Case Title: Americana Homes, Inc. v. Broadmoor Corporation

Citation: 455 P.2d 334

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1969-06-06T00:00:00Z

Document:
455 P.2d 334 (1969) AMERICANA HOMES, INC., a Montana Corporation, Plaintiff and Appellant, v. BROADMOOR CORPORATION, a montana Corporation; Security Trust & Savings Bank, a Banking Corporation; First Montana Title Co., of Billings, a corporation, Trustee; Ornamental Iron Shop; George's Electric Co.; Modern Kitchens, Inc.; Lavane Frank, d/b/a LaVane Frank Masonry; David C. Johnson; William C. Miller and Safeway Plumbing and Refrigeration; and Donald W. Majerus, Cross-Complainants and Respondents. No. 11557. Supreme Court of Montana. Submitted May 14, 1969. Decided June 6, 1969. Jones, Olsen & Christensen, Winn E. Dowlin, Jr. (argued), Billings, for appellant. James, Crotty, Corontzos & Fopp, George R. Crotty, Jr. (argued), Great Falls, Craig Derry, Ira F. Beeler, Billings, for respondents. BONNER, Justice. The plaintiff herein, Americana Homes, Inc., a Montana corporation, instituted this action to foreclose an alleged mechanic's lien against certain real property situate in the Durland Heights subdivision in Yellowstone County, Montana. The district court in response to defendants' motion granted summary judgment under Rule 56(b), M.R.Civ.P. Plaintiffs now appeals from the judgment. The alleged lien stated that labor and materials were furnished commencing on June 7, 1965, and ending on November 3, 1965. The lien was filed for record February 2, 1966, 91 days after the last date labor and materials were furnished. An exhibit attached to the amended complaint shows all transactions between the parties including the dates materials and labor were furnished; also, that on December 28, 1965, credit was allowed for returned merchandise in the amount of $185.18; on December 30, 1965, credit was allowed for returned merchandise in the amount of $20.57. Also on December 30, 1965, credit was allowed for payment made in the amount of $1,187.04. The balance which the plaintiff sought to collect was $778.00. All transactions were on an open account. The pertinent statute in this appeal is section 45-502, R.C.M. 1947, and reads as follows: It is admitted that no material, labor or machinery was furnished by the plaintiff herein within the ninety-one day period from November 3, 1965 to February 2, 1966. However, plaintiff contends that the crediting of the payment on December 30, 1965, and the return of materials on December 28, and 30, 1965, worked to keep the 90 day period set forth in section 45-502 from lapsing. That is, plaintiff contends it had ninety days from December 30, 1965, in which to file its lien urging that the entries (credits) on December 28 and 30 were "items" on an open account so as *336 to bring it under the emphasized portion of section 45-502 above. The question presented to this Court is whether the entries of December 30 were "items" so as to prevent the lapse of the ninety day period. We hold they were not for the reasons set out below. In general with regard to liens it has been stated: It is also true that: So far as the rule in Montana is concerned, this Court in a long line of cases has held: Since the lien in the instant case involves an open account we must decide whether the word "item" in the phrase "* * * when there is an open account between the parties for labor, material, or machinery, such lien may be filed within ninety days after the date of the last item in such account. * * *" includes credits to the account as well as debits to it. If we accept the plaintiff's argument that the credits of December 28 and 30 were "items", we create what we think is an untenable situation. Assuming there is an open account, then the statutory ninety day period could be extended ad infinitum by the return of materials or the payment of a nominal amount on the account every 89 days. An owner who hired a contractor to perform work for him and such contractor procured labor, material or machinery on an open account would never be beyond the pall of a mechanic's lien so long as the contractor continued to make payments or return material or machinery every 89 days to the supplier. The spectre of a mechanic's lien could conceivably hang over an owner's head forever, or at least until the open account was finally paid in full which might be years after the last date the supplier furnished any materials, labor or machinery that enhanced the value of the property. In our opinion the legislature by enacting the emphasized portion of section 45-502 did not intend to create such a situation. Apropos to this case is the case of Caird Engineering Works v. Seven-Up Gold Mining Co., Inc., 111 Mont. 471, 487, 111 P.2d 267, 276. There, in a mechanic's lien case, with regard to the same phrase as is in question here we said: *337 The amendment the Court was construing was the portion of section 45-502 emphasized above. We hold that entry of a credit for payment or for goods returned does not fall within the ambit of "last item in such account." We find that the legislature by that language meant the last item furnished, not the last entry in the open account. For the foregoing reasons the judgment below is affirmed. JAMES T. HARRISON, C.J., and HASWELL, JOHN HARRISON and CASTLES, JJ., concur.