SCHENCKE v. ROWELL

SCHENCKE v. ROWELL. N. Y. Common Pleas, General Term; June, 1877. Architect’s Certificate.—Builder’s Contract.—-Condition Precedent. —Demurrer . —Pleading. —Waiver. A complaint in an action on a contract in wliicli the determination of a third person on a question between the contracting parties is a condition precedent,—e.g., on a building contract containing the usual requirement of an architect’s certificate,—is bad on demurrer if it does not allege the making of such determination, or sufficient ground for dispensing with it. Where a building contract requires the approval of the work by the •architect and his certificate to that effect, the performance of the work and the production of the certificate are both prerequisites to any recovery, unless withheld “by fraud,” or “collusion,” or “in bad faith.” A formal approval and acceptance by the architect without a certificate are not enough. The allegation in a complaint that an architect’s certificate is “ unreasonably ” withheld by him, is not a sufficient justification for not obtaining it. Nor is a mere allegation of plaintiff’s complete performance or of defendant’s acceptance of the work sued for, enough to dispense with alleging a certificate. The architect’s acceptance of any substitute for that which the contract called for, if substantially variant from its terms, unless by-authority of the employer, is not enough to sustain an action; and even the employer’s acceptance of inferior or different work must be supported by some new consideration, as, for example, an agreement to accept such inferior work with deductions for defects, agreed upon, in order to be deemed as part or entire performance. Appeal from an order overruling a demurrer to a complaint. This action was brought by William M. Schencke against George P. Rowell and Charles II. Kent, to recover an alleged balance of $550, on a building contract, whereby the plaintiff was to erect a building on the Centennial grounds, in the city of Philadelphia, for the defendants ; and also to recover $528.41 for extra work and materials furnished about said building. The amended complaint alleged “ that on or about February 24, 1876, plaintiff and defendant entered into an agreement of which a copy is hereto annexed, marked ‘ Schedule A,’ and hereby made a part of this complaint.” “ That the plaintiff duly performed and fulfilled all the conditions and requirements of said agreement, to be by him performed by the terms thereof.” “ That the plaintiff has requested the architect in said agreement mentioned, to give the certificate mentioned in said agreement, but said architect unreasonably neglects and refuses to give the same.” “That the defendants have duly accepted the work performed by the plaintiff under and by virtue of said agreement, &c.,” and that they had paid $6,000 on account thereof. There was also a second cause of action for extra work and materials. “Schedule A,” referred to in the complaint, was an agreement for building, in the usual printed form, with special provisions added in writing, and was under seal. It provided that the plaintiff would “on or before the first day of May, 1876, well and sufficiently erect and finish the new building on the Centennial grounds, agreeably to the drawings and specifications made by M. J. Morrill, and signed by the said parties and hereunto annexed, within the time aforesaid, in a good, workmanlike and substantial manner, to the satisfaction and under the direction of the said M. J. Morrill, to be testified by a writing or certificate under the hand of the said M. J. Morrill,” for $6,550. It further provided for payments, as follows, viz.: 1st. When the frame was raised, $800 ; 2nd, when enclosed, $1,500; 3rd, when finished, except boxes and painting, $1,700 ; 4th, when completed and accepted, $2,550. “Provided, that in each of the said .cases, a certificate shall be obtained and signed by the said M. J. Morrill.” Then followed provisions as to alterations, extra work, &c., not material to the decision of the case. The defendants demurred to the first cause of action, which is stated above, on the ground that it did not state facts sufficient to constitute a cause of action. ■ This demurrer was overruled at special term, and judgment ordered for plaintiff, with leave to defendants to amend on terms. Defendants appealed from this order. Chauncey B. Ripley, for the appellants. I. The complaint was fatally defective in that it did not aver that the certificates of the architect had been obtained. The provision for obtaining them was a condition precedent to the right of recovery by plaintiff, and defendants’ right to exact the certificates was several as to each. Such averment was therefore essential, unless the production of the certificates