Summary
In Duitman v. Liebelt, 17 Wis.2d 543, 549, 117 N.W.2d 672 (1962) it was held that the right to a lien arises on the first day material or labor is furnished.
Summary of this case from State v. LunzOpinion
October 2, 1962 —
October 30, 1962.
APPEAL from a judgment of the circuit court for Fond du Lac county: RUSSELL E. HANSON, Circuit Judge. Affirmed.
For the appellant there was a brief and oral argument by Ervin A. Weinke of Fond du Lac.
For the respondents there was a brief by Crowns, Crowns, Merklein Midthun of Wisconsin Rapids, and oral argument by Morgan L. Midthun.
Action by plaintiff Jerold Duitman, d/b/a Duitman Plumbing Heating, against defendants Gust M. Liebelt and wife, Earl C. Fox and wife, and others for foreclosure of a mechanic's lien. After issue was joined defendants Fox moved for summary judgment dismissing the complaint upon its merits. The facts hereinafter stated appear from the pleadings and the affidavits filed in support of, and in opposition to, the motion for summary judgment.
On and between January 15, 1958, and March 8, 1958, plaintiff Duitman was a partner in a partnership known as Shur-way Plumbing Heating which furnished labor and materials in and about the construction of a house on land owned by defendants Liebelt in the city of Fond du Lac. The partnership was paid for this labor and materials. This partnership was terminated about April 15, 1958, and Duitman thereafter continued the heating and plumbing business, formerly conducted by the partnership, in his individual capacity and assumed the obligation of continuing work in progress on different jobs. Nevertheless, there is no allegation in the pleadings nor averment in the affidavits that the partnership then had any work in progress on the Liebelt house, or that the partnership was then under any contract to perform further work or furnish additional materials in and about the construction thereof.
On or about May 29, 1958, Duitman entered into a contract with the Liebelts to furnish and install plumbing equipment in this house, and Duitman performed this contract on and between May 29, 1958, and July 19, 1958. The dates and nature of the work performed follow:
May 29 — Labor performed in the amount of ........... $ 76.90 May 31 — Materials furnished in the amount of ....... 521.24 July 19 — Materials furnished and labor performed in the amount of .................... 11.50 ------ Total ................ $609.64 On May 28, 1958, defendants Fox purchased the lot and unfinished house from defendants Liebelt for $16,000 under an agreement whereby defendant Gust M. Liebelt was to finish building the house. On this same day defendants Liebelt conveyed the premises to defendants Fox by warranty deed free and clear of incumbrances, which deed was recorded in the office of the register of deeds of Fond du Lac county at 8 a.m. on May 29, 1958. Duitman had no actual knowledge of this change in ownership until June 7, 1958, when defendants Fox moved into the premises.Duitman prepared a claim for mechanic's lien, as principal contractor, against the premises in the amount of $609.64 with interest thereon at six percent per annum from August 1, 1958, and filed same with the clerk of circuit court for Fond du Lac county on September 2, 1958. Thereafter, Duitman commenced the instant action to foreclose his mechanic's lien against the premises. Since defendant Gust E. Liebelt had meanwhile been adjudicated a bankrupt, his trustee in bankruptcy was named as one of the defendants in the action.
Upon hearing the motion for summary judgment the circuit court ordered that the motion be granted. Judgment was accordingly entered on September 25, 1961, dismissing the complaint with prejudice and awarding costs to defendants Fox. From this judgment plaintiff Duitman has appealed.
The crucial question on this appeal is whether plaintiff Duitman was a principal contractor or a subcontractor at the time he furnished the materials and performed the labor which are embraced in his claim for mechanic's lien. If Duitman supplied labor and materials while a subcontractor, his claim for a lien was fatally defective for failure to give the new owners of record, defendants Fox, the notice required by sec. 289.02 (1), Stats. 1957, within sixty days of furnishing the first labor and materials.
Sec. 289.02 (1), Stats. 1957, provided in part:
"Every person, other than the contractor who furnishes labor or materials in any of the cases enumerated in sec. 289.01, shall have the lien and remedy provided by this chapter, if before or within sixty days after furnishing the first labor or materials he gives notice in writing to the owner either by personal service on the owner or his agent or by mailing a copy thereof addressed to such owner or his agent at his last-known post-office address stating that he has been engaged to furnish labor or materials, describing the real estate upon which the same is to be furnished by legal description, mail address, or otherwise, so that the owner is not misled or deceived thereby, and further stating in effect that he is giving such notice pursuant to the Wisconsin mechanics' lien law and will claim a lien against such real estate in the event he is not paid by the contractor for such labor and materials."
