Myers v. Strowbridge Estate Co.

Mr. Justice Bean delivered the opinion of the court. The Strowbridge Estate in its answer to the lien claimants maintains that its property is not subject to — 38 — liens for the debts of the Market Company, the lessee, for the following reasons: “(1) The lien claimants knew of the provisions of the lease exempting the property from liens. (2) Owner’s property is exempted from liens by the notices of nonliability and the knowledge conveyed thereby to lien claimants prior to the making^ of the improvements. (3) Lien elaimánts waived their right to liens by express contract to that effect. (4) Notices of liens were not filed within 30 days after the completion of the work.” The reasonable value of the work and the right to liens for part of the price agreed to be taken in stock is also in issue. It is stated in the brief of the learned counsel for the defendant Strowbridge Estate as follows: “The legal effect of the lease in this case is to make the lessee a contractor within the meaning of the mechanic’s lien law for the alterations and repairs contemplated by the lease: Oregon Lumber & Fuel Co. v. Nolan, 75 Or. 69 (143 Pac. 935). Thus the lessee will be considered as a contractor with the owner and the lien claimants as subcontractors in considering the rights of the parties herein.” This statement practically disposes of the question raised by the notice of nonliability posted on the building. 1, 2. It is contended by counsel for the Strowbridge Estate that subcontractors waived their right to liens for the reason that they had knowledge of the stipulation made by the Market Company in the principal contract prior to the time of furnishing materials or performing labor upon the premises, and they cite Hume v. Seattle Boch Co., 68 Or. 477 (137 Pac. 752, 753, 50 L. R. A. (N. S.) 153); Zanello v. Heating Co., 70 Or. 69 (139 Pac. 572, 575); Hughes v. Lansing, 34 — 39 — Or. 118 (55 Pac. 95, 96, 75 Am. St. Rep. 574). In Hume v. Seattle Dock Co., 68 Or. 477 (137 Pac. 752, 753, 50 L. R. A. (N. S.) 153), it was claimed that when the owner and hnilder stipulate that no mechanic’s lien shall he filed, such a stipulation binds the subcontractors. In commenting upon the rule in a few states where the subcontractor is bound by a nonlien stipulation in the original contract, Mr. Justice Eakin said: “By this rule the laborer is not consulted, and he must accept the work under the conditions of the original contract, in the making of which he had no voice. It was to protect the workman against such conditions that our lien law was enacted. A lien is not given through the contractor by subrogation, but is a direct and independent lien to each claimant against the property.” The opinion is not authority for the claim made. It does not go to that extent. In Zanello v. Heating Co., 70 Or., at page 76 (139 Pac., at page 575), Mr. Justice Ramsey said: “The right to a lien was created by statute, and it cannot be annulled by the owner’s giving notice that he will not ‘recognize’ such right, or by saying, in the building contract, that he will not be responsible for the claims of persons furnishing material or labor for the building. A contractor, a subcontractor, or a person furnishing labor or material for a building can waive his right to a lien by agreeing that he will not claim a lien, or by assenting to a provision in a contract stating that no liens shall be claimed or filed upon the building. But a person furnishing labor or material that goes into a building cannot be deprived of his right to file a lien, excepting by his contract, or by acts on his part constituting an estoppel.” By Section 7416, L. O. L., the right to a lien upon a building is conditioned upon the labor or material for which the lien is claimed being furnished “at the in — 40 — stance of the owner of the building * * or his agent.” Where it is provided in a lease as a part of the consideration thereof that the lessee shall make permanent improvements which shall revert to and become the property of the lessor at the termination of the lease, the lessor thereby causes the improvement to be made, and the lessee becomes the agent of the lessor in the making of such improvements. This section declares who shall be deemed such agent of the owner. The waiver by virtue of a stipulation in the original contract that no lien will be permitted implies that there was an assent to the stipulation, or an agreement on the part of the subcontractor not to claim a lien. The Strowbridge Estate, the lessor, required a deposit of $6,000 to be made by the Market Company to indemnify the lessor against any lien the lessee might cause or allow to be placed on the premises. This provision in the original contract between the owner, Strowbridge Estate, and the Market Company, the contractor, seems to have contemplated that work would