Boise Cascade Corp. v. Pence

394 P.2d 359, 64 Wash. 2d 798, 1964 Wash. LEXIS 407
CourtWashington Supreme Court
DecidedJuly 23, 1964
Docket37232
StatusPublished
Cited by13 cases

This text of 394 P.2d 359 (Boise Cascade Corp. v. Pence) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boise Cascade Corp. v. Pence, 394 P.2d 359, 64 Wash. 2d 798, 1964 Wash. LEXIS 407 (Wash. 1964).

Opinion

Hale, J.

Dr. Lawrence C. Pence engaged Tom Mykle-bust, a building contractor, to build a new house for him in Spokane. They signed a formal contract in November, 1960, in which Myklebust agreed, for the sum of $28,267.80, to complete the house, supplying all materials and labor, in accordance with the plans and specifications prepared by Dr. Pence’s architect. The building contract provided that Dr. Pence deposit the $28,267.80 in periodic payments with the Land Title Company of Spokane as escrow agent, and the Land Title Company, in turn, make “all payments to the sub-contractors and all payments to materialmen” directly upon presentment of proper invoices or vouchers, and in accordance with certain progress reports to be made by the owner’s agent. The escrow arrangement seemed a good method by which the owner might prevent mechanic’s and materialman’s liens from accruing and at the same time assure the subcontractor and materialmen of payment.

Plaintiff Boise Cascade Corporation owns and operates a building supply and equipment facility called Bestway Building Center. Through Bestway, plaintiff sells building materials and engages in construction work. Builder Mykle-bust, before starting work on Dr. Pence’s house, discussed with Bestway his purchase of materials and the possibility that Bestway might undertake the plumbing subcontract. Bestway, having some reservations about Myklebust’s credit, but learning of the escrow provisions in the Pence-Myklebust building contract, asked Land Title Company about it. Land Title Company informed Bestway that Dr. Pence would, under the provisions of the contract, deposit sufficient moneys with it as escrow holder to cover the price of materials and pay the subcontractors.

*800 Beginning about November 15,1960, Bestway commenced delivery of lumber and other building materials to the construction site on Myklebust’s order, sending to Dr. Pence, the owner, a 10-day statutory notice of delivery. A few weeks later, December 6, 1960, Bestway, through its agent, plumber Lyle Harty, contracted to install the plumbing, supplying labor and materials, for $1,356.

Things went along without incident until the residence neared completion, when, about February 1, 1961, differences developed between Dr. Pence and Mr. Myklebust and they ended their contract with Myklebust leaving the job. Shortly thereafter, Dr. Pence engaged another contractor, Mr. Bogart, to complete the house — but omitted any reference to the plumbing in this arrangement.

After Myklebust’s departure from the site, Dr. Pence visited the place several times and observed Bestway’s plumber, Mr. Harty, working in the house, but did or said nothing to end the plumbing contract, thus permitting the work to go forward until Harty had completed it. He also had Mr. Harty do some extra plumbing, for which he paid him $117 directly.

Dr. Pence readily acknowledges responsibility for all materials delivered and plumbing installed before, but not after, Myklebust left the job, insisting that the latter were Myklebust’s obligation. He says that he paid Myklebust for these things in accordance with the building contract and escrow provisions. Bestway, as plaintiff, claiming to be a third-party beneficiary under this contract, brings this action for materials sold and plumbing installed and to foreclose its lien, filed May 31, 1961, on the Pence residence. Its notice of lien claim, without mention of either labor or plumbing, includes these items in the total monetary demand for materials.

The trial court found that Bestway performed three separate contracts: (1) Delivery of building materials under open account at the order of Myklebust before he left the job on February 1, 1961; (2) delivery of building materials on open account after February 1, 1961, all of which have been paid for by the defendants; and (3) the entire plumb *801 ing contract — except extras — performance of which began prior to and continued after Myklebust’s departure. On the open account deliveries made before February 1, 1961, the trial court allowed judgment for $2,366, but denied the lien for want of timely filing; it allowed the plumbing claim as a mechanic’s lien in the further sum of $1,478.20, and awarded an attorney’s fee of $147.80 for foreclosure of the lien.

From this judgment Dr. Pence appeals, directing numerous assignments of error to the findings of fact. Our review of the record and examination of the exhibits show each finding of fact to be supported by substantial evidence, and, therefore, the findings will not be disturbed on review. Morris v. Rosenberg, ante p. 404, 391 P. (2d) 975; Dodd v. Polack, 63 Wn. (2d) 828, 389 P. (2d) 289; Doming v. Cecil, 63 Wn. (2d) 760, 388 P. (2d) 917.

The remaining assignments of error merge to present two questions: (1) Did the building contract, in establishing the Land Title Company as escrow holder, create a third-party contract for the benefit of materialmen and subcontractors? and (2) Did the lien claim meet the requirements of RCW 60.04.060 as to form and contents?

We agree with the trial court’s finding that the plumbing contract, entered into with Myklebust December 6, 1960, several weeks after Bestway had started delivering building materials on open account, is a separate, distinct and severable contract. It could not properly be tacked on to the claim for materials so as to make the filing of the lien timely by adding it to the claim for deliveries made on open account. Anderson v. Taylor, 55 Wn. (2d) 215, 347 P. (2d) 536, 78 A.L.R. (2d) 1161. The trial court properly denied the lien for the open account deliveries. We will next consider, then, whether the judgment was properly awarded on open account without allowance of a lien.

Appellants challenge the judgment awarded on open account contending that this is Myklebust’s debt. They say that Bestway does not come within the definition of a third-party beneficiary to their escrow arrangements with Land *802 Title Company; that Bestway, not being a promisee under the contract, acquired no enforceable rights through it; that even a most favorable definition to Bestway gives it no better status than that of a mere incidental beneficiary.

The construction contract, between Dr. Pence as owner and Myklebust as builder, setting up the escrow arrangement through Land Title Company for the payment of ma-terialmen and subcontractors, conferred contractual benefits on four parties: the owner, the contractor, the escrow agent and any other party whose performance would bring him within the classification of materialman or subcontractor. Although on the date of signing the identities of the fourth group were unknown, the other three parties knew that they would become known in the performance of the contract through the delivery to and use of materials in building the house. The materialmen and subcontractors, while not identifiable as beneficiaries at the time of execution of the contract, became beneficiaries of the owner’s promises on performing in the manner contemplated by the contract with enforceable rights in the promises.

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Cite This Page — Counsel Stack

Bluebook (online)
394 P.2d 359, 64 Wash. 2d 798, 1964 Wash. LEXIS 407, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boise-cascade-corp-v-pence-wash-1964.