165 Cal. 497. material to a proceeding under such contract, the certificate of the architect, 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 that such certificate can be impeached as to such facts only for fraud, or for gross mistake amounting to fraud. (Dingley v. Greene, 54 Cal. 333; Moore v. Kerr, 65 Cal. 519, 4 Pac. 542; City St. Imp. Co. v. Marysville, 155 Cal. 419, 23 L.R.A. (N.S.) 317, 101 Pac. 308.) There can be no doubt that if, in pursuance of said certificate, 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. (M. E. Church, etc. v. Seitz, 74 Cal. 295, 15 Pac. 839; Foster v. Carr, 135 Cal. 86, 67 Pac. 43.) It The object and purpose of paragraph 16, in this regard, was to provide a proceeding whereby the owner might terminate the employment in case the contractor failed in any respect to perform the contract. It does not purport to qualify or affect the right of the contractor to receive the moneys due him for work already done at the time of his failure, [514] unless the proceeding is carried to the extent of an actual discontinuance of the contractor's employment. To provide for that contingency the paragraph declares that "in case of such discontinuance of the employment of the contractor, he shall not be entitled to receive any further payment under this contract," until the work shall have been wholly finished by the owner. will be seen that the right to receive the regular monthly payments under the 17th paragraph does not cease until, nor unless, there has been a valid termination of the employment in the manner provided and that such termination bars only the right to "any further payment." The certificate of delinquency is conclusive thereof for the purpose of authorizing a termination and for the purpose, after such termination, of authorizing the owner to refuse further payments under the contract. The certificate here given does not state that any of the work done was defective or not in conformity with the contract. All it declares is that part of the work had not been diligently prosecuted. Under the terms of the contract, the plaintiff was entitled, on the first day of each month, to a payment equal to three-fourths of the value of the work and materials put into the structure during the preceding month. The facts stated in the certificate had no bearing whatever, upon the right of plaintiff to the Sep tember payment for the August work. No matter how slowly the work was carried on, the plaintiff, until its employment was lawfully discontinued under the contract, was entitled to the contract payments for the work properly done. It follows that the facts stated in this certificate, admitting for the present that it is conclusive, did not deprive plaintiff of the right to demand and receive payment for the August work, nor justify the owner in refusing to make said payment. Paragraph seventeen of the contract, with regard to the monthly payments, 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 said 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 [515] indemnify himself against such lien or claim." The requirement or demand for evidence, mentioned in the first part of this provision, was not made. At the time of the demand for payment for August work, there was a claim against the contractors in favor of the Western Expanded Metal and Fireproofing Company, on account of which Mrs. Butler might have withheld that payment, if she had so desired. The refusal to pay was not based on that fact, but on the fact that 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. Under these circumstances the absence of a finding on the subject is immaterial. The amount of the claim is stated in the findings and judgment. But as the only relief given to that defendant is a direction that its claim be paid only out of the sum found due to the plaintiff, Mrs. Butler has no further substantial interest concerning it. The findings do not, in terms, state that the architects did not certify in writing that the August work for which payment was demanded had been done to their satisfaction. The general finding is that plaintiff rescinded the contract upon the ground that the amount owing for August work had not been paid, "after demand having been duly made by plaintiff upon defendant for such payment." This finding appears to be sufficient to support the judgment, so far as this point is concerned. The evidence shows a state of facts under which the owner would not be authorized to insist that there was no archi tects' certificate that the work was satisfactorily done. It appears that the custom was for plaintiff, each month, to present to the architects an estimate of the work done and material placed during the preceding month, that this was understood to constitute a request to the architects to examine the work and certify that it was done to their satisfaction. Until September, 1907, this had always been done. When the September estimate was presented the architects said that they were instructed by the owner not to give the certificate. The owner also declared that she would not make any more payments. There was never any claim that the work for August had not been properly done, nor any suggestion that the architects' certificate was desired. The refusal [516] to pay was wholly based upon reasons having no relation to the character of the work. As matter of fact, the work for August was well done. The architects should therefore have given their certificate to that effect. Under these circumstances, the payment for the August work became due, notwithstanding the fact that the architects did not approve and certify to the work, the preliminary certificate must be considered as having been waived, and the demand for payment must be deemed to have been duly made. (Coplew v. Durand, 153 Cal. 281, 16 L.R.A. (N.S.) 791, 95 Pac. 38; Tally v. Ganahl, 151 Cal. 421, 90 Pac. 1049; Wyman v. Hooker, 2 Cal. App. 40, 83 Pac. 79; Antonelle v. Kennedy, etc. Lumber Co. 140 Cal. 309, 73 Pac. 966; 30 Am. & Eng. Enc. of Law (2d ed.) 1245, 1249; 6 Cyc. 36.) The finding of a due demand is supported by this evidence. The refusal of the owner to pay for three-fourths of the August work was therefore unjustifiable and was a breach of the contract. As to the contractor, the consideration of the contract had thereby, to that extent failed. In such cases the refusal to pay is a sufficient cause for a rescission by the contractor and authorizes a suit upon the quantum meruit for the reasonable value of the work and materials by it incorporated into the building. (San Francisco Bridge Co. v. Dumbarton Land, etc. Co. 119 Cal. 272, 51 Pac. 335; Porter v. Arrowhead Reservoir Co. 100 Cal. 502, 35 Pac. 146; Golden Gate Lumber Co. v. Sahrbacher, 105 Cal. 116, 38 Pac. 635; Carlson v. Sheehan, 157 Cal. 696, 109 Pac. 29; Fairchild-Gilmore-Wilton Co. v. Southern Refining Co. 158 Cal. 273, 110 Pac. 951.) We are here met with the suggestion that a rescission without the consent of the other party cannot be made except by one who is not himself in default. The rule is usually stated in this general language. (State v. McCauley, 15 Cal. 458; Fairchild-GilmoreWilton Co. v. Southern Refining Co. 158 Cal. 273, 110 Pac. 951.) Where the respective obligations upon which each party is in default are dependent and concurrent, the justice and necessity of the rule is obvious. So, also, in cases where the rescinding party's default is so related to the obligation in which the other party has failed that it in some manner affects the performance thereof, or the duty of the other party to perform, the rule is plainly applicable. But no case which has been cited applies this rule to a delinquency of the rescinding [517] 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. Nor have we found any case in which it has been claimed that the rule is thus applicable. It is, in truth, an application of the maxims that he who seeks equity must do equity and must come into court with clean hands. It is well understood that this rule does not apply to all derelictions by the complaining party, but only to a delinquency "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." (1 Pomeroy's Equity Jurisprudence, sec. 399; Lewis's Appeal, 67 Pa. St. 166; American Assoc. v. Innis, 109 Ky. 605, 60 S. W. 388; Rice v. Rockefeller, 134 N. Y. 186, 30 Am. St. Rep. 658, 17 L.R.A. 237, 30 N. E. 907; Bethea v. Bethea, 116 Ala. 272, 22 So. 561.) Here the default of the plain tiff, as claimed, was negative; it had not been diligent in performance. The contract provided a remedy for that neglect, a remedy which the owner did not pursue. The neglect specified in the certificate, still conceding its conclusive effect, did not, as we have said, in any way affect the liability of the owner to pay for the work actually done. The plaintiff's dereliction was not connected with the default in the payment or with the obligation to pay but was wholly collateral thereto. The rule referred to does not apply to this case. There is another sufficient answer to the above suggestion. The court found that the allegations of the answer that the plaintiff had failed and neglected to supply sufficient workmen and materials and to prosecute the work with diligence were untrue. There is ample evidence to sustain these findings. The claim is that the certificate of the architects, above set forth, relating to the abortive attempt to terminate the contract, is conclusive as to the fact of such failure, not only upon any question properly arising in connection with the proceeding for the termination of the plaintiff's employment, or as to which it would be material, but also conclusive between the parties at all times and upon all 165 Cal. 497. occasions to which the fact certified to may relate, although upon a matter collateral to the proceeding in and for which the certificate was authorized, [518] and not in any way connected therewith or dependent thereon. We are of the opinion that it is not conclusive in a matter collateral to the proceeding in and for which alone it was authorized to be given. Its sole function was to serve as a basis for a notice terminating the contract. Upon any matter dependent on or arising out of that