Billings v. Missoula W.P. Sash Co.

Plaintiff was not entitled to a lien. He was a contractor, and undertook to haul the lumber at so much per thousand feet, depending upon the profit made for his compensation. So far as the record shows, he performed no labor himself. This precise question has been passed upon in the case of Jackson v.Downs, (Tex.) 149 S.W. 286, where it was held that a contractor, such as the plaintiff in this case, had no such lien, but that the same was a lien given for the benefit of the workers who by their labor take part in the manufacture of the lumber. This theory of the law is supported by the Oregon case ofFirst Nat. Bank of Union v. Wegener, 94 Or. 318,181 P. 990, 186 P. 41 It also finds support in the recent case ofWeeks v. Seale, 143 Miss. 222, 108 So. 505, which holds that there is no lien for teams furnished for hauling. (17 R.C.L. 1118.)

In the next place, the plaintiff is not within the provisions of the lien law, assuming it applies to contractors or subcontractors, for the reason that he was not in any way engaged in the manufacture of the lumber. It was his duty to take the finished product and haul the same to the place where it was to be partly piled and partly loaded upon board cars. He was no more engaged in the manufacture of that lumber than were the members of the train crew who hauled it to Missoula. The process of manufacture was over. This question was squarely decided inRyan v. Guilfoil, 13 Wash. 373, 43 P. 351. (See, also,McGeorge v. Stanton-DeLong Lumber Co., 131 Wis. 7,110 N.W. 788; Hogsed v. Gloucester Lumber Co., 170 N.C. 529,87 S.E. 337; Stout Lumber Co. v. Green, 173 Ark. 823, 293 S.W. 709.)

Again, the plaintiff obtained no lien in this case for the reason that the lien given by the statute exists only while the lumber remains at the mill where it is manufactured or under the control of the manufacturer. In this case, there can be no question but that the manufacturer of the lumber was Garnett. A manufacturer is defined as "One who by labor, art or skill transforms raw material into some kind of a finished product or article of trade." (Graff v. Minnesota Rock Co., 147 Minn. 58,179 N.W. 562.) All of the statutes upon this subject are similar to ours, and the cases all hold that no lien attaches when the lumber is out of the possession or control of the manufacturer. (Akers v. Lord, 67 Wash. 179, 121 P. 51;Forsberg v. Lundgren, 64 Wash. 427, 117 P. 244; Douglass v. F.R. Woodbury Lumber Co., 101 Wash. 668, 172 P. 906; Alderson v. Lee, 52 Or. 92, 96 P. 234; FirstNat. Bank of Union v. Wegener, supra.)

Finally, we submit that the plaintiff is not entitled to a lien because he is precluded from having one by the terms of his contract, which is entirely inconsistent with any idea of a lien. It is not strictly correct to say that the plaintiff has waived his lien, as it is more accurate to say that the contract precludes him from having it in the first place. We refer to the provisions of the contract to the effect that the lumber is to be delivered by the plaintiff either on board cars or in piles at Grantsdale, for shipment to Missoula, to be there checked and paid for by the defendant company. The plaintiff when he started operations under his contract had in mind that the lumber was to be delivered to the White Pine Company, and that he was to get his payment after the lumber had been checked by that company. Certainly it would not be contended by the plaintiff that his lien continued to attach to the lumber after it was placed on board the cars and after it reached Missoula and the plant of the defendant company. That company was not the manufacturer, but the owner. It occupied the same position as a purchaser, and the agreement of the plaintiff, which authorized the surrender of possession to that company and the loss of control by himself or by the manufacturer, and provided for payment to be made after receipt and checking at Missoula, was clearly inconsistent with any claim of a lien. (17 R.C.L. 1115; Anderson v. Tingley,24 Wash. 537, 85 Am. St. Rep. 959, 64 P. 747; Rhodes v. Hinds,79 A.D. 379, 79 N.Y. Supp. 437.) It is contended by counsel for appellants that no lien existed by reason of the character and nature of the work which the plaintiff performed. This contention is based on the fact that the plaintiff contracted to haul and pile this lumber at so much per thousand feet; that being a contractor, he was not a laborer and therefore had no lien. The authorities cited by counsel relate to statutes and situations entirely different from those to be found in this case. The case of First Nat. Bank ofUnion v. Wegener, 94 Or. 318, 181 P. 990, 186 P. 41, has not the remotest connection with anything involved in this case and was decided under a different state of facts, and indeed under a different statute. The case of Weeks v. Seale,143 Miss. 222, 108 So. 505, is also a different situation, for that involved only the right of a person who owned teams and let them out for hire to claim a lien. The discussion in Ruling Case Law relates to a situation arising under statutes different from that which we have in this case. The statutes alluded to in the cases referred to are statutes which make reference specifically to laborers and which do not provide, as does our statute, that every person performing work or labor or assisting in manufacturing sawlogs and other timber into lumber and shingles has a lien upon such lumber, etc. (See McDonald-Weist LoggingCo. v. Cobb, 278 Fed. 167, 169.)

