Stimson Mill Co. v. Riley

California Supreme Court Dec 20, 1895 No. L. A. No. 3Published

Before: Belcher

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Holding. The court held that a construction contract substantially complied with statutory requirements despite a minor deficiency in the reserved payment amount, and that minor, trivial imperfections in construction work do not constitute premature payment or lack of completion.

Issues

Whether a construction contract is void for failing to reserve exactly 25% of the contract price for 35 days after completion.
Whether payments made by an owner based on an architect's certificate are premature if the work contains trivial imperfections.
Whether a joint and several bond is valid if not signed by the contractor.
Whether the trial court abused its discretion in determining reasonable attorney's fees.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It is a settled rule that courts of equity are always reluctant to enforce penalties, and every reasonable intendment is indulged to avoid them.”

“All that the law requires is a substantial compliance with the terms of the contract and good faith on the part of the owner.”

“What is a reasonable fee is a matter to be determined by the trial court, and its action will not be disturbed on appeal unless it appears that the sum allowed is clearly unreasonable.”

Synopsis

Mechanics’ Liens.—The Fact That the Building Contract, in providing for the payments, retains, until thirty-five days after the completion of the work, slightly less than the twenty.-five per cent of the contract price required by statute, does not render the owner personally liable for all labor and materials furnished, especially when more than twenty-five per cent was in fact actually retained.

Mechanics’ Liens.—When the Building Contract Provides for payments as the work progresses, payments made when the work has been substantially finished to the required stages cannot be considered premature, so as to subject the owner to liability to materialmen to the additional extent of the payments so made.

Bond—Necessity of All Parties Signing.—Where a bond is in form joint and several, the failure of all the parties named in the instrument as obligors to sign the bond does not render it void.

Mechanics’ Liens.—An Allowance of Attorneys’ Fees in an action to enforce mechanics’ liens will not be set aside as insufficient unless clearly unreasonable,

BELCHER, C. This action was instituted to foreclose twelve liens for labor and materials furnished and used in the construction of a house for the defendant Riley, the several claims, including costs of recording, aggregating in amount the sum of $1,728.86. One of the said liens was for materials furnished by the plaintiff, and the others were duly assigned to the plaintiff. One Duncan also commenced an action to foreclose a lien for labor done by him on the building, of the value of $25, and the two actions were consolidated and tried together. The contract, under which the building was constructed, was executed by Riley, as owner, and J. H. Cummins, as contractor, on October 10, 1893, and was duly recorded. It provided that Cummins should do all the work and furnish all the materials necessary to complete the building according to the plans and specifications made by Charles W. Davis, architect, for the sum of $2,180. It further provides that the payments, so far as need be stated here, should be made as follows: (4) When ready for plastering, $250; (5) when first coat of plastering is finished, $250; (6) when white coat of plastering is finished, $250; (7) when whole work completed and accepted by architect, $300; balance, $530, usual thirty-five days, “provided, that in each of the said cases a certificate be obtained and signed by the said Chas. W. Davis that he has done his work so far as done to his satisfac[220]tion, and also a statement of the value of the work so done by him.” Accompanying the contract was a bond, as required by section 1203 of the Code of Civil Procedure, which was signed by S. C. Dodge, one of plaintiff’s assignors, and R. A. Buchanan, but not by Cummins. It reads: “Know all men by these presents, that we, the undersigned, .... do hereby jointly and severally guarantee the faithful performance of the above contract, and the delivery of the said building to Spurgeon Riley, Esq., free from all liens that may be filed against the contractor on the above contract, not exceeding the sum of five hundred and forty-five dollars, that may accrue against him by reason of the nonfulfillment of the said contract by the said J. H. Cummins, the contractor aforesaid. We further agree that he will pay all his subcontractors, laborers, and materialmen all of the moneys that may become due them by reason of labor or materials under this contract. We hereby guarantee to them the payment in full of all their claims, and hold ourselves responsible to them in the sum of five hundred and forty-five dollars, or so much as may be necessary of the said sum to pay them in full of all labor and materials furnished for said building, exclusive of the contract price of the same.” It is alleged in the complaint, among other things, that at least twenty-five per cent of the whole contract price was not, by the terms of the contract, made payable at least thirty-five days after the final completion of the contract; that the first, fourth, fifth, and sixth payments were made by Riley to Cummins before they became due according to the terms of the contract; and that $750 is a reasonable sum to be allowed plaintiff as attorneys’ fees in the action. Wherefore plaintiff prayed judgment against the defendant Cummins for the several sums specified, aggregating $1,728.86; that it be allowed an attorney’s fee in the sum of $750; and that the said several sums be adjudged and decreed to be liens upon the land and building described, and that the same be sold, and the proceeds applied, etc. Cummins suffered his default to be entered. Riley appeared and answered. The answer set out the contract and accompanying bond and the work done thereunder. It denied that any payment was made before it became due, and alleged that each and every payment was made upon the certificate of the architect as provided by the contract. It also denied the right of the plaintiff to recover on the lien of S. C. Dodge, for the

Stimson Mill Co. v. Riley

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