Court Opinion

ID: 9538690
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:40:02.146095+00
Date Added: 2024-06-11T14:58:05.535278
License: Public Domain

HODGES, Justice.
This action - was commenced by Metropolitan Water Company, the plaintiff, to establish and foreclose a mechanic’s and materialman’s lien against property owned by Harold H. Hild and Margaret E. Plild, the defendants. The defendants filed a demurrer to the amended petition of the plaintiff on the ground that it failed to state a cause of action against them. From the orders of the trial court sustaining the demurrer and overruling plaintiff’s motion for a new trial, the plaintiff appeals to this court on the original record. The parties will be referred to in this opinion by their trial court designation.
The basis of the plaintiff’s claim is a written contract with Harry E. Bray and the Oklahoma Finance Corporation, hereinafter referred to as the developers, which *972contract was incorporated into plaintiff’s amended petition by reference. The contract provides that the plaintiff will construct and install water and sewer facilities, consisting of a sanitary sewage processing plant, water wells, pumps, outfall lines, lines, connections, and meters, for a development to be known as the Cleveland Heights Addition, located in ^ Cleveland County, Oklahoma. The contract grants the plaintiff, which is a public utility, the exclusive right to engage in the business of furnishing water and sanitary sewage service to the lots in the addition. The only provision in the contract concerning payment to the plaintiff for the cost of the construction and installation of the water and sewer facilities is provision 6(a) which states: ■
^“DEVELOPER covenants and agrees that it will require, in contracting the sale of each residential lot in said Cleveland Heights Addition, that the purchaser shall pay to METROPOLITAN, as compensation for the installation of water service to the lot line, including meter-setting charge, the sum of $150.00, and also the sum of $350.00 for the installation of sanitary sewage facilities in right-of-way adjacent to said lot, and in relation to business lots a sum equal to $10.00 per front foot for installation of both such sewer and water facilities, the aforesaid to be payable respectively immediately upon commencement of construction upon each said lot or upon delivery of title to the purchaser whichever time is the earlier. It is understood that the foregoing payments shall be solely for the purposes above stated and shall not relieve the lot purchaser of the payment of any deposits, rates or charges for utility services as prescribed or approved by governmental authorities having jurisdiction thereof.”
The plaintiff alleges in its amended petition that it constructed and installed the water and sewer systems in accordance with its contract with the developers; that eleven of the lots located in Cleveland Heights Addition were subsequently purchased by the defendants from the developers; that the procedural provisions of the statutes to perfect a mechanic’s and materialman’s lien have been complied with; and that there is due and payable to the plaintiff from the defendants the sum of $4,900.00 for material furnished and labor performed under the contract, and that its lien should be foreclosed upon the property to satisfy this indebtedness. There is no prayer for a personal judgment against the defendants.
The sole question presented is whether the plaintiff has stated a cause of action for a mechanic’s (and materialman’s) lien against the defendants. The parties in their briefs have argued two main propositions: (1) Is the contract between the plaintiff and the then owners of the land (the developers) sufficient to give rise to a mechanic’s lien; and (2) Are water and sewer systems improvements upon the land of the defendant within the meaning of our mechanic’s lien statute. Under the view we take of this case, we need consider only the first proposition.
Our lien statute, 42 O.S.1961, Section 141, provides in pertinent part as follows:
“Any person who shall, under oral or written contract with the owner of any tract or piece of land, perform labor, or furnish material for the erection, alteration or repair of any building, improvement or structure thereon * * * shall have a lien upon the whole of said tract or piece of land, the buildings and appurtenances. * * * ”
This statute makes the right to a mechanic’s lien dependent upon a contract with the owner and without a contract no such lien can be created. Berry v. Barbour, Okl., 279 P.2d 335; Birmingham v. Houston-McCune Lumber Co., 171 Okl. 88, 41 P.2d 856; Wm. Cameron & Co. v. Beach, 44 Okl. 663, 146 P. 29.
While the plaintiff makes no allegation of any contract with the defendants, *973the acquisition of the property by the defendants from the developers was subject to any mechanic’s lien existing thereon. Elm Oil Co. v. Clark Lumber Co., 179 Okl. 341, 65 P.2d 1221; Claude Ricker Lumber & Paint Co. v. Barger, 195 Okl. 504, 158 P.2d 1021. We must therefore determine if the plaintiff possessed a mechanic’s lien upon this property by virtue of its contract with the developers at the time the property was purchased by the defendants.
A mechanic’s lien secures the payment of a debt and if there is no debt created by the contract to which the lien can attach there can be no lien. The rule is expressed in Phillips, Mechanics’ Liens, Section 112 (2d ed.), as follows:
“The creation of the lien, though arising by virtue of express legislative enactment, is essentially dependent upon the existence of contract, express or implied, and the obligation of debt arising out of the performance of its stipulations by the mechanic. * * * As the lien security is an incident that follows the legal liability to pay, whenever that obligation does not arise, or ceases, this security docs not exist. * * * ” (Emphasis supplied).
