Appeal, No. 176, Jan. T., 1951, from decree of Court of Common Pleas of Lebanon County, Dec. T., 1949, No. 2, in case of E. H. Witney, trading as Kingston Contracting Company v. City of Lebanon. Decree affirmed.
Earl G. Harrison, with him Walter C. Graeff, William A. Schnader and Schnader, Harrison, Segal & Lewis, for appellant.
John H. Bigelow, with him Eugene D. Siegrist, Richard L. Bigelow, Jr., and Charles L. Frank, for appellee.
Before Drew, C.j., Stern, Stearne, Ladner and Chidsey, JJ.
OPINION BY MR. JUSTICE HORACE STERN
This appeal is under the Act of March 5, 1925, P.L. 23, and accordingly is limited to a determination of the question as to whether the court below had jurisdiction of the action. With that restriction in mind it is evident that the ruling of the court below sustaining its jurisdiction must be affirmed.
A contract was entered into between the City of Lebanon, the defendant, and Kingston Contracting Company, the plaintiff, in which it was provided that
plaintiff should furnish all the materials, labor, and equipment and perform all the work required for the construction of a certain reservoir and dam. The work was to be completed within a year; in fact it was not completed for more than two years; plaintiff claims that the delay was caused by the necessity of changing the location of certain parts of the dam due to errors in the drawings and plans which had been prepared by the consulting engineer employed by defendant. After the work was completed plaintiff submitted to defendant for payment various items of alleged damages aggregating approximately $352,000 and representing increased costs and expenses resulting from the changes in the drawings and plans. Defendant referred these claims to the engineer for the preparation of a final estimate of the amount due. The engineer made a finding that plaintiff was entitled only to the sum of approximately $13,000 in addition to what it had already been paid. Plaintiff thereupon brought the present action of assumpsit to recover on its claims which had been thus rejected, alleging in its complaint that the decision of the engineer should be set aside because it was "arbitrary, capricious, and unlawful", that it involved a passing of judgment upon the engineer's own defective work in the selection of the site for the project and in the preparation of the plans and drawings, and that, by reason of personal and financial interest in the determination of plaintiff's claims the engineer was "divested of judicial power and juridical discretion."
Defendant filed preliminary objections to the complaint, praying the court to dismiss the action for lack of jurisdiction because of the fact that the contract between the parties provided that the decisions of the engineer on all claims of either of the parties were to be binding upon them, that the final estimate of the engineer was to be conclusive evidence of the amount
of work performed by plaintiff and was to be taken as the full measure of the compensation to be received by it, and that all questions or disputes between the parties respecting any matter pertaining to the contract and which were not or could not be decided by the engineer should be referred to a board of arbitration consisting of three members, one to be appointed by the plaintiff, one by defendant, and the third to be chosen by the two thus named, this board to decide the question or dispute, all rights or any action at law or in equity under the contract and all matters with relation thereto being expressly waived by the parties. Defendant claimed that the court was without jurisdiction to consider plaintiff's claims unless and until the decision of the engineer was nullified, and that that decision could be attacked only by proceedings in equity. Defendant's preliminary objections also embraced a motion for more specific pleading, and a demurrer to the complaint on the ground that it was insufficient in law and did not state a ...