193 F. 897 | 7th Cir. | 1911
(after stating the facts as above). The appellants’ numerous assignments of error are rightly treated by counsel and submitted in both arguments as embraced under three general propositions for reversal of the decree against them which awards and forecloses a mechanic’s lien in favor of the appellee, namely: (1) For alleged failure on the part of appellee, as a foreign corporation, to comply with the statute of Illinois in reference thereto; (2) for insufficiency of the claim or statement of lien as filed to authorize recover}^; and (3) for insufficiency of the proof to establish performance of the alleged contract in suit. All facts involved under the issues raised by the bill and answers and by the cross-bills, upon which the hearing proceeded, are specifically found and determined by the trial court; and it is uncontroverted that such findings in reference to performance of the contracts in suit are supported by testimony. No tenable ground appears for disturbance of such findings of fact, and their sufficiency for support of the decree is unquestionable, unless one or the other of the two first-mentioned, contentions is upheld. These first and second propositions, therefore, present the only assignments requiring further consideration.
Section 1 (par. 52):
“Every corporation for pecuniary profit formed in any other state, territory or country, before it shall be authorized or permitted to transact business in this state, or to continue business therein, if already established, shall designate some person as its agent or representative in this state on whom service of legal process may be had if desired: shall have and maintain a public office or place in this state for the transaction of its business, and where proper books shall be kept to enable such corporation to comply with the constitutional and statutory provisions governing such corporation; and such corporation shall be subjected to all liabilities, restrictions and duties which ai'e or may be imposed upon corporations of like character organized under the general laws of this state, and shall have no other or greater powers. * * * ”
Section 2 (par. 53):
“Every company incorporated for purposes of gain under the laws of any other state, territory or coxxntry, now or hereafter doing business within this stale, shall file in the office of the Secretary of State a copy of its charter or articles of incorporation, or iix case such company is incorporated merely by a certificate, then a copy of its certificate of incorporation. * * * Upon a compliance with the above provisions by said corporation, the Secretory of State shall give a certificate that said corporation has duly complied with the laws of this state, and is authorized to do business therein. * « *»
Section 3 (par. 54):
“Every foreign corporation amenable to the provisions of this act which shall neglect or fail to comply with the conditions of the same as herein provided shall be subject to a fine of not less than SI .000.00, to be recovered before any court of competent jurisdiction; and it is hereby made the duty of the Secretary of State, as lie may be advised that corporations are doing business in contravention of this act, to report the fact to the prosecuting attorney of the county in which such corporation is doing business, and the prosecuting attorney shall, as soon thereafter as is practicable, institute proceedings to recover the fine herein provided for, and Ms compensation therefor shall be 10 per cent, of the amount recovered, the remainder to be paid into the revenue fuxid of the state; in addition to wMc-li penally, on and after going into effect of this act no foreign corporation as above defined which shall fail to comply with this act, can maintain any suit or action, either legal or equitable, in any of the courts of this state upon any demand, whether arising out of contract or tort.”
For and against this contention authorities are cited from various states having analogous statutory provisions which are in conflicting lines of theory and rule of pleading thereunder. In Illinois the question does not appear to have arisen directly in any cases called to. our attention, and those which are cited indicate the- practice to be uniform to set up noncompliance as a defense in an answer or plea. The one line proceeds upon-the doctrine of presumptive right action,
2. The claim of lien on which the decree rests was filed May 8, 1905, and reads as follows:
“Fred Bredel Oo., a corporation organized raider the laws of Wisconsin, by Fred Bredel. its president and general manager, slates that on the 11th day of .Time. A. I>. 190.'», the said Fred Bredel Oo. entered into a written contract or agreement with the Natural Carbon By-Products Company, a corporation under the laws of South Dakota, licensed under the laws of the slate of Illinois and doing business at Freeport, Illinois, in and by which said contract or agreement the said Fred Bredel Oo. was to provide'the material, to make, construct, install, furnish and deliver at Freeport, Illinois, upon the real estate of the said Natural Oarbon By-Products Company described as follows, to wit: Block number twenty (20) and lot number fourteen (14) in block number nineteen (19) in Turner’s North addition to the eity of Freeport, in Stephenson county and state of Illinois, for the stun of fourteen thousand and seven hundred dollars (.$14,700), upon foundations and in buildings to be constructed by said Natural Carbon By-Products Company, a bench of nine retorts and other apparatus for the carbonizing of shale, the product to be used in the manufacture of paint, guaranteed to carbonize at least a ton and a half of shale per retort or 1 ?>y2 tons per bench per twenty-four hours- — so constructed as to become attached to said real estate as a part thereof; the payments under said contract to be made as follows: The sum of five-hundred dollars ($500) upon the signing of the contract; one thousand dollars ($1000) upon the presentation by said first party of a bill of lading showing shipment of one carload of material to be used in said construction; the remaining payments to be made on the first day of each calendar month thereafter on the basis of 75% of the contract price of the work done and material furnished during the previous calendar month; the said two payments of $500 and $1000 to apply as payment of such 75% until the same should be exhausted; the final payment, or 25% of the contract price, to be paid within thirty (B0) days after the installation of said apparatus and after the same should be ready for firing.
