Court Opinion

ID: 8014162
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:02:00.068602+00
Date Added: 2024-06-11T16:36:14.090161
License: Public Domain

VALLIANT, J.
(dissenting). — In the foregoing opinion of the majority of the court, it is held that the clause in the contract making the water commissioner umpire in certain matters renders his decision final on the question in this suit, and that the receiving of the money by the plaintiff on the final estimates given, precludes his fecovery. I am compelled to dissent from both of those conclusions. I agree that in those matters left to the decision of the water commissioner by that clause his decision is final, but the clause does not constitute him the judge to construe the contract, or the arbitrator of all the plaintiff’s rights under it.
The law on this subject is quite thoroughly discussed and expounded in Williams v. Railroad, 112 Mo. 463, opinion by Gantt, P. J., which is quoted by the referee as authority for his ruling and is mainly relied on by the learned counsel for respondent. That suit grew out of a contract for the construction of a railroad, wherein it was provided: “The work shall be executed under the direction and supervision of the chief engineer of said railway company and his assistants, by whose measurements and calculations the quantities and amounts of the several kinds of work performed under this *340contract shall be determined, and whose determination shall be conclusive upon the parties; and who shall have full power to reject or condemn all work or materials which in his or their opinion do not fully conform to the spirit of this agreement; and said chief engineer shall decide every question which can or may arise between the parties, relative to the execution thereof, and his decision shall be binding and final upon both parties.” The complaint in that case was that the plaintiff had not been paid for all the work he had done, and that the engineer had rejected and refused to make the estimates called for hy the contract, also that there was wrong classification of excavated material. The answer stated that final estimates were made as required and showed what they were. The reply attacked the estimates as false and fraudulent. There were questions in that case growing out of the pleadings, .to which much of the opinion is addressed, but there were also principles of law discussed applicable to the ease at bar. It was there decided that whilst the clause of the contract above quoted was valid and binding, yet that it did not confer on the 'engineer the power to construe the contract, and conclusively bind the plaintiff hy his construction.
The court said: “Moreover, plaintiffs were entitled to show, if they could, under either count, that the engineer misconstrued the contract in his classification of the loose-roclc clause, and had not measured the work according to contract. An allegation of fraud was not necessary to entitle him to this evidence at this time. Plaintiff claimed and offered tp show that the engineer construed hard-pan to be loose rock, only 'when it could not be plowed with a strong ten-inch plow behind a1 good six mule or horse team.’ Plaintiffs insisted that, under this clause, the contract itself fixed the classification of hard-pan as loose rock without reference to the plowing test. We think the plaintiffs are correct in their interpretation of this clause, and, if the engineer did so misconstrue it, he exceeded the power vested in him by the contract, and *341there is no principle of law or equity that demands that plaintiffs should submit to a misconstruction of their contract which would result in serious loss to them. . . . It is the province of the courts to construe contracts, and the plaintiff had a right to the construction of the court on this clause.”
And in the same opinion it is said: “While the courts with great unanimity sustain stipulations providing that the work shall be done under the direction and supervision of the engineer, and his estimates shall be final and conclusive upon the parties to the contract, they have also concurred in saying that the engineer’s estimate may be assailed for fraud, gross error or mistake.”
Erom the decision in the above-named case two propositions appear: first, that the clause constituting the engineer umpire concerning certain matters liable to arise in the execution of the contract was valid and his decisions in reference to the same were final unless successfully attacked for fraud, gross error or mistake; second, his decisions were final only in the matters which by the terms of the contract were submitted to him and which in that case did not include the power to construe the contract.
If we will now turn back to the clause in the contract, in the case at bar, upon which the referee based his ruling, and upon which the circuit court based its judgment, and read it in parallel with the similar clause in the case of Williams v. Railroad, above quoted, we shall see that the authority of the railroad engineer, if not in fact greater, was expressed in more comprehensive language than that of the water commissioner in this case. The water commissioner was empowered to “determine the amount of the several kinds of work which are to be paid for under this contract; and he shall decide all questions which may arise relative to the execution of this contract on the part of the contractor, and his estimates and decisions shall be final and conclusive.”
