Valley Lumber Co. v. Struck , 146 Cal. 266 ( 1905 )

This is an action to foreclose certain liens of plaintiff and his assignors under the Mechanics' Lien Law. Judgment was for plaintiff; and defendants appeal from the judgment, and also from an order denying their motion to set aside the judgment and render another judgment, etc.

Respondent contends that the appeal should be dismissed because the notice of appeal was not served upon one F. A Duncan. It appears that said Duncan had also instituted an action to foreclose a mechanics' lien against the same property involved in the action of the plaintiff herein; and that the two actions had been consolidated and a judgment rendered giving to plaintiff herein the amount found due it, and to Duncan the amount found due him, and enforcing a lien as to each. This appeal is taken upon the judgment-roll, and the transcript does not contain the pleadings in the Duncan case. The consolidation of the two actions is shown by the findings and the judgment; but the transcript does not show any service of the notice of appeal on Duncan, and for this reason respondent contends that the appeal should be dismissed. But this point is not tenable. There is in the transcript a stipulation between the attorneys for Duncan and the attorneys for appellants which is as follows: —

"F.A. Duncan, plaintiff, versus P.E. Stuck, et al., defendant. It is hereby stipulated that the pleadings in the case of F.A. Duncan v. P.E. Struck et al., may be omitted from the transcript on appeal in the case of the Valley Lumber Company v. Struck et al., and that the final judgment in said Duncan v. Struck, et al., shall depend upon and be determined by the judgment in the case of the Valley Lumber Company v. P.E. Struck, et al., now on appeal to the supreme court of the state of California, and that the omission of the pleadings in said action shall in no way affect the rights of the plaintiff or any party to said action in the said case of Duncan v. Struck, et al.

"It is stipulated and agreed that the pleadings in said action of Duncan v. Struck, et al., are the same as those in the case of Valley Lumber Company v. Struck, et al., printed in said transcript on appeal, and if the judgment in favor of said Valley Lumber Company shall be reversed or affirmed such reversal or affirmance shall apply to and fully cover the said case of Duncan v. Struck and upon the return of theremittitur on appeal to the trial court, said trial court shall make all such orders as may be necessary to place said two consolidated actions in the same position so that in all respects the same orders and proceedings shall be had and taken in each of said consolidated actions. Except that the rights of the said plaintiff shall be unaffected by any reversal of said judgment if the same be reversed in connection with the order referred to in said notice of appeal.

"Dated this 12th day of November, 1902.

"A.M. DREW and FRANK H. SHORT, A.C. WILLIAMS,

"Attorneys for Defendants. Attorney for Plaintiff."

This stipulation is clearly an appearance by Duncan to the appeal, and takes away from the respondent herein the right to make the somewhat technical point that its judgment cannot be reviewed because Duncan's judgment might be affected without his having had his day in court. The motion to dismiss the appeal is denied.

The facts out of which the only point involved in the appeal arises are these: On April 30, 1901, the defendant Hines entered into a written contract with the defendant Struck for the altering and improvement by the latter of a certain building. The contract price was $2,180, to be paid in four installments as follows: $400 when certain named work should be done; $500 when certain other work should be done; $735 when the building and improvements shall be "completed and accepted by the architect"; and the last payment, of $545, thirty-five days thereafter. The question on the appeal relates to the said third payment of $735. The building was completed on August 17, 1901, and the said third payment was made on that day; but there was no certificate of the architect until two days thereafter, — to wit, on August 19, 1901, — on which last-named day the architect gave a certificate of acceptance, which he dated August 17th. The contention of respondent and the decision of the court are, that because this third payment was made before the execution of the architect's certificate it was made prematurely, and therefore the owners of the building must pay the said amount over again to the lienholders, under section 1184 of the Code of Civil Procedure, which provides that "No payment made prior to the time when the same is due, under the terms and conditions of the contract, shall be valid for the purpose of defeating, diminishing, or discharging any lien in favor of any person, except the contractors, but as to such liens such payment shall be deemed as if not made, and shall be applicable to such liens." And by the judgment in the case the said sum of $735 is decreed to be subject to plaintiff's lien. We do not think that this position is tenable. The code itself does not require any acceptance by an architect or a certificate of such acceptance, and has no reference to that subject. The provision in the contract as to acceptance by the architect is solely for the benefit of the owner of the building — merely a means of satisfying the owner of the fact of completion, and not for the benefit of the lienholder. The time when the payment was due was the completion of the building; the acceptance by the architect was merely evidence of such completion which the owner has a right to require as against the contractor; but when the completion had taken place and the owner was satisfied of that fact, he could safely make the payment as against any third party — at least, as against any party who had not previously given the notice of having performed labor or furnished materials which is provided for in the latter part of said section 1184; and no such notice had been given in the case at bar. This view of the statute has heretofore been expressed by this court. It was declared in Blethen v. Blake, 44 Cal. 117, where the court held (we quote from the syllabus): "In a contract for the erection of a building where there was a clause providing that the payment should be made in installments upon the certificate of the architect that the materials and labor had been furnished in accordance with the plans and specifications: Held, that the clause as to the production of the certificate was for the benefit of the owners of the building, and that they might waive it at their option and accept other proofs of the required fact." It was also so held in McLaughlin v. Perkins, 102 Cal. 502, where the court says that similar provisions in the contract there under review "were intended simply for the protection of the owner by making the approval of the architect a condition precedent to the contractor's right to demand payment of the money. This condition, however, the owner was at liberty to waive, if he chose to do so, and he might, without any certificate from the architect, have accepted the building and paid for it as he had agreed to do." And the result of the general authorities on the subject is correctly stated in 24 Am. Eng. Ency. of Law, 1st ed., p. 933, as follows: "The provision requiring certificates of approval is placed in the contract for the benefit of the owner, merely to provide a method by which he can satisfy himself that the contract has been performed. He may waive it at his option, and receive other proof of the required fact, or pay without proof." In Loup v. California S.R.R. Co.,63 Cal. 97, cited by respondent (which was not a mechanic's lien case), the question was merely whether a plaintiff who had done work under a certain contract could maintain an action against the party for whom the work was done before certain estimates had been made by an engineer as provided in the contract. And the case of Newport etc. Co. v. Drew, 125 Cal. 585, also cited, deals entirely with the rights of materialmen who had given the notice provided for in the latter part of said section 1184 to have a lien on unpaid installments, whether matured or not; and the amounts of the various installments, except the last one, were not specified in the contract, but were to be fixed from time to time by "estimates" of the superintendent of construction, to be evidenced by his certificates. The case, therefore, has no applicability to the one at bar. Respondent relies on section 1201 of the Code of Civil Procedure, which provides that "It shall not be competent for the owner or contractor, or either of them, by any term of their contract, or otherwise, to waive, affect, or impair the claims and liens of other persons"; but the payment of the third installment, when the building was completed, did not affect or impair any claim or lien of plaintiff; its right would have been no different if the payment had not been made until two days later, when the certificate was given.

Under the foregoing views the court below erred in finding and decreeing that the amount of said third installment, $735, is in the hands of the appellant I.B. Hines to be applied to respondent's lien; the only amount so in his hands to be so applied is the last payment, of $545; and for this reason the judgment must be reversed. There is also an appeal from "an order denying said defendants' motion to vacate the judgment and to enter another and different judgment," etc.; but as the transcript does not show any such motion or order said appeal cannot be considered, and is dismissed.

The judgment is reversed and the cause remanded, with directions to the court below to enter judgment in accordance with this opinion.

Angellotti, J., Van Dyke, J., Lorigan, J., and Henshaw, J., concurred.