R. Haas Electric & Manufacturing Co. v. Springfield Amusement Park Co.

86 N.E. 248, 236 Ill. 452

• Court: Illinois Supreme Court
• Decided: October 26, 1908
• Status: Published

Opinion

Mr. Justice Vickers

delivered the opinion of the court:

First—Appellants’ first, and most serious contention is, that the court erred in decreeing a lien against the interests of E. Reisch & Bros, and Thomas D. Hogan, appellants’ contention being that only the interest of the park company should be subjected to a lien for these improvements.

Section i of the Mechanic’s Lien law, as amended in 1903, (Hurd’s Stat. 1905, p. 1317,) provides: “That any person who shall by any contract or contracts, expressed or implied, or partly expressed and partly implied, with the owner of a lot or tract of land, or with one whom such owner has authorized or knowingly permitted to contract for the improvement of, or to improve the same, furnish materials, fixtures, apparatus or machinery for the purpose of, or in the building, altering, repairing or ornamenting any house or other building, * * * shall be known under this act as a contractor, and shall have a lien upon the whole of such lot or tract of land and upon the adjoining or adjacent lots or tracts of land of such owner, constituting the same premises and occupied or used in connection with such lot or tract of land as a place of residence or business.”

It will be noted that under the language of this statute the owner of a lot or tract of land may subject it to a lien by either making a contract himself or authorizing another to make such contract for him, or by knowingly permitting another to contract for the improvements upon his land. By reference to the evidence set out in the statement preceding this opinion it will be seen that Thomas D. Hogan, as owner, expressly consented that the park company should have the right to make improvements on the described premises on condition that all improvements, alterations and additions made by the company should remain on the premises at the expiration of the lease, for the benefit of the lessor. It is true that the particular contracts relied on as the basis of the liens in this proceeding are not referred to in the consent agreement of April I, 1906. Indeed, there is nothing said in the consent agreement about contracts that might be made by the park company in connection with any improvements, alterations or additions that such company might undertake to make. The writing signed by the owner authorized the park company to “make improvements on said described premises,” which necessarily carries with it a permission to the park company to make such contracts for labor and materials as were reasonably necessary in the making of the authorized improvements. The authority given by the owner to the sub-lessee to make .improvements is not limited, either as to the extent or character, by any language found in the writing. The owner, no doubt, might have specified the character of improvements to be placed on his land and have limited the cost thereof, but in the case at bar the owner did not see proper to place any limitations whatever upon the power of the park company in this regard, and he will therefore not be heard to complain that the cost is excessive or the character of the improvements undesirable. The first section of the Mechanic’s Lien law of 1895 made the interest of the owner of the land subject to a lien for improvements “knowingly permitted.”

In the case of Carey-Lombard Lumber Co. v. Jones, 187 Ill. 203, this court held that a lessor who stipulates in the lease for the erection by the lessee of a building upon the demised premises, which is to become the property of the lessor upon the termination of the lease, by expiration or otherwise, subjects his title to mechanics’ liens arising from the erection of the building, notwithstanding the lease provides, under a penalty of forfeiture, that the lessee shall permit no mechanics’ liens to attach to the premises. In that case this court reviewed a number of decisions of this and other States, and the conclusion was there reached that one who agrees with another that he shall place buildings or other improvements upon certain property thereby authorizes or knowingly permits such other to improve the property, within the meaning of these terms as used in the Mechanic’s Lien law then in force. It was also held in that case that the clause that the lessee “shall permit no mechanics’ liens to attach to the premises” was merely a covenant on the part of the lessee that he would discharge such liens, and that such clause did not prevent the lien from attaching as between the owner and the party entitled thereto. This case has been re-affirmed in Crandall v. Sorg, 198 Ill. 48, and also in Sorg v. Crandall, 233 id. 79.

Under the rule laid down in the foregoing authorities we are of the opinion that there was no error in holding that these improvements hád been knowingly permitted by the owner of the fee.

Second—Appellants contend, under their second point, that many of the items in the respective bills were not for matters for which the law allows a lien. Apparently both the electric company and the lumber company proceeded in the court lielow upon the assumption that a prima facie case was made out by proving a contract and the delivery of the material upon the premises to be used in improvements to be made thereon. Section 7 of the Lien law of 1903 provides, among other things: “No such lien shall be defeated to the proper amount thereof because of an error or overcharging on the part of any person claiming a lien therefor under this act, unless it shall be shown that such error or overcharge is made with intent to defraud; nor shall any such lien for material be, defeated because of lack of proof that the material after the delivery’ thereof, actually entered into the construction of such building or improvement, although it be shown that such material was not actually used in the construction of such building or improvement: Provided, it is shown that such material was delivered either to such owner or his agent for such building or improvement to be used in such building or improvement, or at the place where said building or improvement was being constructed, for the purpose of being used in construction.”

