Continental Supply Co. v. White

• Decision Date: 20 June 1932
• Docket Number: 6911.
• Citation: 12 P.2d 569,92 Mont. 254
• Parties: CONTINENTAL SUPPLY CO. v. WHITE et al.
• Court: Montana Supreme Court

12 P.2d 569

92 Mont. 254

CONTINENTAL SUPPLY CO. v. WHITE et al.

No. 6911.

Supreme Court of Montana

June 20, 1932

Rehearing Denied July 5, 1932.

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

Action by the Continental Supply Company against H. P. White and J E. Winther, a copartnership, G. R. Nadeau, the Davis Supply Company, Ralph Chamberlain, and others. From a judgment for plaintiff, defendants named, except the two parties constituting the defendant copartnership, appeal separately.

Affirmed as to each of the appealing defendants.

In equity suit, court may award relief which seems just and proper; prayer being no part of complaint.

E. K Cheadle, Jr., of Shelby, for appellant Davis Supply Co.

R. L. Clinton, of Shelby, for appellant Nadeau.

Cooper, Stephenson & Hoover and S. B. Chase, Jr., all of Great Falls, for appellant Chamberlain.

Louis P. Donovan and Henry McClernan, both of Shelby, for respondent.

MATTHEWS J.

The Davis Supply Company, a corporation, G. R. Nadeau, and Ralph Chamberlain have separately appealed from a judgment in favor of the plaintiff, Continental Supply Company, foreclosing a lien against certain oil well casing acquired by appellants and obtained by them from H. P. White and J. E. Winther.

In May, 1929, White and Winther commenced drilling operations under a lease held by the former on certain lands in Liberty county; they purchased certain casing and other necessary supplies from the plaintiff on credit. The well was completed in July, at which time the operators were owing to plaintiff a balance on account of nearly $5,000. The well proved to be a nonproducer and, consequently, the casing theretofore installed was pulled in August; it was racked on the leased ground at the site of the well.

In October the operators sold 1,000 feet of 10-inch casing to one Earl McClure, and in November sold 1,641 feet of 8 1/4-inch casing to defendant Chamberlain. This casing was a part of that pulled from the well, but was not supplied by this plaintiff. Thereafter, on December 18, 1929, the plaintiff filed with the county clerk of Liberty county its affidavit, notice, and itemized statement of account constituting its claim of lien on the leasehold and the property of White and Winther located thereon.

In February, 1930, Nadeau caused 1,760 feet of 6 5/8-inch casing, which had been sold to the operators by the plaintiff and originally placed in the well, to be sold on execution and became the purchaser thereof. In March, the Davis Supply Company, under authority from McClure, removed the 10-inch casing from the premises.

Thereafter the plaintiff commenced this action against White and Winther and all parties claiming any interest in the property of the debtors on the leased premises at the time its lien attached thereto. White and Winther defaulted and their default was duly entered.

These appealing defendants interposed separate demurrers, which were overruled, and thereafter answered. The Davis Supply Company alleged that it acted merely as agent for the purchaser McClure, for the purpose of settling certain accounts owing by him to it and others; it admitted that it took the 10-inch casing, sold a part thereof, and that the balance was so commingled with like casing in its warehouse as to be unidentifiable. It alleged that this casing was not sold to the debtors by the plaintiff, was not used in the well, and was not the property of the debtors at the time plaintiff filed its lien and was, therefore, not covered by the lien.

Admitting the purchase alleged, Chamberlain's answer is, in effect, a general denial of all other allegations.

Nadeau denied generally all allegations, followed by an affirmative defense of estoppel, based upon alleged statements made to him by the manager of the plaintiff company, on which he relied in instituting an action against White and Winther.

Issue was joined by replies, and the cause was tried to the court sitting without a jury. The trial resulted in findings of fact and conclusions of law in favor of plaintiff, followed by the judgment from which these appeals are taken.