A statute which is more comparable with the Montana statute is referred to in Weissenfels v. Schaffer, 99 Or. 228,195 P. 362, where it is held that one who hauled cordwood with his team was one who assisted in obtaining or securing cordwood, and that such person had a right of lien for his services with his team.

There cannot be any question that one who did the work which plaintiff performed in this case is one who assisted in manufacturing sawlogs and other timber into lumber and shingles. Reference is made to the case of McDonald-Weist Logging Co. v.Cobb, supra, holding that a corporation may have a lien in a case of this character; the case of Phillips v. Freyer,80 Mich. 254, 45 N.W. 81, awarding a lien to a sawmill owner, that of Carver v. Bagley, 79 Minn. 114, 81 N.W. 757, holding that contractors are included within the purview of a statute of this kind, and also the following cases: Hogan v. O'Neill,49 Wis. 169, 5 N.W. 490; Martin v. Wakefield, 42 Minn. 176, 6 L.R.A. 362, 43 N.W. 966.

It is next contended that plaintiff is not entitled to a lien because he was not engaged in the manufacture of the lumber. It is submitted that upon this point counsel for appellant have mistaken both the law and the facts. The facts are that when this lumber came from the saws there was no place to pile it or deposit it at the mill. Accordingly it was necessary to haul it to the yard at the Grantsdale spur before it could be put in piles. Anyone who has witnessed sawmill operations knows that one of the processes in the manufacture of lumber is the piling of the lumber in the yards. In most cases the lumber is piled in a yard in the vicinity of the mill. In this case that was impossible, but the piling of the lumber was nevertheless an important process in the manufacture. Again counsel overlooked the facts for the reason that here the process of manufacture was carried on both at the Blacktail siding and at Missoula. The lumber as it came from the saws of Garnett was still rough lumber and remained to be planed, as well as dried, and in this entire process of manufacture it was necessary that it be transported from the mill to the yard at Grantsdale, and in carrying out that process plaintiff was just as much engaged in the manufacture of the lumber as the man who pushed the logs through the saws, or took the lumber from the saws and put it upon the rolls, or who again ran the lumber through the planer and carried out the completed process of manufacture.

When these facts are borne in mind the case relied upon by counsel, Ryan v. Guilfoil, 13 Wash. 373, 43 P. 351, is obviously not in point. The court which decided that case refused to follow it in the cases of O'Brien v. Perfection Pile P.Co., 49 Wash. 395, 95 P. 489, and of Forsberg v. Lundgren,64 Wash. 427, 117 P. 244. In the case of Hogsed v.Gloucester Lumber Co., 170 N.C. 529, 87 S.E. 337, a conclusion that the men on a log train hauling logs to the mill had no lien would obviously not be followed in a jurisdiction having a statute such as ours. (See Robins v. Paulson, 30 Wash. 459,70 P. 1113.) The case of Stout Lumber Co. v. Green,173 Ark. 823, 293 S.W. 709, is a case arising under the rules of the common law and was decided without reference to any statute.

Again it is contended that plaintiff obtained no lien for the reason that the lumber upon which the lien was sought to be imposed had left the control of the manufacturer. The fact that the manufacturer, the Missoula White Pine Sash Company, employed contractors to get out the logs and to saw them into lumber does not affect the right of the plaintiff to a lien, for section 8319, Revised Codes 1921, provides that one who assists in manufacturing sawlogs into lumber and shingles has a lien upon the lumber while the same remains in the possession of or under the control of the manufacturer, whether such work or labor was done at the instance of the owner of such logs or any contractor or subcontractor of such owner. When we bear in mind that the sash company was the manufacturer, that it owned the logs from which the lumber was manufactured, that it owned the lumber when manufactured, that the process of manufacture was completed at its plant at Missoula, where the lumber was dried and planed, then all that counsel for appellants say on this point is beside the question, for the lien continues while the lumber remains in the possession or under the control of the manufacturer.

Cases cited by counsel for appellants are either cases where the lumber has been sold and marketed to some third person, or where a statute differing from ours limits the lien to the lumber while it is at the mill, and where there is no showing as in this and in the case of Abernathy v. Peterson, 38 Idaho, 727,225 P. 132, 135, that the lumber could not be piled in the immediate vicinity of the saws, but had to be hauled to a somewhat distant yard by reason of the character of the surrounding country and as a matter of physical necessity. They cite Anderson v. Tingley, 24 Wash. 537, 85 Am. St. Rep. 959, 64 P. 747, but that that case has no application to a situation of this kind is plainly pointed out by the recent Washington case of Wroten v. Robbins, 103 Wash. 393, 174 P. 968.

From what has been said it is clear that so long as the lumber hauled by plaintiff remained in the possession or under the control of the Missoula White Pine Sash Company, plaintiff's lien could not be lost. There is no agreement on his part that plaintiff would await payment beyond the time that this lumber should leave the possession or control of the sash company. On the contrary the agreement explicitly provided that he should be paid on the 15th of each month for all lumber hauled during the preceding calendar month. Plaintiff seeks recovery of the balance due him from defendant Garnett for hauling lumber from Garnett's mill, located at the mouth of Blackfoot Creek, to Grantsdale spur, in Ravalli county, from December 25, 1926, to March 5, 1927, and to establish and foreclose a lien against the lumber.

The complaint alleges that in 1926 the defendant Missoula White Pine Sash Company, a Washington corporation, hereinafter called a company, entered into a contract with defendant Garnett by the terms of which Garnett agreed to manufacture into lumber certain logs cut from timber belonging to the company and located in Ravalli county; that under the contract the company was to deliver the logs at the sawmill of Garnett, and, after they were sawed into lumber, Garnett was to haul and deliver it on board cars at Grantsdale spur or there pile it in the yards; thereafter, and on June 12, 1926, Garnett entered into a contract with plaintiff, whereby plaintiff agreed to haul the lumber from the mill and load it on cars or pile it at Grantsdale for $3 per thousand feet, payments to be made monthly on the fifteenth day of each month for the lumber hauled the preceding month.

It is alleged that between December 25, 1926, and March 5, 1927, plaintiff handled and delivered on cars and piled in the yards at Grantsdale approximately 1,340,000 feet of lumber for which he was entitled to $4,037.71, no part of which has been paid; that within thirty days after the completion of the work plaintiff filed his notice and claim of lien on the lumber.

The company answered by general denial, save that it admitted that the contract between it and Garnett was as alleged in the complaint. Garnett, by separate answer, admits the existence of the contracts as alleged in the complaint, and alleges that plaintiff has been paid in full for all lumber hauled by him under the contract between him and plaintiff. Issue was joined by a reply.

The court found for plaintiff and adjudged the claim a lien upon the lumber described in the complaint. Defendants have appealed from the judgment.

Defendants, before trial, demanded and were furnished a bill of particulars. The bill of particulars sets forth the amount of lumber hauled under the contract from its inception, and the cash payments made by Garnett to plaintiff. During the course of the trial, by agreement of the parties, plaintiff was permitted to introduce proof showing the total amount of lumber hauled by him under the contract from the time operations began thereunder in August, 1926, as well as all payments made thereon, in order to arrive at the balance due. By pursuing this method of proof, plaintiff introduced evidence in support of his bill of particulars from which it was shown that the amount alleged in the complaint is still due and unpaid.

The contract under which plaintiff hauled the lumber in question provided that he should be paid $3 per thousand feet, and "that the basis of payment shall be the check of the White Pine Sash Company of Missoula, Missoula county, Montana, as delivered by said company after receipt of each car of lumber shipped to it." It provided further that "payment shall be made on the fifteenth of each month for all lumber hauled and loaded, or piled, * * * during the preceding month."

Plaintiff, to prove the amount of lumber hauled by him, introduced evidence of the log scale of all logs cut and sawed during the period of the contract and added ten per cent as overrun which his witnesses testified would be the amount of overrun, taking into consideration the size of the logs and the dimensions of the lumber cut therefrom. Defendants objected to the testimony showing the overrun, and, at the conclusion of all of the evidence, defendant company moved for a directed verdict upon the ground that the proof of the amount of lumber hauled by plaintiff was not in conformity with the standard of measurement stipulated in the contract between the parties.

By several specifications of error the question is presented whether the evidence is sufficient to sustain the judgment. Specifically it is contended by defendants that there is no evidence showing the amount of lumber hauled by plaintiff measured as provided in the contract.

The effect of the stipulation in the contract that the basis[1, 2] of payment shall be the check of the White Pine Sash Company was to make that company the scaler for the purpose of determining the amount of lumber hauled by the plaintiff. The rule is that, where the parties have agreed upon a scaler to scale lumber or logs, they are bound by his scale in the absence of fraud, mathematical mistake, or other legal ground of relief. (38 C.J. 199; Bechard v. Amey, 82 N.H. 462, 136 A. 370;Hanscom v. North Anson Mfg. Co., 120 Me. 220, 113 A. 179;Gadell v. Michigan Iron, Land Lumber Co., 226 Mich. 482,198 N.W. 242; Anderson Lumber Co. v. Robinson,6 La. App. 460; Connecticut Valley Lumber Co. v. Stone, 212 Fed. 713, 129 C.C.A. 323.)

Plaintiff seeks to avoid the effect of the provision in the contract requiring basis of payment to be upon the scale of the Missoula White Pine Sash Company, by showing that the company never furnished him with a scale, and that a part of the lumber was shipped elsewhere than to Missoula. But the record shows that the company scaled the lumber in the yard each month before it was shipped, and, hence, if some was shipped elsewhere than to Missoula, it was of no importance. The company, it should be noted, had no contract with plaintiff and was under no obligation to furnish plaintiff with the scale of lumber hauled. Its obligation was discharged by furnishing the scale to Garnett. Plaintiff could have required production of the books of the company by subpoena duces tecum to show its scale, and thus established the amount of lumber hauled by him. The burden of proof of the amount of lumber hauled by plaintiff under the contract with Garnett not having been established by competent evidence, the judgment in plaintiff's favor cannot stand.

Ordinarily, in an equity case, this court may direct the entry of the proper judgment. (Sec. 8805, Rev. Codes 1921.) But we may not do so here, for the reason that there is no competent evidence in the record to show the amount of lumber hauled as scaled by the company.

