Present: All the Justices 

UNITED SAVINGS ASSOCIATION 

OF TEXAS, F.S.B., ET AL. 

OPINION BY JUSTICE LAWRENCE L. KOONTZ, JR. 

v. Record No. 951470 September 13, 1996 

JIM CARPENTER COMPANY 

FROM THE CIRCUIT COURT OF STAFFORD COUNTY 

James W. Haley, Jr., Judge 

TART LUMBER COMPANY, INC. 

v. Record No. 952238 

DREWER DEVELOPMENT CORPORATION, ET AL. 

FROM THE CIRCUIT COURT OF LOUDOUN COUNTY 

Thomas D. Horne, Judge 

ADDINGTON-BEAMAN LUMBER COMPANY, INC. 

v. Record No. 960615 

ROBERSON BUILDERS, INC., ET AL. 

 FROM THE CIRCUIT COURT OF THE CITY OF CHESAPEAKE 

Russell I. Townsend, Jr., Judge 

 In these appeals we consider the applicability of mechanic's 

liens to materials furnished for specific construction projects 

under pre-existing, non-binding credit agreements between 

contractors and materialmen.1

 In each instance, the contractor 

or its successor-in-interest asserts that the materials were 

furnished under "open accounts,"2 thus each delivery of materials 

 

 1In addition to the original contractors and materialmen, 

each suit involved subsequent purchasers of the subject 

properties and their lenders. For the purposes of this opinion, 

we will limit our discussion to the relevant transactions between 

the original parties, since these transactions formed the basis 

for the mechanic's liens at issue. 

 2Parties on both sides of these disputes use the term "open 

account" to refer to the relationship between the materialmen and 

the contractors, though apparently subscribing to different 
constituted a separate contract. The materialmen assert that the 

materials and deliveries are identifiable to specific projects 

under "running accounts,"3 thus constituting a single continuing 

contract for each parcel. For the reasons which follow, and 

under the specific facts of these cases, we agree with the 

materialmen. 

 I. 

 BACKGROUND 

A. United Savings Association of Texas v. 

Jim Carpenter Company

 In 1983, Kenneth and Keith Ross (Ross Brothers), operating 

as joint proprietors, completed an application for credit with 

Jim Carpenter Company (Carpenter) in contemplation of purchasing 

building materials. In the application Carpenter agreed to 

extend credit, and Ross Brothers guaranteed payment on any credit 

extended. Ross Brothers subsequently incorporated, but otherwise 

continued to function as before. 

 

interpretations of that relationship. The term "open account" 

can be applied generally to any unsecured line of credit. 

Black's Law Dictionary 1090 (6th ed. 1991). For the purposes of 

this opinion, we will use the term "open account" to refer to a 

revolving line of credit based upon a credit application, but for 

which there is no obligation on either party to buy or sell 

materials for specific projects. 

 3The term "running account," like "open account," has broad 

application to various forms of revolving credit. Black's Law 

Dictionary 1333 (6th ed. 1991). As used generally in our 

opinions, however, the term has a more limited meaning when 

applied to the relationship between materialmen and contractors 

where materials identifiable to specific projects are supplied 

under a continuing contract. See, e.g., Southern Materials Co. 

v. Marks, 196 Va. 295, 297, 83 S.E.2d 353, 355 (1954). 

Accordingly, we have selected this term to distinguish the 

materialmen's assertions concerning their relationships with the 

contractors from the "open account" relationship described by the 

contractors. 
 In 1989, Ross Brothers began construction of houses on two 

parcels in the Blake Farm subdivision of Stafford County. Ross 

Brothers ordered materials from Carpenter using separate purchase 

order job sheets for each parcel. Carpenter furnished the 

materials with invoices, assigning separate account numbers to 

each parcel, and submitted regular statements of the accounts to 

Ross Brothers. Deliveries were made to each parcel beginning on 

February 12, 1990 and ending on July 26, 1990. Ross Brothers 

paid for only one delivery. The two completed homes were sold in 

June and July of 1990. 

