Lucas v. Taylor

66 A. 26, 105 Md. 90, 1907 Md. LEXIS 24

• Court: Court of Appeals of Maryland
• Decided: February 28, 1907
• Status: Published

Opinion

Schmucker, J.,

delivered the opinion of the Court.

This is an appeal from a decree of Circuit Court No. 2 of Baltimore City dismissing a bill filed by the appellants for the enforcement of a boat lien. The lien was claimed against the Steamer Anne Arundel, which was built at Baltimore City by the Baltimore Shipbuilding and Dry Dock Company under a contract with the Weems Steamboat Company The lien claim was for a balance of $1,764.13 for work done and materials furnished in equipping the steamer with an electric light plant at the instance of the Shipbuilding Company.

It appears from the record that the keel of the steamer was laid on or about January 2nd, 1904, and the completed vessel was delivered on July 1st, 1904, to the Weems Steamboat Company, which paid in full the contract price for its construction. The formal contract for building the steamer was not actually executed until eleven days after the construction had been commenced, but the terms of the contract had been 'agreed upon. The contract for installing the electric light plant on the steamer was made between the appellants and the Shipbuilding Company on April 19th, 1904, and the work called for by the contract was completed by July 1st, 1904. A few changes or alterations were made, in some of the wires, between July ist and nth, after the steamer had passed into the hands of the Weems Steamboat Company and the charges for those alterations form part of the lien claim.

The claim was filed in the office of the Clerk of the Superior Court on October nth, 1904, which was within six months from the commencement of the work for which the lien is claimed, but not within that time from the laying of the keel of the steamer. The claim is in the usual form and states that the work was done and the material furnished by the appellants “at the instance and request of the said Baltimore Shipbuilding and Dry Dock Company in said Baltimore City.” In the claim as originally filed the Shipbuilding Company were described as “agents and contractors” for the steamer and the Weems Steamboat Company as its owner but by the amendment hereinafter mentioned the former company was described as its owner and builder and the latter company as being “now the owner;”

After the steamer had been completed and delivered tó the Weems Steamboat Company the Shipbuiding Company failed and its affairs were by a deree of the Circuit Court of Baltimore City placed in the hands of Archibald H. Taylor and Walter Ancker as receivers, and the Weems Company sold the steamer to the Maryland, Delaware and Virginia Railway Company.

In that situation of affairs the present bill for the enforcement of the lien was filed on February 24th, 1905. The bill alleges the facts which we have mentioned and prays for a sale of the steamer for the satisfaction of the lien. A certified copy of the lien claim was filed with the bill as an exhibit. All of the defendants answered the bill. The receivers of the Shipbuilding Co. and the Weems Steamboat Co. in their answers deny the validity of the lien, but the Railway Co. states that it has no knowledge of the facts set forth in the bill and neither admits nor denies them but demands proof of them. The Railway Co. further states in its answer that it has purchased the steamer Anne Arundel with all the other property of the Weems Steamboat Co. but does not aver that it has paid for the same nor set up the defense of being a bona fide purchaser for value without notice of the lien.

The plaintiffs took testimony proving their contract with the Shipbuilding Co. for the installation of the electric lighting plant on the steamer, the performance by them of the contract on their part, that the balance claimed of $1,764.13 of the contract price remained unpaid, and that on September 26th, 1904, they gave written notice to the Weems Steamboat Co. of their intention to claim a lien therefor. The defendants put in evidence the contract for building the steamer between the Shipbuilding Co. and the Weems Steamboat Co. It was admitted that the Weems Steamboat Co. paid to the Shipbuilding Co. the full contract price for the construction of the steamer.

The learned Judge below filed no opinion in the case and we are therefore not informed as to the ground on which he relied in dismissing the bill.

The reasons asserted in argument by the appellees for denying the validity of the lien claim were substantially as follows: That the appellants were sub-contractors to whom the Code does not give a lien on boats, That the lien claim was not filed within six months 'from the commencement of the building of the steamer, That the .claim does not state at what place the boat was built, That the Weems Steamboat Co. and not the Shipbuilding Co. was the owner of the steamer, That there was no proper amendment of the lien claim and that the lien, if it ever was valid, had expired by limitation at the date of the decree.

