Ideal Basic Industries, Inc. v. Juniata Farmers Co-op. Ass'n, 42607

• Decision Date: 26 February 1980
• Docket Number: No. 42607,42607
• Citation: 289 N.W.2d 192,205 Neb. 611
• Parties: IDEAL BASIC INDUSTRIES, INC., a corporation, Appellant, v. JUNIATA FARMERS COOPERATIVE ASSOCIATION et al., Appellees.
• Court: Nebraska Supreme Court

Page 192

289 N.W.2d 192

205 Neb. 611

IDEAL BASIC INDUSTRIES, INC., a corporation, Appellant, v. JUNIATA FARMERS COOPERATIVE ASSOCIATION et al., Appellees.

No. 42607.

Supreme Court of Nebraska.

Feb. 26, 1980.

Syllabus by the Court

1. Mechanic's Liens: Statutes. One who claims a mechanic's lien must clearly bring himself within the terms of a statute allowing a lien on real estate.

2. Mechanic's Liens: Statutes: Words and Phrases. A person who manufactures, purchases, or keeps for sale materials which enter into buildings, and who sells or furnishes such materials without performing any work or labor in installing or putting them in place is a materialman within the meaning of section 52-101 et seq., R.R.S.1943.

3. Mechanic's Liens: Statutes. Section 52-101 et seq., R.R.S.1943, do not extend the right to a lien on real estate to a supplier of a supplier of materials.

Lyle E. Strom and C. L. Robinson of Fitzgerald, Brown, Leahy, Strom, Schorr & Barmettler, Omaha, for appellant.

Charles W. Hastings of Dunmire & Blessing, Hastings, for appellees Mel Jarvis Constr. Co. and The American Ins. Co.

Heard before BOSLAUGH, McCOWN, CLINTON, and WHITE, JJ., and WOLF, District Judge.

WHITE, Justice.

This is an appeal by the plaintiff, Ideal Basic Industries, Inc. (hereafter Ideal), from an order dismissing an action to foreclose a mechanic's lien. The parties were Mel Jarvis Construction Company, Inc. (hereafter Jarvis), Larry Lambrecht, doing business as Wood River Concrete Company (hereafter Lambrecht), and The American Insurance Company (hereafter American).

The essential facts are these. Juniata Farmers Cooperative Association entered into a contract with Farmland Industries, Inc. (hereafter Farmland), for the construction of a grain elevator at Hayland, Nebraska. Farmland, as general contractor, agreed to furnish all labor and material for the construction of a concrete grain elevator. Farmland entered into a subcontract with Jarvis. Jarvis agreed to furnish all the labor and materials for the excavation, the lower pits, tunnels, slabs, and to slip form the concrete grain elevator and annex. Jarvis solicited bids for concrete for the elevator project. Lambrecht submitted a bid and Jarvis accepted by issuing a standard purchase order notifying Lambrecht. Between April and July 1976 Lambrecht supplied mixed concrete to Jarvis. All the cement necessary for making the concrete was purchased from Ideal, plaintiff in this action, on an open account.

Initially, the concrete supplied to Jarvis was mixed and transported from Lambrecht's batching plant in Wood River, Nebraska. Ideal delivered the raw cement to the plant at Wood River where Lambrecht would transport these raw materials in a mixing truck to the Hayland site. Approximately a month after Lambrecht started delivery of concrete to Jarvis, Lambrecht constructed a batching plant at the jobsite in Hayland. Ideal then delivered the cement to the Hayland batching plant. The cement involved in this case was delivered to the Hayland plant. Ideal does not seek recovery for any cement delivered to the Wood River plant.

Evidence was adduced to show Lambrecht supplied Jarvis with concrete from April 4, 1976, to July 1976. After two payments, a dispute arose and Jarvis stopped paying Lambrecht. Ideal contends it delivered $32,130 worth of cement to Lambrecht at the Hayland site for which it has not been paid.

On September 29, 1976, Ideal filed a mechanic's lien against Juniata Farmers Cooperative Association for $33,229.82, later amended to $32,130. In order to discharge the property from the lien, Jarvis, as principal, and American, as surety, filed a bond in the amount of $38,500 pursuant to section 52-121, R.R.S.1943. Ideal filed a petition against Juniata Farmers Cooperative, Lambrecht, Jarvis, and American in an attempt to foreclose its lien. Juniata demurred to the plaintiff's petition and the demurrer was sustained. Jarvis and American denied the allegations of plaintiff's petition. Lambrecht cross-petitioned against Juniata, Jarvis, and American, claiming a lien upon the bond filed by Jarvis for the balance due from Jarvis for the sum of $41,316.17. Upon its own motion, the court consolidated the case of Ideal Basic Industries, Inc. v. Juniata Farmers Cooperative Association et al., with that of Larry Lambrecht, doing business as Wood River Concrete Company v. Mel Jarvis Construction Company, Inc., et al. By pretrial order and pursuant to the stipulation of the parties, the court ordered that the case of "Ideal Basic Industries, Inc. vs. Mel Jarvis Construction Company, Inc." be tried first. It is that suit which is now before the court.

Ideal assigns as error the court's finding that Ideal was not entitled to the protection of the mechanic's lien statutes; that the failure of Lambrecht to tag or designate his payments to plaintiff on open account barred plaintiff from enforcing its mechanic's lien; and that the trial court erred in holding Ideal was required to prove the value of cement actually incorporated into the elevator and in failing to find that Ideal proved the value of the cement incorporated into the elevator building. We shall discuss only the first assignment of error.

The controlling question for decision is whether the supplier of a supplier of materials to be used for the construction of a grain elevator is entitled to a claim of a lien under section 52-101, R.R.S.1943. This section defines who is entitled to a mechanic's lien and for what a lien may be claimed. Durkee v. Koehler, 73 Neb. 833, 103 N.W. 767. We have said that one claiming a lien must clearly bring himself within the terms of the statute allowing a lien on real estate. Krotter & Sailors v. Pease, 161 Neb. 774, 74 N.W.2d 538. The section reads in relevant part: "Any person who shall perform any labor or furnish any material, machinery, or fixtures, including gas and electric apparatus and lighting fixtures, whether detachable or undetachable, (1) for the construction, erection, improvement, repair, or removal of any house, mill, well, cistern, manufactory, building, or appurtenance * * * by virtue of an open running account or a contract or agreement, expressed or implied, with the owner thereof or his agents, shall have a lien to secure the payment of the same upon such * * * and the lot of land upon which the same shall stand or the work is performed, and such lien shall include the rental value of any equipment furnished."

In 53 Am.Jur.2d, Mechanics' Liens, s. 73, p. 585, it is stated: "Persons supplying materials to a materialman or a subcontractor must come clearly within the terms of the statute, or they can claim no lien. They are so far removed from the owner that the privilege of a lien is not often extended to them, and the plainest expressions of law must be used to entitle them to this remedy."

It is our view that section 52-101 et seq., R.R.S.1943, provide a lien only to materialmen who supply directly to the owner of the realty, the contractor, or a subcontractor. Ideal sold its material directly to Lambrecht, looked to him for payment, and was directed by him as to the quantity of materials to be delivered and where and when such deliveries were to be made. Earl Barngrover, the Ideal sales representative, testified: "Q. Did you call on Mr. Lambrecht as a customer of...