“It was further stipulated in said contract that trying and testing (lie apparatus should be done at the expense of said second parry under the supervision of the first party, and that the same should be tried and tested for at least, twenty-four hours.
“That said Fred Bredel Oo. furnished the material and rendered the services in said contract mentioned and duly completed said contract according to the terms thereof on the 14th day of February, A. D. 1905; that in addition to furnishing the mai erial and rendering the services pursuant to f lie terms of said contract said Fred Bredel Co. furnished extra material and*902 rendered extra services in and about said real estate to the value of two thousand eighty-six and 72/ioo dollars ($20S0.72) which was completed on the 14th day of February, A. D. 1903: that there is now due the said Fred Bredel Go. from the said Natural Carbon By-Products Company on account of the furnishing of the material and rendering the services and cornpleting said contract and for extra material and extra services, after allowing all just credits, deductions and set-offs, the sum of four thousand two hundred sixty-six and 10/ioo dollars ($4266.10) and that this statement is made for the purpose of securing the lien of the said Fred Bredel Co. upon the real estate pursuant to the provisions of the statute of the state of Illinois in such case made and provided.
“Fred Bredel Co., by Fred Bredel,
“President and General Manager.”
The claim purports to be verified under oath, and so certified by the hand and seal of a Wisconsin notary public.
It is both obvious and conceded that this statement or claim of lien was framed to conform to the provisions of the mechanic’s lien law of Illinois, approved May 18, 1903, which became operative by its terms July 1, 1903. See Hurd’s R. S. 1905, c. 82, pp. 1317-1328. Error is assigned for want of compliance with the act of June 26, 1895, which was in force at the date of the contract in question; and the question whether the last-mentioned act governs the issues becomes material in view of its various provisions.
In the first five above-mentioned gases the rule was declared in reference to the act of 1874, in effect, that the mechanic’s lien law in force at the time a contract is executed enters into and forms a part of the contract, and thus governs in respect of the requirements for the. lien (see Kendall v. Fader, 199 Ill. 294, 301, 65 N. E. 318), and the last-mentioned cases uphold like rule under the act of 1895.
The appellee contends that Turney v. Saunders, 4 Scam. (Ill.) 527, 532, and Templeton v. Horne, 82 Ill. 491, state the rule otherwise,- and leave the question open for an independent construction by this court. These earlier authorities, however, arose under earlier statutes, and are plainly inapplicable to the statute and rule in question, and furnish no support for departure front the rule above stated.
The following provisions of the act of 1895 (Laws 1895, p. 225 [Hurd’s Rev. St. 1901, c. 82, §§ 15, 20, 21]) are therefore applicable to the case at bar:
“Section 1. * * * Tbis lien shall attach as of the date .of the contract, but as against or to the prejudice of any other creditor, incumbrancer ox-purchaser without actual or constructive notice of such contract, the lien shall not attach as of the date of the contract unless within 30 days thereafter the contractor shall file in the office of the clerk of the circuit court*903 of file county * * * a statement giving Ms name and tho name of the owner of the property, what his contract is for, the amount to be paid, a description of the property, and the date when delivery of material or work is to be completed. If such statement, is not filed within the 30 days named the lien shall attach from tho date tho same is filed. Provided that commencement of the work or delivery of material at the premises by any contractor shall serve the same purpose as the filing of such statement or commencement of work by all parties who may subsequently furnish or specially prepare material for or perform services of (or) labor in the construction of the improvement.”
