Blose v. Havre Oil & Gas Co.

• Decision Date: 02 April 1934
• Docket Number: 7234.
• Citation: 31 P.2d 738,96 Mont. 450
• Parties: BLOSE v. HAVRE OIL & GAS CO. et al.
• Court: Montana Supreme Court

31 P.2d 738

96 Mont. 450

BLOSE v. HAVRE OIL & GAS CO. et al.

No. 7234.

Supreme Court of Montana

April 2, 1934

Rehearing Denied April 13, 1934.

Appeal from District Court, Liberty County; C. B. Elwell, Judge.

Action by T. H. Blose against the Havre Oil & Gas Company and others. From a judgment in favor of the plaintiff, the defendant named appeals.

Judgment affirmed.

Henry S. Kline, of Havre, and C. F. Morris, Asst. Atty. Gen., for appellant.

L. E Rhodes and O. C. Hauge, both of Havre, Russell E. Smith, of Cut Bank, and S. C. Ford, of Helena, for respondent.

MATTHEWS Justice.

In 1929 J. J. Hardie, B. D. Burns, D. S. MacKenzie, and V. C. Miller were the holders of an oil and gas lease on certain lands in Liberty county, taken in the name of Hardie and Burns trustees, and on which drilling operations were being conducted by the trustees. On September 23, 1929, the plaintiff, T. H. Blose, was employed by Burns, confirmed by Hardie, to take charge of the well at a wage of $200 per month. In January, 1930, Burns informed Blose that the operators were short of funds and were going to Chicago to seek financing, and that he would have to agree to a temporary reduction of wages to $100 per month. In April the leaseholders incorporated under the name of Havre Oil & Gas Company, each taking stock in the corporation to the extent of his interest in the lease, and, on April 28, 1930, the trustees assigned the lease to the corporation. Burns, who was made manager, then informed Blose that "the company has organized to sell stock and as far as you are concerned you continue just as you have been." Blose had charge of the operations, without interruption, continuously from September 23, 1929, to October 4, 1930, under the direction of Burns, during which time he drilled, cleaned out the well swabbed and pumped oil, and kept the well "in a state of repair and operation."

On October 6, 1930, Blose filed a "claim for labor lien," to which he attached his "statement of account for labor furnished in connection with the drilling of oil and gas well" made "to J. J. Hardie, Bears Den Oil Company, B. D. Burns and Havre Oil and Gas Company." The statement is of debits and credits over the entire period of service, and shows a balance due of $1,765.28. On March 22, 1931, Blose brought action against the original associates, the trustees, and the corporation, jointly, for the full amount claimed and for the foreclosure of his asserted lien.

By a joint answer the defendants admit practically all of the allegations of the complaint, but assert that the employment of the plaintiff was by Hardie and Burns up to the time of incorporation, and by the corporation thereafter. They deny the correctness of the statement of account for each period, and allege the invalidity of the "claim of lien." Certain alleged counterclaims are set up which are not material here. Issue being joined, the cause was tried to the court without a jury.

On the trial the defendants demanded that the plaintiff be compelled to elect as to whether he would proceed against the individuals or the corporation, which demand was refused; they objected to the introduction in evidence of the claim of lien filed, which objection was overruled.

At the close of the trial the court made findings of fact and conclusions of law, upon which it entered judgment in favor of the plaintiff, and against Hardie and Burns, trustees, in the sum of $761.08 under the contract, for $150 attorneys' fees and for costs, and against the Havre Oil & Gas Company in the sum of $678.65. The court decreed that the plaintiff has a valid and existing lien against all the right, title, and interest of all of the defendants in and to the leasehold for the total of the judgments, and decreed the foreclosure of the lien and sale of the property.

The defendants have appealed from the judgment; they specify error upon the receiving of the lien in evidence, the overruling of the motion to compel an election in overruling their motion for judgment of dismissal at the close of plaintiff's case, and upon numerous findings of fact made.

The position taken by counsel is that the plaintiff worked under two separate contracts--the first with the trustees, on which he was entitled to maintain an action against them; the second with the corporation, on which he was likewise entitled to maintain an action against it--which could not be united in a single action, and that, as there was no continuous service under a single contract, the single claim of lien for the full amount was invalid and cannot become the basis of a foreclosure suit.

