Opinion
Argued October 3, 1928
Affirmed October 16, 1928
From Benton: JAMES W. HAMILTON, Judge.
For appellants there was a brief over the name of Messrs. Weatherford Wyatt, with oral arguments by Mr. Mark Weatherford and Mr. J.K. Weatherford, Jr.
For respondent there was a brief over the names of Mr. Arthur Clarke and Messrs. Lewis, Lewis Finnigan, with oral arguments by Mr. Clarke and Mr. Arthur Lewis.
This is a suit for the reformation of a contract and the foreclosure of a mechanic's lien for work performed upon an apartment house situate in Corvallis, Oregon, and for material furnished for use thereon.
The complaint alleges that, on June 25, 1925, A.G. Wright, the owner and in possession of Lots 1 and 2, Block 7, in County Addition to the City of Corvallis, made, executed and entered into a contract with one C.P. Yundt, by the terms of which Yundt agreed to provide materials and labor for the plumbing and heating of an apartment house to be constructed by him as such owner; that through a mistake of the scrivener who prepared the specifications for the construction of the building it was provided therein that the plumbing work for the building should be installed "in compliance with the rules and regulations of the Plumbing Code of the City of Portland, Oregon," whereas, in truth and in fact, it was intended and agreed by both the owner and contractor that the installation should be made in compliance with the Building Code of the State of Oregon. Plaintiff further alleges that, prior to the commencement of any work or the supplying of any material under the contract, Yundt transferred and assigned the same to the partnership firm of Yundt McKenna. On July 20, 1925, Wright conveyed the above-described real property to the Western Investment Corporation by deed. On November 24, 1925, the Western Investment Corporation in turn conveyed that property to E.W. Heckart, and on March 6, 1926, E.W. Heckart conveyed a one-half interest therein to C.L. Heckart and Zelia O. Heckart. These parties were all named as defendants by plaintiff. At the time of the execution and delivery of each of these deeds the apartment house was in the course of construction. Plaintiff avers that, upon the execution and delivery of the respective deeds, each of the respective grantees assumed the obligations of Wright, the original owner, under the contract with Yundt, and that each named grantee duly authorized and employed the partnership firm of Yundt McKenna, assignee of the plumbing and heating contract, to perform labor and supply the material as provided in that contract. She avers that, during the performance of the contract, certain modifications were made therein. These modifications, however, are not questioned. She avers that in pursuance of their contract, Yundt McKenna commenced the performance thereof on August 17, 1925; that they supplied labor and materials therefor and performed all the terms of the contract except as modified, and that they completed the contract as modified on March 29, 1926. Plaintiff alleges that each of the aforementioned grantees, defendants herein, had knowledge of the construction of the building, including the labor and materials so supplied by Yundt McKenna in the performance of their contract as modified. She alleges that, on April 21, 1926, and within 60 days after the completion of their contract, Yundt McKenna filed for record with the county clerk of Benton County, Oregon, a mechanic's lien, duly verified by F.E. McKenna as one of the claimants and a person having knowledge of the facts, and setting forth that there was due and unpaid from the defendants on account of labor and material supplied under the contract as modified the sum of $4,656.33. She further alleges that, prior to the institution of this suit, Yundt McKenna assigned their claim and lien to this plaintiff. Plaintiff prayed for a decree reforming the contract; for judgment against the defendants for the balance due under the contract, with costs and attorney's fees; and for the foreclosure of plaintiff's lien upon the property involved.
At this point we will observe that since the filing of suit $2,000 has been paid upon the balance due.
Defendants E.W. Heckart and Viva A. Heckart, his wife, C.L. Heckart and Zelia O. Heckart, his wife, answering, deny each and every allegation contained in the complaint, except that they admit that they are the owners of the real property described in the complaint, and that plaintiff's assignors performed some plumbing work in the construction of the Heckart apartment house. They aver that E.W. Heckart and C.L. Heckart were engaged as general contractors in constructing an apartment house for A.G. Wright, and thereafter for his grantee, Western Investment Corporation, on the real property hereinbefore described; that C.P. Yundt and F.E. McKenna, doing business under the firm name of Yundt McKenna, were under contract to install the plumbing and heating pursuant to a certain contract and specifications in writing; that thereafter the owner of the building became insolvent, and defendants E.W. Heckart and C.L. Heckart took over the building, and that defendant E.W. Heckart did, on November 24, 1925, enter into a contract with the Western Investment Corporation, the then owner of the property, whereby the land and the building under construction was conveyed to defendant E.W. Heckart; that under this contract defendant Heckart was to assume the "contract price for the plumbing pursuant to the terms of a written contract then in existence between the said former owner and the said C.P. Yundt, which contract called for and provided for the payment of $10,500." The answer avers that, attached to the written contract made and entered into by Yundt and Wright were certain written specifications, prepared by L.L. Dougan, an architect, which specifications were incorporated in and made a part of the contract, and that Yundt McKenna, in carrying on their work, failed and omitted to perform their "said plumbing contract" according to its terms and specifications. Then follow various specifications of inferior workmanship by the plumbing contractors.
