THE CONCORD APARTMENT HOUSE COMPANY

ข.

W. D. O'BRIEN et al.

Opinion filed June 19, 1907-Rehearing denied October 9, 1907.

1. MECHANICS' LIENS-what provision of contract is not waiver of lien. A provision in a building contract specifying that all payments shall be made upon written certificates of the superintendent that such payments shall have become due according to the provisions of section 35 of the Mechanic's Lien act referring to subcontractors, and that the contractor shall furnish, when requested, "a release from any liens or right of lien," refers to liens of subcontractors when settlement shall be made with the contractor, and is not a waiver by the contractor of his own lien.

2. SAME when contractor is relieved of his obligation to release liens. Failure of the owner to make payments according to his agreement in a building contract, releases the contractor from his obligation to furnish the owner, upon request, releases from persons who had furnished material or labor on the contract, particularly where the owner made no request for releases until he demanded that the contractor release his own lien after a suit was begun to enforce the same.

3. SAME―when lien is not waived by taking other security. By taking acceptances upon third persons, mostly upon the financial agents of the owner of the building, for installments of the contract price falling due during the progress of the work, the contractor does not waive his right to a mechanic's lien for the unpaid balance due upon the work, as shown by the final certificate of the superintendent.

4. SAME-what is not a new contract. Where a building contract in writing, fixing a time for completion, final payment, etc., expires by its own limitation before the contractor, owing to the owner's delay, has begun work, and the contractor refuses to begin the work because of the advance of cost of material and labor, if the owner, recognizing the justice of the claim, endorses on the contract an agreement to pay the additional cost of labor and material, the endorsement must be regarded as an extension and modification of the old contract, and not as a new agreement which fails to fix a time for completion and final payment.

5. SAME—what is not sufficient proof to justify allowing credit to owner. In a proceeding by the original contractor to enforce a mechanic's lien, mere proof that a sub-contractor has recovered a judgment against the owner for material furnished on the contract

does not justify allowing the owner a credit for the amount of the judgment without proof that the judgment has been paid, where, as the proof stands, the contractor is still liable to the sub-contractor for the amount of the latter's claim.

APPEAL from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. THEODORE BRENTANO, Judge, presiding.

This suit was commenced in the superior court of Cook county on June 11, 1896, by the Western Planing and Manufacturing Company against the Concord Apartment House Company, appellant herein, to enforce a lien upon certain property in Chicago for material furnished. On March 11, 1898, W. D. O'Brien and Edwin H. Sedgwick, appellees herein, filed an intervening petition, claiming a lien upon the same property by virtue of a contract between O'Brien and the said apartment house company. Appellant demurred to the intervening petition, and the court, on November 6, 1899, sustained the demurrer, whereupon appellees amended the petition. Appellant again demurred, and on March 28, 1901, the court again sustained the demurrer and dismissed the amended petition for want of equity. An appeal was taken to the Appellate Court for the First District, where the decision of the superior court was reversed and the cause remanded for further proceedings. (See Sedgwick v. Concord Apartment House Co. 104 Ill. App. 5.) Upon the case being re-instated in the superior court the said apartment house company filed answer, to which O'Brien and Sedgwick replied, and the cause being at issue, the same was referred to the master for proofs and findings. The master reported, finding the equities for O'Brien and Sedgwick, to which report appellant filed exceptions. The court overruled the exceptions and entered a decree accordingly for the sum of $4105, giving the parties a lien, with power to sell the property described in the pleadings. The said apartment house company appealed to

the Appellate Court for the First District, where the decree was affirmed, and the cause comes here by appeal from the Appellate Court.

