Diener v. Cubbage

• Decision Date: 13 November 1970
• Docket Number: No. 92,92
• Parties: Milton DIENER et al. v. Lewis CUBBAGE et al. t/a C & C Construction Company.
• Court: Maryland Court of Appeals

Page 555

259 Md. 555

270 A.2d 471

Milton DIENER et al. v. Lewis CUBBAGE et al. t/a C & C Construction Company.

No. 92.

Court of Appeals of Maryland.

Nov. 13, 1970.

Barry Zaslav, Silver, Springs (Blondes & Zaslav, Silver Spring, on the brief), for appellants.

Carl Harrison Lehmann, Upper Marlboro Joseph J. Bonner, Lanham, on the brief), for appellees.

Argued before HAMMOND, C. J., and BARNES, FINAN, SINGLEY and DIGGES, JJ.

DIGGES, Judge.

This is an appeal from a decree of the Circuit Court for Prince George's County enforcing a mechanics' lien. The appellees, Lewis and David Cubbage, were sub-subcontractors for certain carpentry work on a townhouse project. The general contractor was Towne Development Company, Inc. whose sole stockholders are appellants Milton and Walter Diener, and Harold Reznick. These three men and their wives (also appellants) own the land in Prince George's County upon which the project was being constructed. Towne subcontracted with Suburban Carpentry Corporation to do the necessary carpentry work, and Suburban sub-subcontracted the job to the appellees for an agreed price of $460 per unit for 141 units or a total of $64,860. The appellees began working in January of 1966 and were paid directly by Suburban for work completed. Suburban in turn billed Towne but at a unit price of $590.32. The appellees walked off the job on October 6, 1966, after Suburban had failed to pay them for several weeks. Up to that point, the appellees had received $51,933 from Suburban and are seeking to collect on a mechanics' lien $8,967. This figure represents the difference between $64,860 and $51,933 which is $12,927 less a $3,960 credit for uncompleted work. The trial court ordered payment on the Cubbages' lien for this amount.

The appellants contend that the lien was void and the trial court was in error for the following reasons:

I. The notice of intention to claim a lien was not in conformity with the requirement of Art. 63 of the Maryland Code.

II. The measure of damages should have been based on the reasonable value of the work performed and not on the price in the contract between the subcontractor and the sub-subcontractors, an agreement to which the appellants were not parties.

III. Appellants were not allowed a proper set-off.

Finally, they question whether appellees, as labor sub-subcontractors, are among those persons entitled to relief under the Maryland Mechanics' Lien Law. If so, is their status affected by the fact that the general contractor fully paid its own subcontractor? We will consider these contentions in order.

I

Art. 63, § 11 provides in substance that written notice of an intention to claim a mechanics' lien shall be given to the owner if he is a resident of the county in which the construction is taking place. Art. 63, § 12 allows such notice to be posted on the building if the owner is absent.

The appellants concede, as well they should, considering the previous decisions of this Court, that the posting of notice is authorized when owners are not residents of the county in which the construction site is located. Jakenjo, Inc. v. Blizzard, 221 Md. 46, 155 A.2d 661 (1959); Dente v. Bullis, 196 Md. 238, 76 A.2d 158 (1950); Bounds v. Nuttle, 181 Md. 400, 30 A.2d 263 (1943); Hensel v. Johnson, 94 Md. 729, 51 A. 575 (1902); Kenly, use of Otto, v. Sisters of Charity, 63 Md. 306 (1885). However the owners contend that the Cubbages have failed in their affirmative duty to prove this non-residency. Bounds v. Nuttle, supra. The appellees argue that they have satisfied this burden through the uncontradicted testimony of one of their witnesses, Mr. Miazga. He stated that none of the appellants lived in Prince George's County but rather all resided in the District of Columbia, with the exception of Reznick, a Montgomery County resident. This testimony alone is sufficient to sustain the chancellor's finding that the posted notice complied with the statutory requirements.