was shown to be waived, or some excuse pleaded (Barton v. Hermann, 11 Abb. Pr. N. S. 379; Morgan v. Birnie, 9 Bing. 672; Milner v. Field, 5 Exch. 829; Clarke v. Watson, 18 Com. Bench (N. S.) 278; Smith v. Briggs, 3 Den. 73; Martin v. Leggett, 4 E. D. Smith, 255; Smith v. Brady, 17 N. Y. 173; Stewart v. Keteltas, 36 Id. 388; Batterbury v. Vyse, 2 Hurls. & C. 42; Thomas v. Fleury, 26 N. Y. 26; Bloodgood v. Ingoldsby, 1 Hilt. 388; Butler v. Tucker, 24 Wend. 447; Adams v. Mayor, &c. of N. Y., 4 Duer, 309; U. S. v. Robeson, 9 Peters, 319; Sharpe v. San Paulo Railway Co., 6 Moak's Eng. Rep. 528; Baron de Worms v. Mellier, Id. 871). II. No waiver was pleaded, nor anything that could operate as a waiver. Compliance with one covenant was no waiver of another ; there was nothing to show that the $6,000 was paid with or without the certificates of the architect, or that a portion of it was not paid for the extra work. III. No excuse for non-performance existed in the complaint. The allegation that the architect-“unreasonably” or “wrongfully” neglected to give the certificate was not enough (Worsley v. Wood, 6 T. R. 710); but “fraud,” “collusion with the defendants,” “bad faith,” or an “injunction of a competent court,” had been held to be a sufficient excuse (Cases cited above; and Bowery Nat. Bank v. Mayor, &c. of N. Y., 63 N. Y. 336; Jones v. Judd, 4 Comst. 411). IV. Admission by the demurrer, of facts alleged in the complaint, was qualified; and was only an admission on the argument. It admitted the facts if well pleaded, but it admitted no mere statement of a conclusion of law. V. The complaint was radically defective in that it failed to express the necessary elements of a contract. The drawings and specifications, though assumed to be a part of the agreement, did not appear, and there was no allegation that they were ever annexed (Cooney v. Winants, 19 Wend. 504; Code, § 162; Spear v. Downing, 34 Barb. 522). VI. The appeal was from the whole of the order in question, and broad enough, therefore, to reach the part relating to costs. The order should be so modified, in any event, as to give the usual costs “ on overruling a demurrer with leave to answer” (Hoffman v. Barry, 2 Hun, 52, and cases there cited; Code, §§ 245, 349, 400; Bucking v. Hauselt, 9 Hun, 633; Nellis v. De Forrest, 6 How. Pr. 413; Hendricks v. Bouck, 4 E. D. Smith, 461). Nathaniel A. Prentice (Chambers, Pomeroy & Boughton, attorneys), for the respondent. I. The allegations of the complaint were sufficient under section 162 of the Code. It was sufficient if the plaintiff alleged a due performance of all the conditions performed, and a valid excuse for non-performance of such as had been omitted. The unreasonable refusal of the architect (which was admitted by the demurrer) was a sufficient excuse for not obtaining his certificate (Hosley v. Black, 28 N. Y. 438; Bowery Nat. Bank v. Mayor, &c. of N. Y., 63 Id. 336; Barton v. Hermann, 11 Abb. Pr. N. S. 381; Clarke v. Crandall, 27 Barb. 76). II. The demurrer admitted the truth of all the allegations of the complaint.. III. The demurrer, by admitting “due performance” of all conditions, except obtaining the certificate, admitted that the work was performed in a good, workmanlike manner, to the satisfaction of the architect. The. certificates were only one means of proving a performance, which might be proved aliunde when the certificate is unreasonably withheld (Thomas v. Fleury, 26 N. Y. 33, 34). IV. That portion of the complaint demurred to stated a cause of action plainly and concisely, as required by section 142 of the Code. [MAJORITY — Robinson, J.] Robinson, J. In contracts for the performance of work under the supervision of an architect, which, to entitle the contractor to payment for work" done, not only require its completion according to the terms of the contract, but also its approval by, and a certificate of, the architect to that effect, the performance of the work and the production of the certificate are both prerequisites to any recovery. A formal approval and acceptance of the architect “ would not relieve the plaintiffs from their agreement to perform the work according to the plans and specifications” (Glacius v. Black, 50 N. Y. 150). While the architect’s certificate is thus made essential and is otherwise indispensable to any right of recovery, its non-production may be excused when withheld by fraud or collusion, or in bad faith (Thomas v. Fleury, 26 N. Y. 26; Barton v. Hermann, 11 Abb. Pr. N. S. 378). The requirement of such certificate being for the benefit and protection of the employer, he may by some definitive or expressive act, waive the necessity for its production. A mere allegation of his acceptance of the work done has no legal significance. Everything done in the progress