The complaint alleges that White and Winther "were the owners of a leasehold for oil and gas purposes" on lands described, on which they operated in the drilling and completion of a well during the period from May 9 to July 11, 1929; that during that period, at the special instance and request of White and Winther, plaintiff furnished them "material, machinery and oil well supplies" used in the operations, of a reasonable value of $4,757.31; "that the defendants have not paid the said sum *** nor any part thereof, and the same is now due, owing and wholly unpaid." It is then alleged that, on December 18, 1929, the plaintiff "for the purpose of securing and perfecting a lien for moneys due to it as aforesaid upon said oil and gas leasehold *** and the building and appurtenances thereto, and upon the material and supplies so furnished and upon all the right, title and interest of said owners in and to" the well "for which they were furnished, and upon all the right, title and interest of such owners in and to all other *** fixtures and appliances used in operating for oil and gas *** upon the leasehold, filed *** Notice of Claim of Lien *** containing a just and true account *** and a correct description of the property charged with the lien." A copy of the claim filed is attached as an exhibit. It is then alleged that, on the date of filing, the property described was on the leasehold and that any rights of these defendants were acquired subsequent thereto.

1. The first attack upon the complaint made by the Davis Supply Company is that it affirmatively appears therefrom that the 10-inch casing was not furnished by the plaintiff. This fact might, under the general materialman's lien statute (section 8342, Rev. Codes 1921), be fatal to the complaint, but, as hereafter shown, is immaterial under the special statute on which the complaint is based. Chapter 152, Laws 1923.

2. It is next contended that the complaint is insufficient, in that it fails to allege that the plaintiff is the owner and holder of the obligation alleged to be secured by the lien, and that the plaintiff is the owner and holder of the lien.

On this contention counsel for Chamberlain cites Bennett Realty Co. v. Isbell, 219 Ala. 318, 122 So. 337, and J. I. Case Threshing Machine Co. v. Simpson, 54 Mont. 316, 170 P. 12. The first case merely declares the general rule that, in an action to foreclose a mechanic's lien, the complaint must contain all of the allegations necessary to support an action at law to establish the obligation. The second holds that, in an action on a negotiable note made payable to bearer, the complaint must allege that the plaintiff is the owner and holder thereof. Neither case supports the contention made.

Here the obligation is on an open account; the complaint follows the approved form in such actions (2 Bancroft on Code Pleading, 1120) and also the form approved for the foreclosure of a mechanic's lien, which form contains no averment that plaintiff is the owner and holder of the lien (3 Bancroft on Code Pleading, 3188). The complaint is sufficient in this respect. Wertz v. Lamb, 43 Mont. 477, 117 P. 89; Mills v. Olsen, 43 Mont. 129, 115 P. 33; 8 C.J. 885, note 38.

3. It is contended that the complaint does not sufficiently state a cause of action against Nadeau. He was a proper party defendant (section 8347, Rev. Codes 1921), and, while there is some authority to the contrary, such a complaint is sufficient if it merely alleges, as to such parties, that they claim some right, title, or interest in the property described, but that such interest is subsequent to and subject to the lien and claim of the plaintiff; matters purely of a defensive nature need not be anticipated and negatived. Wertz v. Lamb, above; 40 C.J. 402, § 553, and 419, § 573.

4. The complaint originally alleged that the claim of lien was "filed for record"; the court at the trial permitted the words "for record" to be stricken; error is assigned. The statute merely provides that the claim shall be "filed," but on filing it is indexed and abstracted in proper records by the clerk (section 8341, Rev. Codes 1921) and thereupon becomes a record of his office. The words stricken might well have been considered surplusage; certainly the court did not err in permitting the amendment in the absence of any showing of surprise or necessity for continuance.

5. It is contended that the complaint and notice do not sufficiently describe the property on which a lien is claimed, or the owner of the property to be charged with the lien. The statute, in so far as applicable here, provides that "any person *** who shall under contract *** with the owner of any leasehold for oil and gas purposes, *** or with the trustee or agent of such owner *** furnish *** oil well supplies [for operating] *** [or] drilling *** any *** well *** shall have a lien" upon the well, the leasehold, buildings, appurtenances, the materials furnished, and upon all "fixtures, and appliances used in the operating for oil and gas purposes upon the leasehold for which said material and supplies were furnished," and that "the liens herein created shall be enforced *** and the notice of same shall be given *** in the same manner as now provided by the laws *** for materialmen's and mechanic's liens." Chapter 152, Laws of 1923, amending sections 8375 and 8377, Rev. Codes 1921.

Section 8340, Rev. Codes 1921, thus made applicable, declares that the lien is "perfected" by the filing of the notice containing "a just and true account of the amount due" and "a correct description of the property to be charged"; no mention is made of...