Real Estate & Improvement Co. v. William Phillips & Sons

The appellees are dealers in lumber. They furnished labor and building materials for a building which was erected at Brunswick in Frederick County, Maryland, by Calvin A. Johns and Anthony E. Lechler and their assignees under an agreement in writing with the Real Estate and Improvement Company of Baltimore then the owner of the ground on which the building was to be erected. By the terms of this agreement Johns and Lechler were to complete the building in accordance with certain plans and specifications, and to furnish the employees of the B. O.R. R Co. with certain accommodations at stipulated prices. In consideration whereof the Improvement Company agreed to convey the property to them in fee-simple upon the completion of the building. Johns and Lechler commenced the building and during the month of October, 1890, the appellees furnished materials to the value of $566.73 which were used in the structure. It is for these materials that the appellees filed their mechanics' lien claim on the 26th of January 1891. On the 1st of February, subsequent to the filing of this claim, Johns and Lechler assigned all their rights and interests under their agreement with the Improvement Company to C.S. Chase, and he on June 22nd assigned all his rights under the original contract to Milton V. Richards, each in their turn agreeing to assume all the obligations of the original contract as well as the liabilities of their predecessor in title. On the next day the Improvement Company conveyed in fee to Richards the lots on which the building had in the meantime been erected, and on February 4th, 1896, Richards conveyed the property to the Improvement Company with the hotel building completed.

It is conceded that the materials for which the claim was filed, were furnished for and used in the hotel building, and that if the lien-claim be valid it attaches to the equitable interest of Johns and Lechler, which was created by their contract with the Improvement Company — which equitable interest has by several assignments vested in that company. We have said that the lien claim of the appellees was filed on the 26th of January 1891. As then filed, Calvin A. Johns was described as contractor or builder and the B. O.R.R. Co. as owner or reputed owner. On the 5th of January 1892, the appellees filed their bill in the Circuit Court for Frederick County against Johns, the B. O.R.R. Co. and Richards to enforce their lien claim. Richards is the only defendant who answered. Testimony was taken, and it was discovered that a mistake had been made in the preparation of the claim, and that instead of Johns being, as he was therein called, a contractor or builder, he and Lechler were the equitable owners of the property as well as the builders. The appellees made known this state of facts to the Court by a petition asking leave to amend, which was granted, and the amendment was accordingly made more than six months after the expiration of the period during which the original claim could have been filed. A decree was passed by the Court below establishing the lien-claim of the appellees. From this decree the Improvement Company has appealed.

Upon the facts of the case it must be conceded that if the lien-claim as amended is valid, that is to say, if the Court below had power to allow the amendment in question, the decree must be affirmed. And this result must follow because the materials were furnished for and used in the building, and the claim was filed within the time prescribed by statute. But the contention is that the claim as originally filed is one falling under sec. 11, Art. 63, of the Code, which provides that if the contract for work or materials is made with any person except the owner, the person so furnishing materials shall not have a lien, unless within sixty days he shall give notice in writing to such owner of his intention to claim the lien. And in another section of the same Article it is provided that the claim, when the materials are furnished to a contractor, shall set forth the name of the claimant and of the owner or reputed owner. It is conceded that no notice was given, and it is clear that if the amendment which was allowed by the Court is effective, no such notice was necessary — for the evident reason, that if Johns and Lechler were both builders and owners this would not be a case within sec. II, of Art. 63, requiring such notice to be given. The main and controlling question in the case, therefore, is whether the amendment allowed in this case is within the terms of our statute (Code, Art. 63, § 41), which is as follows: "This article shall be construed and have the same effect as laws which give general jurisdiction or are remedial in their nature, and such amendments shall from time to time and at any time be made in the proceedings, commencing with theclaim or lien to be filed, and extending to all subsequentproceedings, as may be necessary and proper; provided that the amount of the claim or lien filed shall not in any case be enlarged." It is difficult to imagine any more extensive power of amendment than that conferred by the section just quoted. One and only one limitation appears to be placed upon it — namely — "the amount of the claim or lien filed shall not in any case be enlarged." It is true we have held that because proceedings to enforce a mechanics' lien are proceedings in rem, an amendment will not be allowed altering the description of the property after the time within which, under the statute, the claim can be filed. But evidently this view is based upon the theory that the alteration of the description of the rem makes in effect anew claim. Gault v. Wittman, 34 Md. 35. If the lienor by mistake designates and describes the property to which his lien is to attach as located on the south side of a certain street, when in point of fact the house which is built with materials furnished by him is on the north side of that street, it is clear that if such a mistake could be corrected by amendment after the expiration of the statutory period of six months, the practical result would be the filing of a new claim after the time within which it is conceded it cannot be filed. But it does not appear to us that there is any such difficulty in respect to the amendment allowed in this case. Can it be possible that the statute itself having given the lienor the right to use either, the name of the owner or the name of the reputed owner, he should, especially in a Court of Equity, and under the provisions of a statute to be construed as a statute remedial in its nature, be punished by a forfeiture of his claim, because and only because he has used the latter instead of the former? He is not required, as against the owner whose interest he wishes to subject to his claim, to search the records to ascertain who holds the legal title. He may file his claim against the reputed owner, so says the statute, and it certainly would be going very far to say that he may not from "time to time and at any time" amend the claim by inserting the name of the real in the place of the reputed owner. That this can and should be allowed where the interests of third parties are not injuriously affected we have no doubt. The case ofLenderking v. Rosenthal, 63 Md. 30, was cited by appellant's counsel to sustain the proposition that material-men are bound to inquire as to the title, and that, therefore, it would be inequitable to allow such an amendment as this, because, inasmuch as the recorded lien-claims are indexed in the name of the owner, such name should no more be allowed to be changed than the description of the property — otherwise the records could not be relied on. But the decision of the case just cited was based not upon the fact that the material-men had a right to rely upon the public record of the claims, but it based upon sec. 9, Art. 63, which by its very terms provided that when materials are furnished to a lessee, the lien attaches to his interest only — and that, therefore, the material-man is bound to know the nature and extent of the lessee's interest — not, however, because the land records are supposed to supply the necessary information — for the result is the same so far as the material-man is concerned whether the interest of the lessee be a legal leasehold title under a lease duly recorded or under a contract for a lease not recorded and not required to be recorded.Lenderking v. Rosenthal, supra.