And see to the same effect: Mann v. Schnarr, 228 Ind. 654, 95 N.E.2d 138; Cole v. Clark, 85 Me. 336, 27 A. 186, 21 L.R.A. 714; Bangor Roofing & Sheet Metal Co. v. Robbins Plumb. Co., 151 Me. 145, 116 A.2d 664; Choteau v. Thompson, 2 Ohio St. 114; Rockel, Mechanics’ Liens, Section 241; 2 Jones, Liens, Section 1235 (3d ed.).
This court has held in several cases involving the right to an oil and gas well lien that subcontractors, being entitled to a lien to the same extent as the original contractor, have no lien where there is no liability to the original contractor under the terms of the contract. Haggard v. Sunray Oil Co., 176 Okl. 81, 54 P.2d 662; Josey Oil Co. v. Ledden, 162 Okl. 262, 20 P.2d 582; Cameron Refining Co. v. Jerman, 110 Okl. 272, 238 P. 437; Christy v. Union Oil & Gas Co., 28 Okl. 324, 114 P. 740.
Any doubt that the same rule applied to mechanics’ liens should have been dispelled by the decision of this court in Consolidated Cut Stone Co. v. Seidenbach, 181 Okl. 578, 75 P.2d 442. In that case it was held, among other things, that a subcontractor’s recovery upon a mechanic’s lien was limited to the price stipulated in the contract between the owner and the original contractor reduced by actual damages caused by the contractor which were within the contemplation of the parties when the contract was made. In reaching its conclusion the court stated:
“ * * * Whether the owner is obligated to the contractor to no extent whatever by reason of breaches of the contract or failure to perform, as was true in several of the cases decided by this court, or whether there is limited liability by reason of contractual provisions, the principle is the same. In every case there must be liability to the original contractor. The oil and gas well lien cases are not based on failure to perform, but on absence of indebtedness. What is the owner obligated to pay under his contract? Always that is the primary and controlling question.” (Emphasis supplied).
Perusal of the contract involved in the instant case discloses that the developers did not agree to pay the plaintiff for the installation of the water and sewer facilities. On the contrary, the contractual provision concerning payment for these facilities, set out above, provides that the sole obligation undertaken by the developers was to include a provision in each contract of sale of the lots requiring each purchaser to pay a stipulated amount to the plaintiff. By this provision, the plaintiff has agreed that it will expect payment only in the event that the lots are sold and that it will look only to the purchaser of the lots for this payment. As no indebtedness was created by the contract, there could be no mechanic’s lien.
According to the amended petition, the developers did not carry out their agree*974ment with the plaintiff and failed to include the provision for the stipulated payment to the plaintiff for the installation of water and sewer facilities in the contract of sale entered into with the defendants. We therefore express no opinion as to whether such an agreement by the defendants with the developers to pay the plaintiff for these facilities would have been an indebtedness upon the property to which a mechanic’s lien could attach in favor of the plaintiff for the work previously performed by the plaintiff under its contract with the developers. We also note that there is no assertion by the plaintiff that the defendants have been unjustly enriched in the purchase of these lots. The amended petition does not allege that the defendants did not pay a fair price for the property including the cost of water and sewer facilities, or that the defendants were informed, prior to purchasing the lots, that the plaintiff claimed the right to separate payment for these facilities.
The remaining question is whether the plaintiff acquired a mechanic’s lien upon the property to secure its claim resulting from the alleged failure of the developers to include a provision in the contract of sale with the defendants requiring the defendants to pay for the water and sewer facilities. Application of our mechanic’s lien statute, supra, is limited, by its terms, to indebtedness incurred for labor performed and materials furnished for the purposes mentioned in the statute. In addition, as seen above, this indebtedness must be created by the terms of the contract between the parties. The plaintiff’s claim against the developers for failure to perform their contract is not a contractually created debt and it is not for labor or material. We therefore hold that such a claim for damages for breach of contract is not entitled to the protection of a mechanic’s lien. Brown v. Rodocker, 65 Iowa 55, 21 N.W. 160; Schenectady Homes Corp. v. Greenside Painting Corp., Co.Ct., 37 N.Y.S.2d 53; Pardue v. Missouri Pac. R. Co., 52 Neb. 201, 71 N.W. 1022; Halowich v. Amminiti, 190 Pa.Super. 314, 154 A.2d 406; 2 Jones, Liens, Section 1358 (3d ed.).
As there is no contractual provision creating any indebtedness to which a mechanic’s lien could attach, the defendants acquired the property free from the alleged mechanic’s lien and the trial court correctly sustained the defendants demurrer to the amended petition of the plaintiff. Judgment affirmed.
HALLEY, C. J., and BLACKBIRD and IRWIN, JJ., concur.
DAVISON, WILLIAMS and BERRY, JJ., concur specially.
JACKSON, V. C. J., dissents.