Hunn v. Pennsylvania Institution for the Instruction of the Blind

70 A. 812, 221 Pa. 403, 1908 Pa. LEXIS 496

Opinion

Opinion by

Mr. Justice Elkin,

The plaintiff brought an action of assumpsit to recover an alleged balance due on a building contract and in his statement of claim averred performance. The defendant entered a plea of non assumpsit, payment and set-off, to which plaintiff replied non solvit, no set-off and issue. When the case came on for trial the plaintiff offered in evidence the contract, plans and specifications, and then produced as a witness J. W. Mercur, a member of the contracting firm. Counsel being asked what he intended to prove by this witness, placed on record an elaborate offer covering the purpose of the testimony to be given. Counsel for defendant objected on the ground that the contract between the parties showed that final payment was not to be made until the architects had certified that the work had been completed in accordance with the plans and specifications, and it was not proposed to show that the architects had passed upon questions in dispute between the parties, and for the further reason that complete performance having been averred, proof which shows nonperformance or part performance, is not sufficient to sustain the allegata, which objection was sustained by the court.

No further testimony was offered and the learned trial judge directed the jury to return a verdict for defendant. This appeal raises the question whether the proof offered, but rejected, should have been admitted and, if so, was it sufficient to sustain the averments of the declaration. It is elementary that the probata must sustain the allegata, and of course one who avers performance and fails to prove it has no right to recover. In the present case, however, the contention is not only that performance was averred, but that the proof offered showed performance within the meaning of the law. Whether the contention can prevail necessarily depends upon the facts. The suit was brought to recover the balance due for the construction of a completed building, and the facts show that the building was completed at the time the action was commenced. The performance averred and necessary to be proven was the completion of the building, not the completion within the time fixed in the contract. Failure to complete within the specified time did not forfeit the right to recover, if completed at a later date, but subjected the contractors who might be in default in this respect to the payment of a certain sum for each day of delay as liquidated damages. It was not necessary either to aver or prove completion on August 1, 1898, in order to recover such balance as might be justly due under the contract. Time is not of the essence of the contract in question in the sense that failure to complete within a fixed period forfeits the right to recover for work already done at the date fixed for completion, or yet to be done at that time. The contract provides, not a forfeiture of the right to recover, upon failure to complete on a certain date, but for liquidated damages to be deducted from the contract price. Nor, as we construe the contract, did the right to recover depend upon the completion of the building bjr the contractors themselves, because it is therein provided in clause eleven that upon the happening of certain contingencies the owners shall have the right to enter upon the premises, takes possession of materials, employ men and' complete the building, which right was exercised in this case. The final payment of any balance due the contractors, in the event of the owners electing to complete, was to be held in abeyance until the building was thus completed, when upon settlement the owners were authorized to deduct from the balance due the contractors, the cost of completion, and such damages as may have resulted to the owners by the alleged default of the contractors. By the express covenants of the contract it clearly appears the parties had in contemplation, first, completion by the contractors, and, second, under certain circumstances part performance by the contractors, and final completion by the owners, and the right to recover such balance as was justly due did not depend upon entire completion by the contractors, but upon completion, either by the contractors, or partly by the contractors and partly by the owners, and when completed in either way, final settlement was to be made in the manner provided. We, therefore, hold that the averment of complete performance in so far as the construction of the building is involved is sustained by proof which shows that the contractors performed a large part of the work and that the building was finally completed by the owners in accordance with the contract. When the owners completed the building the day of final settlement had arrived, subject, of course, to the respective rights of the contracting parties as defined by the contract. The contract itself pointed out the method of settlement, which was that the contractors were entitled to receive the total contract price for a completed building, with such allowance or deduction as should be made for alterations, less advances made from time to time, and in the event of the building being completed by the owners, then the cost of completion to be deducted, together with an allowance for such damage as may have resulted by delay or otherwise in completing according to contract. The contracting parties themselves provided an orderly and sensible .method of making settlement, and we can see no reason why pleadings framed and proofs offered, in an action brought to determine the legal rights of the parties, which produce and sustain an issue by means of which an alleged balance claimed to be due may be ascertained in accordance with the terms of the contract, should be held insufficient.

Another and perhaps more important question to determine is that which relates to the failure of the offer to show that matters in dispute between the parties had been submitted to the architects, as required by the contract, or that the architects had certified proper completion. By the terms of the contract the architects were made the arbiters of quéstions that might arise between the parties, and it was their duty to certify when the building was finally completed, and it must be conceded that if the contract referred to the arbitration of the architects, the questions of fact involved in the rejected offer of testimony, or if the architects were made the sole arbiters of these questions, and they have not in point of fact done so, the appellant would have no right to have a jury pass upon them. On the question of arbitration it may be stated that every matter included in the contract and referred to the architects must be determined by them. This is the rule of our cases, and while in some instances it would seem to be a harsh one, it is so firmly established that it must be accepted as settled law in this state. It is, however, in derogation of the common-law right of trial by jury and should not be unduly extended. As indicated in Payne v. Roberts, 214 Pa. 568, the arbitration clauses in such contracts refer to questions arising between the contractors and owners, and not to questions that concern the performance of duties by the architects themselves, and certainly the rule should not apply at all beyond the express covenants of the contracting parties. The law recognizes the right of parties to a contract to stipulate the method of arbitrating questions that may arise between them in the performance of mutual covenants, but no such right exists in the absence of an express covenant and he who asserts it has the burden of establishing its existence. If questions arise between the contracting parties not included in the arbitration clauses, or if the questions raised relate to failure or dereliction in the performance of duties by the architects themselves, the right to have these matters passed upon by a jury cannot be denied upon the ground of failure to arbitrate. Nearly all of the rejected offer of testimony relates to default in the performance of duties imposed upon the architects by the contract, and certainly it could not have been the intention of the parties to deliberately enter into a covenant providing that the arbiters should have the right to pass upon and finally determine questions involving their own failure in the performance of duties. At this stage of the case, it is perhaps only necessary to say that the arbitration clauses only refer to the questions therein specified, and do not relate to questions concerning the performance, or failure to perform, the professional duties of the architects. Nor do we agree that it is absolutely necessary for appellant to produce a certificate from the architects showing that the building had been properly completed before there can be a recovery under the circumstances of the present case. This covenant was intended as a protection to the owners, and if the building had been completed by the contractors, they clearly had the right to insist upon it, but it is equally clear that the owners could waive their right in this respect. If they chose to accept the building as completed by themselves, took possession of and occupied it as a completed building, it ought at least to be for the jury to say whether they had not waived their right to insist upon the certificate of the architects showing final completion. Indeed, if the facts warrant it, and this we cannot now determine, it might be the duty of the court to say as a matter of law that the acceptance by the owners amounted to a waiver of this provision of the contract.

Judgment reversed and a venire facias de novo awarded.