H. & M. Heating Co. v. Andrae
| Decision Date | 09 May 1967 |
| Citation | 35 Wis.2d 1,150 N.W.2d 379 |
| Parties | H. & M. HEATING CO., Inc., a Wis. corporation, Appellant, v. William M. ANDRAE and Liesel Andrae, his wife, Clarence Wilde, d/b/a Imperial Builders et al., Respondents, Kinnickinnic Federal Savings & Loan Assn., a Wis. corp. et al., Defendants. |
| Court | Wisconsin Supreme Court |
Merten, Connell & Sisolak, by James G. Sisolak, Milwaukee, for appellant.
Niebler & Herro, Milwaukee, Chester J. Niebler, Milwaukee, of counsel, for respondents Andrae.
Duty of subcontractor to owner
Under the Wisconsin statutes, 1 a subcontractor has a lien for his materials and labor directly on the property of the owner. He does not acquire that lien by subrogation to the lien rights of the general contract. Sec. 289.02(5), Stats., 2 specifically provides that it shall be the duty of the contractor to protect and defend the owner against a lien claim of subcontractor; and if he fails to successfully defend the owner, he is obliged to make the owner whole in the amount claimed. It is thus apparent that our statutory scheme recognizes the fact that the principal contractor is the agent of the owner, vis-a-vis, a subcontractor. The builder or principal contractor is thus automatically a party adverse to a lien-claiming subcontractor. The contractual obligation to a pay the subcontractor is the responsibility of the contractor, but the owner's property is the hostage for the payment.
As a consequence, the owner can assert as defenses to a subcontractor's claim any defenses that the principal contractor might have against the subcontractor, but he cannot assert defenses that he, the owner, might have only against the principal contractor.
Because the subcontractor's lien is independently granted by statute and is not dependent on the general contractor's lien:
'* * * the fact that the principal contractor has no complied with the conditions of his contract so as to enable him to enforce a lien on the building will not militate against the subcontractor enforcing such a lien if the subject of the subcontractor's lien might in any event be lienable in favor of the principal contractor.' W. H. Pipkorn Co. v. Tratnik (1915), 161 Wis. 91, 95, 152 N.W. 141, 143, 16 A.L.R. 975; Taylor v. Dall Lead & Zinc Co. (1907), 131 Wis. 348, 355, 111 N.W. 490.
In Seeman v. Biemann (1900), 108 Wis. 365, 379, 84 N.W. 490, this court noted:
The Wisconsin court, over the years, has taken the position that the principal contractor is the owner's agent for the purpose of securing materials and subcontracted services; hence, the defaults of the contractor are in no way chargeable to the subcontractor. We said in Pipkorn, supra, 161 Wis. page 93, 152 N.W. page 142:
The rule is well recognized that:
'* * * the failure of the principal contractor * * * does not of itself defeat the right of the subcontractor, workman, or materialman to a mechanic's lien.' 57 C.J.S. Mechanics' Liens § 112, p. 616.
The same encyclopedia cites the Pipkorn Case, supra, for the rule:
'* * * that a subcontractor or materialman may be entitled to a lien even though, owing to the contractor's default, the improvement is worthless.' 57 C.J.S. Mechanics' Liens § 112, p. 617; accord 36 Am.Jur., Mechanic's Liens, p. 40, sec. 38.
Jones on Liens (3d ed.), p. 521, sec. 1304, points out that:
The salutary effect of these rules is to preserve the integrity of subcontractor's lien and prevent the security interest afforded therein from being eroded by claims against the general contractor accruing to the owner through no fault of the subcontractor. The subcontractor's right to look to the owner's property for security against the contractor's failure to pay him should not be conditioned on the contractor's faultless performance of the main contract. His only duty in the three-cornered contractual setup is to faithfully perform his own contract. The only defenses to an action for the foreclosure of his lien are the defenses available to the general contractor.
It is thus clear that Andrae, the owner, can assert the same defenses against the plaintiff, H. & M., that Wilde could, i.e., that it failed to perform its subcontract. However, Andrae cannot reduce the claim of H. & M. as the result of Wilde's default in the principal contract with him as the owner. He can reduce the liability of the property to the subcontractor's claim by the amount of damages attributable to any breach of the plaintiff's contract with Wilde that he or Wilde can establish.
Thus the question before the trial court and this court on appeal is whether the subcontractor discharged his obligation to Wilde.
Did H. & M. perform its subcontract with Wilde?
The record abounds in evidence of Andrae's dissatisfaction with his heating system; and though that dissatisfaction be justified, it does not necessarily follow that the infirmities or defects of the system were the result of any breach of H. & M.'s contract with Wilde. Rather, there is evidence of the satisfactory completion of the work contracted for. H. & M.'s vice president, Harry L. Mushall, testified that H. & M. performed its contract exactly according to the contract specifications. Wilde himself testified that the system installed in the Andrae home was the one agreed upon in the contract as orally amended, that these amendments were specifically agreeable to Andrae, and that the installation was correct.
Mushall testified that the Hart & Crouse oil-fired boiler complied with the contract with Wilde and Andrae knew that the boiler would be a Hart & Crouse and specifically approved of it before installation.
While the domestic coil failed to produce an adequate supply of hot water, it is undisputed that Andrae initiated the request for it in lieu of an ordinary water heater.
Much is made of the unusual and, perhaps, inefficient location of the boiler. In this case the boiler could not be placed next to the existing chimney because Andrae wanted additional room at that location so he could have the type of door that would permit him to bring his boat into the basement. The location of the boiler was discussed by Wilde and Andrae, and while there is some conflicting evidence of whether Andrae directed the location of the boiler, it was conceded by him that he approved of its location. The important point is, however, that Wilde, the principal contractor, directed H. & M., the subcontractor, where to place the boiler. The subcontractor in locating the boiler was expressly within the terms of his contract.
A prefabricated chimney was necessary at the new boiler location and, since the plans had not contemplated a chimney at that point, it was run through a closet. The evidence is undisputed that Wilde proposed the use of a prefabricated chimney and that, in view of the boiler location directed by Wilde, there was only one place for the chimney to go. Wilde actually assisted in the installation of it. Furthermore, Andrae approved of the installation of the prefabricated stack, and Haselow, Andrae's heating expert, testified that the location of the boiler, under the circumstances, was reasonable, as was the installation of the prefabricated stack. The question of the use and location of the stack was a decision made by Wilde and Andrae, not the subcontractor.
A serious defect in the heating system existed because the water used to heat the floor was too hot. It was agreed by all the witnesses that a lower water temperature was needed for the floor heating than for the baseboard heating. The high temperature resulted in discomfort and caused the floor tiling to soften and show pockmarks and excessive wear. There was ample evidence to show that a two-pump system was desirable so water could be utilized at different temperatures, but it was equally clear that what Wilde specified in his contract with H. & M. was the one-pump system. While it had the inherent drawback of making it difficult to control the water temperature at the optimum, it was less expensive. Moreover, it was the system that H. & M. contracted to provide, and it is the system that was provided. It was not the duty of H. & M. to provide the best system available. Its duty was to furnish the system specified. If the heating system was inadequate, it was the duty of the contractor to have taken proper steps to apprise the owner of what he could expect from the selected system. H. & M. was not in privity with the owner and had no duty whatsoever to determine what kind of a system should be installed. There was also testimony by the plaintiff that, by controlling the amount of water that flowed into the floor coils, it was possible to adjust the floor temperatures within reasonable limits. The...
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