Building Contract—Architects’ Certificates—Failure of Contractor to Prosecute Work With Promptness—Right of Owner to Supply. Workmen and Materials—Termination of Contract by Owner—Rescission.—A provision in a building contract read as follows: “Should the contractor at any time refuse or neglect to supply a sufficiency of properly skilled workmen, or of materials of the proper quality, or fail in any respect to prosecute the work with promptness and diligence, or fail in the performance of any of the agreements on his part herein contained, such refusal, neglect, or failure being certified by the architects, the owner shall be at liberty, after three days’ written notice to the contractor, to provide any such labor and materials, and to deduct the costs thereof from any money then due, or thereafter to become due, to the contractor under this contract; and if the architects shall certify that such refusal, neglect or failure, is sufficient grounds for such action, the owner shall also be at liberty to terminate the employment of the contractor for the said work, and enter upon the premises, and take possession of all materials thereon, and to employ any other person or persons to finish the work, and to provide the materials therefor; and in ease of such discontinuance of the employment of the contractor, he shall not be entitled to receive any further payment under this contract, until the said work shall be wholly finished, at which time, if the unpaid balance of the amount to be paid under this contract shall exceed the expense incurred by the owner in finishing the work, such excess shall be paid by the owner to the contractor; but if such expense shall exceed the unpaid balance, the contractor shall pay the difference to the owner.” Held, that the provision authorizing the owner to provide the necessary labor and material when the contractor fails so to do does not contemplate a termination of the whole contract, and only contemplates the supplying of a sufficient number of properly skilled workmen, or the supplying of a sufficiency of proper material, each to be used by the contractor under his contract, in the event that he himself shall have refused or neglected to supply them; and that the further provision, authorizing the owner to terminate the whole contract, upon receiving a certificate of the architect as to the sufficiency of the ground therefor, was one for the rescission of the contract at the instance of the owner for the default of the contractor.

Id.—Construction of Architects’ Certificates—Notice of Termination by Owner.—In order to render operative certificates of the architect issued in pursuance of such provisions of the contract, there must be a substantial compliance by him with the terms of the contract touching their issuance. As such certificates contemplate forfeiture and the right of rescission, their terms are to be strictly construed. The same rule of strict construction is applicable to the notice following the architects’ certificates, which the contract requires shall be given by the owner to the' contractor. While no precise form of words is required in the notice, it must be such as fairly and fully to advise the contractor of what the owner demands, and what he will do in the event of a noncompliance with the demand.

Id.—Construction of Contract—Partial Termination of Work not Contemplated.—Such provisions of the contract, while in proper instances they authorize the termination of the employment of the contractor in toto, do not contemplate a termination of his employment for only a part of the work. As to any part of the work touching which, according to the architect’s certificate, the contractor is delinquent, the owner may furnish the requisite labor and materials, which shall be used by, and charged to, the contractor, but he may not oust the contractor from that part of the contract and undertake to perform it himself, independent of the contractor.

Id.—Failure of Owner to Terminate Contract in Toto—Owner not Authorized to Take Charge of Work—Contractor Justified in Resisting Attempt.—Where the architects’ certificate was sufficient to have justified the owner to follow it up with a lawful notice" to the contractor terminating his employment, but the owner failed to do so, it resulted from such failure that t*he owner was not authorized to take charge of the work or premises, or any part thereof, and that the contractor was justified in resisting the owner’s attempt to do so even if such attempt extended to the whole work instead of only parts thereof.

Id.—Conclusiveness of Architect’s Certificates to Facts Stated Therein.—Where the parties to a building contract thereby authorize the architect, as arbiter, to determine and certify the existence of a fact when such fact becomes material to a proceeding under the contract, his certificate, duly made, that the fact exists, is conclusive upon the parties with respect to the thing to be done; to which such fact relates, or as to which, under the proceeding, it is to affect the rights of the parties, and such certificate can be impeached as to such facts only for fraud, or for gross mistake amounting' to fraud.

Id.—Notice oe Termination Following Architect’s Certificate.— If, in pursuance of such certificate of the architect, the owner had given a proper notice terminating the employment, the certificate, if not so impeached, would be conclusive evidence of the delinquency of the contractor in the particulars therein stated, in any controversy growing out of such termination. It is not, however, strictly speaking, a common-law award.

Id.—Eight op Contractor to Progress Payments—Effect of Failure to Prosecute Work With Diligence.—Under such provisions of the contract, the rights of the contractor to receive progress payments due him for work already done, as called for by a further stipulation of the contract entitling him to monthly payments for such work, did not cease at the time of his failure to furnish the necessary workmen and materials to prosecute the work with diligence. Such right did not cease until, nor unless, there has been a valid termination of his employment in the manner provided.

Id.—Unjustifiable Termination by Owner—Quantum Meruit by Contractor—Evidence op Freedom of Building from Liens or Claims.—The clause in the contract requiring monthly progress payments to the contractor provided “that before each payment, if required, the contractor shall give the architects good and sufficient evidence that the premises are free from all liens and claims chargeable to the said contractor; and further, that if at any time there shall be any lien or claim for which, if established, the owner of the premises might be made liable, and which would be chargeable to the said contractor, the owner shall have the right to retain out of any payment then due or thereafter to become due, an amount sufficient to completely indemnify himself against such lien or claim.” At the time of the demand for payment of the last month’s work, no requirement or demand for evidence of freedom from liens or claims against the contractor was made. There was then a claim existing against the contractor in favor of a subcontractor, but the owner’s refusal to pay was not based upon that fact, but on the fact tha.t she then believed that she had lawfully terminated the plaintiff’s employment. Neither the lack of evidence of freedom from liens, nor the existence of the said claim, was pleaded in the answer as an excuse for the refusal to pay, in this action by the contractor to recover on the quantum meruit the value of the labor and materials furnished under the contract. Held, that under such circumstances, the absence of a finding on the subject was immaterial.