By reference to section i it will be found that it is provided that a lien shall be allowed in favor of the person who shall, under the conditions therein provided, “furnish materials, fixtures, apparatus or machinery for the purpose of, or in the building, altering, repairing or ornamenting any house * * * or sidewalk,” etc. This section of the statute is more comprehensive than the language quoted above from section 7. The provision that it shall not be necessary to prove that material actually delivered to the owner or his agent, or at the place where such building or improvement was being constructed, was actually used in the construction or improvement, is limited to material, and does not extend to “fixtures, apparatus or machinery,” for which a lien may be established under section 1. The words “fixtures, apparatus or machinery” are used in section 1 in addition to the word “materials,” and are intended to designate things for which a lien may be established other than materials.

Even if it be conceded, which we do not decide, that under section 7 it is not necessary to prove that material delivered for the purpose of being used in the construction of a building or improvement actually entered into and was used in the building or improvement, can it be said that proof of the mere delivery of fixtures, apparatus and machinery is sufficient to authorize a decree establishing a lien, without any proof that such fixtures, apparatus and machinery were ever used in such a manner as to become attached to or form a part of the real estate ? Commencing with the case of Hunter v. Blanchard, 18 Ill. 318, and coming down to Compound Lumber Co. v. Murphy, 169 id. 343, this court held that under the law which existed prior to the revision of 1895 the lien could only be established to the extent of materials actually used in the construction of the building. It was no doubt to meet the rule of law thus established that that portion of section 7 of the Mechanic’s Lien law of 1903 which we have quoted was enacted. The principle underlying the cases which limit the lien to the extent of materials actually used in the construction of the building is, that it is contrary to justice to burden real estate with liens to pay for chattels which in no sense could be supposed to enhance the value of the real estate, hence where a lien was sought to be established for fixtures, apparatus or machinery, it was necessary to allege and prove that the things for which a lien was claimed were so attached to the building or improvement as to become a part of the real estate. A full discussion of the law, illustrated by many citations from various States of the Union, will be found in 27 Cyc., page 38, where it is said in the text: “Whether or not machinery is within the lien laws usually depends upon whether it has become a fixture. If it is stationary and firmly attached to the realty, so as to become a part thereof, it is the subject of a lien, otherwise not.” In Drew v. Mason, 81 Ill. 498, it was held that furnishing material and labor in placing a lightning rod on a house is not furnishing materials and labor in building, altering, repairing or ornamenting a house, in the sense those terms are used in the Mechanic’s Lien law; while in Dobschuetz v. Holliday, 82 Ill. 371, it was held that a steam engine, machinery and fixtures attached to the soil by a lessee thereof for the purpose of hoisting coal from mines situated thereon, including all boxes and all other necessary appliances connected therewith, become a part of the lessee’s estate therein and entitle the party furnishing such engine and fixtures to a mechanic’s lien against the estate of the lessee on account thereof.

By reference to the electric company’s bill of particulars filed with and made a part of its .bill, it will be seen that a very large number of the items which enter into the aggregate amount of its claim are matters for which no lien should have been established without proof showing in what manner, if at all, they were connected with the real estate upon which it is sought to establish a lien. Thus, in the claim of the electric company there is included a charge of $577.50 for two electric motors, for which a lien is claimed and allowed without any evidence whatever showing that these machines have been so installed as to become a part of the real estate. Included in the same bill are many other items for which no lien should have been allowed without proof that they were so attached to the real estate as to become permanent fixtures or that they were used in connection with the proper installation of other lien-able things. As illustrating the class of items now under consideration, the following may be mentioned: Sulphuric acid, carboys, Westinghouse knife switch, gasoline, fuse blocks, fuse plugs, fusable knife switch, plug cut-outs, lamp cord, lamps, clusters and reflectors, arc lamp pole tops, poles and candelabra base lamps. These items, together with others of like character, constitute a very large portion of the claim of the electric company. By reference to the evidence of Herman Armbruster, who superintended the installation of all of this work, which is set out very fully in the statement preceding this opinion, it will be found that the work of installing these improvements was put upon buildings, refreshment stands, pagodas, signs, dancing pavilion, bridge, theater, arcade, and various other places of amusement in the park. He says: “We decorated an actual tree, called the ‘Christmas Tree;’ we wired that complete;” that light clusters were installed at the entrance of the theater and on the band stand. It is utterly impossible to tell from his evidence what part of this work is for lien-able matters and what is not, and there is no other evidence in the record bearing on that question. There is also included in the electric company’s bill a number of items for street car tickets and meals for superintendent. We are unable to see how such items could possibly become the basis of a mechanic’s lien under the contract relied upon. There is also an item for carboys which the bill shows were to be returned. This item was improperly included in the amount of the lien.