“Pec. f>. If the work is done, or materials are furnished under an oral contract no lien shall be bad by virtue of this act unless the work shall be done or materials furnished within one year from the dato of the contract and final payment therefor is to he made within such time. Tf the contract be writteii no lien shall be had by virtue of this act if the time stipulated for the completion of the work or furnishing materials is beyond three years from the date of the contract or the time of payment beyond one year from the time stipulated for the completion thereof. Nor shall a lien be had under si written contract where the time of completion or final payment is more than one year from the date of the contract, unless either the work.be continued up to tlie dare of such payment or within 30 days after the completion the contractor shall file in the office of the circuit clerk of the county where the improvement is made a statement under oath, or verified by affidavit. giving the name of the contractor and of the person contracting with him, a description of the property improved, the balance due, and the date for the final payment, which statement shall have the effect and stand in lieu of the claim for lien hereinafter provided for.
“Sec. 7. No contractor shall be allowed to enforce such lien as against or ro tho prejudice of any other creditor, or incumbrancer, or purchaser, unless within 4 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 * * * a claim for lien, verified by the affidavit of himself. agent or employe, which shall consist of a brief statement of the eon,raet. the date the same was made, the date fixed therein or the time Implied for completion and for final payment, and the date that the same was completed, if completed, tho balance due after allowing all credits, and a •uifiiciontly correct description of tbe lot, lots or tracts of land to pass tho title thereof by deed of conveyance. An itemized account shall not be necessary, except for extras, whore the contract is for all of the work or materials. or all of a specific part thereof at a fixed and agreed price. Such claim for lien may be filed at any time after the contract is made, and as to the owner my be amended at any time before trial or on the hearing of a suit to enforce the lien, subject lo a continuance on account of such amendment in the discretion of the court. No such lien shall be defeated to the proper amount thereof because of an error or overcharge on the part of any person claiming a lien therefor under this act unless it, shall be shown that such error or overcharge was made with intent to defraud.”
Under these lien provisions, the rule is well settled (Williams v. Rittenhouse & Embree Co., 198 Ill. 602, 611, 64 N. E. 995, 998, and eases cited) that strict compliance is required for enforcement against third parties — that “the lien is in derogation of the common law, is opposed to common right, and cannot be given except when authorized by the provisions of the statute strictly construed” — and it is unquestionable that several of tlie statutory requirements are not satisfied by the foregoing Hen statement. It does not contain a “brief -.tatement of the contract” in its essential features as shown by the evidence, nor specify “the date fixed therein or the time implied for completion and for final payment,” as expressly required by section 7;
While the foreclosure decree as entered against the American Trust & Savings Bank, mortgagee, must be reversed for the above-mentioned insufficiency of the lien claim, as filed, to establish priority for the mechanic’s lien over the mortgage lien, it is unquestionable under the evidence that the appellee is entitled to equitable relief in one form or another in reference to this mortgage. These facts appear: (1) That the mortgage security embraces, not only the property subject to the appellee’s lien, but other property owned or held by the mortgagor; and (2) that the amount of the indebtedness outstanding, secured by the mortgage, was originally much less than the amount named therein, and a large portion of the bonds have since been retired and canceled. The appellee contends that the residue outstanding amounts to less than $13,000; that the above-mentioned mortgaged property not embraced under its lien furnishes ample security for such residue; that certain of the mortgage bonds were issued and held to provide funds for payment of construction expenses, including the appellee’s work and claim; and that the decree should equitably provide for sale of the property upon which its lien attached for payment thereof, free from such mortgage lien, even though the mortgage may otherwise be entitled to priority. It does not appear, however, that either of these propositions of fact or law was brought to the attention of the trial court, nor that issue was joined or tendered upon either of these alleged facts; and such of the facts as do appear in the record, either in reference to the property included in the mortgage, the circumstances attending the issues of bonds and their retirements, or the amount thereof outstanding, are plainly not directed to the present contention, nor sufficient, without other circumstances in evidence, for determination of the equities between the
On the appeal of Natural Carbon Paint Company, the decree of the Circuit Court is affirmed. On the appeal of American Trust & Savings Bank the decree is reversed, and the cause is remanded for further proceedings in conformity with this opinion. The costs of this appeal are divided, requiring the appellee to pay one half thereof and the appellant National Carbon Paint Company the other half.