of the work contracted for, if known to or recognized by the employer, is to be deemed accepted in part performance; and notwithstanding any such allegation as is made in the 'present case, “that the defendants duly accepted the work performed by plaintiff under and by virtue of said agreement,” the complaint presents no suggestion that the entire work as performed was accepted as a full compliance with the requirements of the contract. Without this, no waiver of an architect’s certificate of complete compliance (so far as it gave assurance of the fact) could be deemed to be made. This action was brought to recover a part ($550) of the last and final payment of $2,550, which was to be made when the whole work was “completed and accepted,” and it is true such completion and acceptance is alleged in these precise and general terms, but as to-the certificate of the architect as to this final payment that the work had been so completed 11 in a good, workmanlike, and substantial manner, to his satisfaction and under his direction,” as required by the-contract, none such is alleged to have been given. The certificate of the architect being indispensable-to any recovery (so far as material), unless withheld for fraud or collusion or in bad faith, the allegation that it was so withheld “unreasonably,” has never been accepted as a justification for its non-production. Every principle upon which the architect’s determination and adjudication in this respect is-deemed operative under the contract, rejects any such “unreasonable ” action as without the consideration of the parties, or the obligations of their contract. The architect, so far as it commits any matter to his judgment, is accepted as an umpire between them (Smith v. Briggs, 3 Den. 73; Butler v. Tucker, 24 Wend. 449; Wyckoff v. Meyers, 44 N. Y. 145), and his mere refusal, when his impartial judgment dictates it, confers upon the contractor no right of recovery, even if, by other witnesses, he should be able to maintain that he had substantially performed the work. The best judgment of the architect upon the matter so committed to his determination has been agreed upon as the test of the performance ; and neither party can reject or repudiate his certificate given .on the one side or his refusal to give it on the other, upon mere allegations or testimony tending to show that his action had been “unreasonable.” His entire refusal to act would throw upon the courts the duty of acting in his stead; but.until divested of the power as conferred upon him by the parties, by death, incapacity, resignation or estoppel to act, the parties have agreed to accept either his certificate or Ms refusal to certify to the-work done by the contractor as a final judgment between them. Under these considerations the complaint was defective in substance. First. The mere allegation of complete performance of the work did not confer any right of action for want of the architect’s certificate. Second. This was not supplied by the averment that the architect had “unreasonably" refused such certificate. Third. The mere allegation that the defendants had duly accepted the work performed by plaintiff under and by virtue of said agreement added nothing in extenuation or avoidance of the necessity of such certificate, without further allegation that such work, was so accepted, not only in compliance with the contract, but was also received as a full performance "Glacius v. Black, 50 N. Y. 153). The acceptance by the architect of any substitute-for that which the contract called for, if substantially variant from its terms, could not be justified (except through authority of the employer), nor can the acceptance by the employer of inferior or different work, than such as was contracted for be deemed or accredited as part or entire performance, except upon some new consideration, operating between the parties; any agreement to accept any such imperfect or incomplete work with deductions for defects agreed upon, would; be binding (Glacius v. Black, supra). But without it, the idea that the mere declarations, of an intention or purpose to waive any right to damages already accrued is wholly unavailable as a defense thereto or as against the assertion thereof. Under these circumstances it follows that the complaint was defective in the foregoing particulars. The order overruling the demurrer should therefore.; be reversed and judgment given for the defendants, unless the plaintiff within twenty days from the service of a copy order to be entered herein, amend his complaint and pay the costs of the trial on the demurrer and of this appeal (to be taken by the clerk), and for failure to so amend and pay such costs that defendants have judgment final. C. P. Daly, Ch. J., and J. F. Daly, J., concurred.