Kendall v. Fader

65 N.E. 318, 199 Ill. 294

• Court: Illinois Supreme Court
• Decided: October 25, 1902
• Status: Published

Opinion

Mr. Chief Justice Magruder

delivered the opinion of the court:

The decree of the circuit court held that Fader, appellee, claiming a mechanic’s lien upon the premises in question, was entitled to a first lien thereon for $1080.20, together with interest and attorney’s fees; and that appellants, as trustees under the will of John L. Rogers,, deceased, were entitled to a second lien by virtue of the trust deed, executed to William Loeb, as trustee, to secure a note for $4000.00, owned by them. The present appeal is prosecuted by the appellants, as owners of the encumbrance, decreed to be subject to the appellee’s mechanic’s lien, and the controversy is, therefore, between the mechanic’s lien creditor and such encumbrancers, and not between the mechanic’s lien creditor and Stewart, the owner of the property. Appellants claim, that the decree of the circuit court was erroneous in holding that appellee was entitled to a lien prior to the lien of their trust deed. The decree is alleged by appellants to be erroneous upon two grounds.

First—It is contended by appellants that the statement of claim, filed with the clerk of the circuit court by appellee for a mechanic’s lien, is indefinite and insufficient. The statement is thus charged to be defective, upon the alleged ground that it does not sufficiently give or state the time or times of furnishing the labor or material. The statement, so filed, discloses that the contract between appellee and Charles F. Stewart, the owner of the property, for the erection of the building upon the premises in question was in writing, and was dated the 25th day of October, 1894; that the original contract provided for the construction of a block of three stone-front residences on the east side of Vernon avenue, but was amended on February 18, 1895, by providing that only one of the three houses was to be erected thereunder, as the other two houses had been withdrawn by previous agreement.

Work upon the houses under the contract is shown by the proof to have been begun shortly after October 25, 1894. It follows that the Mechanic’s Lien law of 1895, which was passed on June 26,1895, and by its terms went into effect at once, has no application in the present case. The form of the statement here is controlled by the Mechanic’s Lien law of 1874, as amended on May 31,1887.

The law in force at the time a contract is executed enters into and forms a part of the contract. Inasmuch as the mechanic’s lien in this case arose out of a contract, entered into prior to the passage of the Mechanic’s Lien law of 1895, the latter law does not govern the present case. It has been so held by this court in a number of decisions. (Andrews & Johnson Co. v. Atwood, 167 Ill. 249; Culver v. Atwood, 170 id. 432; Weber v. Bushnell, 171 id. 587; Stone v. Tyler, 173 id. 147; Young v. Jones, 180 id. 216; Mantonya v. Reilly, 184 id. 183). In Culver v. Atwood, supra, it was held that the Mechanic’s Lien act of 1895 gives new remedies to parties, furnishing labor or material to subcontractors, and imposes new duties upon owners, 'and cannot be allowed to control contracts, entered into before its passage, without making it obnoxious to the constitutional provision concerning laws impairing the obligation of contracts.

It being determined, then, that the law of 1887 governs the construction of the present contract and the statement of claim filed thereunder, it is necessary to refer to the law of 1887, in order to ascertain -what its requirements are. Section 4 of the act of 1887 in regard to mechanics’ liens provides that “every creditor or contractor, who wishes to avail himself of the provisions of this act, 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, a just and true statement or account or demand due him, after allowing all credits, setting forth the times when such material was furnished or labor performed, and containing a correct description of the property to be charged with the lien, and verified by an affidavit.” (Sess. Laws of 1887, p. 219). It thus appears that, by said section 4, the statement of the claim filed with the clerk must set forth “the times when such material was furnished or labor performed.” The contention is that the statement, so filed by appellee, did not set forth the times when the material was furnished or labor performed, as required by section 4. When we turn to the statement in question, it is found to set forth that, by the terms of the original contract dated October 25, 1894, appellee was to build for Stewart a block of three stoUe-front residences and provide all labor, material, etc., for the same, and that work was to be commenced on or before April 30, 1895; that, on or about February 18,1895, the parties amended the agreement of October 25, 1894, by providing that only one house (the middle house) was to be erected under the contract, and that “immediately upon the execution of the said contract this claimant proceeded to erect the said building according to the terms thereof, and completed the said building on or about the 20th day of November, 1895.” This statement was sufficient, as the labor was done and the materials were furnished under an entire contract. In Springer v. Kroeschell, 161 Ill. 358, we said (p. 365): “Where the work was done or the materials furnished under an entire contract, the different times when the work was performed, or the materials furnished, need not be stated. (Phillips on Mechanics’ Liens, sec. 359). Certainty to a common intent is all that is required in stating a mechanic’s claim, and where the law requires the time when the work was to be done to be set forth, a claim which states, that the work was done between April 16,1841, and August 29,1841, is sufficient.—Id. sec. 360.” (See also Hayes v. Hammond, 162 Ill. 133). It sufficiently appears from the statement, that the work was commenced upon the execution of the contract, and that the building was completed on the 20th day of November, 1895.