 On August 21, 1990, Carpenter filed memoranda of mechanic's 

liens on each parcel which it subsequently sought to enforce by 

amended chancery actions filed August 12, 1994. The two chancery 

suits were consolidated and referred to a commissioner in 

chancery, who concluded the mechanic's liens were proper. The 

defendants filed exceptions to the commissioner's report, 

including the contention that the liens, or portions thereof, 

would be barred by the 90 day limitation of Code § 43-4 if each 

delivery were viewed as a separate contract. The chancellor 

sustained the commissioner's findings and awarded judgment to 

Carpenter. We awarded an appeal to the defendants who are 

principally represented by United Savings Association of Texas, 

F.S.B., a mortgage lien holder on one of the properties. 

B. Tart Lumber Company, Inc. v. Drewer 

Development Corporation

 Tart Lumber Company, Inc. (Tart) entered into a credit 

agreement with Drewer Development Corporation (Drewer) to furnish 
Drewer with materials for building projects. Between August 8, 

1990 and November 27, 1990, Tart provided Drewer with building 

materials for a number of residential construction projects in 

Loudoun and Fairfax Counties on land owned by Drewer. 

 For various aspects of each project, Drewer would submit a 

list of requirements or "takeoff." Generally, each takeoff would 

list all the materials for a house or townhouse. Tart would then 

furnish Drewer with a thirty-day firm offer on the materials it 

could supply. Tart did not supply complete house packages, and 

the record does not establish how Drewer obtained those materials 

which Tart could not furnish. When Drewer accepted Tart's offer, 

the materials were furnished along with an invoice referencing 

the specific project on which the materials were to be used. On 

occasion, Drewer would submit "fill-in" requests for additional 

materials which Tart would supply. Tart provided Drewer with 

regular statements combining charges under invoices for all 

materials furnished during a given time period. 

 Beginning in the summer 1990, Drewer experienced financial 

difficulties and ceased payment on its account with Tart. In 

response, on December 12, 1990, Tart filed memoranda of 

mechanic's liens on twelve properties, organizing in each 

memorandum all the invoices for a specific parcel. 

 On June 27, 1991, Tart filed a bill of complaint to enforce 

the liens. Although Drewer did not file an answer, the secured 

parties and trustees who financed the construction filed timely 

pleadings to contest the liens. The cases were consolidated and 

referred to a commissioner in chancery. The commissioner found 
that each delivery of materials was a separate contract, and, 

thus, he concluded that materials delivered more than ninety days 

before the memoranda were filed were not subject to mechanic's 

liens. The chancellor upheld the commissioner's findings. We 

awarded Tart an appeal. 

 C. Addington-Beaman Lumber Company, Inc. v. 

Roberson Builders, Inc.

 On August 16, 1990, Roberson Builders, Inc. (Roberson) 

completed an application for credit with Addington-Beaman Lumber 

Company, Inc. (Addington-Beaman). Addington-Beaman furnished 

Roberson with building materials for the construction of houses 

on three parcels owned by Roberson in two subdivisions in the 

City of Chesapeake. Each invoice referenced the original 

customer number assigned to Roberson's credit application, but 

was segregated by parcel. 

 Although it does not appear from the record that AddingtonBeaman sent Roberson periodic statements, invoices for each 

parcel were separately totaled by Addington-Beaman's accounting 

staff and the statements were bundled together by parcel with the 

adding machine tape showing the total amount due for that parcel. 

 In one instance, an Addington-Beaman employee made a notation on 

one set of invoices that settlement of the contract for the sale 

of the home built on that parcel was expected shortly, at which 

time, presumptively, the invoices for the materials furnished for 

that project would be paid. Roberson did not pay for any of 

these materials before or after it conveyed the properties to 

home buyers. 
 For Lot 24, the deliveries were made from September 9, 1990 

to October 25, 1990. For Lot 122, they were made from September 

6, 1990 to October 31, 1990. For Lot 227, they were made from 

September 18, 1990 to November 13, 1990. Addington-Beaman filed 

memoranda of mechanic's liens for Lot 24 and Lot 122 on January 

29, 1991 and on Lot 227 on February 28, 1991. 

