Ozaukee Sand & Gravel Co. v. City of Milwaukee

• Decision Date: 13 April 1943
• Citation: 243 Wis. 38,9 N.W.2d 99
• Court: Wisconsin Supreme Court
• Parties: OZAUKEE SAND & GRAVEL CO. v. CITY OF MILWAUKEE et al.

243 Wis. 38

9 N.W.2d 99

OZAUKEE SAND & GRAVEL CO.

v.CITY OF MILWAUKEE et al.

Supreme Court of Wisconsin.

April 13, 1943.

Appeal from a judgment of the Circuit Court for Milwaukee County; Charles L. Aarons, Judge.

Reversed.

Action commenced February 4, 1941, by Ozaukee Sand & Gravel Company against the city of Milwaukee, Druecker-Kaestner Co., Inc., a corporation, John P. Druecker, Louis W. Sanders, B. A. Froemming, the Froemming Corporation, Arnold C. Damerow, Joseph D. Rodosta, Reinhold Polzin, Charles C. Damerow and Hoy B. Clayton, and William Last who was permitted to intervene. The defendant B. A. Froemming appeals from the judgment of the circuit court.

The Druecker-Kaestner Co. entered into a contract with the city of Milwaukee to furnish specified types of sand and gravel to be by it used and consumed. The contract was made with the Central Board of Purchases. The amount of material needed could not be determined at the time because it depended on the amount of repair work which the city would do. The plaintiff furnished sand and gravel to the defendant Druecker-Kaestner Co. to be used in performing this contract, for which it still has a claim against the Druecker-Kaestner Co. for $4,721.73. Defendants Damerow, Rodosta, Polzin, Clayton and Last were truckers who were employed by the defendant company to haul the sand and gravel from the plaintiff's pit. Deliveries were made by the Druecker-Kaestner Co. pursuant to the contract and the company assigned the money due it from the city to B. A. Froemming, a creditor, for money loaned to the company. Froemming collected $3,933.47 on January 14, 1941, from the city on these assignments and he still holds a claim against the city.

The defendant Froemming filed a notice of his claim under the assignment with the city on January 10 and 13, 1941. Plaintiff's notice of lien was filed January 15. The defendant truckers' claims for liens were filed with the city January 20, 1941.

The contract between the city and the defendant company stated that it was subject to the terms of ch. 261, Laws of 1882, which law gives liens to laborers and materialmen but which by its terms applies only to contracts made with the Board of Public Works of the city of Milwaukee.

The trial court found that neither the plaintiff nor the truckers were entitled to liens under the rule of Worden-Allen Co. v. City of Milwaukee, 171 Wis. 124, 176 N.W. 877, but that they were entitled to have the money owing from the city held as a trust fund for them under the provisions of sec. 289.53(4), Stats. It was stipulated that 90 per cent of the gravel from plaintiff's pit was used on the city jobs. The trial court found that: “The material furnished by the plaintiff and carried by the defendant truckers to the Druecker-Kaestner Co., Inc., was furnished for repair, maintenance and construction work and is within the definition of ‘improvement’ under sec. 289.01 (1) (b), Wisconsin Statutes * * * .” The judgment provided that the claims of the plaintiff and of the truckers take precedence over that of B. A. Froemming. It was further found that Mr. Froemming received the money he collected on the assignments impressed with the trust. He was ordered to repay it in order to satisfy the claims of the other parties. B. A. Froemming appeals from the judgment. There is no motion for review.

Tierney, Waddleton, Dela Hunt & Tierney, of Milwaukee, for appellants.

Walter J. Mattison, City Atty., Chas. W. Babcock, Asst. City. Atty., and Tietelbaum, Chudnow & Polland, all of Milwaukee (H. L. Kastrul and Houghton, Neelen & Bullinger, all of Milwaukee, of counsel), for respondents.

FAIRCHILD, Justice.

The issue brought here on this appeal is the single question of whether subsection 4 of sec. 289.53, Stats., gives the claims of respondents an advantage over the claim of the appellant.

The statute relied on by respondents provides that all money or warrants paid to or to become due to any principal contractor or subcontractor for “public improvements” shall constitute a trust fund for the benefit of materialmen and laborers for the payment of all claims on such public improvement. This statute was considered in Murphy v. National Paving Co., 229 Wis. 100, 281 N.W. 705. In reviewing the history of its enactment it was shown to be applicable to all cities including those of the first class.

Appellant's contention is that the claims of respondents are not under that section (subsec. 4) because they do not arise out of a protected relation based on a “public improvement” contract, that therefore there can be no trust fund benefit for them under the statute. By this action he seeks to vindicate his right to the moneys already collected by him and to the balance in the city's hands assigned to him by his debtor.

If the purchase of the material can be held to be a contract of the protected class, then under the doctrine of Morris F. Fox & Co. v. State, 229 Wis. 44, 281 N.W. 666, the respondents' claims,...