Van Wells v. Stanray Corp.

• Decision Date: 04 February 1976
• Docket Number: No. 2--674A145,2--674A145
• Parties: Stephen VAN WELLS and Monarch Co., Ind., Appellants, v. STANRAY CORPORATION, Appellee.
• Court: Indiana Appellate Court

Page 198

341 N.E.2d 198

168 Ind.App. 35

Stephen VAN WELLS and Monarch Co., Ind., Appellants, v. STANRAY CORPORATION, Appellee.

No. 2--674A145.

Court of Appeals of Indiana, Second District.

Feb. 4, 1976.

John L. Fox, Indianapolis, for appellants.

Gordon D. Wishard, Smith, Morgan & Ryan, Indianapolis, for appellee.

SULLIVAN, Judge.

A judgment in the sum of $10,393.45 was entered against defendants Stephen Van Wells and Monarch Co., Inc., after a trial without jury upon plaintiff Stanray Corporation's complaint for foreclosure of mechanic's lien. Stanray Corporation, d/b/a Burnet-Binford Lumber Co. (hereafter Stanray), ¹ premised its claim upon the supplying of defendants with certain of the materials used by defendants in renovating a fire-gutted house. The real estate in question, which is situated on 131st Street close to Noblesville, Indiana, was ordered sold on foreclosure of Stanray's lien.

The broad issue presented is whether the judgment is supported by sufficient evidence upon all necessary elements of plaintiff's claim. The only serious argument made by appellants is that Stanray failed to show its compliance with the terms of Ind.Ann.Stat. 32--8--3--3 (Burns Code Ed.1973), which requires a materialman to file a notice of intent to claim a lien within 60 days after furnishing the materials for which the indebtedness is said to lie.

The evidence construed most favorably to Stanray reveals that Monarch and Stanray's division, Burnet-Binford Lumber Co., entered into an oral agreement in July of 1971, under the terms of which Burnet was to supply building materials to Monarch for the latter's '131st Street job'. The 131st Street job, also called the 'Noblesville job' by the parties, consisted of Monarch's work on the subject realty. Monarch was the record owner of the property when the contract was made and Monarch's president to represented the ownership to Stanray's agents. However, the parties stipulated that Monarch gratuitously transferred the property to one of its employees, William Turk, on June 1, 1971, the deed being recorded in September. About the time Turk left Monarch's employ, the property was transferred, again for no consideration, to Turk's replacement, defendant Van Wells. The deed to Van Wells was dated and recorded on November 11, 1971. There was testimony that Turk, and later Van Wells, permitted title to the property to be placed in their respective names at the insistence of, and solely for the financial benefit of, their employer Monarch. Burnet-Binford at all times during its dealings with Monarch conducted itself in reliance on Monarch's implied and express representations that Monarch was the true owner of the property.

The parties have stipulated that all the materials represented by plaintiff's Exhibit 2 'were, in fact, ordered and delivered to Monarch.' Exhibit 2 consists of 45 invoices and delivery tickets prepared by Stanray employees listing materials sold on credit to Monarch for the '131st Street job.' Most of the delivery tickets are signed by various agents of Monarch who picked up the materials from Stanray's branch office. The sum of the amounts shown due on the invoices equals the $8,178.21 principal included in the judgment.

The first of the delivery tickets is dated July 27, 1971; the last in time bears the date of October 18, 1971. All materials, including those shown on the October 18 delivery ticket reached the building site. Stanray filed its notice of intent to hold lien on December 16, 1971, just under 60 days from the date of delivery shown on the final ticket.

SUFFICIENT EVIDENCE FOR TRIAL COURT TO FIND NOTICE OF INTENT TO CLAIM LIEN TIMELY FILED

The statute under which Stanray claims its lien is Ind.Ann.Stat. 32--8--3--1 (Burns Code Ed.1973), which reads, insofar as pertinent:

'Contractors, subcontractors, . . . journeymen, . . . and all other persons . . . furnishing materials or machinery, . . . for the erection, altering, repairing or removing any house, . . . may have a lien separately or jointly upon the house . . . for which they may have furnished materials or machinery of any description, and, on the interest of the owner of the lot or parcel of land on which it stands . . . to the extent of the value of any . . . material furnished . . ..'