There was evidence introduced by defendants, over plaintiff's objection, showing that the overrun on the lumber sawed under this contract was .0043 per cent. But this was in the nature of secondary evidence and was therefore incompetent. Under the circumstances, we think the cause should be remanded for another trial.

Defendant company contends that in no case is the plaintiff[3-5] entitled to a lien on the lumber. The lien is claimed by virtue of section 8319, Revised Codes 1921, which provides: "Every person performing work or labor, or assisting in manufacturing sawlogs and other timber into lumber and shingles, has a lien upon such lumber while the same remains at the mill where it was manufactured, or in the possession or under the control of the manufacturer, whether such work or labor was done at the instance of the owner of such logs or his agent, or any contractor or subcontractor of such owner. The term lumber, as used in this Act, shall be held and be construed to mean all logs or other timber sawed or split for use, including beams, joists, planks, boards, shingles, laths, staves, hoops, and every article of whatsoever nature or description manufactured from sawlogs or other timber."

The company contends that a person employed as plaintiff was here — to haul the lumber from the mill to Grantsdale spur — is not thereby "assisting in manufacturing sawlogs and other timber into lumber" within the meaning of the statute.

The statute creates a new right, and for one to secure its benefits he must show that he is within the class intended to be favored. (Lane v. Lane Potter Lumber Co., 40 Mont. 541,107 P. 898.) Unless plaintiff's evidence shows that his work or labor was that of assisting in manufacturing the logs or timber into lumber, he is not entitled to a lien on the lumber. It has been held, under statutes substantially the same as ours, that a claim for labor for hauling fence posts after they have been manufactured is not lienable. (Ryan v. Guilfoil, 13 Wash. 373,43 P. 351.) Plaintiff asserts that the Washington court refused to follow the Ryan Case in the later cases of O'Brien v. Perfection Pile Preserving Co., 49 Wash. 395, 95 P. 489, and Forsberg v. Lundgren, 64 Wash. 427, 117 P. 244. In theO'Brien Case the work consisted in hauling timber before it was cut into lumber, while in the Forsberg Case the lien claimants performed work in cutting railroad ties in the woods. In neither case was the lien claimed for work in hauling lumber after it was manufactured, and, hence, the court properly declined to apply the rule of the Ryan Case.

In Villenuve v. Sines, 92 Mich. 556, 52 N.W. 1007, 1008, the court had under consideration a statute giving a lien to "any person or persons who perform any labor or services in manufacturing lumber." The court, in holding that the statute does not give a lien for hauling lumber from the mill to the railroad for shipment, said: "The statute covers only labor or services in manufacturing lumber. * * * The manufacture was complete when the logs were sawed into lumber, and the lumber piled in the yard. The statute gives a lien for hauling logs, timber, etc., but does not include the hauling of the product into which logs and timber are manufactured." This decision was followed by the supreme court of Wisconsin in the case ofMcGeorge v. Stanton-DeLong Lumber Co., 131 Wis. 7,110 N.W. 788, where it was held that there is no lien for hauling manufactured lumber. To the same effect is Mitchell v. Page, 107 Me. 388, 78 A. 570.

Plaintiff attempts to avoid the force of these decisions by the assertion that a different rule obtains when it is made to appear, as here, that there is no place at the mill to pile the lumber. The only case that has been called to our attention where this circumstance existed is that of Abernathy v. Peterson,38 Idaho, 727, 225 P. 132, 135. In that case the statute provided for the lien on lumber "while the same remains at the mill where manufactured." The court held that the term "at the mill" would include a lumber-yard adjacent to the railroad where the lumber was hauled and piled. The question whether a claim for the work of hauling the lumber was lienable was not involved in that case because the hauling was alleged to have been done by the owners of the lumber.

