Wailes and Edwards, Inc. v. Bock

Hammond, C. J., delivered the opinion of the Court. The parties here renew their argument as to the effectiveness of a release of the right to file a mechanic’s lien. Wailes and Edwards, Inc. (the Supplier) for the price of $5,631.00 sold kitchen cabinets and appliances to Cuzzins Custom Builders, Inc. (Cuzzins), the owner-builder of a residence which Dr. and Mrs. Robert Bock contemplated buying. The Supplier was paid but a small part of the purchase price.

Just before settlement between Cuzzins and the Bocks on December 20, 1968, Cuzzins’ secretary-treasurer, James Constantino, obtained a release of lien from the Supplier signed on its behalf ²⁷⁶ by one of its employees, James 0. Helsel. Helsel told Constantino he was authorized to sign and the settlement proceeded with the release being taken at face value. In February 1969 the Supplier, taking the position that the release was not binding on it because Helsel had no authority to sign it, filed a mechanic’s lien against the Bock- home on an unpaid balance of $3,830.22 due from Cuzzins.

When the action to foreclose the lien came on for trial, Judge Pugh decided that Helsel had apparent authority to bind the Supplier and therefore the release was valid, and found for the Bocks. We agree with the conclusion of Judge Pugh; in our view the actions of the Supplier, before and after the signing of the release, showed a totality of conduct that prevented it from taking the position that the release does not bind it. The evidence before Judge Pugh permitted these findings: Helsel, authorized so to do by the Supplier, had negotiated the deal for Cuzzins’ purchase of the Supplier’s cabinets and appliances. Helsel was authorized by the Supplier to sign on its behalf the written contract for the cabinets and the appliances.

Helsel, as the Supplier’s authorized agent, dealt with the builder both before and after the contract was signed. Helsel came on the job repeatedly to keep up with the performance of the installation by Cuzzins and to see that Mrs. Bock was kept happy. Mrs. Bock dealt almost exclusively with Helsel and to her he was the Supplier, and this was true also of Constantino. Helsel had signed a release of lien to Cuzzins for the Supplier prior to the release in question (the Supplier denied it authorized this or even knew of it).

The president of the Supplier was asked whether he knew that in deposition Helsel had testified that earlier he had signed three or four other releases to other customers of the Supplier. He said he did know Helsel had said this but did not testify that this had not happened or that Helsel had not been authorized to sign or that the Supplier did not know this had occurred. ²⁷⁷ About the time of the settlement on December 20, Mrs. