Whitehead & Kales Co. v. Taan

• Decision Date: 20 March 1926
• Docket Number: No. 95.,95.
• Citation: 208 N.W. 148,233 Mich. 597
• Court: Michigan Supreme Court
• Parties: WHITEHEAD & KALES CO. et al. v. TAAN et al.

233 Mich. 597

208 N.W. 148

WHITEHEAD & KALES CO. et al.

v.TAAN et al.

No. 95.

Supreme Court of Michigan.

March 20, 1926.

Appeal from Circuit Court, Wayne County, in Chancery; Henry A. Mandell, Judge.

Suit by the Whitehead & Kales Company and others against Lee Taan and others to foreclose a mechanic's lien, in which the Gabriel Steel Company intervened. From the decree below, defendant American Loan & Trust Company, a mortgagee, which by foreclosure had become an owner, appeals. Affirmed.

Argued before BIRD, C. J., and SHARPE, SNOW, STEERE, FELLOWS, WIEST, CLARK, and McDONALD, JJ.Race, Haass & Allen, of Detroit, for appellant.

Denby, Kennedy & O'Brien, of Detroit, for appellees Whitehead & Kales Co. and Gabriel Steel Co.

Joseph D. O'Donnell, of Chicago, Ill. (Joseph J. Kennedy, of Detroit, of counsel), for appellee Wittenmeier Machinery Co.

Lightner, Oxtody, Hanley & Crawford, Monaghan, Crowley, Reilley & Kellogg, Frank C. Cook, John P. O'Hara, and Henry B. Graves, all of Detroit, amici curiae.

CLARK, J.

The bill was filed to foreclose a mechanic's lien. When the cause was at issue, all parties in interest, including many lien claimants, were properly before the court.

Shank Company was the general contractor, with certain persons trading as Trocadero Hotel Company as owners, for the erection of a hotel. American Loan & Trust Company was a mortgagee. Later, by foreclosure, it became owner. From the decree entered, the trust company has appealed. The appeal challenges the decree with respect to the rights of three different lien claimants.

Whitehead & Kales Company.

This is a Michigan corporation. It provided and erected the structural steel pursuant to a contract made with the general contractor. It is said to have no right of lien because Shank Company, general contractor, had no valid contract with the owners. The contract between Shank Company and the owners was executed on November 12, 1919. Thereupon Shank Company, an Illinois corporation, applied to the secretary of state for a certificate of authority to carry on business in Michigan, and it was admitted to do business on December 11, 1919. It contracted with this lienor on January 19, 1920, and thereafter the said steel was provided and erected. Whether Shank Company did any work on the job between November 12th and December 11th is a disputed question of fact, not here important.

We quote section 9068, Comp. Laws of 1915, then in force:

‘Sec. 6. No foreign corporation, subject to the provisions of this act, shall be capable of making a valid contract in this state until it shall have fully complied with the requirements of this act, and at the time holds an unrevoked certificate to that effect from the secretary of state.’

The record does not show whether the contract between Shank Company and the owners was made in Michigan or in Illinois. In such case it is presumed that the contract was made where it was lawful to make it, not in Michigan in violation of law. American Insurance Co. v. Cutler, 36 Mich. 261; 9 Fletcher, Cyc. Corp. 10081-10192. The contract was not void in its inception. 14a C. J. 1308. The quoted section of the statute is not here important.

We quote a part of section 9063, Comp. Laws of 1915:

‘It shall be unlawful for any corporation organized under the laws of any state of the United States, except the state of Michigan, or of any foreign country, to carry on its business in this state, until it shall have procured from the secretary of state of this state a certificate of authority for that purpose.’

When Shank Company contracted with this lienor on January 19, 1920, it had complied with the quoted statute, and it had a valid contract with the owners. Westerlin & Campbell Co. v. Detroit Milling Co. (Mich.) 206 N. W. 371. The lien is valid.

Gabriel Steel Company.