It is worthy of note that the supreme court of Oregon held, inFirst National Bank of Union v. Wegener, 94 Or. 318,181 P. 990, 186 P. 41, that lumber cannot be said to be "at the mill" and subject to a lien when it has been hauled twelve miles from the yard where it was manufactured. In that case it does not appear whether there was room to pile the lumber at the place where sawed. But the question whether the lumber involved here is still "at the mill" when removed to the spur cannot arise under our statute, since a lienable claim remains so as long as the lumber is "in the possession or under the control of the manufacturer."

The difficulty here is that the plaintiff's claim is for work in hauling the manufactured lumber and is not for work performed in assisting in the manufacture of lumber. We think it cannot be said that the work of hauling the lumber to the Grantsdale spur had anything to do with the manufacture of the lumber. That work was done as a necessary part of the transportation of the lumber from the mill to the company's place of business in Missoula. If this claim is lienable, then a claim for hauling from the mill to Missoula would likewise have been lienable, and, if that be possible, then, had the company's place of business been in Minneapolis instead of in Missoula, a claim for services in transporting the lumber from the mill to Minneapolis would also be lienable. This cannot be so. The statute does not afford a lien for labor performed in the transportation or hauling of lumber.

Conceding that the claim for work in hauling the lumber to an accessible place for piling is lienable under our statute, there is nothing in the record to indicate that Grantsdale spur, which is twelve or fifteen miles from the mill, was the nearest place to the mill accessible for piling the lumber. If a claim for the work in hauling this lumber part of the way from the mill to the spur were properly lienable as a part of the manufacturing process, there is nothing in the record to indicate what part of the hauling was necessarily incident to getting the lumber away from the mill, and what part constituted a part of its transportation after manufacture. The rule is that, where a lien is claimed for the amount due for labor, part of which is lienable and part not, and where there is no proof from which the separation may be made with reasonable certainty, the entire claim for a lien must be denied. (McGeorge v. Stanton-DeLongLumber Co., supra; Mitchell v. Page, supra.)

The court erred in holding that the claim of plaintiff constitutes a lien upon the lumber hauled by him. Since the action must be again tried, other questions presented may be eliminated by asking and obtaining leave to amend the pleadings.

On cross-examination of plaintiff, as well as by defendants'[6] witnesses, defendants, over plaintiff's objection, were permitted to show that, while plaintiff was operating under the contract in question, his men were boarded by Garnett at a fixed price per meal, and that other items of merchandise were charged to plaintiff by Garnett, including slabs that plaintiff purchased from Garnett. The plaintiff thereupon showed that these credits were applied by him upon a prior indebtedness which he asserted existed in his favor against Garnett and which arose in 1924 and 1925, under different contracts than the one relied upon in the complaint.

It is contended by plaintiff that, without a special plea by defendant Garnett that full payment had been made to plaintiff, partly by cash and the balance by furnishing meals, slabs, and other items of credit, it was improper to receive evidence of such credits. We think this contention must be sustained. Under section 7429, Revised Codes 1921, performance of an obligation for the delivery of money only is called payment. In view of this statute an agreement to accept property, or something other than money, in satisfaction of an obligation must be specially pleaded. (Lappin v. Martin, 71 Mont. 233, 228 P. 763;Harrington v. Kempton, 54 S.D. 60, 222 N.W. 498.) Should defendant Garnett ask and obtain leave to amend the answer so as to plead payment by credits other than cash, plaintiff may then by appropriately amending his reply show that, in the absence of any particular application of the credits by Garnett, they were applied in payment of a prior indebtedness. (Sec. 7430, Rev. Codes 1921; Engi v. Hardell, 123 Wis. 407, 100 N.W. 1046.)

For the reasons stated, the judgment is reversed and the cause remanded for a new trial as to defendant Garnett; as to the company, the action is ordered dismissed.

MR. CHIEF JUSTICE CALLAWAY and MR. JUSTICE FORD concur.

ASSOCIATE JUSTICES MATTHEWS and GALEN, being absent, did not hear the argument and take no part in the foregoing decision.