Case ID: ohio-st_38/html/0323-01.html
Source: Caselaw Access Project
Author: {"author": "McIlvaine. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Iron Company v. Murray.
    1. The right to a mechanic’s lien for labor or materials furnished for the erection or repair of a building may be waived by an agreement either expressed or implied.
    2. Where no contract is shown except such as is implied from the running of mutual accounts between the parties for many years, with semiannual settlements, a mechanic’s lien cannot be asserted on such accounts, the items of which, generally, were furnished for current repairs upon machinery attached to a rolling-mill, while other items did not relate to repairs of the machinery or building.
    Error to the District Court of Scioto county.
    The original action was brought in the court of common pleas, by Murray, Moore & Co. to recover against the Portsmouth Iron Company a judgment for $1,695.44 and interest for a balance due on an account, and to enforce a mechanic’s lien which was alleged to have been secured under the'statute.
    The main issue in the case was as to the validity of the mechanic’s lien, and the only objection to the validity of the lien related to the nature of the contract upon which the account was based. The account consisted of many items, furnished at many different dates between January 1, and July 1, 1870. The items principally were for repairs on machinery in defendants’ rolling-mill, but some of them were not of that character. A bill of the items was attached to the plaintiff’s petition, amounting to $3,495.62, from which was deducted a counter bill of $1,899.18, leaving the balance of $1,695.44.
    On appeal to the district court, the only testimony offered, on the trial, was to the following effect: That the charges specified in the bill attached to plaintiffs’ petition, were furnished between January 1,1870, and July 1, 1870, and were for work done on said rolling-mill of defendant mentioned in their petition; that plaintiffs were carrying on a foundry and machine works in Portsmouth, and defendant, the Portsmouth Iron Company, was carrying on a rolling-mill in the same place; that in January, 1868, mutual accounts were opened between plaintiffs and defendant, and during the year 1868 and 1869, up to and including January 1, 1870, it was the custom of the parties to make semi-annual settlements and strike the balance, and which ever way the balance should be found, a promissory note was given for the same, payable in four months, but no settlement was made, or note given or offered July 1, 1870, nor at any other time, for the' account sued on; that sometimes such balance was in favor of the plaintiffs, and sometimes in favor of defendant; that prior to 1868, for some years the firm of Arms, Brown & Co. (the immediate predecessors of defendant) carried on said rolling-mill and kept an account with plaintiffs of the same character, and it had been customary to make settlements semi-annually on the first day of January and July of each year, as had been done since 1868; that no contract at any time had been made either with said Arms, Brown & Co. or said Portsmouth Iron Co., in advance, for any definite or specified job of work, but from time to time, as occasion required, the foreman of said Portsmouth Iron Co. would leave an order, or call for such work and materials as were required to keep up repairs on said rolling-mill and machinery. No new job of work was done, either in constructing new machinery as such, or in making any new improvement of any kind, but the character of the work done was simply in supplying such pieces of machinery as became broken, or worn out, from time to time, and in keeping up general ordinary repairs as called from time to time, as specified in the dates of said bill of work. That the items of said account mentioned in said petition, were for work done in repairing machinery attached to and constituting a part of the rolling-mill of the Portsmouth Iron Company, situated on said real estate mentioned in plaintiff’s petition.
    On this testimony a decree was rendered in favor of the plaintiffs below.
    
      W. A. Hutchins, for plaintiffs in error:
    In no proper sense, was there a “ performing labor, or furnishing materials, or machinery, for erecting or repairing any house, mill, manufactory or other building or appurtenance, by virtue of a contract, or agreement, with the owner thereof.” 1 S. & C. 833; Choteau v. Thompson, 2 Ohio St. 114; Beckel v. Pettigrew, 6 Ohio St. 247; Horton v. Carlisle, 2 Disney, 184. No lien attached, for: 1. There was no contract or agreement such as is contemplated by the statute. 2 Ohio St. 12é. 2. There must not only be a contract, but it must have reference to a definite job of work for “ erecting or repairing,” &c. 3. It will be observed that the items of the account running through the six months are separate and distinct, and are also days and weeks apart, and, as plaintiffs below say, there was no contract about it, further than that the foreman of the Iron Works, in keeping up ordinary repairs would, as he needed, send orders for what he wanted. It therefore follows that if any such contract was made as the law contemplates they were separate and distinct contracts, having reference to the work done from time to time under each separate order. The lien, therefore, was not perfected within four months from the completion of most of the jobs of work, and can only have reference to the work done on'the 2éth day of June, 1870, under the last order.
    
