Paschall's, Inc. v. Dozier

• Decision Date: 23 September 1966
• Citation: 219 Tenn. 45,407 S.W.2d 150,23 McCanless 45
• Parties: , 219 Tenn. 45 PASCHALL'S, INC. v. J. P. DOZIER and wife, Mrs. Ethel A. Dozier.
• Court: Tennessee Supreme Court

Page 150

407 S.W.2d 150

23 McCanless 45, 219 Tenn. 45

PASCHALL'S, INC. v. J. P. DOZIER and wife, Mrs. Ethel A. Dozier.

Supreme Court of Tennessee.

Sept. 23, 1966.

John Henderson, Jr., Henderson & Henderson, Franklin, for plaintiff in error.

C. D. Berry, McWilliams & Berry, Franklin, for defendants in error.

OPINION

BURNETT, Chief Justice.

This case involves an appeal from an order of the trial court sustaining the demurrer of the defendants-in-error and dismissing the amended bill of the plaintiff-in-error.

The parties will hereinafter be referred to as they appeared in the trial court; that is, Paschall's, Inc., as the complainant, and J. P. Dozier and wife, Ethel A. Dozier, as the defendants.

In the view which this Court takes, the pertinent facts of this case are as follows:

(1) The complainant, between June 21, 1963, and December 19, 1963, furnished certain materials and labor used in the construction of a bathroom addition to the defendants' house.

(2) Said materials and labor were furnished by the complainant at the specific requests of Mrs. Mary Best, the defendants' daughter, and Ronald Cheney, son of Mary Best, and credit was extended to these persons. Both Mary Best and Ronald Chency were then, and still are, residing with the defendants in the latter's house.

(3) The complainant has attempted to collect the debt from Mary Best but his efforts have been of no avail.

(4) Subsequently, Mary Best was adjudicated a bankrupt on a petition filed by her in the United States District Court for the Middle District of Tennessee on October 12, 1964. Said petition listed the account of the complainant as one of the petitioner's debts. Whether or not she has been granted a discharged is unknown to this Court.

The complainant commenced this suit in the Chanvery Court of Williamson County, Tennessee, to secure a mechanic's lien on the defendants' property and to recover a personal judgment against the defendant for the value of the labor and materials furnished.

The defendant interposed a demurrer on the grounds that the complainant on its face showed that there was no special contract with the defendants and that the complainant had lost its right to a mechanic's lien by failure to comply with the requisites set forth in T.C.A. § 64--1101 et seq. The demurrer was ultimately sustained and the complainant's bill was dismissed. The correctness of that ruling is the question now under consideration by this Court.

The complainant concedes his loss of the right to a mechanic's lien and does not assail the sustainment of those grounds of the demurrer relevant to the lien. However, the complainant asserts that, notwithstanding the loss of the right to a mechanic's lien, the original bill, as amended, continues to state a good cause of action on the theory of unjust enrichment, upon which it is entitled to a hearing on the merits. Antithetically, the defendants contend that the right to a mechanic's lien is the sole and exclusive remedy against the defendants, and that having lost the same, complainant is not entitled to a personal judgment.

The only question confronting this Court is whether or not the complainant's amended bill states a good cause of action upon which it is entitled to a hearing on the merits, notwithstanding the loss of the right to a mechanic's lien.

In ascertaining the merit of the complainant's contention we must examine closely the following significant excerpt from the complainant's bill:

'Said materials and labor were furnished and performed by B. H. Paschall, Jr., d/b/a Paschall's Shopping Center, and by Complainant at the spedific re-requests of Mrs. Mary Best, a daughter of Defendants, and Ronald Chency, a son of Mrs. Mary Best and the duly authorized agent of the said Mrs. Mary Best at all times complained of herein, both of whom were then, and still are, residing with Defendants in the dwelling house heretofore mentioned. Said materials and services were furnished and performed in the construction of the addition heretofore mentioned with the Full knowledge and consent of Defendants. The construction of said addition has Enhanced the value of the property heretofore described, and Defendants have been Unjustly enriched by the construction of same, without their giving remuneration therefor.' (Emphasis added.)

It is a well established rule that demurrers are not favored at law and will be overruled if, by a fair and reasonable intendment, the pleading states, however, inartificially, a good cause of action. See Holland Bros. Electric Co. v. M. W. Kellogg Co., 205 Tenn. 352, 326 S.W.2d 649; Jones v. Allied Am. Mut. Fire Ins. Co., 38 Tenn.App. 362, 274 S.W.2d 525.

