Nicolai-Neppach Co. v. Poore , 120 Or. 163 ( 1926 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] It has become the settled law of this state that where a materialman furnishes material for a building to be erected on land belonging to a person other than the purchaser of such material in order to effect a lien on the owner's interest in the real property it is necessary to give the notice prescribed by statute: Or. L., § 10191. It is also well settled that where the material is furnished directly to the owner of the fee that such notice is not required: Boise-Payette Lumber Co. v. DominicanSisters, 102 Or. 314 (202 P. 554).

It is contended by appellant Wilhoit Springs Mineral Water Company that the material furnished by the defendant Skeen was furnished to the lessees, H.D. Poore et al., and their successor Wilhoit Mineral Springs, Inc. The defendant Skeen claims that the material was furnished directly to the Wilhoit Springs Mineral Water Company. It is conceded that the notice required by said Section 10191, Or. L., was not given by defendant Skeen. The determination of the contention between said parties is purely one of fact. We have carefully examined the evidence and concur with the learned Circuit Court that the material was furnished directly to the defendant Wilhoit Springs Mineral Water Company, the owner in fee of the premises on which the improvements were made and in which the material furnished by the defendant Skeen was used. The testimony upon this issue was confined mainly to the testimony of defendant Robert Skeen and Edw. Labbe, president of the defendant Wilhoit Springs Mineral Water Company. In addition to the positive testimony of the defendant Skeen is the fact that a discount of 10 per cent was allowed by defendant Skeen on all material furnished for said improvements. This discount would not have been allowed to any one of the defendants, excepting the owner of the fee, the said Wilhoit Springs Mineral Water Company. The president of that company and the defendant Skeen had long been friends and at one time partners in electrical works. Because of those relations the defendant Skeen gave to the Wilhoit Springs Mineral Water Company the favor of that discount. It would not have been given to a stranger. It is not disputed that the president of the Wilhoit Springs Water Company went to the place of business of the said Robert Skeen and interested the said Robert Skeen in furnishing the material. The said Edw. Labbe claims that he simply introduced one of the three lessees, to wit: One B.O. Rowan. The defendant Robert Skeen testified that in addition to introducing the said Rowan, he requested Skeen to go out to Wilhoit Springs to ascertain what was needed and to furnish the supplies. One cannot read the testimony without being convinced that Robert Skeen thought he was furnishing the material to the Wilhoit Springs Mineral Water Company through its president, the said Edw. Labbe. He was led to that belief by the conduct of the said Labbe. He would not have given it the discount that he did if he had not believed that the said Edw. Labbe was the purchaser of the material. It was the duty of the said Edw. Labbe, if he was not purchasing it, to have conveyed to his old time friend and former partner the facts so that said Skeen could have protected himself. We are persuaded that Skeen sold the material to said Labbe as president of the Wilhoit Springs Mineral Water Company, which has received all the benefits of the material so furnished and has never paid for them.

It is also claimed by the appellant Wilhoit Springs Mineral Water Company that the lien filed by the defendant Skeen was not filed within thirty days after the completion of the buildings in which said material was used. The record shows, however, that the last item furnished by said Robert Skeen was within thirty days of the filing of his lien. It is stipulated in the record that the material, though used in different structures, was furnished under one contract, and that the several structures constituted but one enterprise and that it was necessary for the convenient use of the structures for the purpose for which they were erected that the entire tract of 300 acres should be sold. In addition to the foregoing considerations the work undertaken by defendants Poore et al. and Wilhoit Springs Mineral Water Co. was not completed. Defendant Skeen had until thirty days after the completion of the work in which to file his notice of lien: Wills v. Zanello, 59 Or. 291 (117 P. 291);Tait et al. v. Stryker et al., 117 Or. 338 (243 P. 104).

The objections to the lien of defendant Finnigan Williams, Inc., are three. First, that the lien was not filed within thirty days of the substantial completion of the work. It is claimed that the work was substantially completed on the opening day, to wit: June 12, 1921, or not later than July 10, 1921. The lien was not filed until August 23, 1921. The record, however, shows that the work was not completed when the premises were taken over by the creditors, to wit: August 18, 1921. The testimony convinces us that the work never was completed. It was interrupted by the creditors as aforesaid. Materialmen and laborers may file a lien against a structure at any time within thirty days after claimant ceases to work or deliver the material, or within thirty days after the completion of the entire work: Wills v. Zanello, 59 Or. 291 (117 P. 291);Tait et al. v. Stryker et al., 117 Or. 338 (243 P. 104). It is our opinion that the lien was filed in time.

