Wyss-Thalman v. Beaver Valley Brewing Co.

Opinion by Mb,. Justice Elkin, The first assignment seeks to convict the learned court below of error in not directing a formal plea to be entered before the jury was sworn when a motion for this purpose was made. Prior to the Act of June 4, 1901, P. L. 431, it was the practice to require a plea to join the issue on a sci. fa. sur mechanic’s lien, but the question of what is the proper practice under tins act has not been decided. The statute in express terms declares it to be its intention to “ furnish a complete [440] and exclusive system in itself ” relating to mechanics’ liens. Section 82 provides that the claim shall be sued out by writ of scire facias and prescribes the exact form of the writ, in which the defendant is notified to file an affidavit of defense and upon failure to do so judgment may be entered against him. Section 34 further provides that the defendant may require plaintiff under oath or affirmation to reply to the statements set out in the affidavit of defense. All of this would seem to indicate that it was the legislative intention to make the system “ complete- and exclusive ” in the method of procedure as well as in the manner of filing the claim and in all other matters relating thereto. While the entry of a plea as required under the old practice would seem to be the better pleading, yet the legislature has omitted this requirement from the new system and the courts ought not to be convicted of error for a refusal to direct a formality in pleading not required by the statute. The case went to trial on the merits, the issue being made up by the writ, the affidavits of defense and the replication, and at best it could not be said that appellant had suffered any injury by failure to enter a plea even if it had been required. On the merits the whole controversy depends upon the construction of the tripartite agreement of August 10, 1904. A brief recital of the facts will throw some light upon the question involved. In 1902, the Wyss brothers with some associates, organized and secured the incorporation of the Beaver Valley Brewing Company. Gothard Wyss was awarded the contract for the construction of the brewery and other necessary buildings. V. Wyss-Thalman, brother and appellant, was selected as architect. At the time of -the completion of the buildings in the summer of 1904, the company had some difficulty in meeting its financial obligations as is shown by the fact that a large sum of money was due the contractor and subcontractors. The company had no ready money to meet its obligations. There was an authorized bond issue of $200,000, of which amount appellant owned $30,000, and $170,000 remained in the treasury not disposed of. The only way in which the company could raise money was to sell its bonds and stock. At this time there was due about $90,000 to subcontractors ; appellant claimed something over $15,000 for his [441] services as architect; and a large balance was due Gothard Wyss upon his contract. These claims could be reduced to liens and if so the value of the bonds would be largely depreciated if not entirely destroyed. This was the situation when the contract in question was entered into. Cox, the prospective purchaser of the bonds and stock, was the first party; Gothard Wyss and appellant, the second parties, and the brewing company, the third party. • Appellant not only acted for himself in his individual capacity, but represented the brewing company'as its president in the negotiations. It is apparent that all of the parties were desirous of clearing up the situation so that the company might be placed on a substantial financial basis. Cox wanted the assurance that the value of the bonds •would not be depreciated by threatened liens; the Wyss brothers were interested as promoters of the company and holders of the bonds and stock of the corporation which would be rendered valueless if the indebtedness was not paid, and in addition, Gothard Wyss was personally liable for a large amount of money due his subcontractors; the brewing company must pay its indebtedness or go into the hands of a receiver. The parties met this situation by the execution of the contract above referred to, the first clause of which fixes the amount of fees due appellant as architect, about which there had been some dispute, and provides that the sum so agreed upon “ shall be assumed by Gothard Wyss and paid by him to V. Wyss-Thalman.” The court below held that this was a novation, it being the intention of the parties to substitute a new debtor, Gothard Wyss, in place of the old one, the brewing company, and to release the latter from making payment to appellant. This is very much like a common instance of novation where, upon the dissolution of a partnership, the remaining partners agree as between themselves and the retiring partner, that they will assume the liabilities of’ the old firm and give notice to this effect to the creditors, who approve of the same; in such a case" there is a new contractual relation between the creditors and the néw firm, to the effect that they will accept the new liability instead of the old one, and, on the other hand, that the new firm promises to pay them for that consideration. Of course, in the illustration given the obligation of the old-partnership is extinguished. In the present case Gothard [442] Wyss by express covenant assumes and- agrees to pay the fees due appellant as architect, and the only reasonable interpretation of the agreement is that the new debtor was accepted instead of the old one. This view is strengthened by the covenant in the fourth clause, which provides for a release from liens and places the burden of furnishing the releases upon appellant and Gothard Wyss. If, as contended, appellant did not intend to accept the liability of Gothard Wyss instead of the brewing company, his most effective method of securing payment would be to file a mechanic’s lien and enforce the collection thereof. His covenant against liens is nob consistent with the contention that he intended to assert his claim through a lien against the company appellee. The contract as a whole is not susceptible of any other reasonable interpretation than that there was a novation in which Gothard Wyss agreed to pay-the amount due appellant who accepted the new obligation instead of the old which was released thereby. But even if it were held not to be a novation appellant could not maintain his lien, because he covenanted to give a release from liens, and on the strength of that covenant the bonds were purchased and the proceeds paid to the brewing company. The purchaser of the bonds was contracting to protect the holders thereof from liens, and appellant in connection with his brother agreed to give releases. Under these circumstances, it would be most inequitable and unjust to permit the covenantor to defeat the legal effect of his own covenant by subsequently filing a lien. In this respect the case comes within the rule of Rynd v. Pittsburg Natatorium, 173 Pa. 237, in which it was held that where under the legal effect of the contract the claimant was bound to release the lien as soon as it was obtained, he will be held to have waived the right to file it in the first instance. If, at the time the contract was executed the lien of appellant had been of record, it would have been his duty to give a release. This seems to be conceded. The fact that it was filed subsequently does not affect the legal rights of the parties. The law looks to the substance of -the transaction, which in this case was that there should be a release from liens in order that the first mortgage bonds would have the security to which they were entitled and to protect which the contract was made. The case is clearly within the letter and [443] spirit of section 15 of the act of 1901, wherein it is provided “ the right to file a claim may be waived by an agreement between the claimant and the party with whom he contracts, or by any conduct which operates to equitably estop the claimant.” Independently of all other considerations the appellant must be held to have been equitably estopped by his conduct and agreement in this transaction from filing and attempting to enforce the collection of a lien. All of the questions raised as to the rescission of the contract and refusal to admit certain offers of testimony are without merit. , Assignments of error overruled and judgment affirmed.