National Loan & Exchange Bank of Columbia v. Argo Development Co.

• Decision Date: 23 August 1927
• Docket Number: 12250.
• Citation: 139 S.E. 183,141 S.C. 72
• Parties: NATIONAL LOAN & EXCHANGE BANK OF COLUMBIA v. ARGO DEVELOPMENT CO. et al.
• Court: South Carolina Supreme Court

139 S.E. 183

141 S.C. 72

NATIONAL LOAN & EXCHANGE BANK OF COLUMBIA v. ARGO DEVELOPMENT CO. et al.

No. 12250.

Supreme Court of South Carolina

August 23, 1927

Appeal from Common Pleas Circuit Court of Richland County; W. H Townsend, Judge.

Action by the National Loan & Exchange Bank of Columbia, as receiver for Corley Bros., against the Argo Development Company and others, to foreclose mechanic's lien. From an order dismissing the petition, plaintiff appeals. Reversed and remanded.

Lyles & Lyles and Cooper & Winter, all of Columbia, for appellant.

Barnard B. Evans, of Columbia, for respondents.

WHITING A. A. J.

The order of the circuit judge, which is made the subject of this appeal, granted the motion of the defendant, Argo Development Company, to vacate a mechanic's lien filed by plaintiff against defendant's property and to dismiss the petition or complaint brought for the enforcement of such claim.

The matter came up for hearing by the circuit judge upon a notice, duly given, specifying as grounds of objection to the petition and also to the statement or notice of claim filed with the clerk of court, that the petitioner in this proceeding "fails to allege that the lumber was furnished by and under a contract with this defendant, or with any one authorized by this defendant, or with the consent of the defendant, and fails to allege that the lumber furnished was actually used on any of the lots described, and if so used on which lot, and upon the further ground that under the statute the petitioner as assignee has no right to enforce the alleged claim."

A concise statement of the various questions and rulings arising out of this motion appears in the order of his honor, Judge Townsend, as follows:

"On hearing the motion counsel for the plaintiff-petitioner took the position that the objections made by the Argo Development Company had been waived by answering and that this motion was not the proper remedy; and I held that they were not waived, and that this motion comes in time, and is the proper remedy. On hearing and considering the motion I hold that both the notice or statement filed with the clerk, and the petition, are fatally defective in not stating either that the material was furnished under a contract with said Argo Company, or the terms of such contract. The plaintiff asked for leave to amend both the notice and the petition so as to cure such defect. The court holds that, time for filing the notice having expired, the motion to amend comes too late to appeal to the discretion of the court, and that under the existing circumstances it should be refused."

There are twelve exceptions taken to the above order which may be grouped for convenience into three propositions: (1) Exceptions 1-4 relate to the preliminary objection that raise the question whether the motion was properly made. (2) Exceptions 5-8 present the contention that the circuit judge was in error in holding that the petition and statement of claim were fatally defective in not stating the contract relied upon to create the lien. (3) Exceptions 9-12 contend for the right of amendment and allege abuse of discretion by the circuit judge in refusing to allow such amendment.

As a basic rule governing proceedings brought for the enforcement of mechanic's liens, it was declared by Mr. Justice McGowan in Murphy v. Valk, 30 S.C. 262, 267, 9 S.E 101, 103, that "in enforcing the rights so given, the special machinery provided for that purpose must be strictly followed." In the case of Tenney v. Anderson Water, Light & Power Co., 67 S.C. 11, 17, 45 S.E. 111, 113, it is also pointed out that "the statute affords the only remedy for the enforcement of the lien." Two requirements must be observed by the claimant of a lien for materials furnished, or, otherwise, it is specifically declared by the statute which creates the lien that it shall be dissolved: First, the provision of section 5647 (Code of Laws 1922, vol. 3) which requires the filing by the claimant, within 90 days after he has ceased to furnish labor or materials, of "a statement of a just and true account of the amount due him, with all just credits given together with a description of the property intended to be covered by the lien, sufficiently accurate for identification, with the name of the owner or owners of the property, if known." Second, the provision of section 5649 which requires the commencement of a suit for enforcement of the lien within six months after the person desiring to avail himself of the lien has ceased to furnish material for the building.

