No. 12331 INTHE SUPREME COURT OF THE STATE OF MONTANA 1973

FRANCIS TINDALL

## , Plaintiff and Respondent,



### OLAF NEGAARD and PHYLLIS E. NEGAARD, hiswife, Defendants and Appellants, and VERNE MCWILLIAMS and LARRY MCWILLIAMS

## , Defendants.

Appeal from: 

### District Court of the Tenth Judicial District, Honorable LeRoy L. McKinnon, Judge presiding. Counsel of Record: For Appellants: Leonard H. McKinney argued, Lewistown, Montana For Respondent: Robert L. Johnson argued and William E. Berger,

Lewistown, Montana.

Submitted: March 1, 1973 Decided :

### MAR 

### 1

### 4 Filed: 

### 141975,Mr. JusticeWesley Castles delivered the Opinion of the Court.
'This is an appeal from ajudgment for plaintiff entered on findings of fact and conclusions of law of the district court of the tenth judicial district, County of Fergus, after trialby the courtwithout a jury. Judgment was for $2,800,25, the fullamount prayed for and attorney feeswere assessed as for a foreclosure of a lien. Plaintiff Francis Tindallwas in the ready mix concrete business and furnished materials used upon defendant ~egaards' premises. Negaards arehusband and wife and willbe referred to herein asNegaard. The other two named defendants areVerne McWilliams and Larry McWilliams. However, this appeal affects only the rightsbetween Tindall and Negaard. Larry McWilliams
was served but defaulted. Verne McWilliams was never found nor served.The district court found as facts, so faras pertinent here: a) That plaintiff furnished materials tothe order of Vern McWilliams and delivered them to the property of Negaard atintervals during the period May 20 to July 9, 1968. b) That plaintiff furnished materials to the order of Larry YcWilliams and delivered them to the property of Negaard at intervals during the period from September 11 to September 26, 1968. c) That Negaard had a written contract with Verne McWilliams


### co make certain improvements. d) That Verne and Larry McWilliams are father and son, and that they did work together; that in fact they worked together

on the Negaard job from May 20 through July 9, 1968. e) That a mechanic's lienwas filed on December 26, 1968. The district court concluded as a matter of law that the Lien was valid, and judgment should be entered. The issues raised by appellant Negaard are:

### 1. Plaintiff failed to sustain theburden of proof necessary to establish a valid lien capable of being foreclosed, 2. The conclusion of law that plaintiff had a valid lien
was erroneous inthat the court allowed tacking of two separate contracts tocreate a valid lien. 3. That a proper finding and conclusion would result in
a dismissal of the lien suit. Negaard contracted, inwriting, with Verne tobuild a foundation for a trailerhouse.Verne did thejob, ordering and receiving the concrete from Tindall. Tindallbilled Verne. Verne was paid intwo payments by Negaard, one in cash on July 10 and the other by check on July 26,1968. On the receipt dated July 26, 1968, signed by Verne, it isnoted '"d in full". Verne did not make any payments toTindall for the concrete
or other materials. At that time, the accounts of Tindall showed due and owing from Verne the sum of $991.50 formaterials delivered to the Negaard job. On September 11, 1968, Larry ordered and received concrete atthe Negaard property. Larry continued toreceive concrete until September 26. Larry

### was billedby Tindall, Larry did not pay for any of the concrete. Larry had made an oral contract with Negaard tobuild a slab around a fishhouse. He alsopoured and finished a sidewalk atthe trailerhouse where his fatherVerne had done the work from May to July. Negaard paid Larry intwo payments, $1500 on September 28, and $1400 on October 18,1968. We have saidheretofore that Tindallbilled Verne and Larry separately. They had separate addresses. On October 31, 1968, Tindall combined the two accounts inthe total amount of $2800.25 and billedVerne and Larry PicWilliams, Contractors. Also, atabout this time, for the 

