Case Title: Geis Irrigation Co. v. Satanta Feed Yards, Inc.

Citation: 214 Kan. 373, 521 P.2d 272

Docket Number: 47,202

State: kansas

Court: Kansas Supreme Court

Date: 1974-04-06T00:00:00Z

Document:
214 Kan. 373 (1974)
521 P.2d 272
GEIS IRRIGATION COMPANY OF KANSAS, INC., a Kansas Corporation, Appellee,
v.
SATANTA FEED YARDS, INC., HAROLD DANIELS, d/b/a Satanta Feed Yards, IRENE M. DANIELS, Appellants. (BUILDERS SERVICE, INC., a Kansas Corporation; DAVIS, INC., a Kansas Corporation; STAR LUMBER COMPANY, a Kansas Corporation; SMITH SAND COMPANY, INC., a Kansas Corporation; DON DUBOIS d/b/a Dubois Sand Company; RUSSELL G. JOHNSON, d/b/a Johnson Rat Hole Drilling; HARPER STEEL CONSTRUCTION COMPANY, a Kansas Corporation; and WILLIAM C. HARPER, d/b/a Harper Steel Construction Company, Defendants.)
No. 47,202

Supreme Court of Kansas.
Opinion filed April 6, 1974.
Thomas Richardson, of Light, Yoxall, Antrim & Richardson, of Liberal, argued the cause, and Stanley E. Antrim, of the same firm, was with him on the brief for appellants.
*374 Arthur B. McKinley, of Sublette, argued the cause for appellee Geis Irrigation Company of Kansas, Inc., and defendants Davis, Inc., Star Lumber Company and Smith Sand Company, Inc., and D.O. Concannon, of Hugoton, was with him on the brief for defendant Star Lumber Co. Ward E. Loyd, of Calihan, Green, Calihan and Loyd, of Garden City, was on the brief for defendant Smith Sand Company.
Jeff Johnson, of Hugoton, argued the cause, and Paul Wolf, of Brollier and Wolf, of Hugoton, was with him on the brief for defendant Builders Service, Inc.
Chester A. Nordling, of Vance, Hobble, Neubauer, Nordling and Sharp, of Liberal, was on the brief for defendant Johnson Rat Hole Drilling.
The opinion of the court was delivered by
FATZER, C.J.:
This is an appeal from a judgment foreclosing mechanics' liens and entering personal judgments against individuals. The basic facts are not in dispute.
On February 18, 1970, the Satanta Feed Yards, Inc., acting through its president, Harold Daniels, entered into a contract with Harper Steel Construction Company for the construction of tanks and hoppers for feeding cattle on its premises. The contract price was $12,999.97. Following the execution of the principal construction contract, Harper Steel Construction Company entered into contracts with six subcontractors for the performance of services and the furnishing of materials and equipment. The labor was alleged to have been performed and the material furnished during the seven-month period following the execution of the principal contract.
In August 1970, Harper Steel Construction Company defaulted on the principal contract after receiving two payments of $3,249.99 each. The last payment was made by Satanta Feed Yards, Inc., on June 5, 1970. Shortly thereafter Harper Steel Construction Company was placed in voluntary bankruptcy and the claimants in this action received notice thereof. The claimants then proceeded to convert their claims into statutory mechanics' liens. The bankruptcy proceedings were completed and the principal contractor discharged.
On February 11, 1971, one of the claimants, Geis Irrigation Company of Kansas, Inc., brought an action to foreclose its mechanic's lien against Satanta Feed Yards, Inc.; Harold Daniels, d/b/a Satanta Feed Yards, Inc.; Irene M. Daniels; Harper Steel Construction Company, and William C. Harper, d/b/a Harper Steel Construction Company. Five other lien claimants were also made parties. They are listed for the purpose of future reference, *375 if necessary, as follows: Builders Service, Inc., rented crane and operator; Smith Sand Company, Inc., furnished crane and operator; Davis, Inc., furnished ready-mix concrete; Russell G. Johnson, d/b/a Johnson Rat Hole Drilling, dug a hole 38 feet by ten feet in connection with the construction, and Star Lumber Company delivered supplies and ready-mix concrete. We here note the plaintiff, Geis Irrigation Company of Kansas, Inc., furnished steel pipe "I" beams, rebar, and wire mesh.
The controversy was tried by the district court and it found generally in favor of the statutory lien claimants. One of the claimants, Don Dubois, d/b/a Dubois Sand Company, did not answer.
The journal entry of judgment reads in part:
There followed the names of the six lien claimants with the amount of their claims. The journal entry of judgment concluded:
Satanta Feed Yards, Inc., Harold Daniels and Irene Daniels have appealed. The appellants' statement of points raise sixteen specified errors, however, many of them are duplications as the same error relates to numerous lien claimants. The numerous alleged errors are considered as a class to avoid repetition.
The appellants first contend the district court erred in rendering judgment against them because the discharge in bankruptcy of the principal contractor precludes enforcement by the subcontractors of their lien rights against the improved property. The point is not well taken.
The general purpose of the mechanic's lien statute is to protect labor and materialmen. It is when the principal contractor is bankrupt or unable to pay that labor and materialmen need the protection of the statute.
In 9 Am.Jur.2d, Bankruptcy, § 764, p. 570, we find the following statement:
