Jack Endo Elec., Inc. v. Lear Siegler, Inc.

• Decision Date: 31 October 1978
• Docket Number: No. 6100,6100
• Citation: 59 Haw. 612,585 P.2d 1265
• Court: Hawaii Supreme Court
• Parties: JACK ENDO ELECTRIC, INC., a Hawaii Corporation, Plaintiff-Appellant, v. LEAR SIEGLER, INC., a Delaware Corporation, Defendant, and J. A. Thompson& Son, Inc., a California Corporation, Defendant-Appellee.

Page 1265

585 P.2d 1265

59 Haw. 612

JACK ENDO ELECTRIC, INC., a Hawaii Corporation, Plaintiff-Appellant, v. LEAR SIEGLER, INC., a Delaware Corporation, Defendant, and J. A. Thompson& Son, Inc., a California

Corporation, Defendant-Appellee.

No. 6100.

Supreme Court of Hawai'i.

Oct. 31, 1978.

Syllabus by the Court

1. If a statutory provision is mandatory, the failure to follow it will render the proceeding to which it relates illegal and void. If the provision is directory, however, the observance of the provision will not be necessary to the validity of the proceeding.

2. The use of the word "shall" in a statute is not dispositive of the issue of whether the statute is mandatory rather than directory. While the word "shall" is generally regarded as mandatory, in certain situations it may properly be given a directory meaning.

3. In determining whether a statute is mandatory or directory, the intention of the legislature must be ascertained.

4. In general, a statute is directory rather than mandatory if the provisions of the statute do not relate to the essence of the thing to be done or where no substantial rights depend on compliance with the particular provisions and no injury can result from ignoring them.

5. The mechanic's and materialman's lien law is purely statutory and a lien will not attach automatically.

6. The notice provision of HRS § 507-43 (Supp.1973) calling for the naming and service of notice upon "the owner of fee title to the property And upon the party or parties who contracted for the improvements if other than the fee owner" is directory rather than mandatory.

Rodney Kim, Honolulu (Kim & Kim, Honolulu, of counsel), for plaintiff-appellant.

Herbert T. Ikazaki, Honolulu (Jeffrey M. Taylor, Honolulu, with him, on the brief, Ikazaki, Devens, Lo, Youth & Nakano, Honolulu, of counsel), for defendant-appellee.

Before RICHARDSON, C. J., and KOBAYASHI, OGATA, MENOR and KIDWELL, JJ.

RICHARDSON, Chief Justice.

Jack Endo Electric, Inc. appeals from the granting of a motion for summary judgment by the circuit court of the first circuit in favor of appellee, J. A. Thompson and Son, Inc.

We reverse.

At various times between February 26, 1973 and October 18, 1975, appellant provided certain building materials to appellee. The materials were used in the construction of improvements on property designated as the Waiau Garden Kai Phases I and II development. Appellee was the general contractor of the development, Lear Siegler, Inc. was the lessee and developer of the property and the Bishop Estate was the lessor, owner in fee.

The materials furnished by appellant were allegedly valued at $95,824.10 of which $22,076.66 was never paid. On March 21, 1974, appellant filed in the circuit court of the first circuit a notice of mechanic's and materialman's lien and demand for payment of the amount due and owing. Appellee and Lear Siegler, Inc. were named as defendants in the notice. However, the owner in fee, the Bishop Estate, was neither named nor served.

On May 2, 1974, appellant brought suit against appellee and Lear Siegler, Inc. to recover the $22,076.66 allegedly due and to foreclose the previously filed mechanic's and materialman's lien. Both appellee and Lear Siegler, Inc. filed answers to appellant's complaint. Appellee subsequently moved for summary judgment since appellant's notice of mechanic's and materialman's lien failed to name and was not served upon the fee owner of the property as allegedly required by HRS § 507-43 (Supp.1973).

On October 17, 1975, the circuit court filed an order granting appellee's motion for summary judgment. Consequently, appellant's complaint was dismissed and his notice of mechanic's and materialman's lien was declared invalid.

The sole issue presented by this appeal is whether a notice of mechanic's and materialman's lien that named and was served upon the lessee developer of real property, and the general contractor of the improvements is effective with respect to the interests of the lessee and general contractor in the improvements and the real property upon which the improvements were situated even if the lessor, owner in fee, was neither named nor served with the notice of lien as allegedly required by HRS § 507-43 (Supp.1973).

