Opinion
January 8, 1959 —
February 3, 1959.
THREE SEPARATE APPEALS from a judgment of the circuit court for La Crosse county: LINCOLN NEPRUD, Circuit Judge. Reversed.
For the plaintiff there were briefs and oral argument by Dale G. Waterman of La Crosse.
For the defendant Gateway Lumber Company there were briefs by Johns, Roraff, Pappas Flaherty of La Crosse, and oral argument by Leonard F. Roraff.
For the defendant Popple Le Duc Lumber Supply Company, Inc. there was a brief and oral argument by Noel E. Bergeron, Jr., of Chippewa Falls.
For the defendant Segelke Kohlhaus Company there was a brief by Hubert V. Fuller of La Crosse.
For other defendants there was a brief by Ruediger Joanis of La Crosse, for Raymond Hengel and William Unger; William J. Sauer of La Crosse, for Emil Ihle; James J. Bannen of La Crosse, for Gordon Quisel; and Schubert Franzini of La Crosse, for Victor Zahn and William Stilter; and oral argument by Robert E. Joanis.
Action to foreclose a mechanic's lien and a mortgage. The complaint alleged that on or about March 26, 1953, at the special instance and request of Nelda Stuart and Earl Stuart, husband of Nelda Stuart, the plaintiff agreed to furnish lumber and building supplies for the construction and completion of a dwelling house and other buildings on lot number 8 in block number 1 of Youngdale Addition in the town of Shelby in La Crosse county, which was owned by said Nelda Stuart. The amount of the claim for lien was $6,126.35, which claim was reduced at the trial to $5,969.06. The complaint further alleged the execution and delivery to the plaintiff by Nelda Stuart and Earl Stuart of a note and mortgage for $4,368.21, dated April 9, 1954, which covered the above-described lot and another lot in the same block of Youngdale Addition.
In addition to Nelda and Earl Stuart the complaint named 22 other defendants. Two of said defendants were husband and wife who were tenants in possession of said lot 8; one of the defendants was the holder of a note and mortgage given by the Stuarts upon said lot 8; and the other defendants were judgment creditors and mechanic's lien claimants.
The Stuarts made no appearance except to file in writing an admission that they had been personally served with a copy of the summons and complaint and that they consented to an immediate hearing in the action without further notice and consented to entry of judgment in accordance with the laws of the state.
The defendant mortgagee, seven lien claimants, and four judgment creditors served and filed answers. Issues were presented as to the validity of the various claims against the Stuarts and the priority between the various claimants. The issues were tried to the court without a jury and the court made and filed findings of fact and conclusions of law.
By its judgment dated and entered January 24, 1958, the court directed the sale of said lot 8. Out of the proceeds of the sale the sheriff of La Crosse county was directed to pay to each of eight mechanic's lien claimants certain specified amounts with interest. The mechanic's lien claim of the plaintiff was allowed at $2,692.38. The judgment further provided that if the proceeds of sale were insufficient to pay each of said lien claims in full, then the sheriff pay to each his prorata share of the amount set forth. Out of any balance there was to be paid to the defendant mortgagee the amount of his note with interest. Out of any remaining proceeds the judgments of Segelke Kohlhaus Company and J. S. Hines were to be paid in that order. Out of any residue after the payment of said sums the plaintiff is to receive the amount of its note and mortgage, plus interest, costs, and attorney's fees, and out of any further balance the Gateway Lumber Company is to be paid the amount of its judgment, plus interest.
Plaintiff appealed from portions of said judgment as follows: From the parts of the judgment allowing the mechanics' lien claims of six of said claimants; from that part of the judgment allowing plaintiff $2,692.38 as the amount of its mechanic's lien claim instead of the sum of $5,969.06; and from the parts of the judgment directing the payment of the Segelke Kohlhaus Company and J. S. Hines judgments.
Gateway Lumber Company appealed from the parts of the judgment allowing the lien claims of the plaintiff and the six other lien claimants, and from the parts of the judgment directing the payment of the Segelke Kohlhaus Company and J. S. Hines judgments.
The defendant Popple Le Duc Lumber Supply Company, Inc., appealed from the allowance of the seven claims for mechanics' liens and from the disallowance of the amount of its judgment against the Stuarts.
Gateway Lumber Company further asked for a review of that part of the judgment holding that plaintiff is entitled to a lien in the sum of $2,692.38.
The first question to be determined is whether the trial court committed error in permitting judgment in favor of the mechanic's lien claimants Stilter, Unger, Ihle, Hengel, Quisel, and Zahn.
The complaint made the following allegation:
"That the public records of La Crosse county, in the custody of the officials of La Crosse county, state of Wisconsin, entitled thereto, show the following alleged liens, judgments, and mortgages: . . ."
