Elliott Contracting Co. v. City of Portland

BURNETT, J.

1. The argument against the com' plaint is that the pleader does not state that the engineer was actuated by fraud or had excluded items due the plaintiff to such -an extent as to indicate bad faith. In the first place we note that not all of the contract is before us in that the terms of the specifications alluded to are not stated. Aside from that the exhibit attached to the complaint embodies the stipulation of the parties. It is said in that pleading that as part of the consideration of the contract the defendant agreed to furnish certain rock at a certain rate. This allegation cannot affect the actual stipulation which speaks for itself and is to be considered as containing all the terms of the contract: Section 713, L. O. L. The plaintiff cannot import into the agreement any additional stipulation, on the pretense that it is merely inquiring into the consideration. The provision which it would thus add is contractual in its nature and not merely monetary. The rule is thus stated in Sutherlin v. Bloomer, 50 Or. 398 ( 93 Pac. 135 ):

*155 “The consideration specified in the written contract consists of certain acts to he performed, and the authorities are practically unanimous in holding that, where the statement in the written instrument as to the consideration is of a contractual nature, as where the consideration consists of a specific and direct' promise by one of the parties to perform certain acts, it cannot be changed or modified by parol or extrinsic evidence”: See, also, Muir v. Morris, 80 Or. 378 ( 154 Pac. 117 , 157 Pac. 785 ).

2, 3. Referring to the agreement itself it is plain that the city did not agree to furnish any particular amount of base course stone but only so much as might be in the stock piles on the drive and should be incorporated into the pavement. At the very beginning of the instrument the plaintiff contracted to furnish all material and perform all the labor necessary and the agreement of the city to put in whatever was in the pile adjacent to the way was a mere exception to the general duty imposed upon the contractor. As stated, the job was to be paid for on the unit principle which would require a measuring of the work after its completion. It consisted of excavation and pavement for which the contractor was to be compensated according to certain fixed rates. This involved a determination of the amount, quantity, character and classification of the work performed by the contractor in its finished state. While it might be improvident for the plaintiff to agree that the measurement of its work should be left to the defendant’s officer we are not aware of any law preventing it from making such a stipulation. It is not contrary to public policy and if it chose thus to put itself at the mercy so to speak of the other contracting party’s servant it had a right to do so. It is analogous to instances where one person agrees to construct a certain piece of work to the satisfaction of *156 the owner. It has been decided many times that in snch cases the owner must be satisfied except that he cannot withhold his satisfaction arbitrarily or fraudulently. The principle is thus stated in 9 Cyc. 620:

“And as there is assuredly no law which prevents a person from making contracts of this kind, if he chooses, the courts should not hesitate to enforce them. The agreement is in short not to make or do a thing which the promisor ought to be satisfied with, but to make or do a thing which he is satisfied with. Such a contract may be one sided in being dependent upon the caprice of one of the parties; it may be an unwise contract to make; but if it is entered into voluntarily, the promisee is bound, and can have no right to ask a court to alter its terms in his favor.”

4. Some Illinois cases, not of the court of last resort, were cited by the plaintiff in support of its contention that the provision relating to the duty of the engineer in measuring the work lacks mutuality and hence is void. A clause of the opinion of Mr. Chief Justice A TT.Rirra in Nelson Bennett Co. v. Twin Falls Land & Water Co., 14 Idaho, 5 ( 93 Pac. 789 ), arguendo, is also noted, but in our judgment they are not expressive of the correct rule. The true doctrine is that all the contract must be taken together as the standard the parties have devised for the control of their relations to each other. There being nothing unlawful about it they have a right to stipulate that either one of them or a third person shall bind the other by his decision.

5, 6. The contractor voluntarily undertook to work with the condition in question included in the agreement. It is not by the mark to say that the contract is unilateral. Almost every agreement contains terms which are to be performed only by one party and not by the other. In a sense the covenants of one are not *157 binding upon the other; bnt the contract is none the less mutually obligatory when considered, as it should be, in all its parts. The city agreed that its officer should decide all questions. It thus constituted that official its agent for that purpose and hence would be bound by his action under the principle of qui facit per alium, facit per se. On the other hand, the plaintiff undertook the performance of the work on that condition and cannot now be heard to complain in the absence of allegations tending- to impeach the award on the ground of fraud or such reckless disregard of fair dealing as would amount to fraud. The complaint really proceeds on the theory that the condition giving authority to the city engineer is a valid one and complains of its violation; but it does not pretend to say that the officer did not rightly compute the number of cubic yards of excavation or the number of square yards of pavement in compliance with the stipulation for the payment of unit prices. Neither does it impute to the officer any fraudulent conduct or willful disregard of fair computation. In the absence of such allegations, the parties mnst be bound by the decision of the tribunal which they themselves have erected. Besides all this,, the plain object of the complaint is by means of an action at law to set aside the award of the engineer acting as arbiter. That this cannot be so done was decided in Fire Assn. v. Allesina, 45 Or. 154 ( 77 Pac. 123 ), which ruling was approved in Cohn v. Wemme, 47 Or. 146 ( 81 Pac. 981 , 8 Ann. Cas. 508), holding that the remedy lies in equity.

That the contract is not unilateral or void is decided in Boston Store v. Schleuter, 88 Ark. 213 ( 114 S. W. 242 ), and Young v. Stein, 152 Mich. 310 ( 116 N. W. 195 , 125 Am. St. Rep. 412 , 17 L. R. A. (N. S.) 231). That the decision of the engineer is binding in the ab *158 sence of fraud is determined in Dennis v. Willamina, 80 Or. 486 ( 157 Pac. 799 ). The same principle is laid down in Gerdetz v. Central Oregon Irr. Co., 83 Or. 576 ( 163 Pac. 980 ). See also: Lanier v. Little Rock Cooperage Co., 88 Ark. 557 ( 115 S. W. 401 ), and Hatfield Special School District v. Knight, 112 Ark. 83 ( 164 S. W. 1137 ). It being competent for the parties to make a contract of the kind stated leaving’ to the engineer the duty of measuring the amount of work done and there being no allegation in the complaint sufficient to impeach the award thus made, that pleading does not state facts sufficient to constitute a cause of action. The general demurrer should have been sustained, for which reason the judgment of the Circuit Court is reversed. Beversed.

McBride, C. J., Benson and Harris, JJ., concur.