be done upon the building and materials furnished for which the structure would be subject to a lien. In such cases a subcontractor does not waive his lien by reason of an agreement between the principal contractor and the owner to the effect that liens should not be filed unless the subcontractor assents or agrees to be bound by such stipulation. Knowledge alone by a subcontractor that the original contractor has waived his lien does not constitute a waiver by a subcontractor of his personal right to a lien for his work and materials in the absence of some agreement on his part that he will also be bound by the original contractor’s waiver: St. Johns Lbr. Co. v. Pritz, 75 Or. 286 (146 Pac. 483); Schade v. Muller, 75 Or. 225 (146 Pac. 144); Norton v. Clark, 85 Me. 357 (27 Atl. — 41 — 252); Miles v. Coutts, 20 Mont. 47 (49 Pac. 393); Hume v. Seattle Dock Co., 68 Or. 477 (137 Pac. 752, 753, 50 L. R. A. (N. S.) 153); Zanello v. Heatmg Co., 70 Or. 69 (139 Pac. 572, 575). 3. The Nolan Case, which was decided after the present suit was tried in the lower court, eliminates the question relating to the posting of notices of non-liability by the owner of the land under Section 7419, L. O. L., and disposes of the main part of this controversy. 4. It is contended, however, that the notice was information to the subcontractors that the original contractor had made a nonlien stipulation with the owner. The provisions for this notice are intended to relieve the owner of the land upon which an edifice is constructed, when he has not contracted for the improvement, from the liability of having a lien attached to his land: Oregon Lumber & Fuel Co. v. Nolan, 75 Or. 69, (143 Pac. 935, at 937). The posting of such notices would not prevent the lien upon the building itself as provided for in Section 7416, L. O. L., and a laborer or materialman might still rely upon the structure as security for his pay, and by taking proper measures have the same sold and removed according to the terms of Section 7417, L. O. L., which is as follows: “The land upon which any building or other improvement as aforesaid shall be constructed, together with a convenient space about the same, or so much as may be required for the convenient use and occupation thereof (to be determined by the judgment of the Circuit Court at the time of the foreclosure of such lien), shall also be subject to the liens created by this act, if, at the time the work was commenced or the materials for the same had been commenced to be furnished, the said land belonged to the person who caused said building or other improvement to be constructed, altered or repaired; but if such person owned less than — 42 — a fee-simple estate in such land, then only his interest therein shall be subject to such lien; and in case such interest shall be a leasehold interest, and the holder thereof shall have forfeited his rights thereto, the purchaser of such building or improvements and leasehold term, or so much thereof as remains unexpired at any sale under the provisions of this act, shall be held to be the assignee of such leasehold term, and as such shall be entitled to pay the lessor all arrears of rent or other money and costs due under said lease, unless the lessor shall have regained possession of the said land and property, or obtained judgment for the possession thereof, prior to the commencement of the construction, alteration or repair of the building or other improvement thereon; in which event, said purchaser shall have the right only to remove the building or other improvement, within thirty days after he shall have purchased the same; and the owner of the land shall receive the rent due him, payable out of the proceeds of the sale, according to the terms of the lease, down to the time of such removal. ’ ’ Therefore, the posting of the notices by the Strowbridge Estate would not affect the matter of a waiver of the lien. The notice in question would not even inform the claimants that the Market Company, the contractor, had stipulated that no lien should attach to the premises; but, on the other hand, if considered with a knowledge of the provisions of the statute would tend to indicate that the owner of the estate had made no contract for the improvement. 