THE RITTENHOUSE & EMBREE COMPANY, Appellee, vs. THE WARREN CONSTRUCTION COMPANY.-(DARIUS MILLER et al. Appellants.)

Opinion filed October 16, 1914.

I. MECHANICS' LIENS-foundation of mechanic's lien is a valid contract. The foundation of the right to a mechanic's lien is a valid contract with the owner of the lot or tract to be improved, or with his duly authorized agent, for the construction of an improvement thereon and the furnishing of material and labor, and while the lien is created by the statute and not by the contract, still a valid contract is essential to the creation of any lien under the statute.

2. SAME-the Mechanic's Lien statute not intended to abridge right of contract. The Mechanic's Lien statute was not intended to abridge or curtail the right of contract between the parties, and where a contract between the original parties waives the right to a mechanic's lien or is of such a character that no lien can accrue thereunder, the provisions of the Mechanic's Lien law, in so far as they attempt to give a sub-contractor a lien in spite of the agreement of the original contractor, are unconstitutional and void.

3. SAME-clear language waiving all claim to a lien controls other provisions of contract. Clear language by which the original contractor agrees to deliver the work "free from all claims, liens and charges," controls other provisions of the contract from which a sub-contractor might infer that he would have a lien, and as such language is a clear waiver of all claims for mechanics' liens the sub-contractor is presumed to have contracted with full knowledge of that fact and acquires no additional rights by reason of the original contractor becoming bankrupt.

4. SAME when owner's right to have work delivered free from ail claims for liens is not forfeited. The right of the owner to the benefit of a clear provision of the contract that the original contractor will deliver the work free from all claims, liens and charges is not forfeited because the owner inserts in the contract provisions for his benefit allowing him to require the original contractor to furnish statements of indebtedness and authorizing the owner to withhold payments until such indebtedness is paid; nor is the owner obligated by such provisions to carry them out for the benefit of sub-contractors.

5. SAME-Section 21 of the Mechanic's Lien law is unconstitutional. Section 21 of the Mechanic's Lien law, in so far as it at

tempts to give a sub-contractor a lien contrary to the clear terms of the original contract, is unconstitutional. (Kelly v. Johnson, 251 Ill. 135, Cameron-Schroth-Cameron Co. v. Geseke, id. 402, and Rittenhouse & Embree Co. v. Wrigley Co. ante, p. 40, adhered to.)

APPEAL from the Superior Court of Cook county; the Hon. CHARLES M. FOELL, Judge, presiding.

SHERIFF, DENT, DOBYNS & FREEMAN, (J. A. ConNELL, of counsel,) for appellants.

ADAMS, CREWS, BOBB & WESCOTT, (JAMES B. WesCOTT, of counsel,) for appellee.

Mr. JUSTICE CRAIG delivered the opinion of the court:

This is an appeal from a decree of the superior court. of Cook county establishing a mechanic's lien in favor of appellee, the Rittenhouse & Embree Company, on certain premises of appellants, the Chicago, Burlington and Quincy Railroad Company and Darius Miller, its president, located at the south-west corner of Jackson boulevard and Clinton street, in the city of Chicago, the property being owned by the Chicago, Burlington and Quincy Railroad Company although the legal title to the real estate is of record in the name of Darius Miller, president of that company. Appellee was a sub-contractor under the Warren Construction Company, to whom a contract was let by the Chicago, Burlington and Quincy Railroad Company, with the knowledge and consent of Miller, for the construction of certain work on the building to be constructed on the above premises. There is no controversy as to the facts or that appellee took all of the necessary steps to perfect a mechanic's lien under the Mechanic's Lien law of 1903, (Hurd's Stat. 1913, p. 1559,) provided the original contract between the Warren Construction Company and the Chicago, Burlington and Quincy Railroad Company was not of such a character as to waive or bar the lien of a sub-contractor or the

provisions of sections 5, 21 and 32 of the Mechanic's Lien law of this State are not unconstitutional. By their objections before the master in chancery and exceptions before the chancellor to the master's report, as well as by their seventh assignment of error in this court, appellants have questioned the constitutionality of sections 5, 21 and 32 of the said Mechanic's Lien law of this State, and it is by virtue of the seventh assignment of errors that the appeal is brought direct to this court.