That clause gave the water commissioner full power to *342direct how the contract should be executed, that is, how the work should be done, and if a question on that point arose between him and the contractor, the latter had to submit. And when work of the several kinds called for by contract, and for which the contractor was to be paid, was done, the water commissioner was to determine the amount- of such work and his determination of that question was conclusive and the contractor had to submit to it, unless he successfully attacked it on the grounds above mentioned. But that is the extent to which the contract clothed the water commissioner with authority to act as umpire. If a question should arise as to whether or not the contractor was entitled, under the contract, to pay for certain kind of work or material furnished, the answer to which depended on a construction of the contract, he would not be bound to submit to the decision of the water commissioner, but would be entitled to the judgment of the court on that question. It appears from the evidence that the inlet tunnel, which is about 1300 feet in length, was to have been constructed on an ascending grade of six inches to the one hundred feet, and in circular form of nine feet two inches in diameter, which would give sufficient inclination towards the west end to cause the water to flow in that direction, and enable the contractor to keep the tunnel free of water by a pump at that end. But after the tunnel had been driven six hundred feet it was discovered that the rock which fprmed the roof began to dip towards the east, and fearing that it would not be sufficiently thick to constitute a safe roof, if the ascending grade was continued, the grade line was lowered, and the contractor was required by the water commissioner to drive the tunnel on a seven-foot heading for a considerable distance, so as to preserve, for the time being, the inclination towards the west, and then return and take out the remaining two feet. This entailed on the contractor the labor of going over the space twice and greatly increased the cost. This forms one of the chief items of the account sued on.
*343It appears, also, from the evidence that in the location of the inlet tower through which the water is let into the tunnel, a mistake was made by the defendant’s engineers, so that when the contractor came to sink the inlet shaft it was discovered that it did not meet as it was calculated to do, that part of the shaft that had been excavated upward, beginning in the tunnel, and it became necessary to make an extra excavation of twenty-four cubic yards, which the contractor did at a cost of $2,400, and this is one of the items sued for.
It is unnecessary for the purposes of this appeal to discuss the other items embraced in the plaintiff’s petition, and these two are mentioned only to illustrate the nature of the plaintiff’s case. He contended with the water commissioner that he was entitled, under the contract, to be paid for the extra cost put upon him by the changed grade and the manner in which he was required to perform the work which constituted the first of the two items above mentioned, and that he should be paid for the additional twenty-four cubic yards of excavation to bring the two parts of the inlet shaft together. This was his interpretation of the contract, but the water commissioner interpreted it differently, and decided that he was not entitled to be so paid. The contention on the part of the city is that the water commissioner’s decision on that question is final.
Erom his standpoint as superintendent and chief director of the work, charged by the city with the duty of certifying the amounts to be paid the contractor for the work as it progressed and at its conclusion, it was the duty of the water commissioner to construe the contract, to include in his estimates all that he judged to be proper and exclude all that he judged to be improper, according to the meaning of the contract, as he understood it, but his decision in so far as it was based on his interpretation of the contract was not conclusive on the contractor.
I do not mean now to express any opinion as to whether *344or not the plaintiff’s construction of the contract in reference to these two items and the other items in.his suit is correct, because that question is not before us, not having been passed upon by the trial court, but I do mean to say that the plaintiff had a right to the judgment of the court upon that question, and was not concluded by the decision of tire water commissioner. Under the ruling of the referee, the defendant offered no evidence as to the merits of the plaintiff’s case, and therefore wliat is here said is based on the plaintiff’s evidence alone; upon a retrial the defendant will have the privilege to introduce proof on that line. Until these questions, both of law and fact, have been pássed on by the trial court, they are original untried questions and not ready for judgment in this court.
The conclusion of the learned referee rested not only on the idea that the decision of the W'ater commissioner was final, but also that the acceptance of the estimates and the receipt of the money called for by them made them accounts stated and as such binding between the parties and not open to attack in the manner offered by the plaintiff.
An account stated' is the result of a contract, the consideration for which is the existence of an unliquidated or disputed claim arising out of a previous transaction between the parties. The contract w'hich results in the account stated is itself a new agreement between the parties and requires an independent consideration to support it; it is the meeting of their minds on the unliquidated or disputed claim, involving a yielding or concession upon one side or both touching the points in dispute. When it involves the yielding of a legal claim it takes the nature of accord and satisfaction, whereof it is said: “The accord and satisfaction must- be advantageous to the creditor. He must receive from it a distinct benefit, which he otherwise would not have had.” [2 Parson on Contracts (8 Ed.), bot. p. 804.]
