Summary
In Industrial Credit, however, as in the subcontractor cases, there was also present the fact that the defendant had previously paid another for the benefits conferred — the secured creditor had lent the bankrupt money in exchange for its right to repossess the truck.
Summary of this case from S M Rotogravure Service, Inc. v. BaerOpinion
No. 313.
Argued May 5, 1971. —
Decided June 2, 1971.
APPEAL from a judgment of the circuit court for Waukesha county: WILLIAM E. GRAMLING, Circuit Judge. Affirmed.
For the appellant there was a brief by Charlton, Yanisch, Greco Roffa, attorneys, and Richard F. Yanisch of counsel, all of Milwaukee, and oral argument by Richard F. Yanisch.
For the respondent there was a brief and oral argument by John C. Shabaz of West Allis.
This is an appeal from the portion of a judgment of the circuit court for Waukesha county which dismissed the counterclaim of Inland G. M. Diesel, Inc., on its merits.
The case arises out of repairs made to the gear-train of a Mack truck owned by Francis J. Horton, who is not a party to this action. The truck had previously been mortgaged to the Industrial Credit Company as security for an installment note in the amount of $21,679.20. The mortgage lien of Industrial Credit is undisputed.
Just prior to February 16, 1968, Horton's truck broke down in the vicinity of Eau Claire, Wisconsin. He went to the Inland General Motors Diesel Company at Menomonee Falls, Wisconsin, and advised Richard Laubusch, who was in charge of the overhaul of diesel engines, of the breakdown. Inland G. M. Diesel, Inc., sold and repaired diesel power plants. Laubusch agreed to do the repair work, with the proviso that the job would have to be C. O. D. because Horton was delinquent on past accounts for work done by Inland. Employees of Inland explained at trial that "C. O. D." meant that the customer had to come up with the money to pay for the repair work before the work was commenced. Horton at that time told Laubusch that if the work would cost only $200-$300 he would advance the money to Inland; otherwise, he would have to finance it. Inland had the truck towed from Eau Claire to its shop at Menomonee Falls. The engine was removed from the chassis, and, upon the disassembly of the engine, it was discovered that the gear-train was damaged and that a major overhaul was required.
Horton reported the breakdown to Calvin Spayde, who was a branch manager for Industrial Credit. Horton did not ask Spayde to have Industrial Credit finance the repairs because, as he stated, he already owed that company too much money. Nor did he ever tell Inland that Industrial Credit would pay for the repairs. On about March 5, 1968, Spayde went to the Inland garage at Menomonee Falls and inspected the disassembled engine. Spayde and Laubusch, Inland's employee, discussed the nature of the repairs. Spayde never asked for an estimate of the repair cost and he at no time indicated that Industrial Credit would pay for the repair work. Laubusch stated that he had no recollection of whether Spayde stated why he came to see the truck. Nevertheless, the repairs were commenced immediately thereafter. When the job was finished, Horton was notified that the work was completed. He told Laubusch that he was going to sell the truck and would pay for the repairs at the time of the sale. The repair bill amounted to $3,006.47. The reasonableness of the bill is not attacked.
On March 25, 1968, Horton filed a petition in bankruptcy in the United States District Court for the Western District of Wisconsin. Inasmuch as Horton was then in default to Industrial Credit for approximately $21,300, the referee in bankruptcy on May 21, 1968, issued an order abandoning the truck to Industrial Credit. Spayde then attempted to take possession of the truck, which had remained at Inland's shop. Henry Kurz, Inland's secretary, refused to surrender the vehicle to Spayde, asserting that Inland was entitled to retain the truck as security for the mechanic's lien for the repair work. Inland was never listed as a creditor in the bankruptcy proceedings.
On June 6, 1968, Industrial Credit commenced an action for replevin against Inland. The truck was seized, and Kurz was tendered a check in the sum of $1,000 in recognition of the limited lien rights conferred under sec. 289.41 (1), Stats. 1967, where the express consent of a secured creditor has not been given. Inland counterclaimed, asserting its lien rights in the full amount of the repair bill. Inland also counterclaimed alleging that Industrial Credit had been unjustly enriched as a result of the repairs to the chattel in which it held a security interest. The record shows that, subsequent to the commencement of the replevin action, the truck as repaired was sold by Industrial Credit for the sum of $6,100, a figure far less than the sum owed by Horton prior to the bankruptcy. Trial was before the court, and at the close of testimony the trial court rendered his decision granting recovery of the truck to Industrial Credit and dismissing Inland's counterclaim on the merits. He found that Industrial Credit had not expressly consented to the repairs and that, therefore, the lien rights of Inland were limited under the statute to the maximum of $1,000, which had previously been tendered. The trial judge also dismissed the counterclaim based on unjust enrichment. The trial judge based his dismissal of the unjust-enrichment counterclaim upon the ground that one of the three necessary essentials for recovery of unjust enrichment was absent in that there was no showing that there was "appreciation by the defendant of the fact of such benefit." The counterclaim was dismissed, and Inland has appealed only from that portion of the judgment which dismissed its counterclaim for unjust enrichment.
