Peabody Seating Co., Inc. v. Jim Cullen, Inc.

• Decision Date: 31 October 1972
• Docket Number: No. 132,132
• Citation: 201 N.W.2d 546,56 Wis.2d 119
• Parties: PEABODY SEATING COMPANY, INC., Respondent, v. JIM CULLEN, INC., et al., Appellants.
• Court: Wisconsin Supreme Court

Page 546

201 N.W.2d 546

56 Wis.2d 119

PEABODY SEATING COMPANY, INC., Respondent, v. JIM CULLEN, INC., et al., Appellants.

No. 132.

Supreme Court of Wisconsin.

Oct. 31, 1972.

Campbell, Brennan, Steil & Ryan, Thomas J. Basting, Janesville, for appellants.

Heft, Coates, Heft, Henzl & Bichler, Robert H. Bichler, Racine, for respondent.

ROBERT W. HANSEN, Justice.

Appellants make three contentions on appeal: (1) that the trial court erred in permitting Peabody to maintain its suit since it commenced the action without a certificate of authority to do business in Wisconsin; (2) that Peabody cannot recover under the bond because it does not have lien rights under the Wisconsin statutes; and (3) that Peabody is precluded from recovering under the bond because it failed to give the 90-day notice required by the bond. In the order raised, these contentions will be considered.

CERTIFICATE OF AUTHORITY.

Appellants contend that Peabody was doing business within this state and, therefore, was required to have a certificate of authority before it could commence or maintain this action. ¹ The trial court found that Peabody's obtaining a certificate of authority after the suit was started cured this defect.

However, it is clear that sec. 180.847(1), Stats., applies only if an out-of-state corporation is 'transacting business' in this state. So the first inquiry must be as to whether the statute applies at all. This asks, Was Peabody doing business in Wisconsin?

The trial court found that American was an agent of Peabody and then imputed the acts of American to Peabody, concluding that Peabody was doing business in the state through its agent. ² The trial court holding that American was an agent of Peabody appears to us to be incorrect. The elements necessary to support such finding of agency have been set forth by this court to be: (1) 'the express or implied manifestation of one party that the other party shall act for him'; (2) 'who has retained the right to control the details of the work;' and (3) 'whether the party agreeing to perform the service is engaged in a distinct occupation or business apart from that of the person who engages the services.' ³

None of the required elements can be located in the case before us. There is no authority delegated to American to act for Peabody. In fact, the agreement between them clearly provides that American is to buy the seats from Peabody and then American is to sell them. The agreement expressly prohibits American from using the name 'Peabody' in the name under which it does business. There is no evidence that Peabody controlled in any way the 'details of the work' done by American. American also held franchises with other companies and the clear indication is that its business was separate and 'apart' from that of Peabody.

With American held not to be an agent of Peabody on this record, there is no other basis in this record for finding that Peabody was 'transacting business' in this state. Peabody had no salesmen or employees in Wisconsin, and made no sales to consumers in this state. Its personnel were present in this state only to visit and assist American. Cullen's contract was with American; all of Cullen's dealings, with the exception of one letter, were with American. We see no facts in this record on which Peabody could be held to be doing business in this state. ⁴

On this record we hold that Peabody was not 'transacting business' in this state and, therefore, not required to obtain a certificate of authority under sec. 180.847(1), Stats. While we travel a different route than that taken by the trial court, we arrive at the same conclusion: Peabody had standing to bring and maintain its lawsuit. We affirm the trial court ruling so holding.

RECOVERY UNDER BOND.

Appellants contend that Peabody is not a 'claimant' entitled to a statutory lien under either sec. 289.16(1), 1965 Stats., or sec. 289.53(1) 1955 Stats. That is correct. Peabody, as the supplier of the subcontractor (American) of the contractor (Cullen), does not have in this state a statutory lien. ⁵ However, the claim of Peabody is made under the bond, and the bond provides its own definition of who is a 'claimant' under the bond. Section 1, Labor and Material Payment Bond, provides as follows:

'A claimant is defined as one having a direct contract with the Principal or with a sub-contractor of the Principal for labor, material, or both, used or reasonably required for use in the performance of the contract, . . .'

Peabody clearly comes within the bond's definition of 'claimant' as 'one having a direct contract . . . with a sub-contractor.' Appellants contend that, nonetheless, Peabody ought not be permitted to recover under the bond because it is not entitled to a lien under the statute. In cases relied upon by appellant, this court was dealing with bonds that used words and phrases also found in the lien statute. In interpreting the meaning and limits of such bonds, this court refused to give them a more expansive meaning or limits than that set forth in the lien statute. ⁶ But that was in the absence of an agreement to the contrary, clearly set forth in the bond itself. ⁷ In the present case, there was such specific agreement to the contrary in the bond, and the bond can be enforced, even though recovery could not be had under the lien statutes. ⁸ Where the bond is clearly broader than the statute requires, claims not 'lienable' under the statute can be recoverable under the bond. ⁹ That is the situation here, and Peabody can recover under the terms of the bond even though it could not recover under the lien statutes.

NOTICE UNDER THE BOND.

Appellant contends that Peabody did not give the 90-day notice required by the bond 'after such claimant . . . furnished the last of the materials for which said claim is made.' This is certainly the closest question raised on this appeal.

It is conceded by appellants that Peabody did give notice (by certified mail) on November 15, 1967. The only issue raised as to such notice is whether it was within the 90-day period after the last of the materials had been furnished to the Elkhorn school project.

The trial court found that various materials were shipped by Peabody at various times to American Products for installation at Elkhorn, including shipments on May 25, 1967, June 7, 1967, and September 5, 1967. The trial court found the September 5th shipment was '. . . in the nature of 1000 cover caps, . . . supplied for installation in the Elkhorn High School.'

The September 5th shipment is needed to put the notice by Peabody within the 90-day notice requirement. There is no question that the 1,000 cover caps were sent to American by Peabody. (Peabody's invoice number H-2019 so indicates.) However, the caps were sent to American at Kenosha, not Elkhorn, and the question is whether the plaintiff here has established that the shipment was installed on the Elkhorn job, or even arrived at the Elkhorn job site. It is not enough that a supplier demonstrate that he furnished materials; it must also be established that the materials were in fact used on the construction project. ¹⁰

On this narrow but critical issue, an employee of Peabody, William Jennings, testified that he did not know if the material was used on the Elkhorn job, stating that, as far as he knew, the cover caps could still be in Kenosha. The vice-president of Cullen, Irwin K. Hartman, testified that the seats were inspected to make sure the job was complete prior to paying American on July 7, 1967. However, he indicated he did not specifically look for missing cover caps, and they could have been, on that date, uninstalled. On the side of indicating the cover caps were installed at the Elkhorn site, there is the testimony of former president of American, E. Patrick Murphy, that all materials supplied by Peabody were installed in the Elkhorn school. Clearly the trial court believed this testimony for it is the only direct testimony that the September 5th shipment of cover caps got to the school building site.

Whatever this court might have done if all or any of its members were trying the case at the trial level, we deal now, on appeal, with a definite finding of fact made by the trial court. Such finding is not to be upset on appeal unless it is 'contrary to the great weight and clear preponderance of the evidence'. ¹¹ This does not mean the evidence in support of the finding must 'constitute the great weight or clear preponderance of the evidence.' ¹² Nor is it sufficient for reversal that 'there is evidence to support a contrary finding.' ¹³ Rather, 'to command a...