For a second further and separate answer, defendants E.W. Heckart and C.L. Heckart aver their copartnership under the name of Heckart Son, and that, prior to November 24, 1925, they were engaged in the construction of certain apartments upon the land hereinbefore described, and that, in reliance upon the representations set down in the written contract, E.W. Heckart was induced to enter into a contract taking over the apartment house and "assuming said plumbing contract," and that he had no knowledge that Yundt McKenna claimed that a mistake had been made in that contract as alleged, or otherwise, but that he believed that the contract was to be performed as written, and in compliance with the specifications thereof; that, in reliance thereon, he invested the sum of $30,000 in taking over the building, assuming the contract, and completing the construction; that, by reason of the representations and acts and things above set forth, the plaintiff and her assignors are estopped from asserting that the contract had been modified as alleged in the complaint.
Defendants prayed for the dismissal of the complaint. The plaintiff, replying, denied the new matter set out in the answer.
On trial, the court decreed that the contract be reformed as prayed for in the complaint; that plaintiff recover judgment against A.G. Wright and E.W. Heckart for $2,561.33, and for $250 as a reasonable attorney's fee; that neither party recover costs; and that plaintiff have a first lien upon the building hereinbefore described, and upon the land on which the same is situate.
Defendants E.W. Heckart and Viva A. Heckart, his wife, C.L. Heckart and Zelia O. Heckart, his wife, appeal, assigning numerous errors in the findings of fact and conclusions of law made by the court, and in the decree based thereon. AFFIRMED.
This appeal involves two serious questions. The first relates to the reformation of the contract, and the second to the substantial performance of the contract as reformed.
The complaint to reform is based upon the non-negligent, mutual mistake of the two original parties to the contract sought to be reformed; and the testimony of both parties substantiates the allegations of the complaint with relation to their intention and the commission of the error. Viewed in the light of the surrounding circumstances, their story is reasonable. Wright, the owner of the real property hereinbefore described, being desirous of building an apartment house thereon, had plans and specifications drawn by a Portland architect. The specifications submitted provided that the plumbing be installed in accordance with the Plumbing Code of the City of Portland. Wright asked Yundt, the original contractor for the plumbing and heating of the building, to submit figures on the cost of the installation of the plumbing and heating plant as specified by the architect. On receiving the figures of the contractor, the owner concluded that they were prohibitive; and it was then mutually agreed to reduce the cost of the installation of the plumbing by adopting the standard prescribed therefor by the Plumbing Code of the State of Oregon. Their testimony on this point is corroborated by that of one Robert H. Griffith, managing salesman for a wholesale plumbing house and the man who reduced the original contract between the plumber and the owner to writing. He testified emphatically that the parties orally agreed that the plumbing should be installed to meet the requirements of the Plumbing Code of this state; and he claimed that certain language which he used in drafting the contract was inserted therein for the purpose of showing that agreement. Standing alone, this language is insufficient to overcome the language used in the specifications. But, from a consideration of all the testimony relating to the intention and the acts of the parties, we find much support for the allegations involving the mutual mistake of the original parties to the contract.
This contract was entered into on June 25, 1925. Prior to that date the Plumbing Code of the State of Oregon was placed upon the statute books. See Gen. Laws Or., 1925, Chap. 272, p. 486. See, also, 2 Or. L., Supp. 1927, Title XLIV, Chap. 20, p. 1639. Among other things, that title provides —
"* * For the registration of persons * * carrying on the business of installing plumbing and drainage in buildings fixing a registration fee, and a penalty for violation of this act * *; and providing a minimum standard for installation of plumbing and drainage in buildings * * in the state of Oregon, and empowering incorporated cities and towns in the state of Oregon to enact ordinances and building codes governing the manner of installation of plumbing * * within the corporate limits of such cities and towns of an equal or higher standard than by this act is provided."
Section 1 of the act declares that plumbing and drainage shall be installed in accordance with the Plumbing Code set out therein. Sections 2 and 3 provide for the registration of, and the issuance of certificates to, plumbers upon the payment of a specified fee therefor. Section 4 provides for the disposition of all such fees and the enforcement of the act by the commissioner of labor. Section 5 denies to any plumber the right to maintain a suit without alleging and proving his registration. Section 6 provides a penalty for the violation of the act. Section 7 sets out the Plumbing Code of the state. Section 8 provides for the enactment and enforcement by municipalities of ordinances for the regulation of the business of master plumbers therein, which ordinances shall prescribe the manner in which plumbing shall be installed in such municipalities, provided that such ordinances shall not prescribe a lower standard of installation than by this act prescribed. Section 9 relates to the application of the act.
