in any of the three cases cited in the brief of the counsel of the defendant, in the decision of which I participated.
With respect to the English law touching this topic, I am inclined to think that it is still in a fluent condition, and that the last word, in reference to it, has not yet been spoken. In Clarke v. Watson, 18 C. B., N. S., 278, the allegation was that the arbiter had “wrongfully and improperly” neglected and refused to make his certificate — a form of allegation that manifestly did not involve the question of fraud on his part; so that this decision has no place in the present inquiry. Milner v. Field, 5 Exch. 829, goes beyond the requirements of the present case, for it maintains that even the collusion of *16the party in the fraud of the arbiter will not dispense with the production- of the latter’s certificate. The decision of the court is contained in four lines, and has no reference to either legal principles or authority; and in Clarke v. Watson, just referred to, which was decided ten years subsequently, in the opinions expressed, a different doctrine is stated; and in Batterbury v. Vyse, 2 Hurlst. & C. 41, this latter view appears to be the one sanctioned. Even the gross misconduct of the arbiter, without the imputation of fraud, in the case of Pawley v. Turnbull, 7 Jur., N. S., 792, was declared by Vice-Chancellor Stuart to dispense with the production of the certificates, and the payment of the money due was decreed notwithstanding their absence.
This attitude of the authorities it is deemed fully justifies the remark already made, that the principal question has not been definitively settled by the courts at Westminster.
The matter has been more definitely treated by the American tribunals, and the results reached seem to be very generally in accord with the views propounded in this opinion. Of this line of cases the following are leading illustrations: The Baltimore and Ohio R. R. Co. v. Polly, Woods & Co., 14 Gratt. 447; Lynn v. Baltimore and Ohio R. R. Co., 60 Md. 404; Herrick v. Belknap, 27 Vt. 673; Snell et al. v. Brown et al., 71 Ill. 133; Wyckoff v. Meyers, 44 N. Y. 143; Thomas v. Fleury, 26 Id. 26; Bowery Nat. Bank v. Mayor, 63 Id. 336; Martin v. Leggett, 4 E. D. Smith 255.
In Batchelor v. Kirkbride, 27 Fed. Rep. 899, the question present in this case was put directly in question, and was pointedly decided ; for the inquiry was whether the plaintiff was dispensed from producing a certificate if it had been refused by the fraud of the arbiter without collusion with the defendant. The jury was instructed at the trial, by Mr. Justice Bradley, that if such fraud was shown, the plaintiff was entitled to recover; and that ruling was upon reconsideration declared to be right, both by the distinguished -judge before whom the case had been tried, and by his associate, Mr. Judge *17Nixon. This case in itself is of great weight, and appears to be supported by the general current of American authority.
Nor does it seem to me that by the adoption of the foregoing theory of explication these arbitration clauses will be shown of any beneficial efficacy. The awards authorized by them will, for all useful purposes, be in truth finalities; they cannot be impeached for the want of skill or knowledge of the-arbiter, nor on the ground that his judgments do not square-with the judgments of other persons; such awards can be vitiated by fraud alone, and which must be proved to the satisfaction of a jury under a watchful, judicial supervision.
In fine, it appears to me that- the foregoing construction of the clause of the contract in question rests upon the triple gi*ound of legal principle, authority and public policy.
I think on this issue the plaintiff should have judgment.