Thereafter it recited that each of said lien claimants had filed a claim for mechanic's lien, giving the date of filing, together with the first and last days on which labor or materials were furnished, as well as the amount thereof. The complaint further alleged that the plaintiff had insufficient knowledge to form a belief as to the validity of the alleged liens and therefore denied the same and put each of said defendants to his proof.
The answer of Gateway Lumber Company alleged it had insufficient information to form a belief as to the validity and priority of the liens set forth in the complaint and therefore it denied the same and put the plaintiff and the other claimants to their proof.
The third appellant, Popple Le Duc Lumber Supply Company, Inc., did not put in an answer.
Upon the trial said lien claimants testified as to their agreements with the Stuarts, what labor and materials they furnished for the construction upon said lot 8, the reasonable value thereof, and the amount due. They further testified that they had filed claims for lien or had caused the same to be done.
It is now contended that six of said lien claimants failed to prove their claims because they did not introduce the original claims for lien or certified copies thereof in evidence upon the trial. No issue was raised as to the filing of the claims for lien by the plaintiff's complaint or the answer of Gateway. The validity and priority thereof were challenged. The effect of the pleadings was to admit that claims of lien were filed on the dates specified in the complaint. No question was raised during the trial as to the form or contents of the claims for lien. In Wisconsin the lien laws are remedial in character and are to be liberally construed. Findorff v. Fuller Johnson Mfg. Co. 212 Wis. 365, 248 N.W. 766; City Lumber Supply Co. v. Fisher, 256 Wis. 402, 41 N.W.2d 285. In view of this rule the record supports a finding by the trial court that each of said claims was properly filed. Gateway does not challenge the proper filing of a claim for mechanic's lien by the plaintiff, but contends that plaintiff failed to prove a contract with the owner of lot 8 to furnish materials for the improvement of lot 8. It appears from the record that plaintiff had no direct contract with the owner, Nelda Stuart. Its negotiations were all with her husband, Earl Stuart. Gateway contends that plaintiff did not present proper proof that Earl Stuart was the agent of his wife, and therefore plaintiff had no claim against her.
The complaint alleged that in contracting with plaintiff, Earl Stuart was the agent of Nelda Stuart. That allegation was not denied in Gateway's answer. The record clearly shows an express contract between plaintiff and Earl Stuart for the furnishing of building materials to be used on lot 8. In addition thereto the record discloses that the Stuarts lived only two doors from lot 8 during the construction period; that Mrs. Stuart was present during the construction period; that other agreements for the improvement of lot 8 were made with both of the Stuarts and that this was the fourth construction project in which both of the Stuarts engaged.
Since the allegation of agency in the complaint was not denied it was not an issue in the case and Gateway is bound by the pleadings. In DeByle v. Roberts, 273 Wis. 648, 653, 79 N.W.2d 115, the following from Restatement, 1 Agency, p. 65. sec. 22, comment b was quoted with approval:
"`Neither husband nor wife by virtue of the relationship has power to act as agent for the other. The relationship is of such a nature, however, that circumstances which in the case of strangers would not indicate the creation of authority or apparent authority may indicate it in the case of husband or wife. Thus, a husband habitually permitted by his wife to attend to some of her business matters may be found to have authority to transact all her business affairs.'"
With that rule in mind, the record supports a finding that Stuart was the agent for his wife and had authority to enter into the contract with plaintiff.
Upon the trial the manager of the plaintiff testified that plaintiff delivered building materials of the value of $2,692.38 to lot 8 for the buildings being erected thereon. He further testified that Earl Stuart called at plaintiff's place of business with a truck and took delivery there of building materials valued at $3,276.68, which he stated were to be used for the improvement of lot 8, and that information was noted on the invoices. The trial court held that plaintiff was entitled to a lien only for the amount of materials it delivered to lot 8. The plaintiff contends that it was entitled to a lien for the full amount of the materials furnished.
Sec. 289.01 Stats. 1953, provided that every contractor who furnishes materials for the improvement of land shall have a lien therefor. There are two major doctrines involving the application of the lien laws. One is the doctrine that a delivery of materials to the building site or a furnishing of such materials for the particular improvement to the owner or his agent is sufficient to maintain a mechanic's lien. A second and more-restricted doctrine is that the materials must be actually used in the building or other improvement for which they were furnished in order to sustain a lien.
An annotation which discusses these doctrines and particular application thereof appears in 39 A.L.R.2d 397. A review of the Wisconsin cases starts on page 438 thereof. The following cases are there reviewed: Esslinger v. Huebner, 22 Wis. *632; Fitzgerald v. Walsh, 107 Wis. 92, 82 N.W. 717; Francis Nygren Foundry Co. v. King Knob Coal Co. 142 Wis. 619, 126 N.W. 39; Barker Stewart Lumber Co. v. Marathon Paper Mills Co. 146 Wis. 12, 130 N.W. 866.
