Opinion
No. 5264
Decided December 22, 1955.
Mechanic's lien — Action to foreclose — Pleading — Amendment to conform to proof — Allegations and proof required — Material furnished under contract between contractor and owner — Separate orders for material — Whether contract entire or divisible determined, how — Materialman's inchoate right to lien — Waiver — Inference of implied contract between contractor and owner — Burden of proof — Time for filing affidavit for lien.
1. It is within the discretion of a trial court to allow an amendment to a pleading to conform to the proof adduced at the trial.
2. In a materialman's action to foreclose a lien, the petition must allege and the evidence must show that the materials were furnished by virtue of a contract, expressed or implied, between the contractor to whom the materials were furnished and the owner.
3. With respect to separate orders by a contractor for material, whether the contract of sale be entire or divisible depends generally upon the intent of the parties to be ascertained by ordinary rules of construction, considering not only the language of the contract, but also, in cases of uncertainty, the subject matter, the situation of the parties and the circumstances surrounding the transactions and the construction placed upon the contract by the parties themselves. Evidence of separate orders alone fails to show whether a contract was entire or divisible.
4. A materialman who has furnished materials to a contractor, which are used in remodeling a building, does not waive his inchoate right to a lien by charging such materials to the contractor on open account.
5. In drawing an inference that a contractor had a tacit understanding or implied contract with an owner to install materials in the owner's premises furnished by a materialman, pursuant to which contract the owner obligated himself to pay the contractor, further inferences may not be drawn concerning the nature, exten or duration or terms of such contract, or that such materials were furnished pursuant to an entire contract between the contractor and the owner.
6. In a materialman's action to foreclose a lien, the burden is upon him to prove that the last materials furnished the contractor and paid for in cash by such contractor were a necessary part of the proper completion and performance of the contract between the contractor and the owner and were not furnished pursuant to another or separate contract between the materialman and the contractor, and upon the failure of the materialman to meet such burden, he fails to prove that his affidavit for lien was filed within 60 days from the date upon which the last of the material was furnished at the building by virtue of a contract between the owner and the contractor.
APPEAL: Court of Appeals for Franklin County.
Mr. Mac Lee Henney, for plaintiff appellee.
Messrs. Brownfield Malone, for appellant.
This is an appeal on questions of law from a judgment of the Common Pleas Court in favor of plaintiff, appellee herein, and against defendant John G. Pitz.
Plaintiff was a wholesale distributor of flooring materials, and the defendant Graham, who is not a party to this appeal, was engaged in business as Linden Flooring Company in Columbus, Ohio, selling such materials at retail and frequently installing them. For some time prior to 1951 plaintiff had sold materials to Graham, which were recorded upon plaintiff's books of account. During the year 1951, various sales of materials were made to Graham, some of which were on credit and others were "cash sales" or "C. O. D."
The statement of account during 1951 discloses:
Date Item Terms Amt. Dis. Remitted Date Bal. 4-4-51 C. O. D. $ 45.45 $ .91 $ 44.54 4-4-51 5-14-51 Asphalt tile C. O. D. 106.56 5.30 101.26 5-14-51 6-18-51 Display kit C. O. D. 2% 9.00 .18 8.82 6-18-51 7-3-51 Asphalt C. O. D. 10.71 .54 10.17 7-3-51 7-6-51 Asphalt tile 5% 670.13 Apt. 18 Main 7-20-51 All purpose 2% 31.85 8- 2-51 To charge 21.06 sales tax $723.04 8-20-51 Plastic Cash sale 78.05 1.56 76.49 8-20-51 8-20-51 Plastic " " 10.50 10.50 8-20-51 9-24-51 Asphalt " " 160.80 170.00 9-24-51 $713.84
Underneath the $713.84 is a notation: "$9.20 to be applied on old AC." It will be noted that the September 24th sale, amounting to $160.80, was paid in cash, but the payment of $170 resulted in an overpayment of $9.20 which plaintiff credited to the general indebtedness of Graham on his account, leaving a balance of $713.84 upon which the lien was filed. All the items purchased by Graham from July 6 to September 24 were used by Graham in remodeling the premises of defendant Pitz, except 30 cartons of the materials purchased on July 6. Graham failed to pay his indebtedness to plaintiff, and on November 23, 1951, plaintiff filed an affidavit for a mechanic's lien on the real estate of defendant Pitz. Thereafter, plaintiff filed the present action, praying for judgment against Graham on the account and for foreclosure of the mechanic's lien. Prior to trial, Graham was adjudged a bankrupt.