proceeding, it would be conclusive. But the proceeding failed for want of a proper notice and it thereupon lapsed and became wholly ineffectual. The certificate made to initiate that proceeding, being unauthorized for any other purpose, falls with it, at least so far as its conclusive effect as evidence upon collateral matters is concerned. (Newall v. Elliot, 1 H. & C. (Eng.) 797.) At most it could be no more than prima facie evidence in any collateral matter. The court below properly held that it was not conclusive and was justified by the evidence in finding contrary to its statements of fact. It is claimed that the plaintiff was in default in failing to complete the building on or before September 1, 1906, as the original contract provided, and upon this ground the defendant, Butler, claims liquidated damages under the contract at two hundred dollars for each day's delay, amounting to one hundred and fifteen thousand dollars, or damages for loss of rents during the delay amounting to $113,433.27. The court found, in effect, that after April, 1906, a new contract was made by the parties for the completion of the building, providing that it should be completed according to the original plan and specifications and under the terms of the original contract, except that no time of completion thereof was fixed, but the same was left indefinite. It also found other facts which, if true, would operate as a waiver of the claim for damages caused by the delay. If these findings are true it necessarily follows that no damages could be recovered by the owner for the delay in question. It is contended that these findings are contrary to the evidence. We think they are sufficiently supported. When the great fire of April, 1906, occurred, the building was partially completed. The fire destroyed everything in it that was combustible. It also for several months completely prevented the resumption of ordinary business in San Francisco. 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. [519] She elected to do so and for that purpose she employed the plaintiff to do the work of restoration. She knew it could not be done until after September 1, 1906, the time fixed in the original contract for the completion of the entire building, but she did not specify any time within which the work of restoration should be completed. In fact, it was not completed until more than two months after the above date. She made no complaint of this delay whatever, but thereupon directed the plaintiff to proceed with the work and complete the building in accordance with the original plans. Thereafter she directed the work to proceed, made the monthly payments regularly as they became due and allowed the contractor to go on expending large sums of money in the building, without ever mentioning the fact, now claimed, that liquidated damages at two hundred dollars a day, or damages by loss of rents, from September 1, 1906, had been and were accruing, and without ever claiming or suggesting the right to deduct such damages from the monthly pay. ments. The stipulation as to time and dam ages were both for the benefit of the owner and she could waive them if she desired. The suggestion that the supplemental agree ment was oral and therefore was not effectual to alter the written contract, is disposed of by the fact that the new agreement for an extension of time was relied on by the plaintiff and was acted upon by it to such an extent as to be a practical performance thereof and sufficiently to estop the owner from denying either the making of the agreement for an indefinite extension or the waiver of the covenants aforesaid. This substantial performance of the oral agreement would make it lawful as an oral alteration of a written contract. Furthermore, the time of perfomance even when it is made of the essence, if it is once waived, sets the matter at large, and another date for performance can only be fixed by a definite notice, or by conduct equivalent thereto. (Boone v. Templeman, 158 Cal. 297, 139 Am. St. Rep. 126, 110 Pac. 947.) The facts found clearly show a waiver of the right to demand damages for delay in completion after September 1, 1906. The evidence still more clearly establishes such waiver. The question whether the demurrers to the answers of the plaintiff and the other defendant to the amended cross-complaint of Mrs. Butler, on the ground that they were uncertain [520] and ambiguous, were properly overruled, is of no importance. The issues arising upon the cross-complaint were all tendered by the affirmative allegations of her answer, the evidence relating thereto was fully presented, and the findings embrace them all. If the answers were uncertain or ambiguous, as claimed, it is clear that the owner was in no wise prejudiced or misled thereby. The judgment and order are affirmed. Henshaw, J., Angellotti, J., Lorigan, J., Sloss, J., and Melvin, J. concurred. Rehearing denied. BEATTY, C. J.