Applying this test of liberal construction, we agree with the complainant that the amended bill states a good cause of action against the defendants on the theory of unjust enrichment.

A perusal of the record indicates that the trial court's sustainment of the defendant's demurrer was primarily based on the cases of Jordan v. Deitz, 201 Tenn. 77 83, 296 S.W.2d 866, and Taylor v. Tennessee Lumber Co., 107 Tenn. 41, 63 S.W. 1130, both of which we take this opportunity to review.

In Jordan v. Deitz, supra, among other things, this Court decided that in a suit by a subcontractor against a landowner, with whom there is no privity of contract, the principal contractor is a necessary and indispensable party to the suit. However, that rule was merely our exegesis of T.C.A. § 64--1126, as unamended, which concerns methods of enforcing mechanic's liens. Subsequent to that decision, the statute was amended to read as follows:

'(2) Where there is no such contract, by attachment in court of law or equity * * * the writ of attachment to be accompanied by a warrant for the sum claimed, to be served upon the owner and May within the discretion of the plaintiff or complainant be served upon the contractor, or subcontractor in any degree, with whom the complainant is in contractual relation, but the owner shall have the right to make said contractor or subcontractor a defendant by cross-action or cross-bill as is otherwise provided by law.' (Emphasis added.)

In our opinion, this amendment is a clear manifestation of the Legislature's intent to change the result of the Jordan case, so that in a suit to enforce a mechanic's lien by one who is not in privity of contract with the landowner, the contractor is no longer a necessary and indispensable party to the suit.

Both the Jordan and Taylor cases are relied on as standing for the proposition that a materialman, who is without privity of contract with the landowner, is not entitled to a personal judgment against the owner. That the trial court grounded its dismissal of the complainant's bill on this proposition is clearly evinced by the following statement from the Chancellor's opinion:

'Here the complainant does not allege that he had a contractual relationship with the owner through an agent or otherwise, so it is not entitled to a personal judgment against the owners, defendants. * * *.'

We are convinced that the trial court was clearly in error in arriving at this conclusion. Nothing which we said in the Jordan or Taylor cases was intended to preclude the possibility of a suit on quantum meruit which is indeed an action in personam. Those cases involved no question of unjust enrichment, and consequently, this Court gave no consideration to the propriety of such a remedy. To hold that, in absence of a mechanic's lien, privity of contract is a prerequisite in all actions to recover the value of labor and material furnished, would not only open the door to fraud, but would completely abrogate the common law remedy of quantum meruit.

The rule we announced in the Jordan and Taylor cases was perhaps stated more unequivocally in Lundstrom Const. Co. v. Dygert, 254 Minn. 224, 94 N.W.2d 527, where J. Matson, speaking on behalf of the Minnesota Supreme Court, held:

'Aside from unjust enrichment, which is an element not involved here, it is generally recognized that, other than the statutory right to a mechanic's lien or other special statutory remedies, subcontractors and materialmen have no right to a personal judgment against the owner where there is no contractual relation between them.' (Emphasis added.)

The law recognizes two distinct types of implied contracts; namely, contracts implied in fact and contracts implied in law, commonly referred to as quasi contracts. The distinction between the two has been explicitly stated by the Court of Appeals in Weatherly v. American Agr Chemical Co., 16 Tenn.App. 613, 65 S.W.2d 592:

'Contracts implied in fact arise under circumstances which, according to the ordinary course of dealing and common understanding of men, show a mutual intention to contract. Such an agreement may result as a legal inference from the facts and circumstances of the case. * * * 'Contracts implied in law, or more appropriately, quasi or construction contracts, are a class of obligations which are imposed or created by law without the assent of the party bound, on the ground that they are dictated by reason and justice * * *."

Actions brought upon theories of unjust enrichment, quasi contract, contracts implied in law, and quantum meruit are essentially the same. Courts frequently employ the various terminology interchangeably to describe that class of implied obligations where, on the basis of justice and equity, the law will impose a contractual relationship between parties, regardless of their assent thereto.

It is well established that want of privity between parties is no obstacle to recovery under quasi contract. 17 C.J.S. Contracts § 6, p. 572; Mill and Logging Supply Co. v. West Tenino Lumber...