Court Opinion

ID: 8194337
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:29.295336+00
Date Added: 2024-06-11T16:40:42.924954
License: Public Domain

The following opinion was filed January 15, 1924:
Jones, J.
It is argued by plaintiff’s counsel that the terms of the agreement did not bind the plaintiff since it was made and signed in the name of Charles Miller. The material was all furnished by the plaintiff and not by Charles Miller, its president. We do not regard the form of the contract as conclusive. The plaintiff by its acceptance of the agreement, acting on it, and bringing the suit for the value of the materials, adopted the agreement as its own. We are convinced by the testimony that the president was acting as the. agent of the company.
It is also contended by plaintiff’s counsel that the contract was ambiguous, and that by the acts of the parties and their conduct it should be construed as merely a continuance of their former modes of dealing. In view of the conclusion we have - reached it seems unnecessary to .discuss this question.
It is one of the contentions of defendants’ counsel that the contract was to finance the partnership in its building operations; that it was an agreement whereby funds were to be provided for the erection of the houses and a way of meeting the obligations to be incurred. We do not construe the agreement as one to finance the partnership except in the manner specifically provided therein, and it is unnecessary to repeat the manner in which the financing was to' be effected.
It is the main contention of defendants’ counsel that the contract operated as a present waiver on the part of the plaintiff of the right to file mechanics’ liens; that there was a waiver by reason of the agreement to accept land con*365tracts and deeds of the property for which the materials were to be furnished; that it was an unrecorded agreement and made no provision that property sold .to innocent purchasers should be liable for liens; that it could not be ascertained when the claim of plaintiff would become due, since the payments were to be deferred until the property was completed, mortgaged, and sold on land contract; that the material was not sold on the credit of the buildings but on the credit of a financing agreement and the money to be derived from the sale of the houses; that the plaintiff was to be paid only out of the net proceeds to be derived from the sale of the property to be improved.
On all these grounds it is insisted that the agreement is wholly inconsistent, with any intention to rely on any mechanic’s lien as a basis of credit.
There is no doubt that the plaintiff could have waived the right to file a lien by express agreement, although when an agreement relied on as a waiver is ambiguous the doubt should be resolved against the waiver. Davis v. La Crosse H. Asso. 121 Wis. 579, 99 N. W. 351.
It is also true that a waiver may be implied from facts and conduct or agreement of the parties which are inconsistent with the right to file a lien and which manifest an intention to waive the right. For example, this court has held that by accepting a mortgage and promissory note extending the time for payment of an indebtedness for the amount claimed as lien to a period beyond that which the statute prescribes for the commencement of an action to foreclose the lien and by including other indebtedness, the right to assert a lien under the statute is waived. Miller-Piehl Co. v. Mullen, 170 Wis. 378, 174 N. W. 542. This is based on the theory, not that the note is taken as payment, but on the ground that the note suspends the time of payment and the payee is estopped from asserting the lien in violation of his contract to extend the time of payment until the note matures.
*366But many of the decisions hold that the lien is not waived by merely talcing a note and mortgage which are payable before the time fixed by statute for enforcing the lien. Phœnix M. Co. v. McCormick H. M. Co. 111 Wis. 570, 87 N. W. 458. See note, Ann. Cas. 1916D, p. 179.
By the Wisconsin statute it is provided that “the taking of a promissory note or other evidence of indebtedness for any such work, labor or materials done or furnished shall not discharge the lien therefor hereby given unless expressly received as payment therefor and so specified therein.” Sec. 3317, Stats.
There is general agreement in the view that the question of waiver is one of intention of the parties, and that if it was the intention, fi> be gathered from all the facts, that the security is intended as merely additional, the lien is not waived.
The agreement here relied on as a wáiver is so unusual that no authorities have been cited or found which seem directly in point on the question whether it was a waiver by operation of law. The proposition has been very ably argued by counsel for appellants, and there is so much force in the contention that if the agreement had been complied with by defendants we should be disposed to accept that view.
But it was a contract containing mutual covenants binding on both the parties. According to its terms defendants were bound to turn over deeds and land contracts for the benefit of the plaintiff; the land contracts w7ere to be subject to a sixty per cent, mortgage on the property on which there should have been paid at least twenty per cent, of the purchase price.
By the undisputed testimony the two contracts tendered the plaintiff were not in compliance with either of these requisites. Moreover, there were outstanding liens held by other parties.
*367There has been great conflict in the decisions on the subject of waiver of mechanics’ liens by 'taking security or by acts and agreements showing an intention . inconsistent with the right to file liens. But the authorities seem quite uniform on the proposition that where a party relies on a special agreement or promise to give security as a waiver of lien rights, he should show compliance on his own part with his agreement. The right given by statute to laborers and materialmen for their protection is highly favored by legislation 'and the courts, and ought not to be impaired by one who pleads an agreement with which he himself has failed or refused to comply. McMurray v. Brown, 91 U. S. 257; Van Stone v. Stillwell & B. Mfg. Co. 142 U. S. 128, 12 Sup. Ct. 181; Baumhoff v. St. L. & K. R. Co. 171 Mo. 120, 71 S. W. 156; Reynolds v. Manhattan T. Co. 83 Fed. 593, 601; Central T. Co. v. R., N., I. & B. R. Co. 68 Fed. 90; Gardner v. Hall, 29 Ill. 277; Phillips, Mechanics’ Liens (2d ed.) § 285; 2 Jones, Liens (2d ed.) §§ 1524, 1525; 18 Ruling Case Law, 971.
It is claimed by appellants’ counsel that a certain mortgage owned by the Mariner Company was superior to any lien which the plaintiff might have. In November, 1920, this company conveyed the lot in question to the partnership pursuant to a land contract executed in 1916. On May 6, 1921, the partnership by its agent executed a mortgage for $1,120 covering this lot to the Mariner Company, which was recorded July 12, 1921. The material was furnished for the building between September 9, 1920, and January 31, 1921.
It is claimed that this was a purchase-money mortgage and a prior lien to any claim of plaintiff. The Mariner Company introduced no proof to maintain this claim, and we are asked to presume that the mortgage was given for the purchase of the lot in question. In the absence of any such recital in the mortgage, and in view of the consider*368able lapse of time' between the execution of the deed and the mortgage, the trial court could hardly indulge in any such presumption. The court found that this lien was subsequent to that of plaintiff and we concur in that decision. On this question sec. 3314, Stats., is pertinent.
At the oral argument counsel for both parties agreed that the judgment ought to be so' modified as to provide for judgment for deficiency, if any, against the defendant Frank J. Meyer individually and as surviving member of the partnership. Respondent’s counsel asked for this modification by filing exceptions and giving notice for review pursuant to sec. 3326, Stats. On the pleadings and the findings of fact it seems clear that this modification should be made.
There was much testimony as to the rights of the respective lien claimants, and th,e findings of the court establishing such rights were very elaborate, .but no questions are before us except those which have been discussed, since the numerous other defendants have not appealed except the Cramer Realty Company, which became a subsequent vendee and subject to the rights of the plaintiff.
By the Court. — Judgment modified as indicated in the opinion, and, as so modified, affirmed.
A motion for a rehearing was denied, with $25 costs, on April 8, 1924.