Doherty v. Carruthers

Defendants contracted with Jack Bried, the original contractor, for certain repairs and improvements on their real property. The contract contained the following provision: “Notice of completion to be filed by this contractor [Bried].” Bried entered into subcontracts with plaintiffs Randolph Doherty and Burt C. Wheeler for materials and with plaintiff Ernest Ongaro for materials and labor.

The work of improvement was completed August 9, 1955. On October 17, a notice of completion, reciting that the work of improvement was completed on October 14, was filed by Bried. It was signed “C. Hugh Carruthers by Jack Bried (As Owner’s Agent).” Plaintiffs filed their claim of lien on November 16, 1955; i.e., within 30 days of the filing of notice of completion, 99 days after actual completion.

The evidence supports these findings and conclusions. Defendant Charles Carruthers testified that when he entered into the contract he was familiar with the requirement of law concerning the filing of a notice of completion. He knew that the purpose of filing such a notice was to give persons who had unpaid bills an opportunity to file a lien against the property. He left up to Mr. Dried solely and entirely the matter of recording the notice of completion. He had no discussion with Dried on that subject except when they were within a few days of finishing the job and Dried said he would file the notice within the next few days. Carruthers did not ask Dried to furnish him a copy of the notice when filed, nor to advise him as to the date of filing the notice. “I left it up to him. It was agreed he would file it. It was part of our contract [that he was to file the notice of completion].” Carruthers testified that when on August 11, 1955, he made the fourth payment to contractor Dried he did not inquire whether there were any outstanding unpaid bills for labor or materials, nor as to who had furnished the work or materials, nor whether Dried had recorded the notice of completion. He merely made the fourth payment on the basis that the work had been completed on August 9. When the final payment was made (September 11) Carruthers did not inquire of Dried whether he had recorded the notice of completion nor did he inquire if there were any unpaid bills. He made his final payment to Dried upon Dried’s representation that 35 days had elapsed since completion of the contract. Carruthers did not until December 14 inquire at the recorder’s office whether a notice of completion had been filed. On December 14, he for the first time learned about the notice that Dried had filed. Prior to then he made no inquiry as to whether a notice of completion had been filed. Also, that was the first day that he had notice that there were any unpaid bills.

Plaintiff Doherty testified that prior to the recording of the notice of completion on October 16, he had no knowledge that the work had been completed. On learning of the recordation of the notice setting forth October 14 as the completion date, he carried his time for filing his claim of lien as 30 days from the recording of the notice on October 16.

William A. Gable, on behalf of plaintiff Ernest Ongaro,

Upon hearing this evidence the trial judge, Honorable Thomas P. Keating, pronounced judgment for the plaintiffs and said: “I think justice dictates that where [one of] two innocent parties are going to be injured ... I think it will have to be the one who might be charged with having allowed the situation to develop. These materialmen and subcontractors actually had no opportunity whatever to protect themselves in the established way and they took advantage of the established way of doing things and filed their notice within time.” We concur.

That Bried had express authority, unrevoked authority, from the owner to write, sign, verify and file for record the notice of completion of behalf of the owner, abundantly appears from the written contract between Bried and the owner and from the owner’s testimony. This agency was created by “a precedent authorization” (Civ. Code, § 2307) and therefore, contrary to defendants’ contention, involves no question of ratification. Also, we are dealing with “actual authority” which the principal “intentionally” conferred “upon the agent.” (Civ. Code, § 2316.)

Accordingly, this agent had authority to make “a representation respecting any matter of fact, not including the terms of his authority, but upon which his right to use his authority depends, and the truth of which cannot be determined by the use of reasonable diligence on the part of the person to whom the representation is made.” (Civ. Code, § 2319.) Given authority to prepare and file the notice, Bried of course had authority to state the facts (including the date of completion) which the statute expressly required such a notice to set forth.

In such a case, the provisions of section 2330 of the Civil

Lien claimants are entitled to watch these filings in the office of the county recorder and rely upon them. (Hughes Mfg. etc. Co. v. Hathaway, 174 Cal. 44 , 48 [ 161 P. 1159 ]; Schwarz & Gottlieb, Inc. v. Marcuse, 175 Cal. 401 , 414 [ 165 P. 1015 ].)

The notice filed in the instant case was regular upon its face. It told the lien claimants that it was timely filed (within 10 days after completion of the work of improvement), therefore, valid and fully effective. The conclusion would irresistibly follow, in the mind of a lien claimant, that he could safely file his claim of lien “within 30 days after the date of filing for record such notice” (Code Civ. Proc., § 1193.1).

Such representations of fact made in writing, 1 ‘ signed and verified by the owner or his agent” and filed for record on behalf of the owner (§ 1193.1) furnish just as effective a basis for estoppel as the oral representations made in Hubbard v. Lee, 6 Cal.App. 602 [ 92 P. 744 ] and 10 Cal.App. 477 [ 102 P. 528 ]. There, an owner who declared that the buildings were not completed and that he would not accept them until certain work was done was deemed estopped to deny the validity of a claim filed by contractors who relied upon such declarations in furnishing materials and in calculating the time for the filing of their claims.

Defendants contend there is no room for estoppel under this statute. They say that a tardy filing of the notice of completion is void and cannot furnish any basis for an estoppel. They rely upon C. Ganahl Lumber Co. v. Thompson, 205 Cal. 354 [ 270 P. 965 ]. That case does not support their thesis. The applicable statute was section 1187 of the Code of Civil Procedure, as amended by the Statutes of 1919, chapter 146, page 190. It authorized the subcontractor to file his claim of lien after he had completed his work and until 30

Estoppel was apparently urged against the defendants upon the ground that their notice of completion declared that completion occurred on November 15. Of this contention the court made the following disposition: “Even if it be assumed, without deciding, that the owners by reason of their tardy filing of the notice of completion are estopped to deny that the building was completed on November 15, 1923, as recited in such tardy notice of completion, it would avail the appellant nothing for its claim of lien would not, even then, have been filed within 30 days after such completion as required by section 1187.” (P. 356 of 205 Cal.) By the latter remark the court apparently had reference to the forepart of section 1187 which said that a subcontractor would have until 30 days after completion for the filing of his claim of lien. If the owner were held to the declaration in his recorded notice that November 15 marked the date of completion, plaintiff subcontractor would have had until December 15 to file his claim, which he did not do. He delayed his filing until December 27.

Perhaps the lack of a basis for an estoppel in the Ganahl case may be found in the fact that the owner’s notice of completion showed upon its face it was being filed at least five days too late. Filed November 30, it set forth the completion date as November 15. That, conceivably, may have been regarded as a suspicious circumstance which should have put the lien claimant upon his inquiry. There is no such circumstance in our case. Here, the notice was filed October 17 and represented that the work was completed Oe

The judgment is affirmed.

Bray, P. J., and Tobriner, J., concurred.

Appellants’ petition for a hearing by the Supreme Court was denied August 5, 1959.