The facts in the case, in so far as they are material to be considered in passing upon the questions raised, are substantially as follows: On November 24, 1911, the Chicago, Burlington and Quincy Railroad Company entered into a written contract with the Warren Construction Company to do all of the rough carpentry work required in the construction and completion of the fifteen-story and basement fireproof office building to be erected on the south-west corner of Jackson boulevard and Clinton street, in the city of Chicago, for the sum of $39,300. By this contract the Warren Construction Company agreed to construct, finish and deliver to the railroad company, "free from all claims, liens and charges, on or before the first day of June, 1912, all of the rough carpentry required in the construction and completion" of the building, and to furnish good, proper and sufficient materials, workmanship and labor of all kinds suitable and sufficient for the finishing and completing of the said work, etc., with the further provision that the amounts to be paid from time to time should in no case exceed ninety per cent of the value of the work done and materials furnished, the remaining ten per cent to be retained as part security for the faithful performance of the contract, and not to be paid until the expiration of thirty days after the completion of the work and the payment of all claims for labor and materials furnished and the return of all drawings and specifications to the architects. The contract also provided that upon request by the architects

the Warren Construction Company would furnish, from time to time, statements of all indebtedness for materials and labor furnished, used or expended upon the said work, and that if at any time during the progress of the work it should allow indebtedness to accrue for labor or materials which might become liens on said building or the ground on which it stands, the railroad company might refuse to make the payments as therein provided for until satisfactory evidence was furnished that said indebtedness had been discharged, and that if such evidence was not furnished within ten days after demand in writing, the railroad company might withhold the amount of such indebtedness and deduct the same from the amount agreed to be paid to the Warren Construction Company, or, at its option, might declare the entire agreement null and void and take possession of such work and complete the same, in which case the Warren Construction Company agreed to pay all loss or damages occasioned thereby. The Warren Construction Company began work upon the improvement contemplated by the written contract, and in May, 1912, entered into a verbal agreement with appellee to furnish certain lumber and building material to be used in the construction of the building, under which arrangement appellee furnished and delivered, and there was used in the improvement, lumber and building material of the value of $1209.24. In July following the Warren Construction Company failed, and on August 8, 1912, was adjudicated a bankrupt by the United States district court for the northern district of Illinois, leaving its work under the written contract incomplete. Thereafter, by order of the United States district court, the receiver in bankruptcy of the Warren Construction Company was directed to, and did, abandon the contract. Appellants, pursuant to certain provisions in the contract, then re-let the contract to finish the incompleted portion of work contracted for by the Warren Construction Company to

the B. J. Regnall Company, by which latter company the work was finally completed.

During the course of the work appellants paid on the contract the following amounts: To the Warren Construction Company $14,486.76; on the account of that company during the interim between the abandonment of the contract and the re-letting of the contract for the unfinished work $3922.70, and to the B. J. Regnall Company for completing the work $24,400, making a total amount of $43,809.66, or $4509.66 in excess of the original contract price. In making these various payments appellants did not obtain any statements from the contractor, as provided by section 5 of the Mechanic's Lien law of 1903. The trial court held that under the provisions of sections 21 and 32 of that act appellants could not claim credit for the payments so made, but, in so far as appellee was concerned, such payments must be regarded as never having been made, and entered a decree allowing a lien in favor of appellee for the sum of $1306.99. To reverse that decree this appeal has been prosecuted.

Appellants contend (1) that under the contract between the railroad company and the Warren Construction Company the latter company waived all right of lien, and consequently no right to a lien exists in favor of the appellee, a sub-contractor; (2) that inasmuch as the improvement cost in excess of the original contract price, appellants can not be charged with any greater liability than the amount of the original contract price, and that the provisions of sections 5, 21 and 32 of the Mechanic's Lien law, which are designed to impose a greater liability on the owner, are unconstitutional and void. Appellee contends (1) that all of the provisions of a written contract must be taken into consideration in construing the instrument, and that when the contract is so construed the right to maintain a mechanic's lien is clearly recognized in that contract; (2) that sections 5, 21 and 32 of the Mechanic's Lien law do not