Continental & Commercial Trust & Savings Bank v. North Platte Valley Irr. Co.

• Citation: 219 F. 438
• Decision Date: 04 January 1915
• Docket Number: 4249,4261.
• Parties: CONTINENTAL & COMMERCIAL TRUST & SAVINGS BANK et al. v. NORTH PLATTE VALLEY IRR. CO. et al. (two cases).
• Court: U.S. Court of Appeals — Eighth Circuit

219 F. 438

CONTINENTAL & COMMERCIAL TRUST & SAVINGS BANK et al. v. NORTH PLATTE VALLEY IRR. CO. et al. (two cases).

Nos. 4249, 4261.

United States Court of Appeals, Eighth Circuit.

January 4, 1915

[Copyrighted Material Omitted]

Charles L. Powell, of Chicago, Ill., and Eldon Bisbee, of New York City (Levy Mayer, of Chicago, Ill., and William C. Kinkead of Cheyenne, Wyo., on the brief), for appellants.

John D Clark, of Cheyenne, Wyo. (Gibson Clark, of Cheyenne, Wyo., on the brief), for appellees O. L. Walker Lumber Co., Wagner Electric Mfg. Co., and Otto H. Falk, as receiver of Allis-Chalmers Co.

William W. Grant, Jr., of Denver, Colo. (Ernest Morris, of Denver, Colo., on the brief), for appellees Fred W. Hart, Hendrie & Bolthoff Mfg. & Supply Co., C. P. Allen General Contracting Co., Colorado-Portland Cement Co., Pioneer Iron & Wire Works Co., Florence Hardware Co., and W. A. Rawlings.

Before CARLAND, Circuit Judge, and T. C. MUNGER and YOUMANS, District judges.

CARLAND Circuit Judge.

The bill in this case was filed by appellants to foreclose a trust deed made and executed by the North Platte Valley Irrigation Company, a Wyoming corporation, hereinafter called the Irrigation Company, on December 18, 1909, to secure an authorized bond issue of $2,000,000. A decree of foreclosure was entered February 9, 1914. From this decree appellants appealed, and that appeal is numbered 4249. There was an application to modify the decree of foreclosure, which was denied, and a separate appeal was taken from the order of denial, and that appeal is numbered 4261. If the decree was right so was the order refusing to modify the same, and as the record in appeal No. 4261 has been consolidated with that of No. 4249, the appeal in No. 4261 may be dismissed, as all matters in controversy may be considered on the appeal from the main decree. The complaint of the appellants concerning the decree of foreclosure grows out of the establishment in the decree of certain statutory liens as superior to the liens of the trust deed. Complaint is also made of the manner of sale and the way in which the decree provides that an appraisal of the property shall be made for the purpose of fixing a basis for the distribution of the proceeds of the sale. As the liens are the cause of the controversy, it is perhaps best to first consider the objections of the appellants thereto, reserving for subsequent discussion the question as to what property the several liens held to be valid ought to cover. It was adjudged that the C. P. Allen General Contracting Company had a statutory. lien under the laws of Wyoming superior to the lien of the trust deed in the sum of $20,438.47 on what in this opinion may be called for the sake of brevity, the dam, power house, wood stave pipe line, pumping station, steel pipe line, and poles erected for the transmission line. The amount of this lien was a balance due upon a contract to construct the 'wood stave pipe line' for $48,000. It is contended that as all the material furnished and work performed under this contract was for the construction of the wood stave pipe line, the lien should be restricted to that structure. As this same question arises as to some of the other liens, the discussion thereof will be postponed until the objections to all the several liens, as liens, have been stated.

It was adjudged that Fred W. Hart had a statutory lien, under the laws of Wyoming, superior to the lien of the trust deed in the sum of $10,374.14 on the dam, power house, wood stave pipe line, pumping station, steel pipe line, and poles erected for the transmission line. Hart was superintendent and engineer in charge of the construction of the so-called 'hydroelectric plant' which with the exception of the dam was composed of the structures hereinbefore mentioned. His salary was $10,000 per year. Besides the work of superintending the construction of the system, he performed work and labor. It is contended that he is not within the Wyoming statute, which provides that:

'Every mechanic or other person who shall do or perform any work or labor upon * * * any building, erection or improvement * * * shall have for his work or labor done * * * a lien upon such building, erection or improvement.'

There is a conflict of authority upon the subject as to whether a person in the position of Hart is entitled to a lien under statutes similar to the one above mentioned. In Massachusetts an engineer or architect cannot secure a lien for plans, but may for superintendence, and where services in these two capacities cannot be distinguished, the lien is lost. Mitchell v. Packard, 168 Mass. 465, 47 N.E. 113, 60 Am.St.Rep. 404. In Iowa, Wisconsin, and Nebraska the lien is upheld for plans alone without supervision. Parsons v. Brown, 97 Iowa, 699, 66 N.W. 880; Fitzgerald v. Walsh, 107 Wis. 92, 82 N.W. 717, 81 Am.St.Rep. 824; and Henry v. Halter, 58 Neb. 685, 79 N.W. 616.

