Bloomington Hotel Co. v. Garthwait

Mr. Justice Carter delivered the opinion of the court: Appellant insists in this court, as it did in the Appellate Court, that appellee, Garthwait, is not entitled to a mechanic’s lien against it. Appellee, Garthwait, not only insists that he is entitled to a lien against appellant, but that he is also entitled to a lien against the mortgagee, Howe, and assigned as error the ruling of the Appellate and trial courts holding to the contrary. The Mechanic’s Lien law of 1895 was in force at the time this contract was entered into. Section 7 of that act (2 Starr & Cur. Stat. 1896, p. 2552,) reads, in part, as- follows : “No contractor shall be allowed to enforce such lien as against or to the prejudice of any other creditor, or encumbrancer, or purchaser, unless, within four months after the last payment shall have become due and payable, according to the terms of the original contract, he shall either bring suit to enforce his lien therefor, or shall file with the clerk of the circuit court of the county in which the building, erection or other improvement to be charged with the lien is situated, against the owner, -a claim for lien,” verified by the affidavit, etc. It is admitted that no claim for lien was filed with the clerk of the circuit court of McLean county. This bill was filed in the circuit court of that county April 4, 1903. The original contract provided that the work should be completed on the first day of August, 1902. It is not claimed by appellee, Garthwait, that the work was completed until December 6, 1902, and there is a dispute as to whether it was then fully completed. The architect gave what Garth-wait claims was a final certificate January 12, 1903. The appellant insists that the bill was not filed “within four months” after the last payment became “due and payable according to the terms of the original contract;” that by the original contract the work was to be completed on August 1, 1902, and the last payment became due twenty days after, or August 21, 1902. The Appellate Court, as well as the trial court, upheld this contention, both as to appellant and as to mortgagee, Howe, but held that the part of section 7 above quoted did not apply to the owner of the premises, and that under section 9 of the Mechanic’s Lien law of 1895,- (2 Starr & Cur. Stat. 1896, p. 2556,) which reads, in part, as follows: “Such suit shall be commenced * * * within two years after final payment is due according to the terms of the original contract,” the lien could be upheld as against appellant, as the petition had been filed “within two years after final payment” was due. We think the holdings of the Appellate and trial courts on the construction of this statute, both as to the mortgagee, Howe, and appellant, are erroneous. This court in McIntosh v. Schroeder, 154 Ill. 520, and Campbell v. Jacobson, 145 id. 389, in passing on the statute of 1874 as finally amended in 1887,- held that the provision in section 28 of this law, as to bringing suit or filing claim with the circuit clerk, applied as well to the owner as to creditors, encumbrancers or purchasers. The wording of section 28 of the law of 1874 as amended in 1887, which relates to the question of filing the petition in the circuit court or the claim with the circuit clerk in order to hold the owner, is not substantially different from the wording of section 7 of the law of 1895. The Appellate Court was wrong in holding that, on account of the difference in the language of the two statutes, under the present statute, in order to hold the owner, it was not necessary to file the claim within four months from the time the last payment became due. The reasoning of this court in Eisendrath Co. v. Gebhardt, 222 Ill. 113, and Weber v. Bushnell, 171 id. 587, supports a holding contrary to that of the Appellate Court on this point. We are of the opinion this suit was started “within four months after the last payment” became “due and payable according to the terms of the original contract.” While it is true the original contract stated that the work should be completed on the first day of August, 1902, and that the final settlement should be made twenty days after the work should have been completed “as covenanted and agreed,” still those parts of the contract must be read in connection with the other portions, which provide (as set out in the foregoing statement of the case) that if, for certain specified reasons, the contractor is hindered he shall be allowed extra time to finish the contract, and that the architect shall decide and fix as to the amount of extra time. This provision as to the extension of time on account of necessary delay is as much a. part of the original contract as are the other provisions as to the completion of the contract. A comparison of the provisions of the contract as to time of completion with the contract set out and passed upon in Weber v. Bushnell, supra, will show that the respective quoted parts of the two contracts are identical in language on this point, reading as follows: “To pay the said certificates immediately on presentation to him, and make the final settlement for the remainder, and extras, if any, twenty days [forty days in Weber v. Bushnell] after the work shall have been completed as covenanted and agreed and the architect shall have certified thereto in writing.” It is true, in that case the court was passing upon the Mechanic’s Lien law as it existed in 1894 and the section now under consideration was amended somewhat by the law of 1895, but it is evident from the statement of the case on this point (page 590, Weber v. Bushnell, supra,) that the words added by the law of 1895, “according to the terms of the original contract,” wer.e considered by the court in that case, and it did not there