Case Name: HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellant, v. A.B.C. CLEANING CONTRACTORS, INC., Appellee
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: United States
Decision Date: 1965-08-09
Citations: 350 F.2d 430
Docket Number: No. 18607
Parties: HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellant, v. A.B.C. CLEANING CONTRACTORS, INC., Appellee.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 350
Pages: 430–435

Head Matter:
HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellant, v. A.B.C. CLEANING CONTRACTORS, INC., Appellee.
No. 18607.
United States Court of Appeals District of Columbia Circuit.
Argued April 1, 1965.
Decided Aug. 9, 1965.
Mr. Kahl K. Spriggs, Washington, D. C., with whom Mr. John F. Myers, Washington, D. C., was on the brief, for appellant.
Mr. Charles Jay Pilzer, Washington, D. C., with whom Mr. George J. Hughes, Washington, D. C., was on the brief, for appellee.
Before Danaher, Burger and McGowan, Circuit Judges.

Opinion:
DANAHER, Circuit Judge:
The appellee instituted its action in the District Court "To Enforce Mechanic's Lien" against Nassau Management Company, Inc. and Tracy Roosevelt Corporation. It later filed an amended complaint adding the appellant as a party. In two counts appellee alleged it had entered into two contracts with Nassau for sandblasting portions of the Hotel Roosevelt "reputed to be owned by the defendant Tracy Roosevelt Corporation." Nassau was alleged to be the duly authorized agent of Tracy Roosevelt Corporation. After receiving payments of only $8,750, leaving a substantial balance owing on the first contract, no payment having been made on the second contract, the ap-pellee filed two mechanic's liens "against the interest of Tracy Roosevelt Corporation" in the Hotel Roosevelt premises. Under circumstances to be mentioned, Nassau and Tracy Roosevelt having defaulted, the District Court entered judgment against the appellant surety in favor of the appellee to recover $5,850 together with interest and costs from February 27,1957. This appeal followed.
Shortly after notice of intention to file the mechanic's liens had been given to Tracy Roosevelt by registered mail, Tracy Roosevelt as principal and the appellant as surety entered into and filed a "Mechanic's Lien Undertaking." The instrument in part recited that the "above-named Tracy Roosevelt Corporation, owner" and the appellant "under take that they will pay and satisfy any judgment that may be recovered in any suit that may be instituted on, or to enforce the above-entitled mechanic's lien."
Appellant insists that the District Court erred in granting judgment against it in that its undertaking merely had been substituted for whatever rights the appellee might have had to foreclose a mechanic's lien against the interest of Tracy Roosevelt Corporation in the property known as the Roosevelt Hotel. It was urged at trial and is argued here that the appellee had not proved that Tracy Roosevelt Corporation ever had any "interest" in the property purportedly subject to lien. Thus, if the property could not have been held to respond to the ap-pellee's claim of lien, the appellee had gained no greater rights from the undertaking. It was stipulated in the District Court between counsel for the respective parties hereto that the land records of the District of Columbia disclosed "no leases or other instruments of record in the names of either Nassau Management Company, Inc. or Tracy Roosevelt Corporation, and that William Newman, Jack Salvage, and Jack Freeman were record title owners of the above-described property at all times pertinent to the dispute in this case
The District Judge noted that the mechanic's lien undertaking had been entered into between "Tracy Roosevelt Corporation, owner, and Hartford Accident and Indemnity Company, surety," and that the parties had undertaken "for themselves, and each of them" to pay and satisfy any judgment that may be recovered in any suit "to enforce the above-entitled mechanic's lien." He concluded that although the default judgment entered against Nassau and Tracy Roosevelt "did not constitute an adjudication that the lien should be foreclosed," nevertheless the "judgment" against Tracy Roosevelt had flowed from a suit "instituted on, and to enforce the mechanic's lien."
The judge therefore ruled, in effect, that the surety may be held liable on its undertaking even though the appellee had secured no more than a personal judgment against Tracy Roosevelt Corporation and even though it was not shown that the latter had ever owned any interest in the property. But the default judgment had expressly reserved a ruling with respect to the validity of the mechanic's lien. In making that reservation, the motions judge undoubtedly had in mind that a prerequisite to ultimate liability of the surety on the undertaking involved an establishment on the
record that Tracy Roosevelt Corporation had some interest in the Roosevelt Hotel which might have been made subject to a mechanic's lien.
D.C.Code § 38-102 (1961) provides that a valid notice of mechanic's lien must include (1) the amount claimed, (2) the name of the party against whose interest the lien is claimed and (3) a description of the property to be charged. On its face, the "notice of lien" in this case purportedly complied with those requirements. We have held however, that where a lienor has named as the alleged owner one who has no interest in the property or the lienor has named the wrong person as purported owner, the notice is fatally insufficient. Surely it may not successfully be maintained that a contractor may gain a valid lien against the true owner of property by filing notice of lien against one who has no interest whatever in the property named.
It is the theory of our mechanic's lien law that an undertaking, when approved by the court as was the case here, becomes a substitute for that interest in the premises which was "subject to a lien." The Code provides that enforcement of the lien proceeds by a bill in equity, and the burden of proof rests upon the complainant. Indeed, the Code expressly provides:
"If the right of the complainant to the lien shall be established, the court shall decree a sale of the land and premises or the estate and interest therein of the person who, as owner, contracted [for the work done]." (Emphasis added.)