The provisions of the Code in reference to liens on boats and vessels are found in Art. 63 relating to Mechanics Liens.

Sec. 43 provides that all boats or vessels of any kind whatsoever used or intended to be used on the Chesapeake Bay or other waters of this State or belonging in this State shall be subject to a lien and bound for the payment thereof as preferred debts for all debts due to boat builders, mechanics, &c., from the owners, masters, captains or other agents of such boats or vessels for materials furnished or work done in the building, repairing or equipping the same.

Sec. 44 requires the lien claim to be filed in the office, in Baltimore City, of the Clerk of the Superior Court “within six months from the commencement of the building, repairing, equipping or refitting of the boat or vessel,” and provides that the claim shall state, along with other things, the place where the boat was built, repaired, equipped or refitted.

Sec. 46 provides that the lien on the boat or vessel shall continue for two years from the day on which the lien claim is filed and no longer.

Sec. 41 provides that Article 63 “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 the claim or lien to be filed and extending to all subsequent proceedings as may be necessary and proper; provided that the amount of the claim or lien filed shall not in any case be enlarged.”

Considering the objections urged by the appellees against the validity of the lien claimed in this case in the order in which we have stated them; we observe that the question of the right of a sub-contractor to a lien has been eliminated from the case by the amendment of the proceedings so as to treat the Shipbuilding Co., for whom the work was done, as the owner of the vessel.

We think that the filing of the lien claim on October nth, 1904, for the balance due for the installation of the electric light equipment which was begun on or after April 19th, 1904, was a compliance with the requirement of sec. 44 that the lien claim must be filed “within six months from the commencement of the building, repairing, equipping or refitting” of the boat or vessel. If we were to adopt the contention of the appellees that all boat liens against a newly constructed vessel must be filed within six months from the commencement of its building we would not only ignore the language of the statute but would, whenever more than six months were consumed in building a vessel, deny the benefit of any lien at all to such mechanics and others as furnished labor or material to the vessel for that portion of its building which was done after the expiration of six months from the laying of its keel. We also think that the lien claim, in stating that the work was done and the materials were furnished “at the instance and request of said Baltimore Shipbuilding and Dry Dock Company in said Baltimore City,” sufficiently complied with the requirement of sec. 44 as to the statement of “the place where” the boat was built, repaired, equipped or refitted.

Upon a proper construction of the contract between the Shipbuilding Co. and the Weems Steamboat Co. for the building of the Anne Arundel the former and not the latter company must be regarded as having been the owner of the steamer while it was being built. The essential features of that contract, which is too long for insertion here, are as follows: The Shipbuilding Co. agrees to construct and fully complete .on or before the first day of July, 1904, for the Weems Steamboat Co. a steamer to be a substantial duplicate of the. steamer Potomac then owned by the latter company. “The price for said steamer so constructed and ready for delivery within the time aforesaid” is fixed at $91,560, to be paid in installments as set forth in the contract. The last two installments are stated to be: Eleven thousand ($11,000) upon completion of satisfactory trial trip; nine thousand five hundred and sixty dollars ($9,560) within thirty (jo) days of ter delivery in accordance with the terms of this contract and accompanying specifications and the establishment of the fact that the speed and carrying capacity are equal to those of the ‘Potomac.' ” A memorandum attached to the contract and signed by the parties provides among other things, that the material and workmanship of the vessel to be constructed are to be first class and to be satisfactory to the owners inspector, who shall at all times have access to the same. In this supplemental memorandum the Weems Steamboat Co. are described as “the owners.” The builder was required by the contract to give a bond for $50,000 for its performance.

There is some conflict of authority as to who is to be regarded as the owner of a vessel being built under a contract to furnish both work and materials, before her completion and delivery to and acceptance by the party for whom she was to be built. Treating the vessel merely as a chattel its title during its manufacture would remain in its manufacturer until its completion and would then pass by delivery to and acceptance by the party for whom it was made. But in contracts of this class like others the true method of interpretation to be followed is to ascertain from the terms .and circumstances of the contract what was the intention of the parties in making it.

