Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; William H. Holly, Judge.
Before EVANS, TREANOR, and KERNER, Circuit Judges.
The suit in the District Court involves the validity of a mechanic's lien for material furnished by the appellant as a subcontractor of the bankrupt, Wilson. Appellee disputed validity on the ground the claim of lien was not filed within the time provided by the Illinois statute.
The bankrupt, Wilson, contracted with Owens-Illinois Glass Company, herein called Owens, to install material in a building owned by Owens. Bailey Meter Company, the plaintiff herein, and hereafter called Bailey, was a subcontractor which furnished two meters covered by the contract of the principal. The meters were furnished in August, 1937. Within ten days Owens paid Wilson for them. They proved defective and Bailey cured the defect in January, 1938. In the same month Bailey served notice of a mechanic's lien on Owens, its theory being that the sixty day statutory period within which notice of lien might be filed, began to run from the date when the defective merchandise was repaired and made acceptable.
On this alleged mechanic's lien Bailey instituted suit against Owens in the Illinois state court. In the meantime Wilson became a bankrupt, and a trustee was appointed who obtained an order against the further prosecution of the claim and directed Owens to turn over to the trustee certain funds in its hands. It was further ordered that Bailey pursue its suit or claim against Owens in the court of bankruptcy. Owens denied indebtedness to the bankrupt. The matter was referred to the referee in bankruptcy who found for Baily.On review, Judge Holly reversed the referee, and judgment was entered for defendant.
We answer the question - May a subcontractor who furnishes material to a principal in Illinois, but files no lien therefor within sixty days from the date of furnishing the material, later and after the principal has paid the contractor therefor and upon finding that the material so furnished is defective and valueless, revive the period for filing claims for subcontractor's mechanic's lien by repairing without cost the defective material? - in the negative. See Taylor Bros. v. Gill, 126 Okl. 293, 259 P. 236, 54 A.L.R. 979, and annotations (where many cases including an Illinois decision, Snitzler v. Filer, 135 Ill.App. 61, are listed) at page 984; Ruling Case Law, Vol. 18, page 934, correctly states the rule to be as follows:
"Generally where a contract is regarded as completed, subsequent performance of some service or furnishing some material remedying the defect will not operate to extend the time for claiming a lien or to revive a lien then expired."