Feick v. Stephens

250 F. 185 | 6th Cir. | 1918

MACK, Circuit Judge

(after stating the facts as above). [1-4] 1. Appellee’s- contention that Feick had a right to abandon further performance under the contract because of the failure to pay in accordance with its provisions and to sue for damages or in quantum meruit for the value of the work done, or after March, even upon the contract as substantially performed, subject only to recoupment for the value of the September work, may be conceded. But he was not bound so to do. He was not compelled to take chances that what he had done would be held to be a substantial performance of the contract. He had a right to keep the contract in force, to refuse his assent to any repudiation or rescission and fully to complete the work. Whether or not he abandoned the further performance is a question of fact. It must be established by the evidence. Abandonment will not be presumed. The delay, it is true, was great; but Feick, evidently doubting wliether he would get any money, was justified in not increasing his prospective losses until compelled by some demand of the company or by self-interest, definitely to elect between completion and abandonment.

On August 5, 1913, and August 16, 1913, he filed claims of lien. They were alike, except that in the second he gave credit for the .plumbing fixtures not then, installed. The filing of these claims did not amount to an election not to go on with the contract. They were merely precautionary steps in the attempted protection of his rights. In these lien claims, he did not assert either abandonment or substantial completion of the work. On the contrary, in that of August 16th, he expressly showed that it was not completed. Moreover, as neither the Sandusky Company nor the trust- company was thereby misled or affected, no estoppel could arise therefrom. We concur in the finding of the referee and of the District Court that Feick had not completely abandoned the work on August 18, 1913.

[5] Feick’s rights are governed by section 8314 of the Ohio General Code, in force when the contract was made, as such rights are expressly preserved by the Act of April 16, 1913 (103 Ohio Raws, p. 369). Under section 8314, filing within four months from “the time of completing such labor or furnishing such material” gives a lien from the date of the first item of labor performed or material furnished.

We concur, toó, in the view adopted by the referee and the court that, at the time of the appointment of the receivers, the contract was not completed, and the implication therefrom, that the plumbing work done in September, 1913, in accordance with the original estimates and contract, except as the location of the toilet room was changed by subsequent agreement, formed a substantial part of the original contract. Whether or not this plumbing work was in any sense a separate and divisible piece of work as found by the district judge, it is unnecessary to consider; for it was' specifically covered in the original estimate of cost and in the original single contract. Clearly, it was not a mere trifle left over after the contract had been deemed by the parties as finished and the work accepted as complete, for the parties never accepted it as complete or deemed it finished. In value, it amounted to something more than two per cent, of the entire cost; and, while not absolutely essential, it was valuable for the proper equipment of the plant. And, as both the referee and the district judge held, hut for the appointment of the receivers and 'the consequent prevention of further performance, Feick would have had four months from the completion of the work in September, within which to file his claim of lien.

Whether the appointment of the receivers operated to prevent him, without their or the court’s express consent, from going on with the contract, with the result that, as held by the referee and the court, the dork done in September is not to be deemed as lawfully performed, and therefore not done under and pursuant to the contract, we need not determine. As the claim was filed for record within four months of the date of the appointment of the receivers, we agree with the conclusion of the referee contrary to that of the district judge, sustaining its validity in the sum of $15,511.27 with interest.

Any other conclusion would lead to this obviously unjust result: That one who had furnished some work or labor and who had properly, at the request of the other party or pursuant to the terms of the original contract, done nothing for more than four months, would lose his right to a lien for the work done, if, after the four months, completion of the job was thus prevented. Neither text nor context of the statute necessitates this construction. On the contrary, under the liberal construction of mechanic’s lien laws, which concededly prevails in Ohio, it has been there determined that a lien may be filed “within four months from the time it (the contract) was completed or the contract wrongfully put an end to by * * * the owner.” Pedretti v. Stichtenoth, Ex’r, 6 Ohio Cir. Ct. R. 516, 519.

It cannot, however, he material whether the completion was prevented before or after four months from the date of the last work actually done. The statutory period for filing is four months; not four months from the time that a part of the work, which subsequently turns out to be the last part, is completed, but four months from the time that the work contracted for either shall have been completed or the completion prevented. Whether the last work before that of September was done on May 11th or 15th, as the referee and court respectively found, that is, less than four months before August 18th, or in March, as the trustee in bankruptcy asserts, that is, more than four months before August 18th, is therefore immaterial. In either case, Feick would have, been justified on August 18th, but for the receivership, in postponing the filing until four months after he should have completed the entire work pursuant to the contract. Only if and when such completion was rendered impossible by the appointment of the receivers could the statutory period be deemed to begin to run.

[6] The statement of account, as filed, was sufficient. It gave notice of a valid claim. A failure to sustain one or more items in sitch an account, concededly, does not invalidate the claim. And, in our judgment, it is immaterial that such items are the only ones performed within four months before the claim is filed for record.

[7] While the claim should ordinarily give notice on the face of it that it has been filed within the statutory period, and while, if the contract has been completed, this would necessitate some statement showing the date of completion to be within the four months, the same rule should not apply when completion has been prevented. There is no statutory requirement that either the date or the fact of such prevention be stated. We cannot therefore deem the statement of account invalid because the last item of the claim as eventually allowed was performed more than four months before the filing, especially when, as in this case, the statement shows clearly that that performance did not complete the work and that the contract remained incomplete until within the four months’ period.

[8] Feick’s failure to take any steps in the District Court to secure a review of the finding of the referee master, disallowing the claim as to $375, precludes our consideration thereof.

[9] 2. The finding of the validity of Feick’s lien establishes also its priority over the trust deed of March, 1913, inasmuch as the mechanic’s lien is effective as of August, 1912, unless, as argued by the trust company, Feick is estopped from asserting his priority.

[10, 11] The claim of estoppel as against bona fide holders of the bearer notes secured by the trust deed rests upon the fact that Feick, as a stockholder, voted in January, 1913, for the. resolution under which the trust deed was executed by the Sandusky Company. This deed contained a covenant that “said property so conveyed is free and clear of all liens and incumbrances, and that it, the company, its successors and assigns, will forever warrant and defend the same against the lawful demands of all persons claiming or to claim the same,” and a recital .that the resolution of the board of directors authorizing its execution was unanimously ratified at a stockholders’ meeting at which all of the stockholders were present in person or by proxy.

To dispose of this contention, it might suffice to point out that, while the facts appear from the evidence, nowhere in the pleadings is there an)*- allegation that Feick was a stockholder or that he voted for the resolution; nowhere is the charge or defense of estoppel made; no issue thereon properly arose in the case, although, if requested, amendments to the pleadings might have been allowed.

Assuming, however, that, as evidence bearing on such an issue was received, the question is properly before us, the contention cannot be sustained. We need not consider whether under any circumstances such participation in such a transaction could estop a stockholder from maintaining his claim to priority over the trust deed for a mechanic’s lien, inchoate at the time of the stockholders’ meeting and ripening into a perfected lien long thereafter. For here, a vital element of estoppel is lacking; no one is proven to have known of or acted upon any representation or act of Feick. Knowledge of the statements in the trust deed does not suffice. That would demonstrate, at best, reliance upon the representations of the company and its officers that persons unnamed had authorized the covenant. Knowledge or information that Feick was such a stockholder is, in any event, essential to estop him.. Of this, there is no evidence whatsoever.

The decree must be reversed and the cause remanded, with directions to enter a decree in accordance with the views herein expressed.