Second, Finnigan Williams, Inc. is not entitled to the lien for labor for the reason that under the circumstances the laborers were the employees of the lessees, and Finnigan Williams, Inc. is not a contractor or a laborer under the statute. The evidence shows that the labor done for which defendant Finnigan Williams, Inc. claims the lien was performed by its own employees. It has been ruled by this court that a corporation, firm or person supplying material and labor is entitled to a lien for the labor supplied as well as the material: Christman v. Salway et al., 103 Or. 666 (205 P. 541).

Third, Finnigan Williams, Inc. is not entitled to a lien for the materials furnished for it did not deliver or mail the statutory five-day written notice within five days after it had commenced to deliver materials and might file a lien therefor. The evidence convinces us that a notice was mailed on May 31, 1921, addressed to the appellant Wilhoit Springs Mineral Water Company, Labbe Bldg., Portland, Oregon. Finnigan Williams, Inc. claim a lien for all material furnished after five days prior to the last-named date. It is contended that the address of the defendant Wilhoit Springs Mineral Water Company was not in the Labbe Building but in the Gasco Building. The name Wilhoit Springs Mineral Water Company did not appear in the Portland directory for the years 1919, 1920 and 1921, but it did appear in the directory for 1917 and 1918, and it is there given as the Labbe Building. The defendant Wilhoit Springs Mineral Water Company knew that the construction work was being carried on. Indeed, their lease with Poore and others required that it be done. The president of the Wilhoit Springs Mineral Water Company, Mr. Edward Labbe, went to the defendant Skeen and requested him to furnish the material due certain work in those improvements.

A liberal construction of the statute should be made for the purpose of protecting those who furnish material and labor for improvements, particularly where the owner of the freehold received the benefit of such improvements for which he has not paid. That is the case here. We think there is sufficient showing of the mailing of the notice to comply with the statute. There is no evidence of bad faith on the part of claimant in directing the notice as it did.

It is also contended that the notice was mailed by an interested party, to wit: the secretary of the corporation Finnigan Williams, Inc. It is claimed in this connection that Sections 539 and 541, Or. L., require the notice to be served by a disinterested party. These sections are a part of the Code of Civil Procedure and have no application to the notice required under Section 10191, Or. L. This section required the claimant to give the notice.

It is also claimed that since the notice was not given within five days after the delivery of the first material, that the defendant Finnigan Williams, Inc. waived its right to claim a lien. That corporation began furnishing material in April and did not give the notice until May 31st. It claims, however, a lien upon the material furnished only from May 26th, five days prior to the date the notice was mailed. It would be too strict a construction of the statute to hold that because notice was not given within five days after the first delivery of the material that the lien claimant could not recover for material furnished within five days and after the notice was given. We think the more reasonable construction of the statute was adopted by the learned Circuit Court in allowing the lien. By not giving the notice required by statute within five days after the first delivery of material, the claimant waived its lien for all material so furnished until within five days of the time when notice was given: Columbia River Door Co. v. Todd, 90 Or. 147 (175 P. 443, 860).

We think the equities are all in favor of defendants, Robert Skeen and Finnigan Williams, Inc. They furnished the material and performed the labor for making the improvements on land owned by the defendant Wilhoit Springs Mineral Water Company. By the terms of the lease between that corporation and H.D. Poore and others, the lessees were required to make the improvements. This provision in the lease constituted the lessees agents of the owner, the defendant Wilhoit Springs Mineral Water Company, for the purpose of constructing the improvements:Oregon Lumber Fuel Co. v. Nolan, 75 Or. 69 (143 P. 935, 146 P. 474). The owner knew that the improvements were to be made and received the full benefits thereof without paying for the same. There is no claim that the owner posted the notice required by Section 10194, Or. L. These conclusions require the affirmance of the decree, and it is so ordered.

AFFIRMED. MODIFIED AS PER STIPULATION.

McBRIDE, C.J., and BEAN and RAND, JJ., concur.