It is said by appellees that even if non-lienable items were included in the electric company’s claim, there have been payments made which the court ought to apply in discharge of such non-lienable items and affirm the decree, since the amount now due does not exceed the amount for which the electric company is clearly entitled to a lien. This view was adopted by the Appellate Court, and resulted in an affirmance by that court on the authority of Monson v. Meyer, 190 Ill. 105, and Barbee v. Morris, 221 id. 382. The first of the above cited cases announces the rule that equity requires the debtor to pay all of his obligations, and that the court will credit a payment so as to give the creditor the best security for the debt remaining unpaid. The case of Barbee v. Morris makes application of this equitable rule to a general payment made upon a building contract where the parties have not made any specific application thereof, and holds that a court of equity may properly credit the payment upon the contract so as to include an item for extra work for which the creditor would not, under the contract, be entitled to a lien, and thus give him the security of a mechanic’s lien for the amount remaining unpaid. Without questioning the rule announced in these cases, we are of the opinion that it is erroneously applied to the facts in this case. The evidence shows that the only credit entered upon the bill of the electric company prior to the decree in the circuit court was an item of $158.16 for material returned. The method of book-keeping by the electric company was to charge all items that were furnished under the contract - to the park company and upon the return of any items a credit was entered, thus canceling the charge made for such item. If the return of these goods can be regarded as a payment at all, it would only be a payment of the amount charged for the specific articles returned, and could not in any view be regarded as a general payment, which a court of equity would apply to nonlienable items, within the equitable rule announced in the foregoing cases. If the material returned was of a class for which a lien might be given upon proof of its mere delivery, such lien would be defeated by the voluntary removal of the material by the contractor from the premises. If the material returned was lumber, the lien which the statute gives upon proof of the delivery of such material at the place of the improvement could not be transferred by the removal of the lumber to other items for which the law gives no lien. The return of. material to the amount of $158.16 only had the effect of canceling the charge made for the items included in that amount.

There is a statement in appellees’ brief to the effect that there have been payments made on this decree, aggregating about $2500, since the decree was rendered in the lower court, and the electric company seeks to avail itself of this fact in answer to the alleged error committed by including in the decree non-lienable items. To this contention it may be replied (1) that the case must be determined in a court of review upon the record made in the trial court, and we cannot take into consideration facts dehors the record that are only brought to our attention by the statement of counsel in their briefs; (2) the state of the record is such that it is impossible to separate the lienable from the non-lienable items, and until such items are separated we cannot tell what the amount of either is. There are no grounds here for the contention that the error of the trial court is cured by the application of payments to the items erroneously included in the decree.

Third—The master in chancery found the amount due the lumber company to be $4111.73. The lumber company filed no objections to this finding. The circuit court found the amount due the lumber company to be $4317.83 and rendered a decree for that amount. The court obtained the larger amount by the addition of $206.10 interest. The Appellate Court struck out the item of interest and affirmed the decree in favor of the lumber company for $4111.73. In this we think the Appellate Court is clearly right. The finding of the master in chancery is conclusive upon the parties as to all questions wherein the finding is not excepted to. Glos v. Hoban, 212 Ill. 222.

Upon evidence heard, an attorney fee of $125 was allowed the lumber company’s solicitors. Since this case was heard in the Appellate Court, this court, in the case of Manowski v. Stephan, 233 Ill. 409, has held that portion of the Mechanic’s Lien act allowing attorney fees for the lienor’s solicitors unconstitutional. No objection or exception to the allowance of attorney fees was made before the master or in the court below, nor was the constitutional question raised until the case reached this court. We are of the opinion that appellants have waived their right to raise this question by failing to raise it in the court below, and if it had been so raised it would have been waived by taking the case to the Appellate Court instead of bringing it directly to this court.

The judgment of the Appellate Court will be affirmed in all respects in so far as the same relates to the decree in favor of the lumber company, and in so far as it relates to the electric company the decree of the circuit court and the judgment of the Appellate Court are reversed and the cause remanded to the circuit court for further proceedings in accordance with the views herein expressed.

Reversed in part and remanded.