Hartford Acc. & Indem. Co., Inc. v. American Country Clubs, Inc.

• Decision Date: 18 November 1977
• Citation: 353 So.2d 1147
• Parties: HARTFORD ACCIDENT AND INDEMNITY COMPANY, INC. v. AMERICAN COUNTRY CLUBS, INC., et al. SC 2293.
• Court: Alabama Supreme Court

Page 1147

353 So.2d 1147

HARTFORD ACCIDENT AND INDEMNITY COMPANY, INC. v. AMERICAN COUNTRY CLUBS, INC., et al.

SC 2293.

Supreme Court of Alabama.

Nov. 18, 1977.

Rehearing Denied Jan. 27, 1978.

Thomas E. Maxwell, Birmingham, for Hartford Acc. & Indem. Co., Inc.

J. N. Holt, Birmingham, for John A. Thames, Trustee in Bankruptcy of American Country Clubs, Inc., et al.

Dan P. Barber, Birmingham, for Isadore Weinstein and Sara A. Weinstein.

JONES, Justice.

This case involves an appeal from the Circuit Court of Jefferson County which denied Hartford Accident and Indemnity Company's lien claimed upon a leasehold of American Country Clubs, Inc. We affirm.

American contracted with Marsh & Daniel, Inc., a general contracting firm, to perform renovations and improvements upon its leasehold known as the Morris House (a restaurant and lounge located on Morris Avenue in Birmingham). Pursuant to this contract, Hartford entered into a payment performance bond surety relationship for Marsh & Daniel.

Because American was unable to meet its debts to Marsh & Daniel as they came due, Marsh & Daniel assigned all its rights to Hartford on April 23, 1975, and filed a lien statement on April 24. This initial lien statement was insufficient in that it incorrectly stated the owner and description of the property. Suit was filed on April 25, 1975, seeking money damages and enforcement of the lien.

On August 18, the lien statement was amended to include Isadore and Sara Weinstein as the owners of the premises. The statement was amended again on September 9, 1975, to correctly state the legal description of one of the parcels of land involved.

American filed a voluntary petition in bankruptcy on October 7, 1975. On November 25, the Honorable Steven B. Coleman, Bankruptcy Judge, granted leave for Hartford to proceed in Circuit Court to determine the validity and amount of the lien claimed.

The trial Court held that American was indebted to Hartford in the amount of $95,924.77, but that it was not entitled to a lien. The refusal to recognize the lien was based upon the Court's holding that no effective lien was filed until the September 9 amendment; that the evidence failed to show the date the debt matured or the date of last performance by Marsh & Daniel; and, that the evidence failed to show the parcel where the Morris House was located.

The term "mechanic's lien" is the generic name for any lien on realty in favor of persons furnishing labor or materials in, or for, the erection of buildings, or for the making of improvements on realty. Emanuel v. Underwood Coal & Supply Co., 244 Ala. 436, 14 So.2d 151 (1943). When this lien is upon a building on leased property, as here, it extends only to the leasehold and the improvements. Tit. 33, § 39, Code.

The requirements of a mechanic's or materialman's lien are found in Tit. 33, §§ 37 et seq., Code. These requirements include the filing of a lien statement containing the amount secured by the lien; a description of the property; and the name of the owner or proprietor of the property in question. Tit. 33, § 41, Code. Furthermore, § 42 indicates that to be effective, the statement must not be filed more than six months "after the last item of work or labor has been performed."

Because this statute is in derogation of the common law, it must be strictly construed. Emanuel, supra; Snellings Lumber Co. v. Porter, 225 Ala. 164, 142 So. 560 (1932); and 53 C.J.S. Liens § 5b.

"Our statutory system provides the only lien legal or equitable available to a materialman as such . . . This cannot be enlarged except by contract express or implied, or by some established equitable principle based on the maxims of equity on a consideration of right and justice." Security Federal Savings & Loan Ass'n. v. Underwood Coal & Supply Co., 245 Ala. 56, 61, 16 So.2d 100, 102 (1943).

Absent a contract or "some established equitable principle" (neither of which is here claimed), for a court to enforce a lien, then, the party seeking enforcement must prove the statutory prerequisites. As stated, one of the requisites is the filing of a lien statement within six months from the date the last work was performed on the project. Home Federal Savings & Loan Ass'n. v. Williams, 276 Ala. 37, 158 So.2d 678 (1963); and Mazel v. Bain, 272 Ala. 640, 133 So.2d 44 (1961).

The lien statement filed on April 24, 1975, was not effective because it incorrectly stated the names of the owners and the legal description of the property. This insufficiency may be corrected, however, should all the requisite information be correctly filed, or the original statement amended, within the statutory period. Any statement or amendment filed after such six-month period is ineffective. Tucker v. Trussville Convalescent Home, Inc., 289 Ala. 366, 267 So.2d 438 (1972); and Guaranty Pest Control, Inc. v. Commercial Investment & Development Corp., 288 Ala. 604, 264 So.2d 163 (1972).

Therefore, as we view the situation, it was strictly a question of fact whether the lien statement was filed before the statutory period had expired. Thus viewed, the evidence presented becomes of paramount concern. Howell v. Hallett Manufacturing Co., Inc., 278 Ala. 316, 178 So.2d 94 (1965).

James L. Marsh, president of Marsh & Daniel, testified as follows:

"Q. When was the last work that was done on the project?

"A. When was the last?

"Q. Yes, by Marsh & Daniel, Inc.

"A. I don't recall."

He went further and stated on cross-examination:

"Q. Now, in connection with that, were you on the job every day?

"A. I was not.

"Q. And of your own knowledge, do you know, or can you state positively when the last work was done prior to March 14?

"A. I cannot."

Later, Marsh stated:

"Q. Right. But you don't recall when that was?

"A. No sir, I don't recall the date. It was AEA week."

As will be shown, the calendar of the Jefferson County Board of Education, of which Hartford seeks judicial notice by this Court to determine the inclusive dates of A.E.A. week, is immaterial. A question of fact is raised regardless of our ruling on this matter.

Mr. John Samford's testimony contradicted Marsh's as follows:

"Q. Do you have any recollection if that was the day you paid him?

"A. This was the day he was paid. The check is dated 3-6-1975 to Jack Higginbotham.

"Q. All right. Based on that, do you have any independent recollection as to when the last work that Marsh's men worked on your nightclub?

"A. To my recollection, they were pulling off the job on about this time.

"Q. On that date?

"A. On or about that day,...