Second—It is furthermore contended by the appellants that some of the sub-contractors, furnishing labor and material for the building under appellee as contractor, took notes secured by a deed of trust upon the property in question; that the taking of these notes, alleged to have been secured by such trust deed, operated as a waiver or discharge of the liens held by such sub-contractors, and that appellee’s statement of claim, as filed with the circuit court, was for a single lump sum, to-wit, $1188.42, and that such lump sum included the amounts, for which such notes were taken by the sub-contractors. It is, therefore, argued that, inasmuch as the lump sum, named in the statement, included sums for which appellee or the sub-contractors had no liens, and which were so included as to be indistinguishable and inseparable, thereby misleading encumbrancers and others dealing with the land, the statement was insufficient and invalid.

The proof shows that quite a number of the sub-contractors accepted notes for portions of the amounts due them from Charles F. Stewart, the owner of the property. It is true that a mechanic’s lien is waived or discharged where the owner thereof takes security, either on property, or that of individuals not parties to the transaction. (Brady v. Anderson, 24 Ill. 111; Kinzey v. Thomas, 28 id. 502; Gardner v. Hall, 29 id. 277; Kankakee Coal Co.v. Crane Bros. Manf. Co. 138 id. 207; Croskey v. Corey, 48 id. 442; Clark v. Moore, 64 id. 273; Lyon & Sons Lumber Co. v. Equitable Loan and Investment Co. 174 id. 31). But it is also true that the claimant of a mechanic’s lien does not necessarily waive his lien, when he takes the note of the owner of the premises, who incurred the debt. It is said that a note of the owner so taken merely serves to liquidate the demand. (VanCourt v. Bushnell, 21 Ill. 624; Brady v. Anderson, 24 id. 111; Meeks v. Sims, 84 id. 422; Paddock v. Stout, 121 id, 571).

In the case at bar, the notes taken by the sub-contractors were the notes of Stewart, the owner of the premises, and not the notes of any third person or persons. Therefore, the taking of the notes alone would not operate as a waiver or discharge of the liens. Undoubtedly, if the sub-contractors accepted a trust deed to secure the notes of Stewart, the owner, the taking of such trust deed as security would amount to a waiver of their liens. It is not clear, however, from the proof that they accepted the security of such trust deed. The notes in question were executed on July 8, 1895. On that date Stewart and his wife made a conveyance of the property in question to James H. Christian, as trustee, subject to the three trust deeds hereinbefore mentioned, one given to secure §750.00, another to secure §4000.00, and a third to secure §500.00. Subsequently, on September 18, 1895, James H. Christian made a declaration of trust, in which he declared that he held said property, subject to said encumbrances aggregating §5250.00, in trust for certain persons, alleged to have been the sub-contractors above referred to. It does not appear clearly from the evidence, however, that this declaration was actually accepted as security by the sub-contractors. But, whatever may be the fact in regard to this, it is not established by the evidence that the sub-contractors waived their liens by taking the notes in question for the reasons hereinafter stated.

There is no evidence whatever, tending to show that appellee accepted any note, or security for what was due to him as contractor, or that he in any other way waived his lien as a mechanic. There is some proof, tending to show that some of the sub-contractors, accepting these notes, signed a waiver of their rights to liens on the premises in question. It is shown, however, that the subcontractors were induced to accept the notes, and to sign the waiver in question, upon certain conditions, which were not complied with.

In the first place, there is proof to the effect that some of these notes were signed by Stewart for extra work done by the sub-contractors under contracts made directly between them and Stewart, the owner of the property, and with which the appellee had nothing to do. In the next place, the sum of §4000.00, secured by the trust deed held by the appellants, was loaned for the purpose of erecting the building upon the premises. In other words, the trust deed and the notes secured by it represented a building loan. It became apparent on or about July 8, 1895, that the balance of money to be paid out by the appellants for the construction of the building would not be sufficient to pay off all the liens upon the building, or all the debts due for material and labor furnished thereon. It was accordingly represented to these workmen that, if they would accept notes for a portion of the debts due them, the remainder of the money in the hands of Loeb, the trustee, would at once, or within a few days, be paid out to them in cash, pro rata, according to the respective amounts of their claims. This agreement, however, to pay the money to the workmen was not kept, and they never received any money at all. To our minds the evidence is quite clear, that they took the notes for small portions of their claims upon • the condition that the balance of the claims was to be paid at once, or within a very short time, in cash. It is also quite clear, that this condition was not complied, with. On the contrary, the proof shows that Loeb, the trustee, paid over the balance of the fund to the present appellants, the holders of the note for 14000.00 and the trust deed securing the same, and not to the sub-contractors.

