
    Henry A. Conolly, as Surviving Partner of the Firm of E. D. Conolly & Sons, Appellant and Respondent, v. Rosalie Hyams, as Executrix, etc., of Joel E. Hyams, Deceased, Respondent and Appellant.
    
      Action on a building contract -4 a failure to produce an architect’s certificate does not authorize a dismissal on the merits.
    
    Where the complaint, in an action to recover the last installment on a building contract containing a provision requiring the contractor to obtain a certificate signed by the architect, before any installment should become payable, alleges full performance of the contract, which allegation is denied by the defendant, and the referee finds, upon conflicting evidence, that the plaintiff never obtained the architect’s certificate, the complaint is properly dismissed; the dismissal, however, should not be “ upon the merits,” as the determination of the referee is simply an adjudication that the action had been prematurely brought and amounts in effect to a nonsuit.
    O’Brien, J., dissented.
    Appeal by the plaintiff, Henry A. Conolly, as surviving partner of the firm of E. D. Conolly & Sons, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Hew York on the 4th day of August, 1899, upon the report of a referee ; also an appeal by the defendant, Rosalie Hyams, as executrix, etc., of Joel E. Hyams, deceased, from so much of the judgment as dismissed the plaintiff’s complaint without costs.
    
      Benjamin Yates, for the plaintiff.
    
      Abram Kling, for the respondent.
   Rumsey, J.:

The action was brought to foreclose a mechanic’s lien. The complaint was dismissed without costs) . Both parties appeal; the plaintiff from so much of the judgment as dismissed the complaint, and the defendant from so much as refused costs to her. The plaintiffs contracted to put up a building for the defendant’s testator at a certain price, to be paid in installments. It was provided in the contract that.a certificate should be obtained from and signed by the architect before an installment should become payable. The action was brought to recover the last installment. The plaintiff alleged full performance of the contract. That was denied by the defendant. There was a serious conflict of evidence as to whether the certificate had been procured from the architect entitling the plaintiff to recover the last installment, the plaintiff insisting ’and giving evidence that' the certificate had been given, and the architect testifying that he did not think he gave a certificate and that it had never been asked for. Upon that evidence the referee found for the defendant and dismissed the complaint.

The plaintiff was bound to produce the certificate before he was éntitled to his payment, and that certificate was a condition, precedent to his right to be paid in full. Until he procured it he was not entitled to recover. (Weeks v. O'Brien, 141 N. Y. 199.)

The finding of the referee was sustained by the evidence ; therefore, his dismissal of the complaint was correct, but the failure to obtain a certificate did not take away permanently the right of the plaintiff to be paid whatever was due to him upon the contract. When that certificate shall have been obtained the defect in his cause of action will be supplied. The determination of the referee was not, therefore, an adjudication that the plaintiff could never recover, but was simply a-determination .that the bringing of the action had been premature, and amounted in effect to a nonsuit. The complaint should not, therefore, have been dismissed absolutely, and the judgment should be modified to read that the complaint was dismissed, but “ not upon the merits.” The question of costs was within the discretion of the referee, and upon the whole case we see no reason for interfering with the manner in which he exercised it. The defendant’s appeal should, therefore, fail.

The judgment should he modified by inserting after the word “ dismissed,” the words “ but not upon the merits,” and as so modified be affirmed, with costs to the defendant respondent.

Van Brunt, P. J., Barrett and Ingraham, JJ., concurred; O’Brien, J., dissented.

O’Brien, J. (dissenting):

The complaint was silent as to whether the architect’s certificate was or was not given, and although that issue was presented by the answer and not by the reply, it was one to which the referee gave undue importance by deciding the. case on that point alone. During the work, although the contract provided at different stages thereof for eight separate .cer tiff cates, it appears that, exclusive of the: final one in dispute, there were but three given; and that, regardless of their presentation, payments were made by the defendant. It will be noticed, therefore, that the parties, to the contract during the progress' of the work did not attach much importance to them as shown by the testimony that, when the suggestion was made that a certificate had been procured, the defendant stated that he did' not care whether it was or not as he would himself determine whether the payment was due or not, regardless of the certificate.