The, English Courts while upholding this rule have shown a tendency to regard the fact that the contract price for building a ship was to be paid to the builder in installments as the work progressed as furnishing strong evidence that the title to so much of the ship as was paid for by each installment was to vest in the vendee at the time of the payment. Woods v. Russell, 5 Barn. & Ald. 942; Clarke v. Spence, 4 Ad. & El. 448; Wood v. Bell, 5 El. & Bl. 772; Laidler v. Burlinson, 2 Mees. & Wel. 614; McBain v. Wallace, L. R. 6 App. cases, 589. Lord Campbell in Wood v. Bell, supra, referring to Woods v. Russell and Laidler v. Burlinson, supra, and other earlier cases said “still it must be remembered after all that what we have to determine is a question of fact; namely what upon a consideration of all of the circumstances we believe to have been the contract into which the parties have entered.”

No Maryland decision construing a shipbuilding contract of this character has been brought to our notice nor are we aware of the existence of any.

In Clarkson v. Stevens, 106 U. S. 505, the Supreme Court of the United States had occasion to pass upon and construe a shipbuilding contract containing many of the features of the one now before us, in order to determine whether the title to the vessel while unfinished remained in the builder or passed to the party for whom it was being constructed. Under the contract in that case Stevens was to build for the United States Government a harbor defense vessel of a specified character by a certain date. The government was to have an inspector to be admitted at all times to Stevens’ shipyard who should receive, receipt for and mark with the letters “U. S.’ all materials for the construction of the vessel and certify the accounts presented therefor. The government was to pay a gross price of $586,717.84 for the vessel, when fully completed and delivered at the Navy Yafd at Brooklyn in conformity with the contract, but payments to the extent of not exceeding $500,000, were to be made on account as the work progressed upon bills certified by Stevens and the government inspector, and the balance was to be paid when the vessel, fully completed according to the contract, was delivered to the government and accepted by it. In lieu of other security for the faithful performance of his contract Stevens gave to the government a mortgage upon his shipbuilding establishment. The Supreme Court held that the title to the unfinished vessel remained in Stevens until its completion and delivery to and acceptance by the government. In arriving at its conclusion the Court reviewed the English doctrine as announced in the cases which we have cited and referred to the rule as laid down by Lord Campbell in Wood v. Bell, 5 El. & Bl. 772, and adopted by the Courts of Massachusetts in Williams v. Jackman, 16 Gray, 514, and of New York in Andrews v. Durant, 11 N. Y. 35, and of New Jersey in Elliott v. Edwards, 35 N. J. L. 265, that “Under a contract for supplying labor and materials and making a chattel, no property passes to the vendee till the chattel is completed and delivered or ready for delivery. This is a general rule of law. It must prevail in all cases unless a contrary intent is expressed or clearly implied from the terms of the contract.” After alluding to the fact that for a time the English Courts following a dictum in Woods v. Russell, 5 Barn. & Ald. 942, held that a provision in such a contract for a payment of the price in installments furnished strong evidence that the title to so much of the vessel as was from time to time paid for vested in the vendee, the Supreme Court further say “The Courts of this country have not adopted any arbitrary rule of construction as controlling such agreements but consider the question of intent open in every case to be determined upon the terms of the contract and the circum stances attending the transaction.” In that case it was held that the title to the vessel remained in Stevens until its completion and that upon his death pending its construction it passed to the residuary devisee under his will, the Court saying “we are of opinion that the fact that advances were made out of the purchase-money according to the contract for the cost of the work as it progressed, and that the government was authorized to require the presence of an agent to join in certifying the accounts are not conclusive evidence of an intent that the property in the ship should vest in the United States prior to final delivery.” In reaching its conclusion the Court laid stress upon the fact that under the terms of the contract the question of its proper performance was in effect reserved for determination until after the completion of the vessel as a condition of acceptance and final payment.

Applying the rule of construction thus laid down by the Supreme Court of the United States, which we are prepared to adopt, to the contract in the record before us it results that the steamer Anne Arundel was owned by the Shipbuilding Company at the time when the work, for which the appellants .claim a lien, was done on her. Although the contract under which she was built provided for the payment of the purchase-money in installments as the work progressed and the Weems Steamboat Co. was entitled to have an inspector present in the yard of the builder, the determination of the question whether she had been constructed according to the ■contract was reserved until her completion and her conformity to the contract in design, material and work was plainly made a condition of her acceptance and the payment of the last two installments of the contract price. Under these circumstances we regard as immaterial the mere fact that in the supplemental memorandum appended to the contract the Weems Steamboat Co. is several times designated the “owner.”