It will be observed that the effect of the amendment was to substitute Johns and Lechler in the place of the B. O.R.R. Co. as owner. In other words in the amended claim Johns and Lechler are described as both owners and builders.

Section 41, Art. 63, relating to amendments of mechanic's lien-claim which we are here considering, has heretofore been considered by this Court. In Blake v. Pitcher Wilson, 46 Md., 464, it is said that "the spirit in which the Mechanic's Lien Law is to be interpreted, had been prescribed by the Legislature and impressed in such strong terms upon its face that no Court can mistake its meaning." It is to be construed in the most liberal and comprehensive manner in favor of mechanics and material-men. See also Treusch v. Shryock,55 Md. 332; Rust v. Chisolm, 57 Md. 379 and other cases not necessary now to cite. In the case of Thomas v. Barker,10 Md. 380; Wehr et al. v. Shryock, 55 Md. 336, and some others relied on by the appellant, this Court dealt with the cases as presented — no question as to the right of amendment having been considered — the lienor having failed to amend his claim so as make it accord with the facts of the case. But in the case ofKnox v. Hilty, 118 Pa. St. 430, and other cases to the same effect so much relied on by the appellant, it was held that there was nothing in the Pennsylvania Statute "which in the least degree gives sanction to the idea that any person may be thus introduced, against whom no right to file a claim existed when the amendment was made." In the case just cited the Supreme Court of Pennsylvania say that independently of the view expressed in the quotation just made from its opinion, their statute provides that the amendments are to be allowed for the purpose of attaining justice and a fair trial on the merits. "If," say the Court, "the amendments are to conduce to a fair trial, they would have to be made either before or at the time of the trial — not long after the trial was finished, judgment entered and execution issued." While it is not necessary for us in this case to hold that the right given by our statute to amend the lien-claim and all subsequent proceedings extends beyond the time when judgment or decree has been entered, yet, as we have seen, this Court inRust v. Chisolm, supra, practically so held by remanding that case so that the account or bill of particulars of materials furnished might be amended. We are unwilling, however, to be bound by the restricted construction placed upon the Pennsylvania and other statutes allowing amendments in mechanics' liens and proceedings to enforce them, for we must be governed by thebroad language of onr own statute — especially in a case where, as here, the interests of third parties, bona fide purchasers without notice, are in no way prejudiced. That such is the situation in this case is apparent from the evidence. As is said by the learned Judge who delivered the opinion in the Court below: "It made no difference that the B. O.R.R. Co., was stated to be the owner or reputed owner of the property. Neither the Real Estate and Improvement Company nor Richards was misled by the statement. Both knew the exact situation and both are chargeable with knowledge that a lien had been recorded against the interest of Johns and Lechler." As we have already intimated we are now dealing with the case before us and not with the case in which the interest of bona fide purchasers without notice are involved.

In conclusion, it is necessary to say only a few words in reply to the contention that the materials having been furnished to Johns, and not to Johns and Lechler, Lechler was not a party to the contract, and that he cannot, therefore, be made a party to this proceeding for enforcing the lien and that his interest in the property cannot be reached. It is true that according to the evidence of the appellee's witnesses the contract for materials furnished was made with Johns alone, yet the evidence afforded by the contract under which the work was done and that of the witness Richards shows Johns and Lechler were joint contractors or partners with equal rights and liabilities, and that according to the assignments under which Johns conveyed his interests they are described as partners doing business under the name of Johns and Lechler. Under these circumstances Lechler certainly would not be allowed by a Court of Equity, even if he wished, to repudiate the contract for materials which had been furnished to his co-contractor or partner Johns. Such a course would enable Lechler to perpetrate a fraud upon the material-men. In the case of Weber v. Weatherby, 34 Md. 661, there was not even a joint contract, nor a partnership, and yet this Court held that articles furnished to one who had a contract with the owner to purchase the property should, when the sale was not effected, and the owner retained the house with the articles in it, the articles having been furnished with his knowledge, be considered as the agent of the purchaser of the articles. "To allow him (the owner of the house) to repudiate the transaction would enable him * * * to perpetrate a fraud upon the mechanic or person, furnishing materials and to appropriate the property of others to his benefit." In this case, however, it is not Lechler who is trying to repudiate the contract made by Johns; but it is the appellant, the present owner of the property, who, being a party to the joint contract between Johns and Lechler, under which the work was done, was familiar with the latter's relations to Johns and the property in question, and therefore stands in no better position than Lechler does. Neither of them would be allowed to repudiate the contract and acts of Johns, if by so doing the property of the appellees would be appropriated without compensation.

Decree affirmed.

(Decided January 11th, 1900).