Nolte v. Smith

• Decision Date: 15 February 1961
• Docket Number: No. 18716,18716
• Citation: 189 Cal.App.2d 140,11 Cal.Rptr. 261
• Parties: , 87 A.L.R.2d 996 George S. NOLTE, Plaintiff and Respondent, v. Wm. How SMITH, Mary Larkin Smith, his wife, Wm. B. Cusack, Eileen M. Cusack, his wife, Archway Incorporated, Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

Page 261

11 Cal.Rptr. 261

189 Cal.App.2d 140, 87 A.L.R.2d 996

George S. NOLTE, Plaintiff and Respondent, v. Wm. How SMITH, Mary Larkin Smith, his wife, Wm. B. Cusack, Eileen M. Cusack, his wife, Archway Incorporated, Defendants and Appellants.

No. 18716.

District Court of Appeal, First District, Division 1, California.

Feb. 15, 1961.

Hearing Denied April 12, 1961.

Robert C. Harris, George A. Williams, Jr., Heller, Erhman, White & McAuliffe, San Francisco, for appellants.

Crist, Peters, Donegan & Brenner, Palo Alto, for respondent.

COAKLEY, Justice pro tem.

Plaintiff George S. Nolte, a licensed civil engineer, prevailed at the trial of this action to foreclose a mechanic's lien for services rendered in connection with a land subdivision project. Defendants, Wm. B. and Eileen Cusack, and others, are owners of the land. The Cusacks appeal.

The trial court found that Nolte was employed to perform the engineering services necessary to subdivide the property into residential lots; that he performed all the terms of the contract; that his services consisted of surveying, planning and mapping said property for such subdivision, preparing a subdivision map for recording, and constructing and erecting permanent markers and monuments upon said property; that he was employed by Archway, Incorporated, a corporation without capital or assets, through which the Cusacks sought to obtain a tax advantage; and that Nolte's employment by Archway, and the performance of his services were with the knowledge of the Cusacks. The appellants do not take issue with the findings just summarized. They contend, however, that there is no substantial evidence to support the additional findings made by the court that Nolte's services (1) were used in a 'work of improvement' and (2) that they 'materially increased the value of said real property.'

It is appellants' position that a lien claimant may not prevail unless the evidence establishes that a 'work of improvement' was constructed on the real property as the quoted term is used in Code of Civil Procedure, §§ 1181 and 1182, or that his services 'improved,' or that an 'improvement' was made to the land, as those terms are used in section 1184.1 of said code. They contend that no improvement was constructed and that the land was not improved within the contemplation of those provisions.

Before discussing the applicable law these additional facts should be noted. The Cusacks were fully aware of the work which Nolte was performing. They lived on the adjoining property and could observe Nolte's crews at work. Also, Mr. Cusack called at Nolte's office on occasions and made suggestions. No notice of nonresponsibility was posted as provided in Code of Civil Procedure, section 1183.1, subdivision (b). Nolte performed the negineering services customarily performed in establishing a subdivision, from the land survey to the preparation of the final subdivision map. The map was ready for approval by the town of Los Altos Hills, and subdivision (b). Nolte performed the engineering The map was never approved because the required bond was not posted. The posting of bond was the responsibility of the owners, Cusack and Smith, or of the subdivider, Archway. It was not the responsibility of Nolte. Appellant does not suggest that Nolte did not fully perform his contract. The record discloses, without contradiction, that Nolte's crews performed engineering services on the property over a period of months, during the course of which they dug for corners, and set stakes, some below the surface so as not to be disturbed by later cultivation. Some of the stakes, markers or hubs were of wood, while others were metal pipe. In answer to a question on cross-examination as to how the metal pipe markets became 'permanent improvements,' Nolte's office manager, a civil engineer, testified, 'These would be boundary corners of street monuments or lot monuments which would be permanent corners.'

