Spaeth v. Becktell

This is a suit to foreclose a mechanic's lien on the hotel property known as the La Grande hotel, brought by the plaintiff, as original contractor, against the original owners, W.C. Becktell and wife, who made the contract, and a mortgagee, whose mortgage was made and recorded after the commencement of the construction of the building. Defendants Becktell, the owners of the property, at the time they made the contract with plaintiff, and at the time the lien was filed, were personally served with summons and complaint, but defaulted. The original mortgagee answered by general denial. The circuit court rendered a decree in favor of the plaintiff in the sum of $1,656.47, with interest, expenses of recording lien, and attorney's fees. Defendant Howard H. Hansen, supervisor of banking of the state of Washington, substituted for the Spokane Savings and Loan Society, a corporation, appealed.

Appellant contends, in effect, that the evidence conclusively establishes the fact that there was no contract as pleaded in the complaint or testified to; that the evidence establishes the fact that the work and labor performed by plaintiff consisted of isolated, separate and distinct contracts and that these contracts can not be tacked together in order to enlarge the time for filing a lien; that the lien notice includes nonlienable items and is void; that there never was a seven-day notice given.

The general description of articles in the lien notice, furnished and installed, is as follows:

1 Ideal water tube boiler, S2906-7B 1 Dunham return trap, 9A 1 Dunham air eliminator and all pipe and fittings in connection therewith. 1 No. 5 "Iron Fireman" automatic coal burner, Type K, Form U, Serial 1693. 1 galvanized iron smokestack.

The items in the lien notice allowed by the court, after deducting those disallowed, were listed as follows:

La Grande, Oregon, Nov. 26, 1928.

Mr. W.C. Bechtel, On account with Fred Spaeth. To property purchased and/or labor performed Oct. 21, 1927 $1500.00 Property purchased and/or labor performed Nov. 21, 1927 11.12 ________ 1511.12 Less payment on Nov. 21, 1927 750.00 ________ Balance due Nov. 21, 1927 761.12 Property purchased and/or labor performed 12-28-27 7.50 Property purchased and/or labor performed 1-20-28 69.90 Property purchased and/or labor performed 4-2-28 52.70 Property purchased and/or labor performed 4-30-28 861.50 Property purchased and/or labor performed 5-26-28 78.00 ________ Total due on Aug. 15, 1928 1830.72

Property furnished and/or labor performed (transferred from hotel by direction of W.C. Bechtel) 44.50 Oct. 27, 1928, Furnishing and installing galvanized iron smokestack 81.25 ________ 1956.47 Payments made since notice filed 300.00 ________ Total due $1656.47

The evidence showed there was a contract between Spaeth and Becktell to furnish all the extras and fulfill all the requirements that might develop during the construction of the building, necessary to make the building operate satisfactorily. Mr. Spaeth testified that Mr. Becktell said to him: "`Well, you are going to do the plumbing and heating for me.' He says, `I want a local man to do that work, and I have made up my mind you are going to do the work'." Spaeth testified that he accepted the offer and told Becktell he would gladly do the work according to their agreement or contract until the building was completed and satisfactory, at the prevailing prices at the time the work was done.

The plaintiff proved the furnishing of the materials and labor, the filing and recording of a mechanic's lien, a contract and specific listing by dates and amounts, the various items claimed, and the reasonable value or contract price of each, and, also, that the claim has not been paid except as to the amounts credited. Becktell admits the allegation in regard to notice, as alleged in the complaint. While the defendant and appellant criticises the wording of the notice, we think it was a substantial compliance with the statute and sufficient.

The appellant contends that the contract between Spaeth and Becktell for furnishing materials and performing labor in May, 1927, did not contain all of the specifications as to what work would be required, and that it is not sufficient. The contract, in substance, was that Spaeth should do all the work necessary to the full completion of the building after the other contract, which did not involve all of the work, was completed.

