Warren Webster & Co. v. Beaumont Hotel Co.

• Decision Date: 29 October 1912
• Citation: 138 N.W. 102,151 Wis. 1
• Court: Wisconsin Supreme Court
• Parties: WARREN WEBSTER & CO. ET AL. v. BEAUMONT HOTEL CO. ET AL.

151 Wis. 1

138 N.W. 102

WARREN WEBSTER & CO. ET AL.

v.BEAUMONT HOTEL CO. ET AL.

Supreme Court of Wisconsin.

Oct. 29, 1912.

Appeal from Circuit Court, Brown County, Samuel D. Hastings, Judge.

Action by Warren Webster & Co. and H. W. Krueger against the Beaumont Hotel Company and others, in which the Beaumont Hotel Company filed cross-complaints. From orders overruling the demurrers to the complaint of plaintiffs and to the cross-complaints interposed by the National Surety Company and the Kirkman Construction Company, they appeal. Affirmed.

The complaint in this action alleges that the plaintiff Warren Webster & Co., as a subcontractor of Martin & Wigman, has a lien for labor and materials used in the construction of the Beaumont Hotel, and that the plaintiff Krueger, as a subcontractor of the Kirkman Construction Company, has a similar lien upon the same property. The various statutory requirements for the establishment of liens are alleged. It appears that on October 4, 1909, Martin & Wigman entered into a contract with the Beaumont Hotel Company to install in the Beaumont Hotel at Green Bay, Wis., the Webster system of steam circulation, and on December 23, 1909, a bond was executed by Martin & Wigman and J. H. M. Wigman as surety with the hotel company, conditioned that if the contractors should fully perform all the conditions of the contract with the hotel company, and “duly and promptly pay and discharge all indebtedness, that may be incurred in carrying out and completing said contract, and save said building and the Beaumont Hotel Co. free and harmless from all mechanics' liens, and claims of liens or other claim or expense by reason thereof,” then the obligation was to be void. On June 9, 1910, Warren Webster & Co. contracted with Martin & Wigman to install the Webster system of steam circulation in the hotel. In behalf of the plaintiff H. W. Krueger, the complaint alleges that on November 1, 1909, the Kirkman Construction Company entered into a contract with the hotel company to furnish the materials and to perform the work in the erection, construction, and rebuilding of the Beaumont Hotel, except as such work and materials were covered by the contract between the hotel company and Martin & Wigman. On the same day the construction company and the National Surety Company as surety executed a bond in favor of the hotel company containing the same conditions as the bond previously executed by Martin & Wigman and J. H. M. Wigman with the hotel company. The plaintiff Krueger furnished materials and performed labor in the construction of the hotel under a contract with the Kirkman Construction Company.

The complaint also alleges that on or about September 1, 1909, the hotel company executed a trust deed or mortgage to W. P. Wagner, as trustee. It is alleged that the execution and delivery of this trust deed was subsequent to the commencement of the work of reconstruction, remodelling, and rebuilding of the hotel, and that the trustee had notice that the work of rebuilding had commenced when the trust deed was executed. The complaint also sets out the interests and claims for liens of other subcontractors, in so far as they had been filed. The plaintiffs ask that the demands of all persons who have filed liens upon the premises be ascertained, and that the interest of the hotel company at the time of the commencement of the work and of the furnishing of materials, and of any person claiming under such interest may be sold to satisfy the liens and costs of the action, and that the plaintiff Krueger have judgment in case of a deficiency against the defendants the Kirkman Construction Company and the National Surety Company, and the plaintiff Warren Webster & Co. have a deficiency judgment against A. B. Martin and J. B. Wigman of the firm of Martin & Wigman, and against J. H. M. Wigman, the surety on their bond to the hotel company. The answer of the hotel company admits that the plaintiff Warren Webster & Co. furnished material and performed labor under its contract with Martin & Wigman, but alleges that it was obliged to purchase some material under its contract with Martin & Wigman. It also alleges that Martin & Wigman agreed to take $2,000 of its bonds in partial payment of their contract, and that the plaintiff agreed to take $1,000 of the hotel company bonds from Martin & Wigman. It is alleged that it is ready to deliver the bonds to the plaintiff, but that the plaintiff is unwilling to take them.