Id.—Waiver of Certificate That Progress Payment was Due— Proper Performance of Work Entitling Contractor to Progress Payment.—A provision of the contract required that no progress payments were to be.made until the architects certified in writing that all work upon the performance of which the payment was to become due had been done to their satisfaction. For many months it had been the custom of the 'contractor, at the beginning of each month, to present to the architects an estimate of the work done and •material placed during the preceding month, and this Was understood to constitute a' request to them to examine the work and certify that it was done to their satisfaction. Until the time of the presentation of the estimate of the last month’s work, this had always been done. When this last estimate was presented, the architects notified the contractor that they were instructed by the owner not to give the certificate, and the owner also declared that she would make no more payments. As a matter of fact, the last •month’s work was well done, and no claim was ever made that it had not been properly done, nor any suggestion that the architects’ certificate was desired, the owner’s refusal to pay being based upon reasons having no relation to the character of the work. IIeld, that the architects should have given their certificate approving the work, and that, under the circumstances, the payment for the last month’s work became due, notwithstanding the absence of such certificate, which must be considered as having been waived, and that demand for payment must be deemed to have been duly made.

Id.—Rescission by Contractor—Unjustifiable Refusal of Progress Payment.—The unjustifiable refusal of the owner to make a progress payment, called for by the building contract, constituted a breach of the contract, and is a sufficient cause for a rescission of the contract by the contractor, and authorized him to maintain a suit upon the quantum meruit for the reasonable value of the work and materials incorporated into the building.

Id.—Rescission When Authorized—Party Rescinding in Default in Unrelated Matter.—The general rule that a rescission of a contract without the consent of the other party cannot be made except by one who is not himself in default, does not apply to a delinquency of the rescinding party, which has no relation to the obligation of the other party, in respect of which the right of rescission is claimed, and which does not excuse, prevent, or interfere with his performance of that obligation, or affect or impair his duty to perform it. Such general rule only applies to a delinquency of the complaining party connected with the matter in litigation, so that it has in some measure affected the equitable relations subsisting between the two parties, and arising out of the transaction.

Id.—Default of Contractor in Diligence—Liability of Owner to Make Progress Payment—Contractor Authorized to Rescind.— The mere negative default of the contractor in failing to prosecute the work of building with diligence, for which neglect the contract afforded the owner a specific remedy which she omitted to pursue, did not affect the liability of the owner to pay for the work already done, and her unjustifiable refusal to make such payment authorized the contractor to rescind the contract.

Id.—Architects’ Certificate not Conclusive in Collateral Matters.—A certificate- of the architects, finding the failure of the contractor to prosecute the work of building with diligence, which was issued by them to initiate a proceeding to terminate the contract, and for the sole purpose of serving as a basis for a notice of its termination by the owner, but which became abortive because no such notice was given, is not conclusive of the fact of the failure of the contractor in any matter not dependent on or arising out of the proceeding to terminate the contract. In any other collateral matter, the certificate, at most, could be no more than prima facie evidence of the failure of the contractor.

Id.—Finding—Failure to Supply Sufficient Workmen or Materials—Diligence in Prosecution of Work.—The finding of the court that the contractor had not failed or neglected to supply sufficient workmen and materials, or to' prosecute the work with diligence, is held to be supported by the evidence.

Id.—Oral Contract Extending Time for Completion of Building— Destruction of Building by Fire—Waiver of Provision for Damages for Delay—Estoppel of Owner.—The original written contract for the erection of the building in question required its completion on or before September 1, 1906, and provided for the payment to the owner of liquidated damages for each day’s delay. While the building was in course of construction, the- great fire in San Francisco, of April, 1906, destroyed everything in it that was combustible, and for several months prevented the resumption of ordinary business in that city. Under the contract, the owner was bound to restore the destroyed parts of the building, and put it in such condition that the remainder of the work could be done. She elected to do so, and employed the original contractor for that purpose. She knew that the work of restoration could not be done until after the time fixed in the original contract for the completion of the entire building, but did not specify any time within which the work of restoration should be completed, and, in fact, that work was not completed until more than two months after September 1, 1906. She made no complaint of this delay, but directed the contractor to proceed with the work, and complete the building in accordance with the original plans, and thereafter, as the work progressed, according to her directions, regularly made the monthly progress payments as they became due, and allowed the contractor to go on expending large sums of money in the building, without mentioning the fact that liquidated damages, or damages for loss of rents, had been or were accruing, or claiming the right to deduct the same from the monthly payments. Meld, the owner was estopped from denying either the making of an oral agreement for an indefinite extension of the time for the completion of the building, the substantial performance of which would make it lawful as an oral alteration of the original written contract, or the waiver of the covenants for the completion of the building within the time designated, and was not entitled to recover the liquidated damages for the delay, or damages for loss of rents during the delay.

Id.—Effect of "Waiver of Time of Performance.—If the time of performance of a building contract is once waived, even when it is made of the essence, the matter is set at large, and another date of performance can only be fixed by a definite notice, or by conduct • equivalent thereto.