      Moore & Pfewmrm, for defendants in error:'
    It is true that in order to acquire the lien provided for the labor must be performed or materials furnished “ by virtue of „ a contract or agreement with the owners of the building or mill.” But what is meant by this requirement? Two things seem to be embraced:
    First. The contract must be with the owner of the building. The part_y doing the work or furnishing the materials must not be simply a volunteer. Choteau v. Thompson, 2 Ohio St. 124. He must be under the immediate employment of the owner, and have the right to look directly to him for his pay. Neither a volunteer nor the employee of some other party than the owner can assert this lien. Sub-contractors, &c., are provided for otherwise under the lien law. But a mere general employment, even by the owner, or a general purchase of materials or machinery, is not enough. “ The contract mentioned is one that has reference to the purpose for which the work is to be done or materials furnished, namely, the erection, alteration or repair of the building, mill,” &c. 2 Ohio St. 124.
    Second. The employment of the labor and the procurement of the materials must be for the purpose named in the law; but it is not necessary that the contract should be very definite as to the particular building to be constructed or repaired. Nor is it essential that the materials procured for a purpose embraced by the law shall be so used. Choteau v. Thompson, 2 Ohio St. 124, 125; Beckel v. Pettigrew, 6 Ohio St. 251. That the work has been done or materials furnished for the purpose named in the law “ may be proved by evidence of an express agreement, or by proof of circumstances from which the purpose may be inferred. A tacit understanding may be as good as an express one.” 2 Ohio St. 125. In respect to the contract required by the law in order to acquire a lien, if the two elements are embraced, that is to say, if the employment or purchase is by the owner, and the purpose of the employment or purchase is to erect, alter or repair a mill, &c., it is enough. This court has never required more. It is not necessary that the contract shall have reference to a definite job of work for “erecting, repairing,” &c.; nor that it should contemplate a specific improvement. If the employment or purchase is not general or for general purposes, but is for the specific purpose of erecting, altering or repairing a house, mill, &c., however general or indefinite the particular work to be done or the use to be made of the materials so obtained in the erection, alteration or repair, &c., may be, the lien can be taken. This is the obvious import of the doctrine established, and the logical result of the reasoning of this court in the Choteau case. And that ruling has never been disturbed. Nor is it necessary that there should be between the parties any contract or understanding that a lien should be taken. We submit that under the ruling of this court in the Choteau case, the items for repairs made and materials furnished for the same, running through a period of six months, constitute but one account, and can be so treated in acquiring the lien.
   McIlvaine. J.

Section 3181 of the Revised Statutes provides that a person who performs labor or furnishes machinery or material . . . for erecting,n altering, repairing or removing a house, mill, manufactory or other building . . . by virtue of a contract with the owner or his authorized agent, shall have a lien,” &c.

While it is plain to our minds that the contract, which is made essential by this statute to the existence of a mechanic’s lien, may be either .express or implied; and, further, that it is not necessary that the contract should stipulate for such lien, or, even, that the labor or material should be furnished with an existing intention to perfect a lien on the property; nevertheless, we are satisfied that if such labor or material bo furnished upon an understanding or agreement, either expressed or implied, that no such lien will be asserted, then the right to assert it is waived and cannot be enforced against a subsequent purchaser or lienor.

The understanding between these parties, as evidenced by a long continued usage and mode of dealing between them, namely, to open and run mutual accounts between them in relation to their respective lines of business, and at the end of every six months to adjust the balance and execute a note for the same payable in four months, was inconsistent with the right to perfect a mechanic’s lien for labor or materials furnished, there being no showing of any contract other than such as may be implied from their mode of dealing with each other.

The several items embraced in the mutual accounts between these parties, upon which the alleged lien is claimed to be based, were undoubtedly furnished in reference to this understanding and constituted simply a running account between the parties, based solely upon the personal responsibility of the debtor. Some items in the account were, others were not, within the scope of the statute, which circumstance strongly tends to show that credit was given on the personal responsibility of the Iron Company and in pursuance of the previous understanding of the parties, which was entirely too vague and indefinite to constitute a contract within the meaning of the statute.

Judgment reversed aznd ecmse remanded.