5. As stated above, when the respective contracts were executed by Myers and the Forth Company two or three pages of the specifications, one set relating to the heating system and the other to the plumbing work, were detached and given to them, and those particular pages were signed by the respective subcontractors. Their attention was not particularly directed to the clause inserted on the first page of what was desig — 43 — nated in the heading as “Specifications” and “General Remarks,” to the effect that the owner would not be responsible for the work. It may have been noticed in a casual or general way. The rule seems to be well established that where reference is made in one document to another unattached document for a specific purpose only, such other document becomes a part of the former for such special purpose only. The reference to the Fancher specifications in the Myers’ and Forth Company’s contracts can serve only for the purpose of furnishing the plans and specifications for the plumbing and the installation of the heating system: Moreing v. Weber, 8 Cal. App. 14 (84 Pac. 220); Stewart v. American Bridge Co., 108 Md. 200 (69 Atl. 708); Young v. Borzone, 26 Wash. 4 (66 Pac. 135); Meredith v. Bitter Root Co., 49 Mont. 204 (141 Pac. 643, 648). The covenant in the lease from the Strowbridge Estate to the Market Company to the effect that no lien would be suffered to be placed upon the premises was not known to the claimants until after a large part of their work was performed and materials furnished. It does not appear that either of these claimants assented to the nonlien stipulation. In Norton v. Clark, 85 Me. 357, 360 (27 Atl. 252), Mr. Justice Emery, in commenting upon a similar stipulation between an owner and a building contractor, said: “This particular stipulation, like all other stipulations, binds only those who made it or assented to it.” 6. By virtue of our statute a direct lien is given to every person who shall furnish material and perform labor in the construction, alteration or repair of a building. That lien is upon the estate of the person causing the construction, alteration or repair to be made. Such lien is a privilege or right given to such — 44 — persons for their protection, and is based upon the theory that they have added to the value of the estate with the consent of the owner, and therefore such estate is liable therefor. The fact that the original contractor has agreed with the owner to protect him against liens cannot be said to be an agreement, on the part of the subcontractors, materialmen and laborers that they will look exclusively to the original contractor and not to the property for their compensation. The builder’s main contract is to the same effect as the nonlien stipulation, and, if he fully complies therewith, there would be ordinarily no occasion for the filing of a lien by subcontractors, materialmen or laborers. His nonlien stipulation, so far as to others than himself are concerned, is a mere duplicate of his principal agreement, and subcontractors, materialmen and laborers cannot be bound by such a stipulation, unless they agree to the same. In such a case, as in any contract, there must be a meeting of the minds of the contracting parties to that effect. 7. The agreement of the subcontractors to accept a portion of their compensation in preferred stock of the Market Company to be redeemed within a certain time did not amount to a waiver of their right to a lien to that extent, as the stock was never delivered or tendered as security or payment to them: McMurray v. Brown, 91 U. S. 257 (23 L. Ed. 321); Springer Land Assn. v. Ford, 168 U. S. 513 (42 L. Ed. 562, 18 Sup. Ct. Rep. 170). The claimants did not waive their right to a lien on the premises. From a reading of the 800 pages of typewritten testimony and an examination of the several contracts and exhibits in the case we find that each of the lien claimants filed a notice of lien within the statutory time, and that the work was performed and the ma — 45 — terials furnished in accordance with the contract and the changes made therein by agreement. During all the time of the performance of the work and the furnishing of the materials involved herein the reconstruction of the building was superintended on the part of the Market Company by George E. Reed, a competent person, and in behalf of the Strowbridge Estate by Mr. A. Walkly, an experienced builder, who was employed by it for that purpose pursuant to the terms of the original contract between it and the Market Company. Many of the questions as to the compensation arising on account of the modifications in the plans and specifications and the agreed departures therefrom were settled and adjusted by the parties through the instrumentality of the superintendents, and such supervision indicates that the materials furnished were in accordance with the agreement therefor. It is plain that the remodeling of the building was proposed to be made at too small a cost, and that the best materials were not at first specified. This no doubt necessitated many changes, and it may be that the modifications resulted in some incongruity or kind of patchwork, but we find from the evidence that the work was done by the lien claimants according to their contracts, and that the amounts allowed are reasonable. The decree of the lower court will therefore be affirmed. Affirmed. Rehearing Denied. Mb. Chief Justice Moore, Mr. Justice Harris and Mr. Justice Benson concur.