The defendants cite a number of decisions condemning the tacking of one contract debt to that of an independent contract debt as the basis of a single lien claim, the latest of which is an oil well case (Exchange National Bank of Tulsa v. Okeya Oil & Gas Co., 107 Okl. 62, 229 P. 765, 766), wherein the correct rule on this subject is stated. Therein the defendant, owner of a leasehold, on four separate occasions entered into separate contracts with one Mays to drill four wells on the leasehold. The wells were completed at different times. Within the statutory period after the completion of the last well, but beyond the period as to the other wells, Mays filed a claim for the total amount due on all of the wells and claimed a single lien upon the entire leasehold. The court declared that neither of the contracts was dependent upon the other, and that "no such contract, or the moneys due thereunder, can be tacked onto another contract, so that the contractor doing the work can procure a lien for the work done under two such separate contracts, by filing one claim within the time required as to one of the contracts, *** if the time has expired as to the other contract." With this rule we are in accord, but it has no application here.

Defendants cite one case which supports their contention (Gerard B. Allen & Co. v. Frumet Mining & Smelting Co., 73 Mo. 688), by holding that, where a contracting firm incorporated, took over the property, and assumed the debts of the firm, in the midst of the performance of the contract, and continued the operations without interruption, there were two independent contractors, because "in the eye of the law, the firm and the corporation are different persons," and therefore a single statement and claim of lien was invalid. This decision was rendered in 1881. We doubt that the Supreme Court of Missouri would so hold to-day; though the exact point has not since been raised in that court, it has held that the amount due under separate contracts on the same structure may be united in a single lien claim, if filed within the statutory period after completion of each contract. Schroeter Bros. Hardware Co. v. Croatian "Sokol" Gymnastic Ass'n (Mo. Sup.) 58 S.W.2d 995, citing Grace v. Nesbitt, 109 Mo. 9, 18 S.W. 1118. At any rate, we cannot subscribe to the extremely technical construction given the lien law to defeat such a lien, a law which "should not be hypercritically interpreted" (Hubbell v. Schreyer, 56 N.Y. 604, 15 Abb. Prac. (N. S.) 300; Williamson v. Shank, 41 Ind.App. 513, 83 N.E. 641), and which will later be shown to be contrary to the rule elsewhere.

While mechanic's lien laws did not exist at common law and are unknown in England, our forefathers were so imbued with the spirit of justice and fair dealing that such laws came into being in this country almost simultaneously with our Constitution. The first "Act to encourage master builders by establishing a lien for their just claims" was passed in Maryland in 1791; the idea spread rapidly to all the original states and to territories and states as they were created. The lien exists to-day in every state in the Union. Lloyd on Building & Buildings, 413. Such a law has existed in Montana since the earliest territorial days. Bannack Laws, p. 332. For a history of our law, see Merrigan v. English, 9 Mont. 113, 22 P. 454, 5 L. R. A. 837, and Lane v. Lane Potter Lumber Co., 40 Mont. 541, 107 P. 898. These laws are based upon the biblical injunction that "the laborer is worthy of his hire." Luke 10:7. Their object is to make the pay of those whose labor or material has gone to enhance the value of another's property prompt and secure against both the misfortune and the possible dishonesty of employers, and the construction to be given to them is that which, without violating the true signification of the language used, shall best promote the object and efficiency of the statute in all its parts. Phillips on Mechanics' Liens (3d Ed.) 28. "Their equity and beneficence are conceded" by all. Shaw v. Young, 87 Me. 271, 32 A. 897, 898.

The controlling statute in the instant case is chapter 152 of the Session Laws of 1923, which provides in part: "Any person *** who shall under contract, expressed or implied, with the owner of any leasehold for oil and gas purposes *** perform labor *** in *** drilling, torpedoing, completing, operating, or repairing of any oil or gas well, *** shall have a lien upon all of the right, title and interest of such owner in and to the whole of such leasehold. *** The liens herein created shall be enforced in the same manner *** as now provided *** for *** mechanic's liens, except that the time within which such liens must be filed shall be six months instead of ninety days. ***"

Desiring to avail himself of the benefits of the foregoing statute the plaintiff was required to file with the county clerk, within six months after the labor was performed, a "just and true account of the amount due him, after allowing all credits, and containing a correct description of the property to be charged with such lien, verified by affidavit, but any error or mistake in the account or...