The amended petition alleges that O'Brien was in the business of contracting for steam heating, and the Concord Apartment House Company, a corporation, was the owner of a leasehold interest in certain lots described in the petition, on which said company was erecting, or was about to erect, an apartment house; that on May 28, 1895, O'Brien entered into a contract in writing with said company to put certain heating apparatus into said apartment house, which contract is set out in full in the petition. The contract contains some twelve articles of stipulation, several of which are not material to the purposes of this statement and therefore will be omitted. Article I provides, in substance, that O'Brien shall furnish all the material and perform all the work necessary for putting in the steam heating plant for the seven-story apartment building situated on the lots described in said article, said work and material to be done and furnished under the direction and to the satisfaction of William M. Wheatley, who shall act as superintendent, and for the purposes of this contract as agent, for the owner. Article 5 provides that "the contractor shall complete the several portions and the whole of the work comprehended in this agreement on or before September 15, 1895." Article 6 contains a stipulation that "should the contractor be obstructed or delayed in the prosecution or completion of his work by the act, neglect, delay or default of the owner or the superintendent, or of any other contractor employed by the owner upon the work, or by damages which may happen by fire, lightning, earthquake or cyclone, or by abandonment of the work by employees through no fault of the contractor, then the time herein fixed for the completion of the work shall be extended for a period equivalent to the time lost by reason of any or all of the causes aforesaid." Article 8 stipulates that the owner shall pay the contractor

$8550, subject to additions or deductions, and payable in installments, as follows: "$1500 when roughing in is done; $4000 when mains, boilers and tank are placed, provided said payments do not exceed eighty per cent of the value of the work done at the time said payments are due as above, it being the intention to reserve at all times twenty per cent of the value of the work, the balance within thirty days after completion of the work." Said section 8 also contains this further provision: "All payments shall be made upon written certificates of the superintendent, to the effect that such payments have become due and according to the provisions of section 35 of the law of Illinois referring to sub-contractors' liens, as in force since July 1, 1887, and as amended and in force July 1, 1891; also furnishing, whenever requested, to the party of second part, a release from any liens or right of lien."

After setting forth the contract the amended petition alleges that the Concord Apartment House Company by its own default delayed the work on said building so that it was impossible for O'Brien to begin work upon his contract until late in November, 1895; that during all that time he was ready, willing and anxious to begin work under his contract, and that in the meantime the price of material and labor had greatly advanced; that on or about November 25, 1895, the said apartment house company requested O'Brien to begin work under his contract, and agreed to pay him in addition to the original contract price, as damages for delay, the sum of $1500, and on December 21, 1895, endorsed said agreement, in writing, upon said written contract, as follows:

"CHICAGO, December 21, 1895. "We hereby agree to pay said first party the additional sum of $1500, same being for the increased cost of material to be used in the building. THE CONCORD APARTMENT HOUSE COMPANY, By Carl Findeisen, President, A. A. Rolf, Secretary."

-also alleges that by reason of said delay said Concord. Apartment House Company accorded an extension of time

for completion of the work to within one year from November 25, 1895, and that, relying on said allowance, O'Brien commenced said work and continued until August 10, 1896, when he completed his contract; that during the progress of the work he furnished, at the request of said apartment house company, extra work and material to the value of $518; that all of said work was performed to the satisfaction of said superintendent, Wheatley, who on August 10, 1896, delivered to said O'Brien his written certificate, to the effect that said work had been completed under the contract and that payment would be due thirty days from that time; that O'Brien filed his verified claim with the clerk of the circuit court on January 9, 1897, and that said statement was duly entered by the clerk as required by law, a copy of such statement being attached to the petition; that on November 28, 1898, O'Brien assigned his interest in indebtedness due him from said company to Edwin H. Sedgwick for a valuable consideration, and that there remains due and owing to him from the said company the sum of $4757.23, with interest from September 10, 1895, etc.

In the amended answer to the petition the said Concord Apartment House Company admits the contract with O'Brien of May 28, 1895, for $8550, but denies that said O'Brien ever did any work under it, and avers that the contract expired by limitation on September 15, 1895, and that on December 10, 1895, a verbal agreement was made with O'Brien to do the work specified in said written contract for $10,050, but that by said verbal agreement neither the time for completing the work nor the time for final payment was fixed; that said verbal agreement was in no sense an extension of the written contract or of any of its provisions. The answer denies that said increase of $1500 was intended as compensation for loss or damages sustained by O'Brien; denies that O'Brien performed extra work or furnished extra material; denies that the entire work under the said verbal contract was fully performed according to