But while the requirement in respect to filing the statement and commencing the suit within the statutory period thus prescribed must be strictly followed, it is clearly manifest that in giving the lien it was the intent of the Legislature to safeguard in the broadest possible manner the rights of those who have endeavored in good faith to follow the provisions of the statute in order to get its protection. The indicated procedure for bringing suit to enforce a lien is, under section 5650, by petition to the court of common pleas for the county where the building is situated. A statement of essential allegations of the petition is made in general terms in section 5653, supplementing the provisions about referred to; other provisions were included in the statute in order that the protection afforded by the lien should be one of common right and should not be dependent upon strict observance of technicalities either of procedure or of pleading. These appear in Code of 1922, Vol. 3, as follows:

"(5648) § 10. Not Invalidated by Inaccuracy of Statement, etc.-No inaccuracy in such statement, relating to the property to be covered by the lien, if the property can be reasonably recognized, or in stating the amount due for labor or materials, shall invalidate the proceedings, unless it appear that the person filing the certificate has willfully and knowingly claimed more than is his due. Civ. '12, § 4118; Civ. '02, § 3013; G. S. 2355; R. S. 2470; 1869, XIV, 220.''

"(5654) § 16. Amendments of Pleading.-The court may at any time allow either party to amend his pleadings as in other civil actions."

No especial provision is made in the statute for defendant's pleadings in actions of this character. It is recognized, however, in the decision that he has the same right to demur or answer as in any other civil action. Matthews v. Monts, 61 S.C. 385, 387, 39 S.E. 575; Metz v. Critcher, 83 S.C. 396, 397, 65 S.E. 394; Id., 86 S.C. 348, 68 S.E. 627. Or, even after answer, upon five days' notice in writing to the opposite party stating the grounds of his objection, he may demur, or move to dismiss the petition, for failure to set out essential allegations of facts. Sections 400 and 405, Code of Civil Procedure 1922; circuit court rule No 18. The defendant's motion is of this character. It raises the question that the petition has failed to state facts necessary to show the mechanic's lien that it seeks to enforce. "If this be a defect appearing on the face of the complaint, the objection is not waived by answer without stating the objection, but may be urged on the trial, if the defendant give five days' notice in writing to the opposite party of the grounds of such objection." Peterman v. Pope, 74 S.C. 296, 298, 54 S.E. 569, 570.

Considering next the question whether the petition, as based on the statement of claim filed by the petitioner, is lacking in any essential facts as contended in defendant's motion, we must look for guidance to the statute that gives the remedy. Section 5653, Code of 1922, provides:

"The petition shall contain a brief statement of the contract on which it is founded, and of the amount due thereon, with a description of the premises subject to the lien, and all other material facts and circumstances."

In checking over the averments of the petition to see whether it conforms to the requirements of the statute above quoted, reference must again be had to the Code of Civil Procedure, where section 420 provides:

" Pleadings to be Liberally Construed.-In the construction of a pleading for the purpose of determining its effect, its allegations shall be liberally construed, with a view of substantial justice between the parties."

If the petition be considered without reference to the statement of lien upon which it is based, it must be regarded as incomplete in statement of the facts necessary to create a lien, in that it contains merely the allegation that plaintiff's assignor, Home Lumber Company, had furnished material for the erection of a number of houses on the several lots of land described in the petition. The mere furnishing of such material with the intention that it should be used in the erection of houses on the property is not enough to meet the requirements of the mechanic's lien statute. There must also appear the use of the material in the erection or repair of some building or structure on the identical property against which the lien is claimed. This is in effect the language of the statute, section 5639, in which it is stated that the lien is given "for materials furnished and actually used." See, also, Wardlaw v. Troy Oil Mill, 74 S.C. 368, 372, 54 S.E. 658, where it was held that the debtor, by selling without notice to the creditor a portion of the brick furnished for the erection of an oil mill, had divided the items of the account into two distinct classes, one secured and other unsecured.

It appears, however, in the petition, that it was brought for the enforcement of a mechanic's lien which is described and identified by specific averment of the petition in which it is also alleged that the said lien had been filed and duly recorded as required by law. If resort be made to the statement or...