At the conclusion of the plaintiff's case, defendant Pitz moved for judgment in his favor on the ground that plaintiff had neither pleaded nor proved that plaintiff had furnished the materials to Graham in pursuance of a contract between Graham and Pitz and also that the lien had not been filed within the time required by law. The motion was overruled, and the defendant Pitz elected to stand on such motion. Thereupon, the court orally announced judgment in favor of the plaintiff and against the defendant landowner. Prior to journalization of the decision, plaintiff orally moved the court for permission to amend his petition and to reopen the case and introduce evidence so as to plead and prove that the materials were furnished Graham pursuant to a contract with Pitz.
By entry filed December 1, 1954, leave was granted to amend the petition by inserting "in pursuance of a contract between said defendant Graham and defendant John G. Pitz." Decision on the motion to re-open the case to permit the introduction of evidence relative to such alleged contract was reserved. Thereafter, on March 1, 1955, without re-opening the case, an entry was filed finding that there is due plaintiff from defendant Graham the sum of $860.10, including interest, secured by a good and subsisting mechanic's lien on defendant Pitz' premises, duly filed on November 23, 1951. The appeal is taken from that judgment.
The first question presented is whether the evidence discloses that the materials were furnished by the plaintiff to Graham for installation in the Pitz premises by virtue of a contract, expressed or implied, between Graham and Pitz.
In the first case arising under the Mechanic's Lien Act decided by the Supreme Court, Choteau, Merle Sanford v. Thompson Campbell (1853), 2 Ohio St. 114, it is said, at page 124:
"In order to acquire the lien provided by the first section of the act, the labor must be performed, or materials furnished, `by virtue of a contract or agreement with the owner' of the building. The section so declares, and by this is meant not simply to exclude volunteers (persons who may labor without being employed, or may furnish materials without their being purchased); for such cases seldom, if ever, happen; and should they happen, they would create no debt. But there can be no lien unless there is a debt, and it would therefore be idle to presume an intention to guard against liens that could never exist for want of a debt to support them.
"By `contract,' then, is meant something more than a mere agreement to do work or sell goods. The contract mentioned in the section is one that has reference to the purpose for which the work is to be done, or materials furnished, namely, the erection, alteration, or repair of a craft or building. * * *
"* * * Should a man's domestic patch a window or mend a lock in his employer's house, or a farmer's hired man make or repair a door of his barn, no one would say that a lien attached in either case. So, if a material-man sell his wares with no understanding, express or implied, as to their application, he can assert no lien upon the building or vessels in which they may be placed. He trusts to the responsibility of the buyer alone and takes no security. He sells, not for the special purpose named in the statute of `constructing, altering, or repairing,' but for any purpose that may seem best to the buyer. But it is only where the materials are furnished for a purpose named in the act that a lien is acquired. That they are so furnished, may be proved by evidence of an express agreement, or by proof of circumstances from which the purpose may be inferred. A tacit understanding may be as good as an express one." (Emphasis added.)
That case related to the furnishing of materials directly to the owner rather than to a contractor performing work for the owner.
It has been said that it is vital to the establishment of a lien that the proof disclose that material or labor was furnished under contract with the owner directly, or through a contractor who traced his contract to the owner. West Side Lumber Co. v. Saylor, 8 Ohio Law Abs., 577. It has been held that in a materialman's action to foreclose a mechanic's lien, the petition must allege a contract between the contractor and the owner. Becker Plumbing Supply Co. v. Rialto Improvement Co., 36 Ohio App. 102, 172 N.E. 700. See, also, United States Mortgage Trust Co. v. Wood, 19 C. C., 358, 10 C. D., 324.
It was within the discretion of the trial court to allow the amendment. But did the amendment conform to the proof adduced at the trial, so as to support the judgment? It was stipulated that all the material sold to Graham from July 6 to September 24 was used by Graham in remodeling the premises of the defendant, except 30 cartons of the materials purchased July 6. It has been said by way of dicta that where work is done for an individual that is a benefit to him, and he knows that the party doing the work expects to be paid for it, an implied obligation arises on the part of the party benefited to pay what it is reasonably worth. Ashley v. Henahan, 56 Ohio St. 559, 574, 47 N.E. 573. In the Choteau case, supra, the court said that a tacit understanding may be as good as an express one.
In Slamey v. City Material Co., 30 Ohio App. 435, 165 N.E. 55, there was credible although conflicting evidence that the materials ordered by the contractor went into the premises of the owner of the property, and that the owner, if he did not originally order the materials, ratified the act of the contractor in accepting the material with knowledge that it was going into the building. It was contended that the petition was insufficient in that it failed to allege that the owner had a contract with the party who purchased the materials. The court held that the evidence submitted on the question created a situation whereby counsel in the case tried the issue as if there were no infirmity whatsoever in the petition itself, and affirmed the judgment. The Slamey case was determined on error, not appeal. The following year the same court, with the same judge writing the opinion, decided the Becker case, supra, on appeal. The petition alleged that at the request of the contractor, the plaintiff delivered certain materials to the building of the defendant-owner and that the materials were used in such building. The opinion fails to indicate whether any evidence was introduced in support of those allegations and merely states "There was no contract between Reimer [the contractor] and the Rialto Improvement Company [the owner], and an allegation of this nature we think would be necessary under Section 8310, General Code." In the instant case, there was likewise no such allegation, but the defect was cured by amendment.