If the rights of the parties are concluded by the determination of the question whether the architect’s certificate for the eighth or last payment under the contract was or was not given, then I agree with Judge Eumsey that that question having been resolved upon conflicting evidence in defendant’s favor, the judgment should not be disturbed. I think, however, considering the manner in which the trial proceeded, that, apart from the certificate of the architect, the issue to be determined was whether the contract was substantially completed. This, upon the trial, both sides proceeded to litigate, as will be seen not alone from the plaintiff’s evidence, but also by the cross-examination entered upon by the defendant, directed to showing that the plaintiff had not completed or substantially performed the contract, and that the defendant had given a notice which, under the 4th section thereof, he had the right to give; that he intended, upon the plaintiff’s refusal,- to proceed and complete the work.

There thus arose a condition of affairs where the provision as to the presentation of the architect’s certificate, was inapplicable. The contractor was insisting that the contract was completed, and the owner was equally as insistent that it had not been and proceeded under the clause of the contract entitling him to do so, to finish such work as he clainj.ed had been left undone. I think, therefore, under the case referred to by Mr. Justice Rumsey of Weeks v. O'Brien (141 N. Y. 199), that it was error for the referee to dismiss the complaint upon the ground that no architect’s"*certificate was given, but instead thereof he should have proceeded to determine to what extent the owner had been obliged to pay for completion, and this amount should have been deducted from the last payment. Evidence of just what it, cost defendant was given', and without crediting any of ‘the plaintiff’s evidence as to the extent and value of the work thus done, there would be due the plaintiff an amount equal to just about what was offered in the shape of a judgment. Although the offer of judgment was not before the referee, and is not before us for consideration, it is referred to merely for the purpose of showing that there was no real dispute as to what the plaintiff should receive if entitled to receive anything.

As said in Weeks v. O'Brien (supra)we think this issue as to the completion of the work by the defendant, having been opened by the counsel for the defendant and it appearing from his evidence that no certificate was necessary to enable the plaintiff to recover the difference between the last installment and the amount expended by the defendant in completing the work, the complaint should not have been dismissed upon the ground upon which the motion was granted, but that the case should have gone to the jury upon the issue so litigated.”

It is urged, however, that the lien was filed and the suit begun before the completion of the work and was, therefore, premature. But this was not conclusively established, there being evidence on the part of the plaintiff from which a different Inference or conclusion could have been reached. According to the plaintiff the firm •“ got through this work about the middle of January,” 1889, having, on December 27, 1888, agreed to finish; the lien was filed January 24, 1889, and, though work was done by the defendant on the building thereafter, it was not work included in the contract. There was further testimony that, although the plaintiff’s work was finally completed in January, it was substantially done on December 27, 1888, when the building was taken possession of by the defendant and partially occupied.

It also appears that, though no change was made in writing in the original plans, there were verbal changes agreed upon by which the scope of the plaintiff’s work was materially altered. Mr. Hyams, himself, before December, 1888, sublet some of the work originally included in the specifications, and certain additional work. Just what work the parties had in mind on December 27, 1888, when the plaintiff agreed to do all the remaining work, is not certain,.but, considering Mr. Hyams’ conduct in subletting part of the work which was done under his supervision, it is a fair inference that that e agreement related to such work as it was then mutually arranged the plaintiff was to finish. And in this connection some importance is to he attached to the Ith certificate, which stated that the building “ was completed*” from which it would reasonably appear that, with respect to any work remaining to be done, the parties then reached an understanding by which the building was accepted under plaintiff’s agreement to finish certain work then agreed upon.

In other words, it appears that the terms of the original contract were changed by Mr. Hyams, by virtue of the jirovision therein permitting him to make such changes, and that a new agreement for the uncompleted portion of the building was entered into; that at that time — in December, 1888 — the plaintiff’s work was' substantially performed and was finally completed by the middle, of January, before the lien was filed. It is unnecessary to determine just what amount the defendant should be allowed to deduct from the final payment, as that would be the proper subject for the consideration of the referee upon a new trial, if granted, provided he reached the conclusion that in December, 1888, the original contract was abrogated fro tanto and a new agreement entered into between the parties by which certain work was to be done by the plaintiff and additional work by the defendant, himself, which latter, so far as it affected the value of the work which the plaintiff’s firm was to do under the original contract, was to be allowed the defendant and deducted from the final payment.

I am, therefore, of the opinion that the judgment should be reversed and a new trial ordered, with costs to the plaintiff to abide the event.

Judgment modified by inserting after the word dismissed ” the words “ but not upon the merits,” and, as so modified, affirmed, with costs to the defendant respondent.  