This is a case of first impression in California. Counsel has not referred us to authority from other jurisdictions on the precise question. Nor has our independent research disclosed such authority. Further, 'By reason of the dissimilarity of the mechanics' lien statutes of the different states, the decisions of the courts of one state construing the statute of that state are generally not considered as of great value as precedents in construing the statute of another state.' 57 C.J.S. Mechanics' Liens § 4, pp. 499-500. Also, 'The supreme court has remarked that the mechanics' lien law of this state has been changed at nearly every session of the legislature since the first statute on the subject was passed, and that many former decisions of the court in relation to it rest on provisions not now in existence.' 32 Cal.Jur.2d 596; Booth v. Pendola, 1891, 88 Cal. 36, 23 P. 200, 25 P. 1101. The amending process did not stop in 1891. It continued periodically until 1957 when, for example, the Code of Civil Procedure, § 1181, was amended to add, by name, 'registered engineers, [and] licensed land surveyors,' to the list of persons entitled to claim a lien for services; this despite the fact that the Supreme Court, in 1951, had held that a licensed surveyor and civil engineer was entitled to the benefits of the mechanics' lien laws, under a comprehensive interpretation of the term 'laborer' as used in the statute. Myers v. Alta Construction Co., 37 Cal.2d 739, 235 P.2d 1. It is significant that the amending process has been one of liberalization in favor of those who bestow services on the structure or land.

Mechanics' liens are provided for in our Constitution (Art. XX, § 15) and by statute (Code Civ.Proc. § 1181 et seq.). It is a right provided '* * * by the organic law, and shall not be lightly considered * * * the entire purpose of the laws providing for liens of mechanics or materialmen is to secure to them payment for the labor performed or material furnished.' Bay Lumber Co. v. Pickering, 120 Cal.App. 163, at page 167, 7 P.2d 371, at page 373. 'The mechanics' lien law is remedial in character and should be liberally construed in its entirety with a view to effect its objects and to promote justice.' Hendrickson v. Bertelson, 1 Cal.2d 430, 35 P.2d 318, 319.

"The doctrine upon which section 1192 [now 1183.1] of the Code of Civil Procedure rests is that of estoppel, which is indeed the underlying principle of the entire theory of the mechanic's lien. The owner of real property having, either by his own act or that of another with his consent or knowledge, procured the improvement of such property and received the benefit of the labor or material of another thereby, is deemed to have created an equitable lien upon the premises to secure the payment of the value of such labor and materials * * *" (John R. Gentle & Co. v. Britton, 158 Cal. 328, 332, 111 P. 9, 11).

The pertinent statutes are Code of Civil Procedure, §§ 1181, 1182, 1183.1 and 1184.1. They read, in part, as follows:

Section 1181: 'Mechanics * * * registered engineers, licensed land surveyors, * * * and all persons and laborers * * * performing labor upon or bestowing skill or other necessary services on * * * the construction * * * either in whole or in part, of, any building, structure, or other work of improvement shall have a lien upon the property upon which they have bestowed labor * * * whether done or funished at the instance of the owner or of any person acting by his authority or under him, as contractor or otherwise.'

Section 1182: '(a) For the purposes of this chapter, 'work of improvement' includes, but is not restricted to, the construction, alteration, addition to, or repair, in whole or in part, of any building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or wagon road, the seeding, sodding, or planting of any lot or tract of land for landscaping purposes, the filling, leveling, or grading of any lot or tract of land, the demolition of buildings, and the removal of buildings.

'(b) For the purpose of this chapter, except as otherwise provided herein, 'work of improvement' and 'improvement' mean the entire structure or scheme of improvement as a whole * * * '

'Section 1183.1: 'The land upon which any building, improvement, well or structure is contructed, together with a convenient space about the same * * * is also subject to the lien * * * and the work or labor done * * * with the knowledge of the owner * * * shall be held to have been constructed, performed or * * * at the instance of such owner * * *'

Section 1184.1: 'Any person who, at the instance or request of the owner (or any other person acting by his authority or under him, as contractor or otherwise) of any lot or tract of land, grades, fills in, or otherwise improves the same, or the street, highway, or sidewalk in front of or adjoining the same, or constructs in installs sewers or other public utilities therein, or constructs any areas, or vaults, or cellars, or rooms, under said sidewalks, or makes any improvements in connection therewith, has a lien upon said lot or tract of land for his work done and materials furnished.'

As noted earlier, appellants argue that unless the 'work of improvement' or 'improvement,' in connection with which the services were rendered, takes the form of a structure, including a ditch, well, wagon road, etc. (see Code Civ.Proc. § 1182), there can be no lien. This is particularly true, they argue, with respect to the applicability of Code of Civil Procedure, § 1181. Their argument finds support in the cases which they cite, all of which were decided prior to the 1951 amendments to the statutes and prior to McIntosh v. Funge, 210 Cal. 592, 292 P. 960, 74 A.L.R. 420, discussed below.

Humboldt Lumber Mill Co. v. Crisp, 146 Cal. 686, 81 P. 30, 31, is one of serveral cases relied upon. There the building in which the lien claimants' materials had been used was destroyed by fire before completion and before...