It seems, however, that the tendency of modern decisions is toward allowing liens to engineers and architects designing and superintending the construction of improvements. Wetzel Ry. v. Tennis, 145 F. 458, 75 C.C.A. 266, 7 Ann.Cas. 426; Trust Co. v. Richmond (C.C.) 54 F. 723; Cascaden v. Wimbish, 161 F. 241, 88 C.C.A. 277; Phoenix Furn. Co. v. Hotel Co. (C.C.) 66 F. 683; Hughes v. Torgerson, 96 Ala. 346, 11 So. 209, 16 L.R.A. 600, 38 Am.St.Rep. 105; and Alvord v. Hendrie, 2 Mont. 115.

The following are cases in which architects have been allowed liens under statutes similar to that of Wyoming: Mulligan v. Mulligan, 18 La.Ann. 20; Insurance Co. v. Rowland, 26 N.J.Eq. 389; Gardner v. Leck, 52 Minn. 522, 54 N.W. 746; Knight v. Norris, 13 Minn. 473 (Gil. 438); Van Dorn v. Mengedoht, 41 Neb. 525, 59 N.W. 800; Field v. Water Co., 25 R.I. 319, 55 A. 757, 105 Am.St.Rep. 895; and Stryker v. Cassidy, 76 N.Y. 50, 32 Am.Rep. 262.

Appellants claim that it was decided in Wyman v. Quayle, 9 Wyo. 326, 63 P. 988, that Wyoming took her mechanic's lien statute from Missouri, and that in Blakey v. Blakey, 27 Mo. 39, the Supreme Court of Missouri had held prior to the adoption of the statute by Wyoming that a superintendent at a stated salary to superintend the work of others was not entitled to a lien. An examination of that case, however, shows that all that was decided was that where a builder took a contract for the erection of a house, he could not maintain a lien for superintending his own workmen. Edgar v. Salisbury, 17 Mo. 271, simply held that where lienable and nonlienable charges were stated together in one charge, so that it was impossible to ascertain how much was lienable, the entire lien would be lost. Murphy v. Murphy, 22 Mo.App. 18, was disposed of on the same point, and Nelson v. Withrow, 14 Mo.App. 270, followed Blakey v. Blakey, supra. The old doctrine that these lien statutes, being in contravention of the common law, must be strictly construed has given way to a more liberal doctrine, in modern times, for the purpose of carrying out the purposes of the statute. Upon full consideration of the authorities bearing upon the question, we are of the opinion that a liberal construction of the Wyoming statute requires us to hold that Hart is entitled to a lien, the extent thereof to be hereafter discussed.

It was adjudged that the Hendrie & Bolthoff Manufacturing & Supply Company had a statutory lien under the laws of Wyoming superior to the lien of the trust deed in the sum of $4,606.57, on the dam, power house, wood stave pipe line, pumping station, steel pipe line, and poles erected for the transmission line. The material furnished by this company went into the power house, the pumping station, and transmission line. Under the Wyoming law these statutory liens cease to exist after six months from the date of the filing of the same, unless within that time an action shall be commenced and prosecuted without delay to final judgment. The lien of this claimant was filed August 26, 1912. It answered the bill in this case and filed a cross-bill on December 30, 1912. No process was issued, however, on the cross-bill. It is contended that as no process was issued, no suit was commenced within the requirement of the law as above stated, and that, the irrigation company never having had its day in court, there was no authority to adjudge the lien. It hardly needs the citation of authority to establish the proposition that the filing of a cross-bill is the commencement of a suit. Humane Bit Co. v. Barnet (C.C.) 117 F. 316; Carter v. Peurrung (C.C.A. 6) 99 F. 888, 40 C.C.A. 150; Flower v. MacGinniss (C.C.A. 2) 112 F. 377, 50 C.C.A. 291; Farmers' Loan Co. v. Railway, 177 U.S. 51, 20 Sup.Ct. 564, 44 L.Ed. 667; and Story, Eq. Pl. (4th Ed.) Sec. 7.

In regard to the failure to issue process so that an issue could be framed between the irrigation company and the other codefendants and the complainants, we must consider the status of the case at the time the cross-bill was filed. The Bolthoff Company had been brought in as a defendant by the complainants, and the officers of the Irrigation Company testified in the case as to the validity of the lien, and at the time of the final hearing of the case, it had been provided by rule 30 of the new equity rules (201 F. v, 118 C.C.A. v) that a defendant might state, in short and simple form, any counterclaim against the complainant which might be the subject of an independent suit in equity against him, and that such counterclaim, when set up, should have the same effect as a cross-suit, so as to enable the court to pronounce final judgment in the same suit both on the original and the cross claims.

We think under the facts appearing in the record, the objection that no process issued on the cross-bill is very technical and it does not appeal to our sense...