US SUPREME COURT DECISIONS

A contract for the construction of a railroad provided that the company's engineer should in all cases determine questions relating to its execution, including the quantity of the several kinds of work to be done and the compensation earned by the contractor at the rates specified; that his estimate should be final and conclusive, and that

"Whenever the contract shall be completely performed on the part of the contractor and the said engineer shall certify the same in writing under his hand, together with his estimate aforesaid, the said company shall, within thirty days after the receipt of said certificate, pay to the said contractor, in current notes, the sum which according to this contract shall be due."

Held that in the absence of fraud or such gross mistake as would necessarily imply bad faith or a failure to exercise an honest judgment, the action of the engineer in the premises was conclusive upon the parties.

Kihlberg v. United States, 97 U. S. 398, and Sweeney v. United States, 109 U. S. 618, affirmed and applied.

This was a suit at law to recover a balance claimed to be due the defendant in error as plaintiff below for grading and masonry on a section of the road of the plaintiff in error. The contract, which was substantially set forth in the declaration, contained the following provisions, among others:

"1. To prevent all disputes, it is hereby mutually agreed that the said engineer shall in all cases determine the amount or quantity of the several kinds of work which are to be paid for under this contract and the amount of compensation at the rates herein provided for, and also that the said engineer shall in all cases decide every question which can or may arise relative to the execution of this contract on the part of said contractor, and his estimate shall be final and conclusive."

"2. That whenever this contract shall be completely performed on the part of the said contractor, the said engineer shall certify the same in writing, under his hand, together with his estimate as aforesaid, and the said company shall within

Page 114 U. S. 550

thirty days after the receipt of such certificate pay to the said contractor in current notes the sum which according to this contract shall be due."

The declaration not alleging that this had been done by the engineer, the defendant demurred, and the demurrer was overruled. The defendant also pleaded that the engineer had made a final estimate of the work done under the contract and that the amount found due had been paid, and the plea continued:

"And so the defendant saith that the final estimate of the said engineer, made as aforesaid, was a final and conclusive settlement of all that was due the plaintiff under said contracts, and is a bar to any further inquiry into the execution of said contracts, and the payments made by this defendant in pursuance of said final estimates as aforesaid are a full payment and discharge of all that is due to the plaintiff under said contracts."

Sundry exceptions were taken at the trial, which are referred to in the opinion of the Court. The substantial question involved in all was the effect of the provisions in the contract upon the plaintiff's right to recover. Judgment below for plaintiff. The defendant sued out this writ of error.