As indicated by the title of the act, the Oregon Plumbing Code prescribes a minimum standard for installation of plumbing and drainage in buildings and structures in Oregon; and all persons have a right to contract for the installation of plumbing of a higher standard than provided therein.
The defendants contend that a reformation of the contract embraces the reformation of the lien notice, which is not allowed by law. They also assert that the plaintiff is not entitled to reformation, on the ground that she is a mere volunteer; and, further, that she is estopped by her assignor's representations to the effect that the plumbing contract was under the Portland Plumbing Code. They further assert that there is a variance between the contract mentioned in the lien and that pleaded in the complaint and established at the trial.
The reformation of the contract in the case at bar does not alter the lien notice. The contract is not a part of the notice. In some jurisdictions the statute requires that the contract be described in the notice. Our statute, however, makes no such requirement. It prescribes the necessary elements to be set out in a claim of lien; and this court has time and again held that it is unnecessary to set out in the notice of lien any more than the statute itself requires. See Or. L., § 10195; Osborn v. Logus, 28 Or. 302 ( 37 P. 456, 38 P. 190, 42 P. 997); Allen v. Elwert, 29 Or. 428 ( 44 P. 823, 48 P. 54); St. Johns Lbr. Co. v. Pritz, 75 Or. 286 ( 146 P. 483); 40 C.J., p. 231.
There is no force in the contention of defendants that this plaintiff is estopped for the reason that she is a mere volunteer. It has been held by this court that the assignee of a chose in action may maintain an action thereon in his own name although he may have paid no consideration therefor. Among the decisions, see Gregoire v. Rourke, 28 Or. 275 ( 42 P. 996); Haviland v. Johnson, 70 Or. 83 ( 139 P. 720). The law seems to be well settled that the equitable remedy of reformation will not only be allowed as against original parties and their heirs, but will also be granted as against the assignees, creditors, purchasers with notice, and all others standing in privy: Coates v. Smith, 81 Or. 556 ( 160 P. 517); 23 R.C.L., p. 339; 3 Elliott on Contracts, § 2381; 34 Cyc., p. 953. In the case at issue, the record shows that the assignment was made after the recordation of the lien.
Early in the judicial history of this state it was held that, although the right to perfect a mechanic's lien by filing notice under the act providing for such lien is a privilege to be exercised by the person performing the labor or furnishing material, when the lien is perfected it is assignable: Brown v. Harper, 4 Or. 89; Nottingham v. McKendrick, 38 Or. 495 ( 57 P. 195, 63 P. 822); Loud v. Gold Ray Realty Co., 72 Or. 155 ( 142 P. 785). By the assignment to the plaintiff as against the defendants, she acquired all rights to which the assignors were entitled: 5 C.J. 961.
Now, adverting to the alleged variance: The testimony shows that there was no substantial variance between the contract as performed and the contract as reformed. In other words, the evidence shows that there was a substantial performance of the contract by Yundt McKenna.
Did defendant E.W. Heckart know, at the time he took over the building, that the plumbing was being installed in conformity with the Oregon Plumbing Code? It is asserted that he took over the building in the belief that the plumbing was to be installed in accordance with the Portland Plumbing Code. The preponderance of the evidence is to the contrary. The record discloses that E.W. Heckart and C.L. Heckart are contractors and builders of wide experience. As appears from the statement, the Heckarts had the contract for the construction of the building, and at the time of the transfer of the real property to E.W. Heckart by the Western Investment Corporation he had knowledge of the work that was being done on the building, and, by reason of his actual presence on the job, was familiar with the "roughing in of the plumbing," and the character thereof. Day by day he stood by and saw the plumbing work progress. Not only that, but the testimony of both Yundt and McKenna, and of their bookkeeper, is to the effect that, prior to taking over the property Heckart called upon them and attempted to have the contract price reduced as a part consideration for his taking over the building and assuming the indebtedness that had arisen out of its construction, and that he was then and there informed that Yundt McKenna would not reduce their contract price. Besides, according to their testimony, they at that time told Heckart that the plumbing was being installed in accordance with the Oregon Plumbing Code.
It does appear, however, that, according to the specifications, it was the duty of the plumbing contractors to keep the plumbing and heating system in repair for a period of one year after completion thereof. This they failed to do; and by reason of such failure the defendants were damaged in the amount of $200, which amount will be credited upon the judgment awarded to the plaintiff.
In all other things, the decree appealed from is affirmed.
Neither party will recover costs in this court.
AFFIRMED.
RAND, C.J., and BEAN and BELT, JJ., concur.