American Bldgs. Co. v. Wheelers Stores

• Decision Date: 30 October 1978
• Docket Number: No. 4935,4935
• Citation: 585 P.2d 845
• Parties: AMERICAN BUILDINGS COMPANY, a Delaware Corporation, Appellant (Plaintiff below), v. WHEELERS STORES, a Division of Peavey Delaware Limited, a Delaware Corporation, and Peavey Company of Minneapolis, Minnesota, a Minnesota Corporation, and Industrial Building Company, a Wyoming Corporation, Appellees (Defendants below).
• Court: Wyoming Supreme Court

Page 845

585 P.2d 845

AMERICAN BUILDINGS COMPANY, a Delaware Corporation, Appellant (Plaintiff below), v. WHEELERS STORES, a Division of Peavey Delaware Limited, a Delaware Corporation, and Peavey Company of Minneapolis, Minnesota, a Minnesota Corporation, and Industrial Building Company, a Wyoming Corporation, Appellees (Defendants below).

No. 4935.

Supreme Court of Wyoming.

Oct. 30, 1978.

Donald E. Jones and Gay Bartels, Torrington, for appellant.

Michael E. Warren of Sawyer & Warren, Torrington, for appellees.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

RAPER, Justice.

From a judgment of the district court in favor of defendant-appellee Wheelers Stores (hereinafter Wheelers) denying plaintiff-appellant American Buildings Company (hereinafter ABC) a contractor's lien and its foreclosure against Wheelers' property, this appeal is taken. ¹ The issues, as stated by ABC, are:

"1. Is the Mechanic's Lien Law of the State of Wyoming applicable and does it afford protection to a manufacturer of prefabricated buildings sold by local dealers who contract directly with the owner to furnish buildings for erection on owner's property, and

"2. Were the elements of estoppel present in this case to deny the appellant of its right to enforce the lien." ²

We would state the issues more precisely:

1. Does a manufacturer of a prefabricated building, as a vendor, have a lien within the contemplation of § 29-2-102, W.S.1977, ³ when its vendee-dealer sells the building direct to the owner of real property under a contract to supply only the prefabricated parts to be assembled and erected by the owner?

2. Under the facts of this case, is ABC estopped from enforcing, or has it waived, any lien it may have?

We shall affirm.

Wheelers is a retail sales company operating sixty-four stores at the time of trial. ABC manufactures prefabricated steel buildings for commercial use. Industrial Building Company, Casper, Wyoming (hereinafter Industrial), was the Wyoming dealer for ABC. In 1974, ABC's regional sales manager met with representatives of Wheelers to negotiate the sale and purchase over a period of time of several prefabricated buildings. It was determined that when a purchase was made, ABC would sell the building to one of its dealers. The dealer would then, in turn, sell the building to Wheelers. Over a period of time, as a result of that meeting, Wheelers bought five ABC buildings in that fashion. In each of the five transactions, Wheelers was instructed to pay the dealer directly. ABC's relationship with its dealers is "vendor-buyer," i. e., title to buildings passes to the dealer. The dealer is an "independent businessman" who markets as he sees fit. ABC does not sell directly to an owner or customer.

In accordance with those arrangements, Wheelers ordered a building from Industrial for a store at Torrington at a cost of $29,254.78. ABC sold the prefabricated components to Industrial. Industrial arranged delivery to Wheelers. Wheelers erected the structure and Wheelers paid $2,925.48 on account to Industrial. After the building was assembled on site by Wheelers, Industrial billed the purchaser for the $26,329.30 balance. Wheelers, relying upon the directions of ABC, paid Industrial in full. Industrial did not pay ABC its price for the structure. ABC credited Industrial with $6,100.84, thereupon filed and noticed a lien for $23,153.94, and initiated this action to foreclose.

The trial judge found that ABC, under the facts of the case, did not come within the ambit of § 29-2-102, and further was estopped from claiming a lien. ABC urges that Industrial was an original contractor of Wheelers, and hence ABC is a materialman a "person" furnishing "material" "by virtue of any contract with the owner", "or his contractor" and should have a lien to secure payment for materials furnished. In other words, the claim of ABC is that Industrial is a "contractor" of the owner within the statute; so, therefore, ABC, in furnishing materials to Industrial, became entitled to a lien.

This court has decided some applicable fundamentals which pertain to the lien laws of this state. Mechanics' liens were not recognized at and are in derogation of common law so there must be full compliance with legislative requirements. Arch Sellery, Inc. v. Simpson, Wyo.1959, 346 P.2d 1068. Statutory lien laws must be strictly construed and their scope cannot be extended. Cities Service Oil Company v. Pubco Petroleum Corporation, Wyo.1972, 497 P.2d 1368.