The question of the timeliness of Stanray's filing of notice of intent to hold lien centers upon Ind.Ann.Stat. 32--8--3--3 (Burns Code Ed.1973), compliance with the terms of which has been held to be an absolute condition to an effective lien. Gooch v. Hiatt (1975), Ind.App., 337 N.E.2d 585; Ellis v. Auch (1954), 124 Ind.App. 454, 118 N.E.2d 809. The statute reads in its pertinent parts as follows:

'Any person who wishes to acquire a lien upon any property, . . . shall file in the recorder's office of the county, at any time within sixty (60) days after . . . furnishing such materials . . . described in section 1 (32--8--3--1) of this act . . ..' (Emphasis supplied).

The essence of the controversy is whether the item shown on the delivery ticket dated October 18, 1971, was actually 'furnished' Monarch by Stanray on that date so that the 60-day period did not begin to run against Stanray until after October 18. If, as defendants contend, the item shown on the October 18 delivery ticket was not in fact 'furnished' on that date, then the last delivery of goods disclosed by either an invoice or delivery ticket was September 15, 1971, in which case Stanray's notice would not be timely.

Appellants Van Wells and Monarch correctly point out that:

'Indiana law places a burden upon a mechanic's lienholder who seeks to foreclose such a lien to show that the purported lien meets all statutory requirements necessary to its creation. Hough v. Zehrner (1973), Ind.App., 302 N.E.2d 881; Kidd Bros. Lumber Co., Inc. v. Tonnis et al (1958), 128 Ind.App. 459, 149 N.E.2d 828.' Gooch v. Hiatt, supra, 337 N.E.2d at 587.

However, when asked to reverse the trial court's finding that the lien claimant has successfully carried his evidentiary burden, we may not do so unless convinced that such finding is 'clearly erroneous.' Ind. Rules of Procedure, Appellate Rule 15(M). In applying the 'clearly erroneous' standard, we view the evidence in the light most favorable to the appellee without attempting to either reweigh that evidence or adjudge the credibility to witnesses. Gooch v. Hiatt, supra. The question before us is thus whether the evidence most favorable to Stanray reveals that the trial court clearly erred in finding that Stanray 'furnished such materials' to Monarch as late as October 18, 1971.

As stated by this court in Foster v. Sigma Chi Chapter House (1912), 49 Ind.App. 528, 531--532, 97 N.E. 801, 802:

'The right of a materialman to enforce a lien for the value of materials furnished by him is limited to cases where the following facts appear: The improvement must be made by the authority of the owner of the real estate, the material must be sold, not generally to the contractor, but for the purpose of being used in construction of the particular building, the materials must be actually used in construction of the building, and the notice of the intention of the materialman to hold a lien against the property must be filed, as required by law, within 60 days after furnishing such materials. Topp v. Standard Metal Co. (1911), 47 Ind.App. 483, 94 N.E. 891; Barnett v. Stevens (1896), 16 Ind.App. 420, 431, 43 N.E. 661, 45 N.E. 485; Clark v. Huey (1895), 12 Ind.App. 224, 232, 40 N.E. 152; Leeper v. Myers (1894), 10 Ind.App. 314, 316, 37 N.E. 1070; Miller v. Fosdick (1901), 26 Ind.App. 293, 59 N.E. 488.' (Emphasis supplied).

Thus, the 60 day period is computed from the date of the last furnishing of 'such materials', i.e., materials sold for use in constructing the particular improvement which the owner of the real estate has authorized, and which are in fact used in that construction. See Ellis v. Auch (1954), 124 Ind.App. 454, 118 N.E.2d 809; Jackson v. J. A. Franklin & Son (1939), 107 Ind.App. 38, 23 N.E.2d 23; Foster v. Sigma Chi Chapter House, supra.

As noted, the parties stipulated that the materials shown on the October 18 delivery ticket were ordered by and delivered to Monarch...