As to the cause of action alleged by H. W. Krueger, the answer of the hotel company admits the allegations made separately in his behalf. It is alleged that the trust deed to W. P. Wagner was given and recorded prior to the commencement of any work or the furnishing of any material under the Kirkman Construction Company or the Martin & Wigman contracts, and that these contractors and the subcontractors under them had notice thereof. The cross-complaint of the hotel company alleges the contract with the Kirkman Construction Company for the construction of the hotel and the execution of the bond by the National Surety Company to secure the execution of the contract. It is alleged that, before completion of the contract, the work was abandoned by the Kirkman Construction Company, and that, in accordance with the terms of the contract, the building was completed by the hotel company. It is alleged that, after the abandonment, it cost the hotel company $11,105.35 to complete the work and furnish the materials under the contract; that damages for defective work and irremediable defective material and for liquidated damages were sustained by the hotel company in the further sum of $14,257.20; and that approximately $10,000 was due subcontractors from the Kirkman Construction Company at the time the contractwas abandoned; that this amount is still owing; and that mechanics' liens therefor, which the Kirkman Construction Company and the National Surety Company are obligated to pay, have been filed against the property of the hotel company. And it is alleged that of the sum of $70,000 to be paid the Kirkman Construction Company for construction and materials all has been paid except $4,912.73 in cash and $12,000 in hotel company bonds. The hotel company demands judgment that Warren Webster & Co. be required under their contract to accept hotel company bonds in settlement of their claim; that the claims for liens of the various subcontractors under the Kirkman Construction Company may be ascertained and determined; that the Kirkman Construction Company and the National Surety Company be adjudged primarily liable therefor, and be required to pay the same into court; that the hotel company have judgment for $21,449.82 and costs of the action against the Kirkman Construction Company and the National Surety Company; and that upon payment of these amounts the Kirkman Construction Company and the National Surety Company be entitled to the $12,000 hotel company bonds.

The answer and cross-complaint of the trustee for the hotel company is substantially the same as the answer and cross-complaint of the Beaumont Hotel Company. He asks that the trust deed be declared and held a prior and superior lien to those of the subcontractors, that the principals and sureties on the bonds for construction be ordered to pay the liens of the subcontractors, and that the hotel property be liable to the liens of the subcontractors and be sold and the proceeds of the sale be applied to discharge the liens only in the event, and to the extent that such subcontractors be not paid by the principals and the sureties on the bonds.

The answers and cross-complaints of those of the defendant lienors who answered allege, in substance, that they were subcontractors, and as such furnished materials and performed labor in the construction of the hotel building under the contracts, that they have filed claims for liens for the amount of their claims, that the principal contractors have failed to pay them, and that the bondsmen are liable for the amounts of their claims, and they ask that the rights of all persons having liens on the premises may be ascertained and determined, whether they be plaintiffs or defendants, that the premises subject to the liens be sold to satisfy the liens so ascertained, and the costs, and, in case of a deficiency, that they have personal judgment against the parties liable on the demands for which the liens are claimed.

The National Surety Company demurred to the complaint of the plaintiffs on the grounds that several causes of action had been improperly united; that the complaint did not state a cause of action against it; that no cause of action in favor of H. W. Krueger was stated against it; that the complaint did not state facts sufficient to constitute a cause of action against it and in favor of the plaintiff Warren Webster & Co., and in that Warren Webster & Co. was made a party plaintiff, and did not state a cause of action against it; that there was a misjoinder of parties in that subcontractor lien claimants were made parties defendant with it; and that the court had no jurisdiction because the action is one in equity for the foreclosure of mechanics' liens, and in such an action the court had no jurisdiction of a cause of action at law against the defendant.

The National Surety Company demurred to the cross-complaints of the defendant subcontractor lien claimants on the grounds that such cross-complaints did not state facts sufficient to constitute cross-complaints against it; that the court had no jurisdiction because the action was one in equity for the foreclosure of mechanics' liens and the cross-complaints stated causes of action at law; that the cross-complaints do not state facts sufficient to constitute causes of action against it; that the causes of action stated are not pleadable as cross-complaints in the action; that there was a defect of parties, in that the plaintiff Warren...