It is said, however, by counsel for appellants that, even if it were true that, by an arrangement between Stewart, the owner, and these lien claimants, the liens were not to be waived or discharged by the taking of the notes except upon the performance of the condition already stated, yet such agreement between the owner and the sub-contractors would not bind appellants, as encumbrancers, unless it appears that appellants were parties to said agreement, and consented thereto. (Lyon Lumber Co. v. Equitable Loan Co. 174 Ill. 31). But it is quite apparent from the proofs that appellants knew of said agreement, and assented to the same. The abstract, so far as we have been able to discover, makes no reference to the testimony of Julius Loeb taken in this case. Julius Loeb was a member of the firm of William Loeb & Co., mortgage brokers. His evidence shows that he and William Loeb, the trustee, were agents not only for Stewart, the mortgagor, but for the appellants, the mortgagees. The arrangement, by which the lien claimants were to take these notes, was known to William Loeb and Julius Loeb. They held the money, and paid it out from time to time for the construction of the building upon statements and affidavits submitted to them by the contractor, and upon orders given by the owner. The testimony of Julius Loeb also shows that, when he and his partner discovered from the statements submitted to them that there would not be enough money to pay all the claims, the balance of the money was turned over to the appellants, and not to the claimants who received the notes in question. The amount, stated by appellee to be due in the statement, which he filed with the clerk of the circuit court, included, according to the statements of counsel for appellants as made in their brief, the sum of §390.49. If the amounts, making up this sum of §390.49, consisted of items which were non-lienable, then, inasmuch as they are not separable on the face Of the statement, it may be that their insertion therein would defeat the lien. It has been held that, where the claim is for a single sum, part of which is non-lienable and not distinguishable from the rest on the face of the statement, the entire lien will be defeated. (Adler v. World’s Pastime Exposition Co. 126 Ill. 373; Culver v. Schroth, 153 id. 437; Phillips on Mechanics’ Liens, sec. 356).

There is, however, nothing to show that appellee intended any fraud upon appellants by failing to deduct, the amounts, for which notes were so taken by the subcontractors, from the total amount claimed by him to be due. He testifies, that he did not deduct such amounts, because he never received any credit for them from the sub-contractors. In view of the fact that the condition, upon which the notes were signed, was never fulfilled, appellee did not consider that the sub-contractors had waived their rights in the matter. In fact he was sued by several of these parties, who had taken notes from Stewart, the owner of the property, and was obliged to pay their claims. In view of what has been said, we are not able to say that the lower courts have not decided correctly in holding that the claim filed by the appellee was a true statement of the amount due him after allowing all proper credits. It is true, that the statement of the lump sum, claimed to be due, was somewhat larger in amount than the amount which was allowed to the appellee by the decree of the circuit court; but upon this subject we agree with the following statement made by the Appellate Court in their opinion, deciding this case: “It does not appear but that appellee believed and still believes himself entitled to a lien for the whole amount, so claimed to be due, except that, as to oue item- of §10.00, he admits that he failed to make a proper credit, but such a mistake, and the fact that the court upon the hearing disagreed with him as to another item of $60.00 for which in good faith he claimed a lien, do not necessarily constitute such a violation of the requirements of such statement, as to make it invalid. Where there is no wrong intention, and where no party is thereby prejudiced, and especially where the item is easily separable from the residue of the indebtedness, the mistake is said in Culver v. Schroth, 153 Ill. 437-446, not to be sufficient of itself to vitiate the statement and defeat the lien.”

Third—Appellee assigns a cross-error, alleging that the Appellate Court erred in disallowing the solicitor’s fee, which was embraced in the amount found to be due by the circuit court. There was no error in this action of the Appellate Court. The Mechanic’s Lien law of 1874, as amended in 1887, made no provision for the allowance of an attorney’s fee. Section 18 of the Lien law of 1895, already referred to, authorizes an attorney’s fee to be taxed as part of the costs in favor of the claimant. (Sess. Laws of Ill. of 1895, p. 233). But, as has already been stated, the act of 1895 has no application to the case at bar. The circuit court decreed that appellee was entitled to a first lien upon the premises for the amount of the solicitor’s fee in question, and thereby made a contract for the parties, which they did not make for themselves. The Mechanic’s Lien law of 1874, as amended in 1887, entered into and formed a part of the contract under consideration, and inasmuch as that act provided for no lien for solicitor’s fees, such lien could not be given by a statute subsequently enacted. It is true that remedies, which the law provides to enforce contracts, constitute no part of the contracts themselves, and are within the control of the legislature. (Smith v. Bryan, 34 Ill. 364; Templeton v. Horne, 82 id. 491; Woods v. Soucy, 166 id. 407). Here, however, the allowance of such lien for an attorney’s fee, when it was hot authorized by the act in force when the contract was made, would not be an extension of appellee’s remedy, but would be a charge of an additional encumbrance upon the property for his benefit. We agree with the Appellate Court that the allowance of the fee was improper.

Upon a consideration of the whole case, we are of the opinion that the judgment of the Appellate Court is correct. Accordingly, that judgment is affirmed.

Judgment affirmed