There are also some well-settled definitions applicable to the section we have under consideration. Loosely speaking, one who enters into a contract with another to do or supply a service or goods is a "contractor". However, when a contract concerns the construction of improvements to real property, "contractor" has a specialized meaning related to the building trades; and it is in this sense that "contractor" is connected to the law of mechanics' liens, as is a "subcontractor" and one who supplied materials. The latter has come to be known as a "materialman". Statutory terms must be construed in connection with the subject matter with which they are used. Morrison-Knudson Co. v. State Board of Equalization, 1943, 58 Wyo. 500, 135 P.2d 927.

Stripping the Wyoming statute to its essentials applicable to this case, bares its intent: "Every * * * person * * * who shall * * * furnish any material under * * * any contract with the owner * * * or his * * * agent, trustee, contractor or subcontractor * * * shall have a lien * * *." Note that "owner", "agent", "trustee", "contractor", and "subcontractor" are in the alternative. The word "contractor" is amplified by § 29-2-109, W.S.1977, when it sets out the lien filing procedure:

"It shall be the duty of every Original contractor, within four (4) months, and every subcontractor, and every journeyman and day laborer, and every other person seeking to obtain the benefits of the provisions of this act (§§ 29-2-101 to 29-2-124), within 90 (90) days after the indebtedness shall have accrued, to file * * *." (Emphasis added.)

We consider the addition of the word "original" to be only for the purposes of distinguishing a "contractor" from a "subcontractor". Industrial furnished Material to the owner, Wheelers, under a contract. ABC had no contract with Wheelers.

The authority is overwhelming that one who merely furnishes materials to the owner or a contractor is a materialman, and not a contractor or subcontractor, within the meaning of the mechanics' lien laws. Anno., short-titled "Mechanic's Lien Who Is Materialman," 141 A.L.R. 321. See also, A.L.R. Bluebooks of Later Decisions. ⁴ As concluded by the same annotation, one who not only furnishes materials, but installs them, is a contractor or a subcontractor, and not a materialman, within the meaning of mechanics' lien laws. ⁵ In building contracts, a "subcontractor" is one who assumes performance of a portion or all of the contract work which the contractor has obligated himself to perform under contract with the owner. Wells-Stewart Construction Co. v. Martin Marrietta Corporation, 1968, 103 Ariz. 375, 442 P.2d 119; Kinney Electrical Manufacturing Company v. Modern Electric Company, N.D.1967, 149 N.W.2d 69; O'Neal Steel Company v. Leon C. Miles, Inc., Miss.1966, 187 So.2d 19; Rogers v. Crane Co., 1937, 180 Okl. 139, 68 P.2d 520, 524; 17 C.J.S. Contracts § 11, p. 588. We must conclude that Industrial is merely a materialman ⁶ and not a contractor.

Applying the principle that the lien law of Wyoming will not be extended beyond its terms, there then arises the question as to whether a materialman (ABC) to a materialman (Industrial) can come within its terms. We conclude from our research that vast authority supports the conclusion that a materialman supplying a materialman is too remote a relationship not within the sphere of statutory protection affording a lien to suppliers of materials. It is not a new concept. A detailed review of cases illustrating the rule is clarifying. In Caulfield v. Polk, 1897, 17 Ind.App. 429, 46 N.E. 932, a singularly similar set of circumstances to those now before us converged. In that case, Eagle Machine Works agreed to sell and furnish an engine and boiler to defendant for defendant's canning factory. The plaintiff-manufacturer agreed to furnish Eagle a steam boiler to be used in fulfilling Eagle's contract with the defendant. The boiler was received by Eagle and thence shipped to defendant, along with the engine. As in the instant case, the defendant did its own installation. The defendant timely settled its debt with Eagle but Eagle failed to pay plaintiff-manufacturer. The manufacturer claimed a lien under the Indiana statute. ⁷ The manufacturer argued identically, as does the manufacturer ABC, that Eagle was a contractor within the statute. The court in Caulfield explained:

"The statute gave the machine works the right to a lien, not as a contractor, but as a material man. The distinction between the two must be kept in view if property owners are to have proper protection. If one material man furnishing material to another material man has a right to a lien, then any material man, no matter how far removed, has the same right, and all he has to do is to show that he furnished the material to be used in that particular building, and it was so used. A material man should be and is protected for any machinery furnished to a person authorized to put the same in a building, whether such person be the owner or a contractor or subcontractor. Beyond this the statute does not go in terms, and should not go by implication. In the case at bar, appellant (plaintiff) did not furnish the boiler to appellee (defendant), nor to any one authorized to place it in appellee's factory, nor to any one authorized, either expressly or by implication by appellee to purchase it. The statute makes no provision for a lien in favor of one who simply sells materials to...