Power Transmission Equipment Corp. v. Beloit Corp.

• Decision Date: 03 October 1972
• Docket Number: No. 135,135
• Citation: 55 Wis.2d 540,201 N.W.2d 13
• Parties: POWER TRANSMISSION EQUIPMENT CORPORATION, Appellant, v. The BELOIT CORPORATION, Respondent.
• Court: Wisconsin Supreme Court

Page 13

201 N.W.2d 13

55 Wis.2d 540

POWER TRANSMISSION EQUIPMENT CORPORATION, Appellant, v. The BELOIT CORPORATION, Respondent.

No. 135.

Supreme Court of Wisconsin.

Oct. 3, 1972.

Borgelt, Powell, Peterson & Frauen, Milwaukee, Phillip E. Crump, Milwaukee, of counsel, for appellant.

Nowlan, Mouat, Lovejoy & Wood, Janesville, of counsel, for respondent.

HALLOWS, Chief Justice.

The first question is whether Beloit has a lien on the forgings in its possession for the freight charges it paid. The trial court held Beloit had such a lien under sec. 289.44, Stats., ¹ and we think the trial court was correct. Power Transmission contends this section does not apply: (1) Because the forgings were mistakenly delivered, and (2) they were not delivered on consignment for sale. We accept the findings of the trial court that the forgings involved were those delivered in July of 1969 and not those mistakenly delivered in September, 1969. True, the forgings were delivered for the purpose of having them machined and not on consignment for sale. But sec. 289.44 is not limited to consignments for sale. Long ago in Weeks v. Robert A. Johnson Co. (1902), 116 Wis. 105, 92 N.W. 794, this court stated that a consignee under sec. 289.44 need not hold the property for sale in order to possess a lien. In Weeks, the consignee had agreed to purchase a machine if it operated satisfactorily; the machine did not so perform and caused damage to material and the consignee was authorized to replace a part of the machine. The court held the consignee had a lien under the section for the cost of the replacement part but not for the material damaged. In the case of In Re Adams Machinery, Inc. (1963), 20 Wis.2d 607, 123 N.W.2d 558, in determining whether a particular consignment agreement was subject to filing requirements of sec. 241.26, Stats., the court noted that while most consignments are for the purpose of sale, a consignment relationship could be created which contained no authority to sell and that the word 'consigned' used in a commercial sense meant the property was committed or entrusted to the consignee for sale or for care. Since there is no definition in the statute of the word 'consignee,' we must give it its common and approved usage. Sec. 990.01(1), Stats. In a mercantile use, which is applicable here, 'consignee' means one to whom a consignment may be made, a person to whom goods are shipped for sale, or one to whom a carrier may lawfully make delivery in accordance with its contract of carriage, or one to whom goods are consigned, shipped, or otherwise transmitted. Black's Law Dictionary, 4th Ed., p. 380. The mercantile use of 'consignee' is not restricted to one who receives property for the purpose of sale. Sturn v. Boker (1893), 150 U.S. 312, 326, 14 S.Ct. 99, 37 L.Ed. 1093. This view of the meaning of the statute makes it unnecessary to consider whether Beloit has also a lien at common law as found by the trial court or under sec. 289.41(1), Stats., which it claimed in the trial court.

Common-law and statutory liens continue in existence until they are satisfied or terminated by some manner recognized by law. A lien may be lost by failing to assert it, by waiver, or by payment or tender of the proper amount of the debt secured by the lien. Power Transmission claims Beloit waived its lien by making an excessive demand. The record shows Beloit refused to give up possession of the forgings unless the freight charges plus interest were paid and also payment made of the sum of approximately $23,000 on a disputed claim which had no reference to the forgings.

While there is dicta in Folsom v. Barrett (1902), 180 Mass. 439, 62 N.E. 723, cited by Power Transmission to the effect a lien may be lost by a demand of the lienholder for an amount in excess of that due, that case does not state the general rule or the rule in this state. 51 Am.Jur.2d, Liens, p. 185, sec. 50; Weeks v. Robert A. Johnson Co., Inc., supra. We adhere to the rule in Wisconsin that an excessive demand does not waive the lien. The excessive demand, whether of the amount due for which the lien is claimed or because it is founded upon an obligation unrelated to the lien, must be made in good faith and in belief that the person making the demand is entitled to such sum and that he has a general lien upon the specific goods. There is no evidence in this case that Beloit was not in good faith and did not believe it was entitled to the sum demanded when it made its demand. Nor is there any evidence Beloit did not believe it had a right to withhold possession of the forgings until payment was made on the account for which it had no specific lien thereon. There must be some evidence the person claiming payment knows or realizes he does not have a general lien on the specific property upon which he has a specific lien before he can be charged with bad faith.

Power Transmission, however, claims Beloit had bad faith because it filed a counter-bond in the replevin suit to retain possession of the forgings which it did not own or claim title to. While it may be difficult to understand the purpose of Beloit's filing a counter-bond in order to retain the forgings, which it did not own, nevertheless, sec. 265.06, Stats., allows a defendant to file a bond in a replevin suit and the effect thereof is to give the plaintiff, if successful, a right to recover the value of the property. ² We do not consider the filing of a bond in a replevin suit as evidence of bad faith or, if so, a basis for denying the defense that a lien existed.

Power Transmission contends Beloit had no intention to claim a lien because when it was billed for the machining the invoice did not include the paid-freight charges. One having a lien on personal property does not waive the lien until the demand for the property on which he has a lien is made and he fails to assert it. The critical time is the demand for the property and the refusal. Nor is the lien lost merely because the right to retain possession is not expressly claimed on the ground of the...