Engle v. First Nat. Bank of Chugwater

• Decision Date: 14 February 1979
• Docket Number: 4933,Nos. 4932,s. 4932
• Citation: 590 P.2d 826
• Parties: Gaylord ENGLE, an Individual, Truxtun B. Shreve, d/b/a Shreve Heating & Cooling Service, Inc., Appellants (Plaintiffs below), v. FIRST NATIONAL BANK OF CHUGWATER, Appellee (Defendant below). FIRST NATIONAL BANK OF CHUGWATER, Appellant (Defendant below), v. John ZIEMBA, d/b/a Troy Decorating Company, Appellee (Plaintiff below).
• Court: Wyoming Supreme Court

Page 826

590 P.2d 826

Gaylord ENGLE, an Individual, Truxtun B. Shreve, d/b/a Shreve Heating & Cooling Service, Inc., Appellants (Plaintiffs below), v. FIRST NATIONAL BANK OF CHUGWATER, Appellee (Defendant below).

FIRST NATIONAL BANK OF CHUGWATER, Appellant (Defendant below), v. John ZIEMBA, d/b/a Troy Decorating Company, Appellee (Plaintiff below).

Nos. 4932, 4933.

Supreme Court of Wyoming.

Feb. 14, 1979.

Franklin D. Bayless, Cheyenne, signed the briefs for appellants in Case No. 4932 and appellee in Case No. 4933, and appeared in oral argument on their behalf.

Raymond B. Hunkins, Wheatland, signed the brief for appellee in Case No. 4932 and appellant in Case No. 4933, and appeared in oral argument on its behalf.

Before RAPER, C. J., McCLINTOCK, THOMAS and ROSE, JJ., and GUTHRIE, J., Retired. ^*

RAPER, Chief Justice.

This appeal involves the right of plaintiffs-appellants, Gaylord Engle and Truxtun B. Shreve (appellants), to mechanics' liens ¹ on a ranch home built by them for their children, Gaylord D. Engle and Barbara A. Engle (Engles). ² The district court granted summary judgment in favor of defendant-appellee, First National Bank of Chugwater (Bank) ³ denying appellants' lien claim. From that summary judgment, appellants appeal. The district court also granted summary judgment in favor of another plaintiff, John Ziemba (Ziemba), and, from that order, the Bank appeals.

The basic issues, as set out by the appellants, are that the district judge erred:

1. In finding that the oral contracts between appellants and the Engles were too indefinite to be enforced.

2. In not granting summary judgment in favor of the appellants for foreclosure of their liens for labor and materials supplied in the construction of a new home on the Engles' ranch.

3. In not granting summary judgment for appellants on the grounds the Bank would be unjustly enriched to the extent of the value of labor and materials if the appellants' liens were not found to be valid. ⁴

The Bank asserts that:

1. The contracts between appellants and the Engles and Ziemba and the Engles are void under the Wyoming Statute of Frauds, § 16-1-101, W.S.1977.

2. The contracts are so vague and indefinite as to be unenforceable.

3. If the contracts are found to be valid, they should be viewed as continuing contracts and the indebtedness not yet accrued, thus not fulfilling the requirements of § 29-2-109, W.S.1977. ⁵

4. The lien statements filed in this case are fatally defective because they describe the entire ranch on which the improvements are located rather than describing the one acre on which the improvements actually appear, and are thus not in compliance with §§ 29-2-109 and 29-2-102, W.S.1977.

5. No distinction is made between the new home and corral fencing and the land on which they appear, and thus the lien statements are again fatally defective.

We will reverse the summary judgment in favor of the Bank. We will affirm the summary judgment in favor of Ziemba.

In 1973, the Engles purchased a ranch located southeast of Pine Bluffs, Wyoming, near the Colorado-Wyoming border. The purchase was made by means of a loan from the Farmer's Home Administration (FHA) in the amount of $80,000. Included in the loan was $23,000 to be used to begin construction of a new ranch house. The Engles were aware that $23,000 would be insufficient to complete a home but undertook construction with a plan that the house would be completed year by year as funds became available. The appellants were to assist the Engles and provide materials and labor. The terms of the oral contract between appellant Shreve and the Engles were:

1. Appellant Shreve, with the aid of his wife, was to do the heating, wiring, plumbing, septic system, and help to finish the trim on the house, the framing, gutters, and run the main loop for electricity into the house.

2. No definite time for completion was established. When construction commenced in March or April of 1974, the work was to be done as money was available to purchase materials and as the Shreves had time to do the work.

3. Payment was to be made to Shreve for materials provided and for labor at the going rate. The payments were to begin when the work was completed and as funds became available to the Engles from the sale of crops and livestock.