The item "Property purchased and/or labor performed, 11-5-27, $265.40", which referred to some work done on the parking, or connecting the building with the street, was held by the circuit court to be nonlienable and was deducted from the amount of the claim of lien; also the interest on all the items was deducted. In view of the fact that plaintiff has not appealed, this item needs no further consideration. It is separate and distinct from the other items and easily segregated therefrom. No lumping charge was contained in the lien.

The work was all done and the materials were furnished under an entire continuing contract or understanding, although at different times. Therefore, a lien claimed or statement filed within the statutory period after the last item was done or furnished, is sufficient as to all the items. The same rule is applicable where all of the items furnished are parts of one continuous or connected transaction or continuous running account. In order that the requisite continuity may exist, it is not necessary that all the work or material should be ordered at one time, or that the amount of work or quantity of material should be determined at the time of the first order or that the price should be then agreed upon or that the time of payment fixed. It is sufficient if the last item of labor or material is furnished in pursuance of the mere general arrangement to furnish labor or materials for a particular building or employment, or an agreement or understanding that further labor or material will be required and furnished: 40 C.J. 198, § 236; Bernard v. Hassan, 60 Or. 62, 64 (118 P. 201).

At the time that Mr. Becktell made the contract with Spaeth for doing the work, he did not know just what he would do as to all of the work. It is not necessary that the contract under which materials are furnished and labor performed should be of such a nature that the parties could have it enforced by specific performance or that either party would be required to answer in damages for the failure to comply with the contract. Where the parties have performed the contract, it becomes an executed contract and not an executory one, and the lack of mutuality is removed: 13 C.J. 334, § 181; Mid-Co Supply Co. v. CentralTorpedo Co., 127 Okla. 273 (260 P. 753); Joplin Sash Door Co.v. Oklahoma Presbyterian College, 36 Okla. 547 (129 P. 40,43 L.R.A. (N.S.) 158); Hot Springs Plumbing Heating Co. v.Wallace, 38 N.M. 3 (27 P.2d 984, 988); 1 Williston on Contracts, pp. 81 and 82, § 49, note 54.

Although the building was nearly completed and a portion of the heating and plumbing done at the time of his contract, yet Spaeth was an original contractor within the meaning of section 51-101, Oregon Code 1930: Stark-Davis v. Lansdon, 125 Or. 89 (265 P. 792); Shea v. Graves, 142 Or. 503 (19 P.2d 406). The fact that the building was occupied during the time a portion of the work was performed does not change the matter.

Spaeth testified that Becktell had planned for a beauty parlor, but did not know just exactly where; that he could place the beauty parlor where he thought best during the completion of the building; that the beauty parlor lavatory was discussed, but not the particular place; that at the time the verbal contract was made at the beginning, there was also discussed the second boiler and a stoker for the second boiler; that there was no stoker specified in the general contract for the heating and plumbing, which was awarded to the Alaska Plumbing Heating Company, and that they agreed upon an Iron Fireman automatic coal burner, and the price was fixed at $1,500. It appears that afterwards, in order for Mr. Spaeth to obtain this Iron Fireman, an order was taken from Mr. Becktell for the same. This is termed by appellant as a new contract. It did not detract in the least from the original arrangement, but was simply as a basis for ordering the fireman from the seller to Spaeth. Mr. Becktell testified that he said to Spaeth:

"I want to assure you, Mr. Spaeth, that anything in the future that I will need in the hotel there, I will be more than glad to have you supply, and I want to tell you now, regardless of your losing the contract, I want to offer you any additional work, that goes to complete the hotel as a building."

Becktell was asked whether he entered into such a contract, specifying each article, and he testified "that is all correct with the exception of the dates" about which he was not certain.

