Boise Cascade Corp. v. Distinctive Homes, Inc.

• Decision Date: 04 November 1965
• Docket Number: 37493,Nos. 37492,s. 37492
• Citation: 407 P.2d 452,67 Wn.2d 289
• Court: Washington Supreme Court
• Parties: BOISE CASCADE CORPORATION, d/b/a Bestway Building Center, a corporation, Appellant, v. DISTINCTIVE HOMES, INC., a corporation, B. M. Denson and Elsie H. Denson, husband and wife, and William J. Clarke and Betty L. Clarke, husband and wife, and Walla Walla Federal Savings & Loan Association, a corporation, Respondents. BOISE CASCADE CORPORATION, d/b/a Bestway Building Center, a corporation, Appellant, v. DISTINCTIVE HOMES, INC., a corporation, formerly Mark Denson Builders, Inc., B. M. Denson and Elsie H. Denson, husband and wife, and John C. Sheppard and Alice A. Sheppard, husband and wife, and Walla Walla Savings & Loan Association, a corporation, Respondents.

Page 289

67 Wn.2d 289

407 P.2d 452

BOISE CASCADE CORPORATION, d/b/a Bestway Building Center, a corporation, Appellant, v. DISTINCTIVE HOMES, INC., a corporation, B. M. Denson and Elsie H. Denson, husband and wife, and William J. Clarke and Betty L. Clarke, husband and wife, and Walla Walla Federal

Savings & Loan Association, a corporation, Respondents.

BOISE CASCADE CORPORATION, d/b/a Bestway Building Center, a corporation, Appellant, v. DISTINCTIVE HOMES, INC., a corporation, formerly Mark Denson

Builders, Inc., B. M. Denson and Elsie H. Denson, husband

and wife, and John C. Sheppard and Alice A. Sheppard,

husband and wife, and Walla Walla Savings & Loan

Association, a corporation, Respondents.

Nos. 37492, 37493.

Supreme Court of Washington, En Banc.

Nov. 4, 1965.

Gess & Hurson, Kennewick, for appellant.

Butler & Yencopal, Chas. H. W. Talbot, Richland, for respondents.

HILL, Judge.

The sole issue on this appeal is whether the plaintiff-appellant, Boise Cascade Corporation, d/b/a Bestway Building Center, hereinafter called Boise, waived its lien rights on two newly constructed residence properties on each of which it was seeking to foreclose its lien for materials furnished. The houses were built on lots owned by B. M. Denson, the construction being by Distinctive Homes, Inc., a Denson corporation, and they will be referred to herein as the Clarke house and the Sheppard house. ¹

The trial court found that the liens had been waived, and entered judgment canceling the claimed materialmen's lien of the plaintiff-appellant on each of the properties.

B. M. Denson and Claude, J. Denson, his son, testified that in consideration of B. M. Denson signing two promissory notes, one for $3,000 and one for $2,019.19, ² thus assuming a personal liability to that extent for money which Distinctive Homes, Inc., owed Boise for materials theretofore furnished, the agents of Boise agreed to waive the liens on the newly constructed Clarke and Sheppard houses.

There was testimony from Boise's agents that it had insisted on the Denson notes as additional security and had agreed to withhold filing its liens, if certain payments were made before the time elapsed beyond which the lien rights would be lost for lack of filing. It was Boise's position that these payments were not made and, hence, it did not violate its agreement when, on May 22, 1962, it filed the liens on the Clarke and Sheppard houses which it now seeks to foreclose.

A lien right is a valuable right and its waiver is not to be presumed, and any waiver must be established by evidence that is 'clear, certain and unequivocal.' Emrich v. Gardner & Hitchings, Inc., 51 Wash.2d 528, 320 P.2d 288 (1958); Pacific Lumber & Timber Co. v. Dailey, 60 Wash. 566, 111 P. 869 (1910).

The testimony of the Densons is, in itself, substantial evidence. That the trial court believed their testimony is indubitably clear; and the trial court made it equally clear that it disbelieved the witnesses who testified that Boise did not waive its lien rights, but merely agreed to extend the time for filing the liens to give the debtors some additional time in which to make payments.

The respondents invoke the Hesperian rule: that there being substantial evidence to sustain the findings of the trial court, we will accept those findings as verities. Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 575, 343 P.2d 183 (1959).

Were this merely a question of whether the Densons or the agents of Boise were to be believed on the issue of whether or not Boise waived its lien rights, we would have contented ourselves with our customary obeisance to Hesperian. There are, however, at least two factors, a written document and a statute, which require that we go beyond a consideration of who and what the trial court believed, and who and what the trial court disbelieved in a determination of whether the evidence of waiver was 'clear, certain and unequivocal.'

The written document, dated April 24, 1962 (exhibit No. 4), was a unilateral statement of Boise's credit manager as to what had been agreed upon at the conference between the Densons and Boise's agents on April 19th or 20th, and a copy of it was delivered to the Densons April 25th or shortly thereafter; neither of whom made any protest as to its accuracy. This memorandum made no reference to any waiver of liens, but specifically said that Boise would protect its account by perfecting and filing liens. It differed materially from the Densons' version of the conference, by stating that Boise's claim of $5,385.70 against the Clarke house was to be paid by $2,383.70 from the proceeds of the sale of the Clarke house, ³ and B. M. Denson's note for $3,000; and that Boise's claim of $5,151.26 against the Sheppard house was to be paid from the proceeds of the sale of a third house (identified as R--26). ⁴

But even more important than exhibit No. 4 public policy expressed in a state statute (RCW 60.04.140), which indicates that a claim that a lien has been waived by the taking of a promissory note must rest on something more tangible than the assertion that such lien was waived by the acceptance of a note or notes.

Doubtless, experience with the frequent claim of the waiver of lien rights by the acceptance of promissory notes led to this state enacting a statute in 1893 which presently reads: ⁵

The taking of a promissory note or other evidence of indebtedness for any labor performed, material furnished, or equipment supplied for which lien is created by law, shall not discharge the lien therefor, unless expressly received as payment and so specified therein. RCW 60.04.140.

Concededly, the $2,019.19 note, given by B. M. Denson, was additional security to cover the amount due for materials on a house on which the lien rights were already lost; but it, together with the $3,000 note of B. M. Denson, ⁶ are claimed by the Densons to have been given for the waiver of the lien rights by Boise on the Clarke and Sheppard houses, although neither of the notes meets the statutory requirement that the waiver of the lien be specified therein.

It was not specified in either note that it was received in payment of the indebtedness for materials, or that the lien rights were waived. Instead, each note specifically provided that,

* * * neither the giving nor the acceptance of this note with or without security shall be held to waive the payee's right to enforce any lien for materials or other lien to which otherwise it is entitled.

For cases construing such statutes, see Llewellyn Iron Works v. Littlefield, 74 Wash. 86, 132 P. 867 (1913); River Rouge Savings Bank v. S & M Bldg. Co., 359 Mich. 189, 101 N.W. 260, 91 A.L.R.2d 409 (1960).

The contention is made that this statute (RCW 60.04.140) does not apply where there has been a novation, and that a new party (B. M. Denson) had assumed the debt of Distinctive Homes, Inc., to Boise for materials furnished. Our case of Union High School District v. Pacific Northwest Construction Co., 148 Wash. 594, 269 P. 809 (1928), is cited in support of this proposition.

The quick answer is that there was no novation here. We have defined novation as

'* * * a mutual agreement among all parties concerned for the discharge of a valid existing obligation by the substitution of a new valid obligation on the part of the...