The oral contract between appellant Engle and the Engles provided that Engle would:

1. Do framing and finishing work which included placing the plates, floor joists, putting up all the walls, rafters, roof sheeting, flooring and setting the outside doors. The finish work he would do included setting of the inside doors and all the window and door frames, base trim, kitchen cupboards, cabinets, bathroom, bathroom trim and vanity.

2. Complete work as funds and materials were available and as the home reached the stages where the work he was to do could be done.

3. Be paid at the going rate when the house was completed, as the Engles were able to raise funds from agricultural production. (He began work in June, 1974.)

4. Materials were to be paid for with funds from the FHA loan.

The oral contract between Ziemba and the Engles was for drywall and painting on the house to be done when the progress of construction permitted. He was to be paid when the building was completed.

In March, 1975, at a time when substantial work had been done on the house, the Engles renewed a previous note and obtained an additional $20,000 advance from the Bank to finish feeding yearling heifers and to pay an obligation at a Torrington bank. ⁶ Until May 14, 1975, these loans were secured by chattel mortgages on livestock and cattle, but on that date the Bank procured a second mortgage on the Engles' ranch. After the second mortgage was obtained by the Bank, work continued on the home.

Foreclosure proceedings were filed by the Bank on May 21, 1976. A receiver, appointed on June 29, 1976, took control of all crops, feed, and equipment. The order appointing the receiver also restrained the Engles from construction, improving, or altering the Engles' ranch. At the time of that order, the home was not completed.

The appellants and Ziemba filed liens on September 20, 1976. They had not been joined in the foreclosure action by the Bank. At the foreclosure sale, the Bank bid in the property for the sum of.$174,917.22, which included their own judgment plus about $106,000 due FHA. The foreclosure sale was approved by the district court on December 12, 1976. On March 8, 1977, the appellants and Ziemba filed in district court the required petitions to foreclose their liens against the Engles and the Bank. § 29-2-114. The Engles were later dismissed as parties by virtue of discharge in bankruptcy.

The district court, on December 2, 1977, granted summary judgment in favor of the Bank against the appellants. It was premised on the district court's conclusion that no enforceable contract ever existed between appellants and the Engles, because time for payment was too indefinite:

" * * * The depositions of these two plaintiffs indicate that they were to be paid 'when he was able to raise the money from his agricultural productions. It was to be any time in the future that he could * * *.' (Deposition of Gaylord Engle)"

" 'I would carry the balance until they could pay for it * * * that was to be paid at whatever time they got back on their feet and could afford to pay * * *.' (Deposition of Truxton (sic) B. Shreve)"

The court found Ziemba's contract to be sufficiently definite because Ziemba stated:

" * * * He told me he was going to pay me when we finished. That's what he told me." (Ziemba's deposition.)

Further, the district court determined that Ziemba's lien was timely filed because a restraining order had the effect of causing the indebtedness to accrue under § 29-2-109 (supra footnote 5).

We first explore the propriety of granting a motion for summary judgment under the circumstances of this case. In doing so, we look at a motion for summary judgment in the same light as the district judge and as though originally before us because we now have the same materials as he did on which to base a decision. Seay v. Vialpando, Wyo.1977, 567 P.2d 285; Shrum v. Zeltwanger, Wyo. 1977, 559 P.2d 1384. Granting of a summary judgment depends upon the correctness of the court's dual finding that there is no genuine issue as to any material fact and that the prevailing party is entitled to judgment as a matter of law. Johnson v. Soulis, Wyo. 1975, 542 P.2d 867. The facts surrounding the alleged formation of the contracts are not questioned here. The Bank does not contend there were no agreements but asserts they were too indefinite to rise to the status of contracts. The evidence presented by appellants and Ziemba as to the agreements stands uncontradicted. We conclude that there are no material issues of fact insofar as the agreements are concerned.

Our task is to determine whether the agreements were unenforceable for indefiniteness, as a matter of law. We hold them enforceable. When terms of the contract are shown without any conflict of evidence, the interpretation of a contract becomes a question of law for the court. Horvath v. Sheridan-Wyoming Coal Co., 1942, 58 Wyo. 211, 131 P.2d 315. It is necessary to establish the existence of a contract in order to fulfill the requirements of the lien statute. Arch Sellery, Inc. v. Simpson, Wyo. 1959, 346 P.2d 1068. The statute does not call for a written contract or express contract or formal contract; an implied contract is sufficient upon which to base a mechanic's lien. Jordan v. Natrona Lumber Co., 1938, 52 Wyo. 393, 75 P.2d 378.

The agreements of appellants and Ziemba recite terms of understanding which fulfill the basic requirements of a contract: parties competent to contract; a subject matter; a legal consideration; mutuality of agreement; and mutuality of obligation. 17 C.J.S. Contracts § 1(1), pp. 538-539.

Moreover, in this case we are not dealing simply with...