The view that the discharge in bankruptcy of the principal contractor is no bar to the enforcement of subcontractors' statutory lien rights, is in harmony with the purpose of our mechanic's lien statute. (K.S.A. 1973 Supp. 60-1103.)
Although this court has not ruled on a question exactly in point, it did, in Manufacturing Co. v. Casualty Co., 114 Kan. 151, 217 Pac. 282, quote with approval the syllabus in an Oklahoma case, which reads:
Those wishing to pursue the two theories further should see 98 A.L.R. 329.
The appellants next contend the district court erred in granting judgment against the defendants Harold Daniels and Irene M. Daniels personally, since all of the claims are in rem against specific property. The point is well taken.
The record shows Irene M. Daniels had no part in the transaction other than as a stockholder in Satanta Feed Yards, Inc. In fact, counsel for appellees conceded in oral argument there was no basis for a personal judgment against her. Neither do we find any basis for a personal judgment against Harold Daniels. It was determined in Sash Co. v. Heiman, 71 Kan. 43, 49, 80 Pac. 16, that a subcontractor seeking the foreclosure of a mechanic's lien could not recover *377 a personal judgment against the owner of the improved property. Here, Harold Daniels was not the owner. At best, he was only a stockholder, president and general manager of Satanta Feed Yards, Inc., which was the record owner of the premises.
In their joint brief, three of the claimants rely on an oral promise made to Ben Davis, of Davis, Inc. Davis testified he informed Harold Daniels he (Davis) was concerned about Harper's paying methods and Daniels said, "he would see things were taken care of."
The promise, if made as a promise to pay, was barred by the statute of frauds as it was in the form of a guaranty. In Walton v. Piqua State Bank, 204 Kan. 741, 466 P.2d 316, this court held:
Also, the promise, even if valid, was made for none other than Ben Davis and formed no basis for a personal judgment in favor of all claimants. There is nothing in the record to support a personal judgment against either of the Daniels.
The appellants contend the district court erred in granting judgment in favor of Geis Irrigation Company of Kansas, Inc., since it was estopped from enforcing the mechanic's lien because of its action in making a notation on an invoice statement, "paid by check No. 2056...."
Without going into the many ramifications of the testimony on this question, it is sufficient to state that estoppel is an affirmative defense and it must be set forth affirmatively. (K.S.A. 60-208 [c].) The appellants failed to plead estoppel as a defense. In North *378 River Ins. Co. v. Aetna Finance Co., 186 Kan. 758, 352 P.2d 1060, we held:
The appellants contend the district court erroneously allowed mileage or travel time under the mechanic's lien. The statute (K.S.A. 1973 Supp. 60-1101) provides for such allowance, and reads in part:
Certainly the cost of delivering materials and supplies to the construction site is cost of transportation. The foregoing provision is made applicable to subcontractors by K.S.A. 1973 Supp. 60-1103, which stated:
The appellants object to the allowance of the liens for the reason the statutory notice was not properly given. They assert the notices were not sent by restricted registered or certified mail properly carrying the phrase "deliver to addressee only." They refer to K.S.A. 60-103 for the definition of restricted mail. The difficulty with the appellants' argument is the fact the statute was amended in 1970 (effective July 1) by the addition of the following exception:
The principal contractor and Satanta Feed Yards, Inc., are corporations, hence, not being natural persons, the endorsement was unnecessary. The case of Schwaller Lumber Co., Inc. v. Watson, 211 Kan. 141, 505 P.2d 640, dealt with notice to natural persons and has no application to the point before us.
Two of the claimants did not attempt to make service by registered *379 or certified mail, but personal service of notice was made by the attorneys for the claimants. The statute covering service, K.S.A. 1973 Supp. 60-1103, provides in part:
The appellants challenge the sufficiency of the personal service. The record contains ample evidence to support the district court's findings that proper personal service was made. It would serve no useful purpose to review that evidence and extend this opinion.
The appellants argue with considerable force there was not sufficient proof that the material and supplies furnished found their way into the building. Again, this is a question of fact for the determination of the district court. It found the material and supplies in question were delivered and placed at the building site. There was substantial evidence to support the finding. With respect to the enforcement of a mechanic's lien, this state follows the rule of presumptive use where material is delivered to the building site. In Seyb-Tucker Lumber and Implement Co. v. Hartley, 197 Kan. 58, 415 P.2d 217, we held:
Although there was some conflicting evidence, it was for the district court to resolve the question.
A careful examination of the record discloses no trial errors which would justify the granting of a new trial. The judgment is reversed insofar as it purports to grant a personal judgment against Harold Daniels and Irene M. Daniels, and affirmed in all other respects.
It is so ordered.
FROMME, J., not participating.