-I dissent from the order denying a rehearing. The validity of the judgment in favor of the contractor depends upon his right to rescind the written contract, and he had no right to rescind if it was not a breach of the contract on the part of Mrs. Butler to refuse payment of his demand for the August work. She had a perfect right to refuse payment of that demand if, as is conceded, there was a claim of the Western Expanded Metal and Fireproofing Co.-as subcontractor-then existing for more than the contractor's claim. And the fact that she did not put her refusal on that ground is of no consequence unless her failure to do so in some way raises an estoppel. I cannot see that it does. NOTE. Right of Building Contractor to Rescind Contract for Failure of Owner to Make Payment. Generally, 54. Wrongful Refusal of Certificate by Architect, 56. Effect of Default of Contractor, 59. Generally. The failure to pay an instalment of the contract price as provided in a building agreement, is a substantial breach of the contract, and gives the contractor the right to consider the contract at an end, to cease work, and to recover the value of the work already performed. United States.-South Fork Canal Co. v. Gordon, 6 Wall. 561, 18 U. S. (L. ed.) 894; Phillips, etc. Censt. Co. v. Seymour, 91 U. S. 646, 23 U. S. (L. ed.) 341; Pigeon v. U. S. 27 Ct. Cl. 167. California.-Porter v. Arrowhead Reservoir Co. 100 Cal. 500, 35 Pac. 146; Golden Gate Lumber Co. v. Sahrbacher, 105 Cal. 114, 38 Pac. 635; San Francisco Bridge Co. v. Dumbarton Land, etc. Co. 119 Cal. 272, 51 Pac. 335; Beck v. Schmidt, 13 Cal. App. 448, 110 Pac. 455; Tubbs v. Delillo, 19 Cal. App. 612, 127 Pac. 514. And see the reported case. See also Cox v. McLaughlin, 52 Cal. 590, 54 Cal. 605, 63 Cal. 196, 76 Cal. 60, 18 Pac. 100, 9 Am. St. Rep. 164 (explained in Porter v. Arrowhead Reservoir Co. 100 Cal. 500, 502, 35 Pac. 146; Carlson v. Sheehan, 157 Cal. 692-696, 109 Pac. 29; Fairchild-Gilmore-Wilton Co. v. Southern Refining Co. 158 Cal. 264, 110 Pac. 951. Illinois. Schwartz v. Saunders, 46 Ill. 18; Dobbins v. Higgins, 78 Ill. 440; Geary v. Bangs, 37 Ill. App. 301, affirmed 138 Ill. 77, 27 N. E. 462. Iowa.-Shulte v. Hennessy, 40 Ia. 352. Kansas.-See Draper v. Miller, 92 Kan. 275, 140 Pac. 890, rehearing denied 92 Kan. 695, 141 Pac. 1014. Louisiana.-See Bergen v. New Orleans, 35 La. Ann. 523. Minnesota.-Peet v. East Grand Forks, 101 Minn. 518, 112 N. W. 1003. Missouri.-McCullough v. Baker, 47 Mo. 401; Bean v. Miller, 69 Mo. 384. See also Murgan v. Regan, 48 Mo. App. 461. New York.-Moore v. Taylor, 42 Hun 45-58, 5 N. Y. St. Rep. 202; Cunningham v. Massena Springs, etc. R. Co. 63 Hun 439, 18 N. Y. S. 600, affirmed 138 N. Y. 614, 33 N. E. 1082; Thomas v. Stewart, 132 N. Y. 580, 30 N. E. 577; Lawrence v. Heylman, 89 App. Div. 620, 85 N. Y. S. 789; Smith v. Corn, 3 Misc. 545, 23 N. Y. S. 326. See also Graf v. Cunningham, 109 N. Y. 369, 16 N. E. 551; Flaherty v. Miner, 123 N. Y. 382, 25 N. E. 418; White v. Livingston, 69 App. Div. 361, 75 N. Y. S. 466 (affirmed 174 N. Y. 538, 66 N. E. 1118). Pennsylvania.-Worden v. Connell, 196 Pa. St. 281-285, 46 Atl. 298; Harton v. Hildebrand, 230 Pa. St. 335, 79 Atl. 571. Utah.-Bennett v. Shaughnessy, 6 Utah 273, 22 Pac. 156. Vermont.-Preble v. Bottom, 27 Vt. 249. Washington.-Anderson v. McDonald, 31 Wash. 274, 71 Pac. 1037. Thus in Geary v. Bangs, 37 Ill. App. 301, affirmed 138 Ill. 77, 27 N. E. 462, the court said: "The first question of law presented for our determination upon record, as it stands, is whether a party, who is engaged in the performance of a contract, may, on the other party's refusal to comply with some stipulation on his part to be performed, such as in this case, the payment of an instalment of money when due, abandon the further performance of the contract and sustain an action to recover for the work already performed. While it cannot be said that a failure to pay an instalment due on a contract is an absolute prevention of the performance, still we know that in many instances, particularly in building contracts, the nonpayment of an instalment when due will render it necessary for the contractor to abandon the work. But the true ground is that a refusal to pay in accordance with the terms of the agreement is a breach which indicates that the one who is guilty of it, does not intend to be bound by the contract, and therefore the other party may rescind it and recover for the work he has done." In Tubbs v. Delillo, 19 Cal. App. 612, 127 Pac. 514, it appeared that the plaintiff and the defendant had entered into a contract for the construction of a building on a lot of land owned by the defendant. The consideration was to be paid in seven instalments as the work progressed. Under the terms of the contract each instalment was payable on the 165 Cal. 497. contractor's writen statement showing that the necessary amount of work had been done to entitle him thereto. It was also agreed that if the owner delayed for more than five days in paying an instalment, such delay, at the contractor's option, might be deemed a prevention by the owner of the performance of the contract. The owner was in default on the fifth instalment and the contractor, having demanded his payment, relinquished further operations on the