 After Addington-Beaman filed bills of complaint to enforce 

its mechanic's liens, all three matters were referred to a 

commissioner in chancery. The commissioner found for AddingtonBeaman. The chancellor reversed the commissioner's findings, 

ruling that each delivery was a separate contract required to 

meet the time requirements of Code § 43-4, even if filed under a 

combined lien. Thus, the chancellor ruled that only those 

deliveries which fell within the statutory time requirement were 

subject to the liens and judgment was awarded only for the 

amounts on those invoices which fell within that time period. We 

awarded Addington-Beaman an appeal. 

 II. 

OPERATION OF MECHANIC'S LIENS UNDER CONTINUING 

CONTRACTS AND OPEN ACCOUNTS 

 The central issue of each of these appeals is whether the 

materials were furnished by materialmen under specific continuing 

contracts or merely by marketplace suppliers under general open 

accounts. See Staples v. Adams, Payne & Gleaves, Inc., 215 F. 

322, 327-28 (4th Cir. 1914). We have previously stated the 

standard for operation of mechanic's liens under these differing 

forms of contract: 

 "If the materials were furnished under a single 

contract, and were in fulfillment thereof, the items of 
the account would be continuous, and the material man 

would have ninety days from the date of the last item 

within which to file his account and perfect his 

lien. . . . On the other hand, if the several items of 

the account, or a portion of them, are furnished under 

separate contracts, then the lien should have been 

filed ninety days from the date of the last item under 

each independent contract." 

First National Bank of Richmond v. William R. Trigg Co., 106 Va. 

327, 339-40, 56 S.E. 158, 161 (1907)(quoting Central Trust 

Company v. Chicago, K. & T Ry. Co., 54 F. 598, 599 (1893)). 

 However, it appears that the specific issue of 

distinguishing between deliveries of construction materials under 

running accounts amounting to a single continuing contract and 

deliveries under open accounts amounting to separate contracts is 

a matter of first impression in Virginia, although not uncommon 

to the law of mechanic's liens generally.4

 See, e.g., 

Annotation, When contract, transaction, or account deemed 

"continuing" one as regards time for filing mechanics' lien, 97 

 

 4In Sergeant v. Derby, 87 Va. 206, 12 S.E. 402 (1890), we 

held that a single contract for a specific amount for 

construction materials for two separate houses provided a 

sufficient foundation for a mechanic's lien on both houses. 

There, we were not required to determine whether multiple 

deliveries of materials identified to a specific construction 

project constitute individual separate contracts. Also, in 

Addington-Beaman Lumber Co. v. Lincoln Savings and Loan Assoc.

241 Va. 436, 403 S.E.2d 688 (1991)(hereinafter referenced as 

Lincoln to avoid confusion with the present appeal involving 

Addington-Beaman), a case involving an open account for 

construction materials, we held that where there is a series of 

individual but related transactions identified to specific lots 

benefited by the materials, the materialman is required to 

apportion the costs of the materials in the memoranda of 

mechanic's liens to specific lots. Neither of these cases 

addresses the specific issue of the present appeals by 

distinguishing a running account amounting to a single continuing 

contract from a general open account amounting to multiple 

contracts. 
A.L.R. 780 (1935). We begin our analysis by reviewing the 

settled law of mechanic's liens in Virginia. 

 Mechanic's liens are authorized by Code § 43-3(A), which 

provides: 

 All persons performing labor or furnishing materials of 

the value of fifty dollars or more, for the 

construction, removal, repair or improvement of any 

building or structure permanently annexed to the 

freehold . . . shall have a lien, if perfected as 

hereinafter provided, upon such building or 

 structure . . . . 

 Code § 43-4 establishes the criteria for the filing of a 

memorandum to perfect the mechanic's lien: 

 A . . . lien claimant . . . in order to perfect the 

lien given by § 43-3 . . . shall file a memorandum of 

lien at any time after the work is commenced or 

material furnished, but not later than ninety days from 

the last day of the month in which he last performs 

labor or furnishes material, and in no event later than 

ninety days from the time such building, structure, or 

railroad is completed, or the work thereon otherwise 

terminated. 

 Mechanic's liens were created to provide the "security of a 

lien to those who, by their labor and materials, have enhanced 

the value of [a] 'building or structure' . . . ." Lincoln, 241 

Va. at 439, 403 S.E.2d at 689. Although a mechanic's lien "must 

have its foundation in a contract," Rosser v. Cole, 237 Va. 572, 

576, 379 S.E.2d 323, 325 (1989), the contract need not be in 

writing. Pario v. Bethell, 75 Va. 825, 829 (1881). 

 Nor is there any requirement that the contract at its 

inception state with specificity the nature of the work to be 

done and/or the materials to be furnished. Rather, where the 

work or materials are furnished as part of a continuing contract 

related to a single property, a single contract adequate to 
underpin a mechanic's lien will be found to exist. Thus, in 

Osborne v. Big Stone Gap Colliery Co., 96 Va. 58, 30 S.E. 446 

(1898), we stated that "[i]t is true that a number of items were 

furnished more than ninety days before the account was filed 

. . . but it was a running account, and, where nothing to the 

contrary appears, is to be considered as falling due at the date 

of its last item." Id. at 66, 30 S.E. at 449 (emphasis added). 

 Determining whether a particular claim is founded upon an 

account constituting a single continuing contract or upon 

separate and independent contracts is a question of fact, but one 

which turns upon a substantive, rather than technical, view of 

the situation. See Chicago Lumber Company of Omaha v. Horner, 

317 N.W.2d 87, 90 (Neb. 1982). In making this determination, the 

trier of fact should consider the factors surrounding the 

dealings of the parties including their agreement and its 

purpose, the object of the work done or the materials furnished, 

the time when the work was done or materials were furnished, and 

other circumstances which suggest the nature of the parties' 

intentions. 

 Unlike the labor of a subcontractor, which can be readily 

identified with a specific project, the utilitarian nature of 

construction materials places upon the materialman a greater 

burden in establishing his right to a lien on a particular 

project. Accordingly, applying the analysis used in Osborne and 

a non-technical view of the situation, where the course of 

dealing between the parties shows that each understood that the 

materials were being supplied for a particular project, rather 
than merely for general use by the contractor, and nothing in the 

record suggests that a mere open account was intended, a 

continuing contract will be found. With these principles in 

mind, we turn now to the specific cases in these appeals. 

 III. 

NATURE OF THE SPECIFIC ACCOUNTS 

 In each of the present cases, the parties focus a great deal 

of attention on the initial applications for lines of credit. 

However, as is shown by each record, these documents are not, and 

do not purport to be, contracts. The credit applications did not 

obligate either the contractor seeking credit or the materialman 

offering credit to purchase or furnish, respectively, any given 

materials at any given time. In short, while these documents may 

be evidence of the intentions of the parties with respect to the 

subsequent contracts represented by the accounts in question, 

they do not represent the sole basis of the formation of those 

contracts. 

A. United Savings Association of Texas v.

Jim Carpenter Company

 In Carpenter, the contract is evidenced by the purchase 

orders, invoices, and account statements. The materials 

furnished to each parcel were invoiced and billed under an 

account number unique for each parcel. This method of recordkeeping clearly reflects an implied, if not express, unitary 

agreement of the parties for furnishing materials for specific 

construction projects under a continuing contract. Considering 

the substance of this course of dealing, we believe that the 

separate orders and deliveries were part of an ongoing, unitary 
transaction. Nothing in the record indicates that Ross Brothers 

sought competitive bids or otherwise sought the materials from 

other suppliers. Accordingly, we hold that the chancellor 

correctly ruled that the materials were furnished under a single, 

unitary contract for each parcel. 

