Society Linnea v. Wilbois

• Decision Date: 06 March 1962
• Docket Number: No. 50513,50513
• Citation: 253 Iowa 953,113 N.W.2d 603
• Parties: SOCIETY LINNEA, Plaintiff-Appellee, v. John A. WILBOIS, Defendant, Rhiner Bros. Plumbing Company, Defendant-Appellant, Jewett Lumber Company, Defendant-Appellant.
• Court: Iowa Supreme Court

Page 603

113 N.W.2d 603

253 Iowa 953

SOCIETY LINNEA, Plaintiff-Appellee, v. John A. WILBOIS, Defendant Rhiner Bros. Plumbing Company, Defendant-Appellant Jewett Lumber Company, Defendant-Appellant.

No. 50513.

Supreme Court of Iowa.

March 6, 1962.

Rehearing Denied May 8, 1962.

Neiman, Neiman & Stone and Lorna L. Williams, Des Moines, for defendant-appellant Jewett Lumber Co.

Wilson, Maley & Stamatelos, West Des Moines, for defendant-appellant Rhiner Bros. Plumbing Co.

Eskil C. Carlson, Des Moines, for plaintiff-appellee.

LARSON, Justice.

In the light of our many cases dealing with the rights and priorities of mechanic's lien claimants, it would indeed be hard to imagine a more complex case than the one presented here. It involves a defendant owner of a three-plex apartment house, now bankrupt, who first considered and later purchased the premises, then a rundown vacant rooming house, for $2,600.00. Before his leap into this none-too-profitable venture, he contacted the plaintiff for a loan sufficient to purchase the property, pay off a mortgage thereon, and to do minor remodeling, a plumbing company to inspect the premises and advise him as to the adequacy of sewer and water connections and other needed plumbing and heating repairs, and a lumber company to see if it would sell him material needed for repairs on an open account should he decide to buy the property.

Being encouraged by all parties, he made the purchase November 6, 1958 with funds from plaintiff's loan of $3,500.00. The deed and plaintiff's mortgage for that sum were duly recorded on the same date. Unknown to the former non-resident owner, he had taken full possession of the house, had ordered certain lumber and material be delivered thereto on October 21, 1958 and had commenced work on the roof and porch some 16 days before receiving the deed.

This set the scene for the issues presented, (1) as to whether the defendant Wilbois had any such beneficial interest in the property at the time the defendant materialmen agreed to and did furnish him labor and material to improve and repair the premises, as would entitle them to a valid mechanic's lien when he later acquired the title therefore, and (2) if so, would such liens be prior to certain mortgages of record given to secure funds with which to purchase and improve the property? The trial court held no valid mechanic's lien could arise under the circumstances until material and labor were furnished under a contract with Wilbois after he obtained a beneficial ownership or title therein and that prior to November 6, 1958 Wilbois was not such an 'owner'. We must agree.

The salient facts are not in dispute. The defendant Wilbois on September 9, 1958 through a real estate broker submitted an offer to buy the property known as 1059-9th Street for $2,600.00, but this offer was not accepted. The amount seemed to be satisfactory, but the out-of-state owner demanded a cash deal. Sometime later Wilbois applied to plaintiff for a loan of $3,500.00, proposing to buy and repair the premises therewith. After an inspection of the property by its officers the plaintiff told him to go ahead. In the meantime Wilbois had contacted the defendant Rhiner Brothers Plumbing Company, and having secured permission from the real estate broker, had them probe the sewer and water connections and remove some cellar pipes to permit excavation estimates. Almost four hours were spent in this work. At that time it was made quite clear that Wilbois did not own the place but that in case he decided to buy the property the Rhiner Brothers would get the plumbing and heating work found necessary and desired, on a cost plus basis. No other work was done by this defendant on that property until March 15, 1959.

I. The trial court found the inspection work done in October, 1958 before Wilbois actually purchased the property was no part of the plumbing and heating agreement under which the repair, remodeling and improvements were done, that each of these jobs stood alone under separate agreements and could not be joined to extend the period within which a mechanic's lien could be established. This factual conclusion is hard to refute and we are satisfied it was correct.

The objects of each employment were separate and distinct, and were so intended and understood by the parties. When the inspection work was done in October, obviously credit was not extended beyond that of the employer, and his title or present interest in that property was not involved. In fact his disclosed interest at that time was no more than that of an interested looker. The first service rendered was personal and advisory only.

This issue is governed by our decision in Casler Electric Co. v. Carlsen, 249 Iowa 289, 86 N.W.2d 682, and authorities cited therein. There as here the record clearly established that the claimant actually furnished work and material under two separate contracts, and we held they could not be joined together to extend the time for filing under the mechanic's lien law. The same rule applied here, and defendant cannot be permitted to join these two work agreements to establish an earlier date of commencement for his plumbing and heating work rendered later. The date of commencement for mechanic's lien purposes obviously was March 15, 1959 and was not prior to plaintiff's mortgage liens.

II. The situation as to the defendant Jewett Lumber Company is factually somewhat different. Here prior to his decision to buy, Wilbois talked over the contemplated purchase and improvement with the officers of the Jewett Company, and they agreed to furnish lumber and material for the work at the then-quoted price less discount and to extend credit for the job. Nowhere does it appear that the Jewett Lumber Company was ever advised that Wilbois had bought the property. When it received an order and sent material to the premises on October 21, 1958 it apparently assumed Wilbois had obtained either a deed or had executed a contract to buy the property.

While no material was furnished for this job from November 6, 1958 until November 24, 1958, and Wilbois had paid for that furnished him prior to November 6th in the sum of $294.87, it is the contention of the defendant Lumber Company that because this was an open account the material furnished after November 24th in the sum of $1,593.41 is a part of a single transaction. Thus it maintains the commencement date was October 21, 1958. Any payments made thereafter by Wilbois it says were received on account. The trial court thought otherwise and established a junior lien in the Jewett Lumber Company for only the unpaid $1593.41.

When Wilbois obtained his deed November 6, 1958, he commenced excavation work. It then became apparent much more money would be needed to make even the minimum repairs and improvements. At his request, plaintiff loaned him an additional $5000.00 and recorded its mortgage for that amount November 20, 1958, which was four days prior to the time the defendant Jewett Lumber Company furnished any material subsequent to November 6, 1958.

It is plaintiff's position that, since the Jewett Lumber Company could obtain no lien for the material furnished when Wilbois had no title or beneficial interest in the property, it could not make retroactive the agreement under which material was furnished after November 24, 1958 by claiming it was a part of an open running account opened with Wilbois October 21, 1958. It was the trial court's position that there were two contracts involved, the first where the lumber company legally was compelled to look solely to Wilbois for its money, and the second after November 24th, when, under the statute it could look to the property as well. While it seems the circumstances warrant such a separation, the books of the lumber company show it did not carry two accounts, but only one open account, running from the date material was first sent to the premises. It took a chance that Wilbois at the time of the first orders had a sufficient beneficial interest to sustain an agreement with him to furnish that material for that property. It was factually mistaken. This presents the problem as to whether material furnished Wilbois under the agreement shown here at a time when he was not an 'owner' entitled the Jewett Company to a lien when he later became the 'owner'. We think not for usually a lien on the property can only be established for improving materials furnished on open account after the one contracting therefor became the 'owner'.

...