Having determined that the Shipbuilding Company was to be regarded as the owner of the vessel during its construction the next - question to be considered is whether the record shows a sufficient and effective amendment of the proceedings to entitle the appellants to a decree in this case for the enforcement of their lien claim. This question is not one of the Circuit Court’s discretion in permitting the amendment, but one of its power to do so. The powers of the Court in dealing with a proceeding like the present one are wider and greater than those incident to the limited jurisdiction ordinarily'exercisable by it in statutory proceedings. Sec. 41 of Art. 63 declares in positive and unmistakable language that “ This article shall be construed and have the same effect as laws which give general jurisdiction or are remedial in their nature ” and authorizes the making of proper amendments at any time in the proceedings ‘ ‘ commencing with the claim or lien to be filed and extending to all subsequent proceedings.” As was said in Real Estate Company v. Phillips, 90 Md. 525, “It is difficult to imagine any more extensive power of amendment than that conferred by the section just quoted.” In that case the mechanic lien claim alleged that the materials for which the lien was claimed had been furnished to A. the contractor and that B. was the reputed owner of the property. No notice had been given to the owner of the intention to claim the lien. A bill was filed in equity for the enforcement of the lien and in taking the testimony in the case it was shown that A. ánd C. were both builders and equitable owners, whereupon, after the time within which a lien could be filed, the plaintiffs were allowed to amend their claim, so as to allege that A. and C. were both builders and equitable owners of the property, and a decree was rendered in the plantiffs favor. Upon an appeal to this Court the decree was affirmed. It was urgently contended in that case that to permit the amendment there made was in effect to allow an -entirely new claim of lien to be filed after the expiration of the time prescribed for filing the original lien, but as both parties to the building contract knew their mutual relations and the interest of no bona fide purchaser without notice was affected, this Court held that the lower Court had not exceeded its power in permitting the amendment and passing a decree in the plaintiff’s favor.

In the present case the Shipbuilding Co. and the Weems Steamboat Co. were perfectly familiar with the terms of the contract between them under which the steamer was built and neither of them were prejudiced by the allowance of the amendment. The Railway Company the other defendant which purchased the completed steamer from the Weems Company does not aver, in its answer to either the original or amended bills, that it purchased and paid for the boat without notice of the lien nor does it in any manner set up or rely upon the defense of having been a bona fide purchaser for value and without notice of the lien. We therefore think the Court below did not exceed its power in allowing the amendment.

Nor do we think that there was any such technical mistake in the manner of making the amendment as should have caused the appellants the loss of their, claim to which there was no defense interposed on the merits. The appellants as plaintiffs below having obtained leave of the Court, after the evidence was in, to amend the lien claim and bill of complaint in the respect already mentioned proceeded to amend accordingly the bill of complaint and the certified copy of the lien claim which had been filed with the bill as an exhibit, without filing an amended lien claim in the Clerk’s office of the Superior Court. The appellees, did not demur to the amended bill or by any form of pleading object to the manner in which the amendment had been made, but formally - adopted by a paper filed by them in the case, as their answers to the amended bill, the ones which they had respectively filed to the original bill.

It is doubtless an excellent practice in amending a lien, even when done by leave of Court in a pending suit, to also file the amended claim in the clerk’s office where the original lien is required by law to be filed and a failure to take that precaution may debar the claimant from enforcing his claim against the property in the hands of a bona fide purchaser for value without notice of the amendment. It may also be said that the Code requires inferentially, although not in express terms, that an amendment toa mechanics or boat lien, voluntarily made by a lienor in the exercise of his statutory right, must be filed in the clerk’s office where the original lien was filed. But it does not therefore follow that every amendment of the lien claim which may be authorized, during the progress of a proceeding for its enforcement, by a Court of equity, in exercise of the general jurisdiction conferred upon it by Art. 63 of the Code, must be filed in the clerk’s office where the original lien is recorded in order to be effective for the purposes of that suit. This is especially true when it is not sought by the amendment to affect the rights of other persons than those who are before the Court as parties to the suit in which the leave to amend is- granted, and thereby receive notice of the amendment. We see no sufficient reason for holding the amendment now under consideration to have been ineffective as against the interest of the appellees or any of them in the steamer on which the lien is claimed.