In De Young v. Crooks, 124 Or. 19 (263 P. 918), the court said:

"Plaintiffs claim $329.34 for extra labor and materials; we are of the opinion that this sum should be reduced to $311.01. The defendants contend that the plaintiffs cannot recover this sum due to the condition of the pleadings. The complaint alleges that the compensation to be paid by the defendants for the extra items was agreed upon. An itemized statement of the extra items is set forth in the complaint with the actual charges made therefor. The testimony does not show that before the items were installed the plaintiffs and defendants met and agreed upon the amount. Upon the other hand, the testimony indicates that the defendants signified the extra items they desired, and requested the plaintiffs to supply the necessary labor and materials. The specifications which became a part of the contract contemplated that the defendants might desire some extra items. * * * The plaintiffs charged the defendants actual cost, plus fifteen per cent for supervision. Defendants contend that where an express contract is alleged a party cannot recover upon an implied one; * * *"

As the written contract in that case recognized the fact that some minor changes might be desired, and therefore bound the contractor to make these changes on the requisition of the owner, it was held that the extra items desired were agreed upon, and the parties agreed that the defendants should pay for the actual cost, that the contract made provision for a percentage, and that the pleadings were sufficient to warrant a recovery under the proof.

The instant case is not one where trifling items of material and labor were furnished after the contract was actually completed. The last item of October 27, 1928, for furnishing and installing galvanized iron smokestack, $81.25, was as much a part of the construction of the building as the foundation itself. True, Becktell may not have known that he would be compelled to extend the smokestack, but, if he did, he had contracted with Spaeth to do the work.

Appellant claims that in order for the doctrine of continued contract or running account to be applied, labor or materials must be furnished pursuant to a single contract, agreement or understanding, or must relate to one continuous job, such as the construction of a building. Taking this statement, we think the testimony plainly shows that the materials were furnished and labor performed pursuant to an agreement and understanding and relates to one continuous job, namely, that of the completion of the construction of the building by completing the heating and plumbing.

Again, appellant refers to the case of Harrisburg Lumber Co.v. Washburn, 29 Or. 150, 165 (44 P. 390), as pertaining to the nonlienable items, a case where the materials furnished were found to be 1,260 feet of lumber to be used in a sidewalk, the price of the lumber being given as $9.50 per thousand, and, the quantity and value being apparent from the notice, it did not depend upon oral evidence. The notice did not contain a lumping charge; hence the items of lumber furnished, to be used in building a sidewalk, did not invalidate the lien.

So here, the notice of lien contains a separate item for work in connection with the sidewalk or parking and is not connected in any way with the other items and is easily segregated. There was no lumping charge contained in the notice of lien in the present case, and this item did not invalidate the lien. The same may be said in regard to items charged for interest. The rule is well established in Johnson v. Alm, 121 Or. 285 (254 P. 803), that where a claim included both lienable and nonlienable items and where they are joined together in a lumping charge, without any segregation, the whole lien becomes void.

A lien is not defeated by the inclusion in the lien claim, or statement of charges, of items which are not lienable, such as materials which are used in building or improvement where the inclusion of such charge is due to inadvertence or honest mistake, without fraudulent intent, and the items for which claimant is entitled to a lien can be segregated from those which are properly included. In such case the illegal charges will be eliminated and the lien will be enforced as to the proper and lienable charges: Allen v.Elwert, 29 Or. 428 (44 P. 823); Title Guaranty Co. v. Wrenn,35 Or. 62 (56 P. 271, 76 Am. St. Rep. 454); West Side Lbr. S.Co. v. Herald, 64 Or. 210 (129 P. 1006, Ann. Cas. 1914D, 876);Northwest Lbr. Fuel Co. v. Plantz, 126 Or. 69, 73 (227 P. 1116, 268 P. 763).

As bearing on the case, see, also, Eastern Western Lbr. Co.v. Williams, 129 Or. 1 (276 P. 257); Bartels v. McCullough,102 Or. 66 (210 P. 733).

The plaintiff acted in good faith in filing his lien, and there is no fraud in connection with the item disallowed by the trial court.

The decree of the circuit court should be affirmed.