That judgment which establishes a right to a lien upon the interest "subject to lien" is the judgment which is secured by the undertaking. The instrument here in suit did not include a liability upon the surety to respond at all events simply because the appellee secured a personal judgment that Tracy Roosevelt was indebted to the appellee. The surety's "obligation is confined to the purpose of the statute." The trial judge erred in resting his decision on the default judgment rendered against Tracy Roosevelt Corporation.
But after reference to the default judgment against Tracy Roosevelt as' one basis for his decision, the District Judge also said:
"The second string to my bow is that if I am in error on that, plaintiff is entitled to judgment because, in my opinion, the defendant surety company is estopped from denying that the Tracy Roosevelt Corporation is the owner."
We are thus brought to consideration of the estoppel ground for the judgment. The trier's findings include none of the elements upon which a conclusion of estoppel might rest, indeed there seems to have been no proof offered in support of the theory. We can not possibly accept this predicate on the record before us.
Yet in reversing, we will not order judgment for the appellant. We think we sense what the trier had in mind. He knew, of course, that the statute made the action equitable in nature. Before him was a surety seeking to be excused from liability. The pleadings disclosed that the surety had caused Tracy Roosevelt to execute an indemnity agreement to save the surety harmless. The surety had not exhibited of record the Tracy Roosevelt application for the undertaking, so that whatever representations had been made by Tracy Roosevelt were not available. Certainly the judge could reason that on the basis of Tracy Roosevelt's activities and the fact that as principal, it had paid a premium for the undertaking, it must have had some interest in the premises and in the Hotel Roosevelt. Perhaps Tracy Roosevelt at all times pertinent had been party to an agreement to buy the Hotel Roosevelt property and had thus acquired an interest. Tracy Roosevelt or its agent Nassau had made payments of some $8,750 on account of work performed by the ap-pellee, and the latter by the default judgment had shown itself to be a creditor as to the unpaid balances long since due, with interest and costs.
Certainly with the foregoing in mind, the mere showing by the appellant of the negative subject matter of the stipulation as to record title was insufficient to constitute a satisfactory explanation of the situation. This appellant as surety had participated with Tracy Roosevelt in freeing the purportedly liened premises from the appellee's asserted lien claim. Since to that end court approval of the undertaking had been procured, the trial judge might have thought that this case called for the surety's more complete exhibition of the circumstances producing that result. We will not say the judge unreasonably expected that all the "equities" should be exhibited in their true light.
Of course the ultimate burden of proof would and still does devolve upon the contractor, appellee here, but it seems clear the District Court will assay the respective rights of the parties upon the record as a whole, after full and frank disclosure.
Reversed.
. It was stipulated that the appellee had performed work, labor and services "under contract with the other two Defendants" on account of which there was an outstanding balance to the appellee of $5,850 plus interest and costs. Neither Nassau Management Co., Inc. nor Tracy Roosevelt Corporation is before this court. A "personal judgment" had been entered by default for the appellee to recover $8,850 plus interest and costs from February 26, 1957, "against the defendant Tracy Roosevelt Corporation." That judgment expressly reserved "any ruling regarding the establishment or enforcement of a mechanic's lien against the property involved in this case, said matter being left open for future decision of this Court."
. See D.C.Code § 38-110, 111 (1961).
. D.C.Code § 38-118 (1961) provides in relevant part:
"In any suit to enforce a lien hereunder, the owner of the building and, premises to which such lien may have attached may file a written undertaking to the effect that he and they will pay the judgment that may be recovered (Emphasis added.)
. D.C.Code § 38-119 (1961) provides in part:
"Such an undertaking, [supra note 3, as here, may be offered before suit] in order to discharge the property from existing liens, in which case notice shall be given as aforesaid to the parties whose liens it is sought to have discharged [the undertaking being] to the effect that the owner and his said sureties will pay any judgment in any suit • for the enforcement of said lien."
. Property "subject to" a mechanic's lien "to the extent of the right, title, and interest, at that time existing, of such owner" is referred to in D.C.Code § 38-101 (1961).
. Chamberlin Metal Weather Strip Co. v. Karrick, 60 App.D.C. 316, 53 F.2d 928 (1931).
. Anglo-American Assn. v. Campbell, 13 App.D.C. 581, 607, 608 (1898); cf. Jung-bert v. Marrett, 313 Ky. 338, 231 S.W.2d 84 (1950).
. D.C.Code § 38-111 (1961); see Brown v. Waring, 1 App.D.C. 378, 380 (1893).
. The stipulation of the parties which identified the three record title owners of the premises further disclosed that there were no leases or other instruments of record in the names of Nassau or Tracy Roosevelt Corporation. The individual owners had not been named in the notice of lien or shown otherwise to have had any connection with the contracts or with the parties heretofore mentioned. There was nothing before the trial court to show the existence of a valid lien "against the interest of Tracy Roosevelt Corporation" as "owner" or otherwise.
. Anglo-American Assn. v. Campbell, supra note 7, 13 App.D.C. at 608.
. As adopted by this court, see Parker v. Sager, 85 U.S.App.D.C. 4, 8, 174 F.2d 657, 661 (1949).
. Nor will we assume that the judge derived "estoppel" from the mere fact that the undertaking had been offered and filed. Cf. Parsons v. Moses, 40 App.Div. 58, 57 N.Y.S. 727 (1899).
. Cf. Fidelity Storage Corp. v. Trussed Concrete Steel Co., 35 App.D.C. 1, 12 (1910), appeal dismissed 225 U.S. 716, 32 S.Ct. 836, 56 L.Ed. 1270 (1912).