Nor do we think that for the purposes of this suit the lien given by the statute to the appellants has expired because more than two years have now elapsed since the filing of their lien claim. We cannot yield our consent to the appellee’s contention that the lien expires at the expiration of the two years mentioned in section 46 of Art. 63, even although the proceedings contemplated by the statute for its enforcement have been instituted within two years and are still pending. To adopt so strict an interpretation of the .lien law would not only disregard the provision of sec. 41 as to the method of construing Art. 63, but would frustrate the beneficent purposes of its enactment. Under the appellee’s view of the law all that would be necessary to defeat the lien which it gives to a mechanic.upon^ a boat for work done in building it would be to prolong the defense to the proceeding for its enforcement, even if promptly instituted, by obstructive tactics or the exercise of the right of appeal, for two years from the date of the filing of the lien claims. Or unavoidable delays for that length of time arising from crowded dockets or the illness of a Judge, or other causes over which the lien claimant, however diligent, had no control would deprive him of all benefit from his lien.

The primary purpose of the lien law was to give to certain classes of claims regarded by the law as meritorious the security of a lien upon the structures created by the labor or material forming the basis of the claim. The law does not require the party entitled to the lien to enforce it at once. The views of this Court upon that subject were expressed in the case of Blocher v. Worthington, 10 Md. 1, which in many respects resemble the one now before us. In Blocher’s case, in construing sec. 15 of the mechanics’ lien law in Allegany County enacted by ch. 76 of the Acts of 1841, which provided that “the lien of every such debt, for which a claim shall have been filed as aforesaid, shall expire at the end of three years from the day on which such claim shall have been filed unless the same shall have been revived by scire facias',’ &c., the Court said: “The defendant contends that this section interposes an absolute bar to all further proceedings upon the claim after the expiration of three years. We think that the plain meaning of this section is that the scire facias must issue before the expiration of the three years from the filing of the claim. Filing the claim creates the lien upon the property but the party need not proceed immediately to enforce it by process."

In several case, which were instituted to enforce mechanics’ liens, within five years after the filing of the lien claim this Court has by its decrees, passed after the expiration oft he five years, enforced the lien or at least .recognized its existence. In Real Estate Co. v. Phillips, 95 Md. 515, the lien claim was filed on January 26th, 1891, and the bill for its enforcement was filed on January 5th, 1892, but the decree establishing the lien and directing its enforcement was not passed until August 18th, 1899, and that decree was affirmed by this Court as late as January 11th, 1900. In Baker v. Winter, 15 Md. 1, which was a scire facias to enforce a mechanics’ lien our predecessors by a decision rendered after the expiration of five years from the filing of the claim, reversed the judgment and sent the case back to permit the lien to be amended in the lower Court and further proceedings had for its enforcement; and in Greenway v. Turner, 4 Md. 296, this Court by its judg ment rendered more than five years after the filing of the lien claim reversed' the judgment of the lower Court in a scire facias to enforce a mechanics’ lien and sent the case, back for further proceedings. In both of these cases the scire facias was instituted before the expiration of the five years.

It thus appears that this Court has heretofore acted in accordance with that construction of the lien law which holds that the lien may be enforced by an appropriate suit in equity or scire facias provided the proceeding be instituted within the five years mentioned in the statute even though the final judgment or decree therein be rendered after the expiration of that period.

The appellees have called our attention to some decisions of a tenor opposite to the views which we have expressed, touching the expiration of mechanics’ and judgment liens, but none of the decisions relating specifically to mechanics’ lien are of Courts of last resort. Nor is the reasoning in any of these cases sufficiently cogent to induce us to depart from the course pursued by our predecessors in the application of the mechanics’ law of this State.

For the reasons set forth in this opinion the decree appealed from will be reversed and the case remanded for further proceedings in accordance with this opinion.

Decree reversed zvith costs and case remanded for further proceedings in accordance zvith this opinion.