Vorrath v. Garrelts

• Decision Date: 23 August 1971
• Docket Number: Docket No. 10122,No. 3,3
• Citation: 192 N.W.2d 547,35 Mich.App. 463
• Parties: Ronald VORRATH, Plaintiff-Appellee, v. Elmer GARRELTS and The Federal Land Bank of Saint Paul, a corporate body, Defendants-Appellants
• Court: Court of Appeal of Michigan — District of US

Page 547

192 N.W.2d 547

35 Mich.App. 463

Ronald VORRATH, Plaintiff-Appellee, v. Elmer GARRELTS and The Federal Land Bank of Saint Paul, a corporate body, Defendants-Appellants.

Docket No. 10122.

Court of Appeals of Michigan, Division No. 3.

Aug. 23, 1971.

Released for Publication Dec. 30, 1971.

Murray C. Campbell, White, Klute & White, Niles, for defendants-appellants.

Donald J. Dick, Berrien Springs, for plaintiff-appellee.

Before R. B. BURNS, P.J., and FITZGERALD and J. H. GILLIS, JJ.

R. B. BURNS, Presiding Judge.

Plaintiff contractor agreed to construct a house according to plans submitted by defendant owner for the sum of $28,948.70. Numerous changes in the plans, all of which were suggested by the defendant, increased the total price by an additional $6,000. After requesting, but not receiving, the additional $6,000 for these plan changes the plaintiff ceased working on the defendant's partially-completed house.

At trial level the plaintiff's mechanic's lien was upheld and foreclosed in the amount of $6,663.

Seeking to invalidate plaintiff's lien the defendant argues that plaintiff's statutorily required contractor's statement was defective. ¹ ] Plaintiff contends that the errors were harmless and that his 'substantial compliance' with the statute in question was sufficient.

The pertinent statutory provision (M.C.L.A. § 570.4 (Stat.Ann.1970 Rev. § 26.284)) states:

'The original contractor shall, whenever any payment of money shall become due from the owner * * * or whenever he desires to draw any money from the owner * * * make out and give to the owner * * * a statement under oath of the number and names of Every subcontractor or laborer in his employ, and of Every person furnishing materials, giving the amount, If anything, which is due or to become due to them, or any of them * * *. Until the statement provided for in this section is made, in manner and form as herein provided, the contractor shall have no right of action or lien against the owner.' (Emphasis supplied).

Plaintiff conceded he failed to include several subcontractors and laborers in his contractor's statement.

'Strict' not 'substantial' compliance is the rule of construction concerning the question of whether or not a lien attaches.

In Burman v. Ewald (1916), 192 Mich. 293, 295, 158 N.W. 853, the Court said:

'The statute providing for a mechanic's lien, being in derogation of the common law, Must be strictly construed to the point when the lien attaches; that thereafter, because of its remedial character, a liberal construction may be indulged.' (Emphasis supplied). ²

Plaintiff argues that he is not required to list those subcontractors and laborers that he paid prior to filing his statement.

This argument was upheld by the Court in Halpin v. Garman (1916), 192 Mich. 71, 158 N.W. 29. In Spicer v. Dugrey (1922), 221 Mich. 264, 190 N.W. 646 the Court upheld a lien when the plaintiff inadvertently omitted one bill due to an electrical contractor. However, in the present case the contractor omitted eight of 18 subcontractors to whom money was owed. The omission cannot be interpreted even as substantial compliance.

Providing the owner with a list of unpaid subcontractors, laborers, and materialmen and the amounts due them as required by statute is a condition precedent to the attachment of a mechanic's lien. Wood v. Bolinger (1930), 252 Mich. 489, 233 N.W. 390; Wildey v. Gillett (1912), 171 Mich. 153, 136 N.W. 1116.

Reversed. Costs to defendants.

J. H. GILLIS, Judge (dissenting).

I dissent. I am convinced from a review of the record, that the errors made in plaintiff's statement of account and lien were inadvertent and not made in bad faith. I am also convinced that since there is evidence to support the trial judge's finding on this issue, that determination should not be disturbed on appeal unless shown to be clearly erroneous. Morman v. Ryskamp (1926), 235 Mich. 140, 209 N.W. 52.

It has long been held that unintentional errors which result in Overstatement of the amount due from the recalcitrant debtor will not defeat a mechanic's lien. McMonegal v. Wilson (1894), 103 Mich. 264, 61 N.W. 495; Fairbairn v. Moody (1898) 116 Mich. 61, 74 N.W. 386; Union Trust Co. v. Casserly (1901), 127 Mich. 183, 86 N.W. 545; Vaughan v. Ford (1910), 162 Mich. 37, 127 N.W. 280; Grace Harbor Lumber Co. v. Ortman (1916), 190 Mich. 429, 157 N.W. 96; Knowlton v. Gibbons (1920), 210 Mich. 547, 178 N.W. 63; Ypsilanti Lumber & Coal Co. v. Leslie (1922), 218 Mich. 664, 188 N.W. 395; Hart v. Reid (1928), 243 Mich. 175, 219 N.W. 692.

It is not the law in this State that Understatement of the statement of account and lien by a contractor through inadvertent omission of a subcontractor's bill results in loss of the lien. That very situation arose in Spicer v. Dugrey (1922), 221 Mich. 264, 267, 190 N.W. 646 where it was held:

'This court has occasionally criticized some statements of liens which overstated the amount due because it was evidently the intent of the Legislature to keep such accounts from being overstated to the detriment of the owner or other persons claiming liens. When the account is understated it results in no loss to anyone except to the lienor, who loses the lien against the premises for that part of his claim which has been omitted.'

While it is true that failure to make out and...