The above cases, together with Neumann v. Strandt, 195 Wis. 610, 219 N.W. 348, are cited in the plaintiff's brief. In the Neumann Case the court stated the rule as follows (p. 613):
"Thus materials and services can be furnished upon the credit of the building to be erected and the land upon which it stands. Otherwise the owner of real estate might, as against materials furnished and services rendered, unjustly enrich himself at the expense of the materialman furnishing materials and those rendering services. In the early case of Esslinger v. Huebner 22 Wis. *632, it was held that where materials were sold upon the credit of a building to be erected, the owner could not, by thereafter disposing of them for money and then procuring other materials, defeat the right of the materialman to a lien; and so in Barker Stewart L. Co. v. Marathon P. M. Co. 146 Wis. 12, 130 N.W. 866, it was held that the lumber and materials used in the erection of a cofferdam and concrete forms, although not physically incorporated into the completed structure, nevertheless entered into the value of the completed structure and the materialman was entitled to a lien therefor."
The comment in the A.L.R. annotation on Wisconsin cases states that the holdings involving the particular questions in the cases there discussed were dicta. If so, we now declare it to be the law in Wisconsin that the delivery of materials to the owner or his agent, either upon the premises or otherwise, for use upon or in a particular project, is sufficient to sustain a mechanic's lien.
In this case the plaintiff delivered materials of the reasonable value of $5,969.06, and it was entitled to judgment for that amount.
Segelke Kohlhaus Company obtained a judgment against L. E. Stuart, also known as Earl L. Stuart, and Nelda Stuart, also known as Nelly Stuart, on January 8, 1954. In docketing the judgment on the same date the clerk of court did not comply with the provisions of sec. 270.74, Stats. 1953, by entering in the docket the place of abode and vocation of the judgment debtors. Sec. 270.79 provides that a judgment, when properly docketed and the docket gives the judgment debtor's place of abode and his occupation, trade, or profession, becomes a lien on the real property of the judgment debtor for a certain period. During the trial and on October 28, 1955, the clerk of court added to his docket the place of abode and vocation of the judgment debtors. The lis pendens in this action was recorded on April 12, 1955. The attorney for the judgment creditor relied upon the case of Darling Co. v. Follett Farms, 217 Wis. 294, 258 N.W. 607, as authority for its claim that it had a valid judgment lien. This was because the attorney for Gateway had examined the court records and knew who the judgment debtors were. The same showing was not made upon the trial as to the plaintiff, and the plaintiff also is appealing from that part of the judgment directing the payment of the Segelke Kohlhaus judgment.
A judgment must be properly docketed to become a lien. Sec. 270.79, Stats. 1953, requires that the docket give the judgment debtor's place of abode and his occupation, trade or profession, as well as the other information required by sec. 270.74 in order to constitute the judgment a lien. Under the situation here Segelke Kohlhaus Company had a valid judgment but that judgment did not become a lien prior to October 28, 1955, because the clerk had not properly docketed the same.
The above also applies to the judgment of J. S. Hines. He had a valid judgment but because the clerk had not properly docketed the same the judgment did not become a valid lien. Therefore the trial court was in error in determining that the Segelke Kohlhaus Company and J. S. Hines judgments were liens prior to plaintiff's mortgage and the judgment lien of Gateway.
Popple Le Duc Lumber Supply Company, Inc., also had a judgment against Earl Stuart and Nelda Stuart. The company was made a party defendant in the action and through its attorney admitted service of the summons and complaint, and its attorney served a notice of retainer on plaintiff's attorney and filed the same but did not prepare and serve an answer to the complaint. At the time of the trial the attorney and one of the officers of the company appeared and attempted to introduce testimony relative to its judgment. Objection was made to the introduction of any testimony with reference thereto on the ground that the company had not served and filed an answer or demurrer. The objection was sustained by the court. This was error. The judgment creditor should have been permitted to offer proof as to its judgment. This requires a reversal of the judgment so that the case may be reopened to permit this judgment creditor to offer its proof. If the proof establishes that this judgment creditor had a valid judgment lien at the date of the filing of the lis pendens or thereafter, the priority of its lien should be established.
Except for the amount of plaintiff's mechanic's lien claim, the determination of the trial court was correct as to the amounts and priority of the claims for mechanics' liens. Next in priority is the Franzini mortgage. The judgment should next direct the payment of plaintiff's mortgage and the Gateway judgment ahead of the Segelke and Hines judgments.
By the Court. — Judgment reversed. Cause remanded for further proceedings and the entry of a judgment consistent with this opinion.