### first time, Tindall called Negaard informing him that he had not been paid for the concrete. Regarding the oral contract found by the trialcourt tohave existed between Negaard and Larry McWilliams, Negaard testified thathe contacted several people, and Verne McWilliams got the bid to build the slab around the fishhouse. Verne, however, then asked Negaard whether his son Larry could do thejob. Negaard agreed and Larry did thejob. Appellant, Negaard, attempts inhisbrief to show that the lastmaterials were delivered on September 24 under the proof. He then argues that since the lienwas not filed until December 26, that itwas not timely under section 45-502, R.C.M. 1947, because itwas not filedwithin 90 days of furnishing the last item in such account, Wehave examined the record carefully and find there is substantialcredible evidence touphold the trial court's finding that September 26 was the last date of delivery. However, the problem remains whether therewas one account
or two accounts. The trialcourt found two separate contracts as shown above, but then went on to find that Verne and Larry were father and son, oftenworked together, and didwork together between May 20 and July 9. Based on this alone, the trialcourt "tacked" the two jobs together, Section45-502, R.C.M. 1947, discusses perfection of liens in terms of accounts. Clearly here, the records of Tindall handled Verne and Larry in two distinct individual accounts, Not only
were they kept separate by name, but the addresses on the ledger sheetswere different. Thus we have, as the trial court found, two distinct contracts; and as the record clearly shows, two separate and distinct accounts, The earlier account of ~erne's was complete and the last item furnished on July 11, so that a lien filed on December 26 was ndt timely and to this extent thejudgment is in error. However, appellant argues that if part of the items for which the lienwas filed are invalid, the entire lien failsand 

### is void. He predicates this theory on this argument expressed inhis brief: "~indall's testimony clearly reveals he made no effort to ascertain any differences. He never madeinquiry of Negaard or either of the McWilliams concerning the relationships involved. He always billed the contracts individually yet when it comes time toassert a lienright, he arbitrarilychanges his treatment of these two contractors, bills them jointly as if a partnership for the first time on October 31, 1968 and on thisbasis fileshis single lien on December 

### 26, 1968. This indicates a delibateness of mind and purpose on the part of Tindall to attempt tovalidate the entire account through the filing of a single lien.11 Appellant citesDuval v. Fuchs, 141Mont, 123, 127, 375 P.2d 541, where the Court said: "The rule inMontana as elsewhere iswell-settled that a willful and knowing exaggeration of the amount due willvoid an otherwise valid mechanic's 1 lien. Of course, if fraud is shown in the filing, the lien is vitiated. for fraud cuts down evervthinpl'

# . Eskestrand

# c.Wunder, 94 Mont. 57, 20'~. 2d 622. In Duval, an exaggeration inamount of some ten times appeared and fraudwas specifically found by the trialcourt. In the instant case, therewas no fraud found. In fact, the trialcourt found that the relationship of father and son, being together on thejob, having worked together on otherjobs, and Negaard having ordered concrete once by telephone plus other facts, put asmuch duty on Negaard as on Tindall. Negaard never bothered to check materialmen, even though he admitted tohaving previous experience with Liens. Also, no dispute as to the amount of material delivered or price appears here. We conclude, as the trialcourt did ineffect, that no willful or knowing exaggeration existshere. Thus the rule that where the lien includes nonlienable items the proof limitsthe recovery. See: Cole v. Hunt, 123Mont. 256, 211 P,2d 417; Hammond v. Knievel, 141Mont. 433, 378 P.2d 388; Caird Engineering Works v. Seven-Up Gold Mining Co., 111Mont. 471, 111 P.2d 267. Wehold then that the lien isvalid as to the materials furnished to Larry McWilliams. The judgment on the materials furnished Verne McWilliams is set aside. The matter isreturned to the district court forentry of judgment inaccordance herewith. One further issue 

### is involved, Attorney feeswere awarded

on the basis of the recovery amount. It isobvious that attorney

### feeswillneed reconsiderationby the district court since the
new judgment involves a lesser amount. For consideration of this matter, attention of the district court is called to Luebbenv. Metlen, 110Mont. 350, 100 P.2d 935;Thompsonv. 

### Cure, 133 Mont. 273, 322 P.2d 323;and Section 93-8614,R.C.M. 1947, Since the judgment is reversed in part and returned to the district court for modification, under Montana Rules Civil Appellate Procedure,Rule 33, each party shall bear its own costs
on appeal.



### / Chief Justice