think there was any necessity to distinguish on this point between the law as it stood in 1894 and the amended law of 1895. However that may be, the law of 1895 was passed on squarely by this court on this point in Eisendrath Co. v. Gebhardt, supra, and the court there held that when payments were to be made upon presentation of the certificate of the architect, and he is authorized to make certain adjustments and find a balance and give final certificate, “final payment according to the terms of the original contract did not become due and payable until the certificate was given.” Under this decision the final payment would not become due according to the terms of the original contract until, in .accordance with the terms of this contract, “the architect shall have certified thereto in writing.” Giving the most favorable view possible to the contention of appellant on this question, it must be held that the architect did not give his final certificate until December 6, 1902. This bill was filed April 4, 1903, and within four months from December 6, 1902. The-reasoning of this court in McDonald v. Patterson & Co. 186 Ill. 381, and City of Salem v. Lane & Bodley Co. 189 id. 593, is in harmony with this conclusion. What we have said on this subject practically disposes of the next contention of appellant, that the Appellate Court was in error in holding that it was not entitled to damages for the delay in completing the contract. The contract provides that the amount of claims for the allowance of extra time and work by the contractor or for deductions by the owner shall be fixed by the architect, and that his decision shall be final and binding upon the parties. The letters leading up to the meeting of the architect, Hanna, the president of appellant company, appellee, Garthwait, and the superintendent, Pillsbury, in Bloomington on January 8, 1903, set out in the statement of the case, show plainly that the meeting at that time was for the purpose of settling all the disputed claims. Whatever written notice was required by the contract to lie given appellant of this meeting, if it was not fully complied with, was waived by the previous correspondence, the letters of its president, Hanna, as well as by what Hanna said and did the day of. the meeting'. The great weight of the testimony outside of this correspondence tends to uphold this conclusion. No other inference can be consistently drawn from all the evidence in this record than that on that date it was understood that the building was substantially completed and should be accepted as of December 6, 1902, and that that meeting was held for the final settlement and disposition of all matters in dispute. Hanna, for appellant company, manifestly by these letters wished to have this meeting held for that very purpose. Neither he nor anyone else acting for appellant interposed any objections to meeting that day on the ground that the requirements of the contract as to notice had not been complied with. The representatives of the hotel company, including Hanna, knew at that timé, on account of the changes and variations in the specifications, the acceptance of the building and the completion of the contract should be understood to date from December 6, 1902.. No claim was then made for deductions from the contract price on account of the delay. If such claim were to be made, it should, under the terms of the contract, first have been presented to the architect, and his decision on the matter was final. The evidence clearly shows that no claim for the deduction by appellant for liquidated damages on account of this delay was made by the hotel company until that claim was set forth in its answer to Garthwait’s bill of complaint in this proceeding. While the notices of appellee, Garthwait, to the architect, asking for an extension of time, may not be technically in compliance with the contract, still the acquiescence of the appellant, through its representatives, until long after the time of this meeting for final settlement, amounts to a waiver of the notice and precludes it from insisting upon a strict compliance with the contract in this respect. Where the delay is caused by extra work directed by the owner and the architect, the contractor cannot be held liable therefor. Neither can he be held liablé when he is allowed to proceed with the work-after the-time fixed for its completion, where the owner accepts the work after it is completed and makes payment without raising any question as to the delay. Literal compliance with the provisions of a contract is not essential to a recovery. It will be sufficient if there has been an honest and faithful performance of the contract in its material and substantial parts and no willful departure from or omission of the essential points of the contract. To permit appellant to claim liquidated damages under this contract, under the circumstances shown by this record, “would be, in our opinion, contrary to the law and abhorrent to reason and justice.” Hartford Deposit Co. v. Calkins, 186 Ill. 104; Evans v. Howell, 211 id. 85. See, also, Foster v. McKeown, 192 Ill. 339; 30 Am. & Eng. Ency. of Law, (2d ed.) p. 1257. We think the judgment of the Appellate Court on this point in conformity with the finding of the master was in accordance with the law and the facts, and that the chancellor improperly charged appellee, Garthwait, the sum of $2180 as liquidated damages for delay. If the certificate of January 12, 1903, was understood to be a final certificate covering the entire contract and all the work had been completed at that date, then, under the authorities, this certificate, in the absence of fraud or mistake, would be binding and conclusive upon the parties. (Barbee v. Findlay, 221 Ill. 251; Korf v. Lull, 70 id. 420; McAuley v. Carter, 22 