Opinion ID: 2089115
Heading Depth: 1
Heading Rank: 9

Heading: Accrual of Mechanics' Liens.

Text: Sometime prior to July 1, 1965, the surveyor placed on the site 35 lath stakes with orange ribbons attached to indicate the street layout and to show prospective bidders how much cut or fill would be required to grade the streets. The mortgage was recorded on August 5th and no claims for liens had been filed at that date. Grading work on the streets commenced on August 13th. On August 9th the staking for excavation and foundations for the buildings was completed and excavating commenced in December. It is claimed under sec. 289.01 (2) (b) [4] and sec. 289.01 (1) (b), Stats. 1965, [5] that the staking of the streets constituted the visible commencement of work in the place of the improvement and thus all the liens of the claimants relate back to the date of staking of the streets by the surveyor. It is a rule of long-standing that every construction lien shall have priority as of the time of visible commencement of the improvement work at the site as against an unrecorded mortgage given prior to the commencement of the improvement. This doctrine of accrual of mechanics' liens does not depend upon which lien contractor started the work on the key day because if there is a valid construction lien prior to a mortgage under sec. 289.01, Stats., all other construction liens relate back to that priority, i.e., the commencement of the work of improvement prior to the recording of the mortgage. Prince v. C. G. Bretting Mfg. Co. (1931), 203 Wis. 504, 234 N. W. 699; Evans-Lee Co. v. Hoton (1926), 190 Wis. 207, 208 N. W. 872. The placing of grade stakes for a street does not constitute an improvement because such work does not fall within the statutory definition of an improvement in sec. 289.01 (1) (b), Stats. Staking streets per se is not of permanent value to the land and cannot constitute an improvement. It is a preliminary means to grading or excavating, which would be of permanent value to the land, and cannot constitute an improvement. It is a preliminary means to grading or excavating which would be of permanent value and which are expressly included in the statutory definition of improvement. We see no significance in the stakes marking out streets rather than foundations for buildings because excavating or grading is done on the land of the project. While excavating, grading, and other work short of constructing a building are an extension of the meaning and scope of improvement, staking is not so enumerated in the statute. In Clark v. Smith (1940), 234 Wis. 138, 290 N. W. 592, an architect was denied a lien for the preparation of plans because the building called for in the plans was not commenced. In Fitzgerald v. Walsh (1900), 107 Wis. 92, 82 N. W. 717, architectural plans for a building were drawn and used for negotiating contracts with contractors and in setting the stakes for the excavation of the basement; it was held the commencement of the excavation was the commencement of the building within the meaning of the statute. While neither of these cases considered the question here presented, the Minnesota court in M. E. Kraft Excavating & Grading Co. v. Barac Construction Co. (1968), 279 Minn. 278, 156 N. W. 2d 748, held that survey stakes under a statute similar to Wisconsin's did not constitute actual or visible beginning of the improvement and the priority of the subsequently recorded mortgage was upheld. This view is taken in a recent amendment by ch. 351, Laws of 1967, to our lien law which became effective February, 1968, after the rights in this case accrued. What was sec. 289.01 (2) (b) is now sec. 289.01 (4), Stats., and provides When new construction is the principal improvement involved, commencement is deemed to occur no earlier than the beginning of substantial excavation for the foundations, footings or base of the new construction, ... The legislative note accompanying this revised section states no substantial change was made. The notes of Walter B. Raushenbush, the research reporter and legislative draftsman for the study of the Wisconsin lien laws states in Wisconsin Construction Lien Law (1968), CLEW, pp. 42-45, this new section was a clarification of the meaning of the phrase visible commencement in place of the work of improvement, because there was a concern that the placing of surveyor's stakes ... was, after all, visible commencement of the work. For the division of authority holding staking, measuring, and fencing of property as determinative of the accrual of mechanic's liens, see 1 A. L. R. 3d, Mechanic's LienAccrual, (1965), 822, 825-828. While a meritorious argument is made in the briefs why staking should be determinative of the priority of construction liens, we think the language of secs. 289.01 (1) (b) and 289.01 (2) (b), Stats. 1965, did not encompass staking as a visible commencement of the improvement work.