In view of the foregoing decisions, it is concluded that, in a materialman's action to foreclose a mechanic's lien, the petition must allege and the evidence must show that the materials were furnished by virtue of a contract, expressed or implied, between the contractor and the owner.
Inasmuch as it is stipulated that all the materials sold to Graham from July 6 to September 24 were used by him in remodeling the premises of the defendant, except the 30 cartons of materials purchased July 6, there is in our opinion sufficient evidence from which to draw a reasonable inference that the materials were furnished to the defendant for repair of his premises incident to an implied contract between Graham and defendant. However, as to the amount of the lien the judgment is erroneous to the extent that it includes the value of the aforesaid 30 cartons of materials which were apparently used on another job.
The second question arises upon appellant's contention that the materials in question were sold on separate orders on different dates and were furnished to Graham on open running account. With respect to the separate orders, whether a contract of sale be entire or divisible depends generally upon the intention of the parties to be ascertained by ordinary rules of construction, considering not only the language of the contract, but also, in cases of uncertainty, the subject matter, the situation of the parties, the circumstances surrounding the transactions, and the construction placed upon the contract by the parties themselves. Huntington Finke Co. v. Lake Erie Lumber Supply Co., 109 Ohio St. 488, 143 N.E. 132. In the instant case no such evidence incident to ascertainment of the nature or terms of the contract is present.
Evidence of the separate orders alone fails to show whether the contract was entire or divisible. But since the materials went into the building, we are of the opinion that plaintiff did not waive his inchoate right to a lien by charging the materials to Graham on an open account.
The third question is whether the affidavit of lien was filed within 60 days from the date upon which the last material was furnished at the building of the defendant Pitz. Under the stipulation, the materials purchased by Graham on September 24 and paid for by him in cash went into the building. Section 8314, General Code (Section 1311.06, Revised Code), requires the affidavit to be filed within 60 days from the date on which the last of the material was furnished at the building, making no distinction between furnishing such material on credit or for cash.
In attempting to answer the first question presented, we have drawn an inference that Graham had a tacit understanding or implied contract with Pitz to install the materials furnished by plaintiff in the premises, pursuant to which Pitz obligated himself to pay Graham; but we may not indulge in further inferences concerning the nature, extent, duration or terms of such implied contract or that such materials were furnished pursuant to an entire contract between Graham and Pitz.
It has been held that neither corrective work nor material gratuitously furnished after completion of a contract to remedy defects extends the time for lien. Walter v. Brothers, 42 Ohio App. 15, 181 N.E. 554; see, also, Bohunek v. Smith, 36 Ohio App. 146, 172 N.E. 852. In Falls Savings Loan Assn. v. Brumit, 28 Ohio App. 60, 161 N.E. 295, the court found that the contract which the law implied from the mere purchase and delivery of materials previous to June 29, 1926, was fully satisfied by the payments previously made for such materials, and that the contract which the law implied from the subsequent purchase and delivery of materials was a separate and distinct contract, and constituted a new account, and since there was no general contract for the construction or for the furnishing of materials, the lien of the plaintiff dated from the date the first of the materials were furnished by it after June 29, 1926.
For all the record shows in the instant case, the materials furnished on September 24th may have been pursuant to an additional contract between Graham and Pitz. Since it was paid for by Graham, no basis for a lien is established.
In Walter v. Brothers, supra, the court said:
"A true test is whether the alleged repairs are a necessary part of the proper completion and performance of the work which the lien claimant undertook to do, and an attempt in good faith to perform the contract, and not merely an effort to extend the time for filing an affidavit for a lien. This is always a question of fact." (Italics supplied.)
The burden was upon the plaintiff to prove that the materials furnished on September 24, and paid for in cash, were a necessary part of the proper completion and performance of the contract which, as we have indicated above, is to be implied between Graham and Pitz, and were not furnished pursuant to another or separate contract. The plaintiff has failed to meet this burden. We, therefore, conclude that the plaintiff has failed to prove his affidavit for lien was filed within 60 days from the date upon which the last of the material was furnished at the building, by virtue of a contract between Graham and Pitz.
Other errors assigned are found to be nonprejudicial.
The judgment of the Court of Common Pleas is reversed and final judgment is entered for defendant Pitz, and the cause is remanded to the Court of Common Pleas for execution for costs.
Judgment reversed.
NICHOLS and GRIFFITH, JJ., concur.
FESS, J., of the Sixth Appellate District, and NICHOLS and GRIFFITH, JJ., of the Seventh Appellate District, sitting by designation in the Second Appellate District.