id. 53; Fowler v. Deakman, 84 id. 130.) Manifestly, from the evidence the building had not been entirely completed at the date of this meeting, January 8, 1903. The men were still at work on it under the direction of Garthwait, and so continued until some time in the following February. The certificate which was given on January 5, 1903, dated back to December 6, 1902, stated that the work was practically completed. The architect was without authority to issue a final certificate until the work was fully completed, and neither the certificate of December 6, 1902, nor of January 12, 1903, can be held to be final. While there is some conflict in the evidence as to just what was agreed to on January 8, 1903, as necessary yet to be done by Garthwait and as to what he agreed should be done, it is evident from the testimony of superintendent Pillsbury, as well as from that of the architect, Newberry, that it was agreed at that date that Garthwait should still put some finishing touches on the work. The architect, in a letter to the secretary of appellant, dated January 29, 1903, among other things states: “Relative to the woodwork and painting, I would say that I have repeatedly urged Mr. Pillsbury to insist upon thoroughly first-class work and finish, and while the work is not altogether satisfactory to me, I trust that you will realize that I could hardly be expected to have the woodwork changed after it had been set in place, and that the faults in the painting have already been many times-noted to Mr. Pillsbury and yourself by me. I have recommended that an additional coat of varnish be put on the building and the samé rubbed down to a dull finish, this to be additional work to that provided in the contract, with the exception of a reasonable allowance to be charged to Mr. Garthwait. The general work of the building has already been accepted by me as a general completion of the contract, final settlement -and adjustment of accounts excepted. The accounts were gone over with care by Mr. Pillsbury and myself with your Mr. Hanna, and in general considered to be reasonable and proper. Of course, if there are items not taken up by us and claims which you have against contractors, I would be glad to consider them and will certainly make proper deductions for the same. I have several times asked for itemized list of all the claims that you desire to make and have made deductions for all items about which I have been instructed. Please furnish me with your list of claims at your earliest convenience.” This letter clearly indicates that the architect did not consider that the' work was fully completed on January 8, 1903. The certificate of the architect not being understood to be final by him can not here be held final. The finding of the master on the extra work differs materially from the holdings of the chancellor, and the conclusion of the Appellate Court differs in several particulars from the findings of both the chancellor and the master. The evidence as to the work that was to be done by Garth-wait after the statement of January 8, 1903, and of his failure to do all of this and do other work in accordance with the contract, is in hopeless conflict. Any conclusion on this record as to some of the items is necessarily, therefore, not free from doubt. We have gone over with care not only the findings of the master, the chancellor and the Appellate Court on these questions, but the briefs, abstracts and the record itself. We.cannot agree with the contention of appellant that the $1000 mentioned in the “general items” for decorating was improperly allowed by the master and the Appellate Court. Appellant denies that this $1000 was taken into consideration by the contractor in making his bid for changing the decorating of the walls from water color to paint, or that his bid for $360 for the work and material was over and above $1000 for decorations in the general .items. Appellee, Garth wait, testified that his bid did so consider these items, and we find nothing in the evidence to contradict his testimony. The architect was not asked about it. The testimony of the painter contractor, H. T. Kummer, called by appellant, would indicate that the sum to be paid for changing from water color to paint should be as much as $1360. The Appellate Court was justified, also, in finding that the $312 deducted by the chancellor for the cracks in the concrete floor of the kitchen should not be allowed, as this repairing was caused by the floor being torn up for independent plumbing by contractors after it had been properly laid by appellee. The finding of the chancellor for $455 against appellee for failing to furnish a third coat of paint, and $1000 for poor finishing of the interior part of the building, approved by the Appellate Court, was a proper deduction as against him. There is evidence also tending to uphold the Appellate Court and chancellor as to the item for $487 charged against Garthwait for defective floors in both toilet rooms, although on these three last items the evidence, as the Appellate Court said, is in “hopeless and inexplicable conflict.” On the entire record we think the finding pf the Appellate Court as to the statement of the amount in favor of appellee, Garthwait, and the amount that should be allowed him as a lien, is in accord with the law and the facts. The judgment of the Appellate Court against appellant for $3534.79 due appellee; Garthwait, February 4, 1903, with interest from that date, will therefore be affirmed, but the judgment of that court holding correct the ruling of the trial court sustaining the demurrer of mortgagee, Howe, will-be reversed and the cause remanded to the circuit court as to said Flowe, with directions for further proceedings in conformity with this opinion. Reversed in part and remanded.