We cannot help but observe that when the appellant Reznick testified he failed not only to refute Miazga's testimony but in fact confirmed it as far as his own non-residence was concerned. It seems inconceivable that had any of appellants resided in Prince George's County, Reznick would not have been quick to point this out in his testimony, and thus bring this litigation to an abrupt halt. District Hgts. Apts. v. Noland Co., 202 Md. 43, 50-51, 95 A.2d 90 (1953).

A final point on the question of notice involved the meaning of the word 'addressed.' The appellants argue that the notice was not addressed to the owners since it contained only their names and not where they lived. This at best is a specious argument. In Kenly, supra at 310 the Court said:

'The notice that is placed on the building must be of the same character as that personally served. It must be addressed to the owner or agent.'

Since the word 'addressed' is not used in Art. 63 appellants apparently base their argument on the Kenly case. However, they misinterpret the contextual meaning of the word. Even a casual reading of Kenly indicates that the term was used in the sense of naming the person to whom the notice was directed. The Court said at page 310: 'Nor can we see how a notice can be given to the owner in either mode, except by naming him.' Since the notice did contain the names of all the appellants and was posted in the presence of a competent witness, no more need be said on this point.

II

The next question is one of first impression in this state. The appellants contend that since they are not parties to the contract between the subcontractor and the sub-subcontractor, they should not be bound by that contract price. Instead they claim they are liable only for the reasonable value of the labor performed. While this Court has not focused on this point, other jurisdictions have. In Laird v. Moonan, 32 Minn. 358, 363-364, 20 N.W. 354, 356 (1884), the court said:

'As between the immediate parties to a contract, the contract price fixed therein is, of course, the measure of liability; but it could not have been intended that the owner's contract carried with it an implied consent that the contractor should bind him to pay whatever he (the general contractor) might promise (a subcontractor) for labor or materials, or any more than the reasonable price or value.' (Emphasis added.)

Similarly in Christman v. Salway, 103 Or. 666, 676, 205 P. 541, 545 (1922), the Oregon court said:

'No rule is more firmly established in this state than, that where labor is performed or materials furnished at the instance of the contractor of the owner, and not to the owner himself, or to a common-law agent of the owner, the law fixes the amount for which a lien may be had, as the reasonable value of the labor or materials, and not the price which the contractor agreed to pay therefor.'

This concept has also been affirmed in Bangor Roofing & Sheet Metal Co. v. Robbins, 151 Me. 145, 116 A.2d 664 (1955), Quackenbush v. Artesian Land Co., 47 Or. 303, 83 P. 787 (1906) Lanier v. Lovett, 25 Ariz. 54, 213 P. 391 (1923), and by such authorities as Phillips, A Treatise on The Law of Mechanics' Liens on Real & Personal Property, § 204 (2d ed. 1883) and 10 Thompson, Commentaries on the Modern Law of Real Property, § 5215 (1957). Reasonable value, then, is the measure of damages, but the contract price can be used in determining what those damages are. We are in agreement with those authorities which hold that while the contract is not binding on the owner, the contract price is nonetheless prima facie proof of the reasonable value, and the owner has the burden of introducing evidence to show unreasonableness. In Lanier v. Lovett, supra, the Arizona court said at page 63, 213 P. at page 394:

'The price agreed upon for labor or materials between a subcontractor and the contractor, is, prima facie, the reasonable value, and if a contract is entered into far a specific sum for labor or material, and is complete within itself, a detailed statement of the account is unnecessary.' Quoting from 18 R.C.L. 938, § 71.

A similar statement can be found in Phillips, supra at § 204:

'The owner, when the contract is not made immediately by himself or his duly authorized agent, but by his contractor, may show that the price agreed to be paid by the contractor was beyond the fair market value at the time; but, if there is no evidence to show that the materials furnished by a sub-contractor are worth less than the price agreed on between him and the principal contractor, he is entitled to a lien for this agreed price. The owner, when sued by a subcontractor, would be able to impeach the contract only for fraud or mistake. The contract in either case is...