Appellant argues that although HRS § 507-43 (Supp.1973) requires the naming and service of notice upon the owner of fee title And the party who contracted for the improvements, if not the fee owner, appellant substantially complied with the statute by only naming appellee and Lear Siegler, Inc. Appellant only intended to affect appellee's and Lear Siegler, Inc.'s interests in the improvements and the real property. Appellant was not concerned with affecting the lessor's interest in either the improvements or the fee.

Appellee, on the other hand, contends that the notice provisions of HRS § 507-43 (Supp.1973) are mandatory and require strict compliance. Thus, since the statute requires the fee owner to be notified and since the fee owner, in the instant case, was not notified, the lien is invalid. ¹

We find in favor of appellant and hold that the lower court erred in granting appellee's motion for summary judgment. The instant notice of lien was sufficient to impose a lien on appellee and Lear Siegler, Inc.'s interest in the improvements and the real property upon which the improvements were situated.

HRS § 507-42 (1968) concerns, Inter alia, the issues of when a mechanic's and materialman's lien will be allowed, who can obtain the lien and the interests that are subject to the lien. HRS § 507-42 (1968) provides that

(a)ny person or association of persons furnishing labor or material in the improvement of real property shall have a lien upon the improvement as well as upon the interest of the owner of the improvement in the real property upon which the same is situated, or for the benefit of which the same was constructed(.)

Where the terms of a lease, contract of sale, or instrument creating a life tenancy require the improvement of the real property, the interest of the lessor, vendor, or remainderman in the improvement and the land upon which the same is situated shall likewise be subject to the lien, and any provision for forfeiture or other penalty against the lessee, vendee, or life tenant in case of the filing of a mechanic's or materialman's lien or actions to enforce the same, shall not affect the rights of lienors.

Since appellant furnished material to be used in the improvements for the Waiau Garden Kai Phases I and II development, appellant is a proper party to be seeking to impose a lien. Pursuant to the statute, appellant could obtain a lien on the improvement itself, the interest in the real property of the owner or beneficiary of the improvements and, depending on the terms of the lease, possibly the interest of the lessor in the improvements and the real property. Consequently, since Lear Siegler, Inc. was the developer and owner of the improvements and since appellee was the general contractor of the improvements, both appellee and Lear Siegler, Inc. were proper parties against whom a lien could be imposed. ²

The mechanic's and materialman's lien law is purely statutory and a lien will not attach automatically. HRS § 507-43 (Supp.1973) enumerates the notice procedure allegedly necessary to impose a valid lien. The pertinent part of HRS § 507-43 (Supp.1973) provides that

(t)he lien shall not attach unless a notice thereof is filed in writing in the office of the clerk of the circuit court where the property is situated and a copy of the notice served in the manner prescribed by law for service of summons upon the owner of fee title to the property and upon the party or parties who contracted for the improvements if other than the owner of fee title of the property. . . . The notice shall specify the names of the parties who contracted for the improvement, the name of the general contractor and the names of the owner of fee title to the property. ³

HRS § 507-43 (Supp.1973) is written in seemingly mandatory language. It is framed in the negative and uses the word "shall." Consequently, if the provision is mandatory, the failure to follow it will render the proceeding to which it relates illegal and void. If the provision is directory, however, the observance of the provision will not be necessary to the validity of the proceeding. In re Nomination Papers, Etc., 352 Pa. 576, 44 A.2d 48 (1945).

The use of the word "shall" in the statute is not dispositive of the issue of whether the statute is mandatory rather than directory. While the word "shall" is generally regarded as mandatory, in certain situations it may properly be given a directory meaning. Nat. Transit Co. v. Boardman, 328 Pa. 450, 197 A. 239 (1938). In determining whether a statute is mandatory or directory the intention of the legislature must be ascertained. The legislative intent may be determined from ". . . a consideration of the entire act, its nature, its object, and the consequences that would result from construing it one way or the other." Appeal of Baldwin, 153 Pa.Super. 358, 33 A.2d 773, 775 (1943). See also, Sjostrom v. Bishop, 15 Utah 2d 373, 393 P.2d 472 (1964). In general, a statute is directory rather than mandatory if the provisions of the statute do not relate to the essence of the thing to be done or where no substantial rights depend on compliance with the particular provisions and...