building. The court said: "The owner's refusal to make any further payment, in the purview of the contract, placed him in default and entitled the contractor to recover the balance due for the work performed. It would make no difference that the contractor continued to work a few days longer than he was required, as this would be rather a favor to the owner." In Swartz v. Saunders, 46 Ill. 18, the action was instituted to enforce a mechanic's lien against the property of the defendant. The plaintiff had contracted to perform all the carpenter work on a certain building being erected by the defendant and was to receive therefor a certain agreed sum. The plaintiff was also entitled to demand and receive from the architect in charge, from time to time, estimates of the amount due for work done, which amounts were to be immediately paid by the defendant. The plaintiff applied on the 16th of October to the architect for an estimate of the amount due him at that time under the contract, and received from him a written estimate or certificate, that he was then entitled to a payment of fifteen hundred dollars on the contract. He presented this certificate on and at different times after its date, to the defendant and demanded payment, which was refused. On the night of the 21st of October, 1866, the building, not then having received the upper joists, and being uncovered, was blown down by a high wind and destroyed. The court said: "Before the walls had fallen, the defendant had failed to pay the estimate to which the appellee was entitled under the contract, and after their fall appellant insisted and claimed that although he had failed to pay appellee for the work he had done, he was bound to proceed and replace his portion of the work thus destroyed, and that too, without any compensation. This was an unjust demand, with which appellee was not bound to comply. He had once done the work and for which payment had been refused. That he had a right to abandon the work, under the circumstances, seems a proposition so plain as to require no argument. The claim made by appellant upon the appellee, to replace the work destroyed, and that too, gratuitously, was in effect, a denial of all obligation to pay for the work done, and was of itself a sufficient justification to appellee to abandon the contract." However, in Murray Bros. Co. v. Aroostook Valley R. Co. 109 Me. 350, 84 Atl. 457, it was held that where work is being done on a percentage basis and the agreement includes a stipulation that the contractor is not to pay more than a certain suma for laborers, the fact that the owner justly complains that the contractor is paying higher wages than are necessary and refuses to continue to pay unreasonably high wages, is not such a breach of contract as will justify the contractors in abandoning the work. And in Davis v. Ford, 81 Md. 333, 32 Atl. 280, it was held that a contractor was not justified in abandoning his contract because of the failure of his employer to pay for extra work where it appeared that the extra work was performed without any agreement as to price, as provided in the contract, and the demand for payment was not made for more than a year after the particular work was completed. In Nelson v. San Antonio Traction Co. (Tex.) 142 S. W. 146, it appeared that the contractor was obligated by the terms of his contract to lay certain pavement and to maintain the same for a period of ten years. After the pavement had been completed there was due the contractor the last instalment under the terms of the contract. This the defendant refused to pay although no valid reason for a refusal existed at the time. Subsequently action was instituted by a sub-contractor to enforce a mechanic's lien against the property of the defendant and the defendant instituted a cross-action to recover for breach of contract in failing to keep the pavement in repair. The court said: "We are of opinion that the default of the traction com pany in making the final payment did not operate to release [the contractor] from his undertaking to guarantee the maintenance of the pavement. It gave him a right of action immediately against the traction company for the balance, and the latter could be compelled at his suit, as has been done in this proceeding, to pay him with interest. There is no basis for a contention that [the contractor's] agreement to repair for ten years was dependent for its existence or continued existence upon payments being made at the times specified in the contract. [He] is asking for the complete payment of the consideration for his contract, which was to do the work and to maintain it for ten years. For the amount to be paid him, he agreed, not only to do the work, but to maintain it afterwards. He certainly is in no position to require the traction company to pay said consideration to the last cent, and deny his obligation to fully perform that which he was to do for such consideration." In Cranford Co. v. New York, 150 App. Div. 195, 134 N. Y. S. 839, the court held that what would amount to an unexcusable or unreasonable delay on the part of an |