A transaction in which a creditor consents to receive, as *345■in full satisfaction of Ms debt, a less sum than is undisputedly owing and then due, is without consideration and such payment is in law only a partial payment, even though the creditor gives a receipt in full. [Riley v. Kershan, 52 Mo. 224; Willis v. Gammill, 67 Mo. 730; Tucker v. Bartle, 85 Mo. 114.] All these cases are cited and the doctrine reaffirmed in Pollman Coal Co. v. St. Louis, 145 Mo. 551, ripon which last ease the referee chiefly based his conclusion that these estimates constituted an account stated. That case grew out of contracts with the city for sprinkling its streets, in which it was provided that injuries done to the fire plugs by the plaintiff’s employees by their carelessness in handling them when taking water therefrom, should be paid for by plaintiff, and the amount of damages deducted from the estimates of pay due him under the contracts. A claim was made by the street commissioner for damages on this account, the correcness of which the contractor disputed, but in the final estimates the cost of repairs to the fire plugs were put in as debit items of the account against the contractor, and the balance was struck by deducting them from the amount otherwise due him; he received the estimates with the voucher attached upon which he received the money called for by them and receipted the accounts in full. He attempted to avoid the effect of this by pleading in his reply that he was forced to accept what was offered Mm, because he was in need of the money, and on accepting it protested that the deductions were unjust, and that he was not liable for the cost of the repairs deducted. The defendant demurred to the reply, and the demurrer was sustained by the trial court, and upon appeal that ruling was approved, this court holding that while the city was insisting on its set-off, that fact put the plaintiff’s claim sufficiently in dispute, to afford a consideration for the account stated, and that the plaintiff having accepted it, his protest was of no effect.
And we may say here that if in the case at bar there was *346a valid account stated between the parties, the fact that when the plaintiff received the money he protested, as his evidence tended to prove he did, would not avoid the effect of the account stated.
But the case at bar differed from the case last cited in this, that here the items for which the plaintiff claims compensation do not appear at all in the estimates which are claimed to be accounts stated; there is no reference to them, and the receipt is in terms only “in full payment of. above account.” True, in the caption of each the estimate purports to be the final estimate on that work, but the account itself contains only undisputed items of indebtedness of the city to the plaintiff. In the payment of those items the city has paid only what is conceded to have been justly due, regardless of what may be thought of these items now in suit. Supposing, therefore, these items are justly due the plaintiff, what consideration has the city paid, what concession has it made, what has it suffered in consequence of the supposed release of the plaintiff’s claim as to these ? The condition is simply that of a debtor who has paid a part of his debt, and obtained a receipt for the whole of it, or of one who has withheld the payment of what he acknowledged to be due until he could force his creditor into giving him a receipt for what is in dispute. Pollman Coal Co. v. St. Louis, supra, gives no sanction for calling an estimate and receipt under these circumstances an account stated, and a payment of the disputed claim.
Where, as in the ease at bar, a creditor presents an account of several items, some of which are undisputed, and some disputed, and the debtor offers to pay the undisputed items upon condition that the creditor give a receipt for the account in full, including the disputed items, refusing otherwise to pay even that which he concedes to be due, the acceptance of the payment and giving of the receipt under those circumstances does not constitute an account stated, nor a payment of the whole claim. [Wilson v. Palo Alto Co., 65 Iowa 18; Bridge *347Co. v. Murphy, 13 Kas. 35; Railroad v. Clark, 92 Fed. Rep. 968.]
Among the exceptions filed by the plaintiff to the referee’s report, were the following:
“2. That the referee erred in holding that the estimates and decisions of the water’ commissioner of defendant were final and binding and conclusive as to the work and material embraced in this action.
“4. That the referee erred in holding that as to the causes of action set forth in this case, there were accounts stated between plaintiff and defendant that were settled and paid and constituted a bar to this action.”
Those exceptionsi were well taken, and the court erred in overruling them. For this error the judgment of the circuit court should be reversed and the cause remanded to that court for a new trial.
Brace, J., concurs in the views here expressed.