Sec. 289.41 (1), Stats. 1967, provides:
"Every mechanic and every keeper of a garage or shop, and every employer of a mechanic who transports, makes, alters, repairs or does any work on personal property at the request of the owner . . . thereof, shall have a lien thereon for his just and reasonable charges therefor, . . . and may retain possession of such property until such charges are paid. The lien given by this section for all such charges in excess of $300, except that for . . . road tractors, trailers and semitrailers, $1,000 . . . shall be subject to the lien of any security interest in said property which was perfected by filing as required by law prior to the commencement of the work for which a lien is claimed unless such work was done with the express consent of the holder of such security interest."
In Gebhardt Bros., Inc. v. Brimmel (1966), 31 Wis.2d 581, 584, 143 N.W.2d 479, we restated the elements necessary to establish a claim based on unjust enrichment. We said:
"These elements are: (1) A benefit conferred upon the defendant by the plaintiff; (2) an appreciation or knowledge by the defendant of the benefit; and (3) the acceptance or retention by the defendant of the benefit under such circumstances as to make it inequitable for the defendant to retain the benefit without payment of its value."
In the instant case, the trial judge held that the second element had not been proved. He took the position that the evidence was insufficient to show that, at the time the work was being done, Industrial Credit had any knowledge or appreciation that Inland G. M. Diesel, Inc., was performing work for its benefit. The burden of proving such appreciation and knowledge is upon Inland, and the court's factual finding in this respect must be upheld unless it is contrary to the great weight and clear preponderance of the evidence. There is no evidence to show that Industrial Credit had any knowledge that Inland was in fact doing the repair work. This finding must be upheld. Industrial Credit's appreciation and knowledge of the work came at a later time.
The validity of the trial judge's legal conclusion rests upon the premise that the appreciation of the benefit must be contemporaneous with the performance of the services that confer the benefit. In Dunnebacke Co. v. Pittman (1934), 216 Wis. 305, 312, 257 N.W. 30, the court disallowed a claim for unjust enrichment, stating:
"Had the Gilligans been present during the time that the construction work was going on, and had they made no protest, we should have a different situation with which to deal."
The court in that case goes on to say that, even were there not contemporaneous knowledge, subsequent conduct evincing an attempt to accept the benefits might suffice to furnish a factual basis for recovery in quasi-contract.
It thus appears that the position taken by the trial judge is arguably meritorious, although no case has been brought to our attention which clearly holds that the knowledge and appreciation of the benefit conferred must be contemporaneous with the services that conferred the benefit. Nor need we reach a conclusion in this respect in the instant case, since our analysis of the facts and of the statutory law leads to the conclusion that a claim for unjust enrichment is inappropriately asserted.
The statute provides a clear remedy for a mechanic or keeper of a garage who considers himself in jeopardy as a result of the dubious financial standing of the owner of a vehicle when that vehicle is subject to a prior lien or security interest. For sums in excess of $1,000, the statute is explicit that a mechanic's lien "shall be subject to the lien of any security interest in said property which was perfected by filing as required by law prior to the commencement of the work for which a lien is claimed unless such work was done with the express consent of the holder of such security interest."
We conclude that where, as here, there is an express statutory provision to protect the garageman, that statutory remedy excludes the assertion of a cause of action for unjust enrichment against a holder of a properly filed security interest. In Gebhardt Bros., Inc. v. Brimmel, supra, page 585, we quoted with approval from Superior Plumbing Co. v. Tefs (1965), 27 Wis.2d 434, 134 N.W.2d 430, and Utschig v. McClone (1962), 16 Wis.2d 506, 509, 114 N.W.2d 854:
"`By the subcontractors' lien statutes, sec. 289.02, Stats., and following, the law has offered security and protection to a subcontractor. His failure to avail himself of the remedy so provided does not produce for him a right to recover payment directly from an owner who did not employ him and with whom he had no contract.'"
We are satisfied that the policy of the law implicit in these cases controls herein, i.e., where the statutory law clearly provides a procedure which if followed will insure a claimant full protection, he ought not to be able to resort to common law or equitable remedies as against innocent parties who have complied with the law to protect their interests. The rights of Inland would have been fully protected by the timely invocation of the statutory procedures. Nor in this case do we see any equities that Inland should be able to assert as against Industrial Credit. Industrial Credit made no request to repair the truck, and the trial judge's findings of fact that no conduct on its part could be construed as a knowing acquiescence in the repair of the truck is not contrary to the evidence. Inland had full knowledge of Horton's credit situation, and if it wished to repair the vehicle it had every opportunity to attempt to secure the express consent of Industrial Credit and thus either obtain a full lien for the value of its repairs or elect not to do the work. At the time Horton filed bankruptcy he owed Industrial Credit over $21,000 and the property securing the obligation was insufficient to pay Horton's obligation to Industrial Credit. It is apparent that both Industrial Credit and Inland stand to lose substantially as a result of Horton's bankruptcy. There appears to be no reason why Inland should be protected against this loss when it failed to pursue its clear statutory rights.
By the Court. — Judgment affirmed.