The circuit court determined that Duitman was a subcontractor at the time he furnished the labor and materials for which he claimed a lien and that, therefore, he did not have a lien because he failed to give the required sixty-day notice. The court's holding was based upon Capital City Lumber Co. v. Schroeder (1932), 208 Wis. 157, 242 N.W. 489. That case held that conveyance of real estate, at a time when work is in progress or the premises are subject to a claim for lien, does not affect the right of a materialman to a lien for labor and materials theretofore furnished, provided the claim for lien is timely filed. See also Findorff v. Fuller Johnson Mfg. Co. (1933), 212 Wis. 365, 248 N.W. 766. The court also determined in the Capital City Case that where a materialman had actual knowledge of the conveyance by the owner, his status changed from that of principal contractor to that of subcontractor as to materials thereafter furnished on the premises. The same principles are, of course, applicable to one who furnishes lienable labor instead of, or in addition to, materials.
We deem that the converse of the last-stated holding of the Capital City Case is also true, i.e., a materialman who is furnishing lienable labor or materials as a principal contractor does not become a subcontractor with respect to labor or materials thereafter supplied to the original owner, who has meanwhile conveyed the premises to a new owner, if the materialman has no actual or constructive knowledge of the conveyance. In the instant case, Duitman did not have actual knowledge of the conveyance by the Liebelts to defendants Fox until June 7, 1958, when the latter took possession of the premises. Duitman supplied labor and materials worth only $11.50 after June 7, 1958, during which time his status was clearly that of a subcontractor. The real controversy in this case revolves around Duitman's status before June 7, 1958, while furnishing the labor and materials which constitute the remaining $598.14 of his claim.
Duitman's position on this appeal is, apparently, that January 15, 1958, and not May 29, 1958, is the date when the first materials and labor were furnished with respect to his claim for lien inasmuch as he stands in the shoes of the predecessor partnership. Proceeding from this premise he then contends that the recording of the deed to defendants Fox on May 29, 1958, was not constructive notice to him. This is because the recording of a deed of conveyance is not constructive notice to all the world but only to subsequent purchasers or incumbrancers. Perkins v. Perkins (1921), 173 Wis. 421, 427, 180 N.W. 334; 45 Am. Jur. Records and Recording Laws, p. 469, sec. 87.
One who furnishes materials or labor for improving real estate and thereafter files a claim for a mechanic's lien against the premises is in a sense an incumbrancer. Cf. Redmon v. Phoenix Fire Ins. Co. (1881), 51 Wis. 292, 300, 301, 8 N.W. 226. Nevertheless, the critical date, insofar as the lien claimant's duty to check the records in the office of the register of deeds is concerned, is the first date on which he furnishes labor or materials because the right to a lien of a supplier of labor or materials arises on that date. We are of the opinion that he does have a duty to ascertain ownership of the real estate as of this date of furnishing the first labor or materials. Therefore, any recorded deed in the chain of title as of that date is constructive notice to him of any rights claimed therein. His duty to search the records, however, does not continue each time he thereafter furnishes further labor or materials pursuant to his original contract or as part of a relatively uninterrupted course of dealing with the person who requests the furnishing thereof. Thus, for example, a deed recorded after a contractor or materialman first furnished labor or materials would not be constructive notice to him with respect to any labor and materials furnished thereafter pursuant to one contract or as a part of a relatively uninterrupted course of dealing with the person who requested the furnishing thereof.
It should be noted with respect to the issue of priority of mechanics' liens in relation to other incumbrances that the determining date is the first date on which visible work is done on the premises in connection with the improvement and not the first date on which the lien claimant supplies labor and materials. Evans-Lee Co. v. Hoton (1926), 190 Wis. 207, 212, 208 N.W. 872.
In the instant case the record shows that the labor and materials furnished by Duitman on and between May 29, 1958, and July 19, 1958, were furnished pursuant to a contract separate from that pursuant to which the partnership furnished labor and materials between January 15, 1958, and March 28, 1958. Moreover this is not a situation in which a materialman furnishes materials for a building project without an express contract in a relatively uninterrupted course of dealing with the person ordering same. Therefore, we agree with the conclusion, expressed by the learned trial judge in his memorandum opinion, that the furnishing of labor and materials by the partnership earlier in the year was wholly irrelevant to the issues of the instant controversy. Since the two contracts were separate, Duitman had a duty on May 29, 1958, at the time he supplied the first of the labor and materials under the new contract with the Liebelts, to ascertain who was the owner of the premises. Had he investigated the records in the office of the register of deeds on that day he would have discovered that the deed from the Liebelts to defendants Fox had been recorded that morning at 8 o'clock. We hold that the recording of this deed was constructive notice to Duitman, and, therefore, under the holding of the Capital City Case his status was that of a subcontractor of the Liebelts.
In view of the foregoing, Duitman at the time of commencement of the action did not possess a valid claim for a mechanic's lien because of his failure to give defendants Fox the sixty-day notice required by sec. 289.02 (1), Stats. 1957.
By the Court. — Judgment affirmed.