Appellant contends that the lien was lost and may not be enforced, for the reason that no notice of lis pendens was filed by the lienor, although it intervened and filed its cross-bill herein, within one year from the date of filing its statement of lien. It was not a party to the original bill.

In Sheridan v. Cameron, 32 N. W. 894, 65 Mich. 680, there is discussion, unnecessary to decision, relative to this question. What was there said is repeated, unnecessarily, in Smalley v. Terra-Cotta Co., 71 N. W. 466, 113 Mich. 141. And an opinion, unnecessary to decision, pertinent here, is expressed in Furnace Co. v. Wayne Circuit Judge, 198 N. W. 248, 226 Mich. 672. There views do not have the force of controlling precedent. They weigh as expressions of men learned in the law.

The statute:

‘Sec. 9. The several liens herein provided for shall continue for one year after such statement or account is filed in the office of the register of deeds, and no longer unless proceedings are begun to enforce the same as hereinafter provided * * *.’ Section 14804, Comp. Laws of 1915.

‘Sec. 10. Proceedings to enforce such lien shall be by bill in chancery, under oath, and notice of lis pendens filed for record in the office of the register of deeds, shall have the effect to continue such lien pending such proceedings. And in such proceedings, the complainant shall make all persons having rights in said property affected or to be affected by such liens so filed in the office of the register of deeds, and all persons holding like liens so filed, and those having filed notice of intention to claim a lien, parties to such action. And all persons holding like liens or having filed notice of intention to claim a lien, or any other persons having rights in said property, may make themselves parties thereto on motion to the court and notice to complainant, and may file their intervening or cross bills or answers claiming the benefit of cross bills and notices of lis pendens therein. * * *’ Section 14805, Comp. Laws of 1915.

The part of section 10, quoted, is in three sentences. The first relates to the filing of the first or original bill to enforce a lien. The second provides for those who shall be made parties to such proceeding. The first sentence requires the plaintiff to file a notice of lis pendens. What is such notice? What must it contain? This is answered by section 12712, Comp. Laws of 1915:

‘Sec. 58. To render the filing of a bill constructive notice to a purchaser of any real estate, it shall be the duty of the plaintiff to file for record, with the register of deeds of the county in which the lands to be affected by such constructive notice are situated, a notice of the pendency of such suit in chancery, setting forth the title of the cause, and the general object thereof, together with a description of the lands to be affected thereby; and it shall thereupon become the duty of the register to record such notice, in a book kept for that purpose, upon the payment of the same fees as is provided by law for recording deeds. A copy of such record, authenticated by the register, shall be evidence of such notice, and the filing of the same, in all courts and places.’

Of the object of this statute it was held in Alterauge v. Christiansen, 11 N. W. 806, 48 Mich. 60:

‘The object which the statute has in view is the giving of such a notice as will enable parties to ascertain therefrom the persons and property affected by the bill with the general nature of the matters in controversy, leaving them to an examination of the court record to ascertain the details and particulars thereof.’

A notice of lis pendens, therefore, filed pursuant to section 10, above quoted, ought to set forth, among other things, either in the title or in the body of the notice, ‘the persons * * * affected by the bill.’ Section 10 does not require those who are brought in by a plaintiff's original bill as parties to file notice of lis pendens in connection with any cross-bill or answer in the nature of a cross-bill which they or any of them may file. The reason for this is obvious. The original bill made them parties, and the plaintiff, in his notice of lis pendens, should set forth the names of all such parties as were affected by the bill. It is suggested, however, that a party, so brought in on plaintiff's bill, and seeking relief, ought to see that a notice of lis pendens has been filed by the plaintiff, or he should file one on his own account to guard against error or omission of plaintiff in that regard.

The third sentence of section 10, quoted, relates to those not made parties to the original bill, and who desire to intervene and to be made parties and to file cross-bills, or answers in the nature of cross-bills. They are required to file notice of lis pendens. The reason for that is equally obvious. They are not parties to the original bill and not named by plaintiff in his notice...