B. Tart Lumber Company, Inc. v. Drewer 

Development Corporation

 In Tart, Drewer's takeoffs clearly constituted requests for 

bids, which, once accepted, created a contract for materials for 

that construction project covered by each takeoff. Here, the 

materials furnished under each request were part of a single 

construction project, as is shown by the fact that each invoice 

referenced a specific parcel. Moreover, Tart's salesman 

testified that in most cases the materials were delivered in bulk 

shipments to the individual parcels and that he regularly 

travelled to the job sites "because we were dealing in such large 

quantities, I wanted to make sure . . . the deliveries were 

dropped in the correct locations." 

 The salesman testified that materials were supplied under 

"fill-in" orders only where "either the takeoff was incorrect or 

some of the material [had been] broken." Moreover, when a fillin was requested, it does not appear that any competitive process 

was used. Rather, Drewer simply contacted Tart and requested 

that the materials be supplied. Tart then supplied the fill-in 

materials under an invoice referencing the specific parcel.5

 

 

 5In certain instances, Tart supplied material to Drewer 

without referencing specific parcels, and these materials were 

billed as part of the combined statements sent to Drewer. 

However, Tart excluded the charges for these materials when 
Thus, once Drewer accepted Tart's bid on a takeoff, the 

deliveries under that account, including those materials supplied 

as fill-ins, became part of a single, continuous contract related 

to a specific construction project. 

 The fact that Tart combined invoices for multiple parcels in 

unitary billing statements does not preclude a finding that the 

materials were delivered to the individual parcels under separate 

continuing contracts. Nothing in the record suggests that the 

combined statements were used for any purpose other than the 

convenience of the parties. Moreover, when it filed its 

memoranda of mechanic's liens, Tart was able to segregate the 

charges for the materials furnished for each parcel, in a manner 

similar to a permissible apportioning of an account between 

related properties under a single contract. See Lincoln, 241 Va. 

at 439-40, 403 S.E.2d at 689-90. Accordingly, we hold that the 

chancellor erred in ruling that each delivery of materials 

constituted a separate contract. 

C. Addington-Beaman Lumber Company, Inc. v. 

Roberson Builders, Inc. 

 Finally, in Addington-Beaman, the record shows that each 

order and each delivery of materials was segregated by parcel. 

The record further shows that Addington-Beaman anticipated 

satisfaction of the invoices for a given parcel in conjunction 

with the settlement on the sale of the home constructed on that 

parcel. As with the other two cases, the substance of the 

relationship between the parties establishes that the materials 

 

filing its liens. 
were furnished under separate, but continuing contracts for each 

parcel. We find nothing in the record to support the contrary 

conclusion that the parties viewed the relationship as a mere 

open account. Accordingly, we hold that the chancellor erred in 

treating the individual deliveries of materials as separate 

contracts. 

 IV. 

 CONCLUSION 

 In United Savings Association of Texas v. Jim Carpenter Co., 

the chancellor correctly found that the mechanic's liens were 

filed within ninety days from the last delivery of materials 

under continuing contracts for each parcel. Accordingly, we will 

affirm that judgment. 

 In both Tart Lumber Co. v. Drewer Development Corp. and

Addington-Beaman Lumber Co. v. Roberson Builders, Inc., the trial 

courts erroneously found that the accounts did not constitute 

running accounts amounting to continuing contracts, and hence 

incorrectly ruled on the time limitation for the filing of liens. 

 Accordingly, we will reverse the judgment of the trial courts in 

those two cases, and remand the cases for a determination of the 

amount of the liens as filed under continuing contracts for each 

parcel. 

 Record No. 951470 --Affirmed. 

Record No. 952238 --Reversed and remanded. 

Record No. 960615 --Reversed and remanded. 

JUSTICE COMPTON concurs in result.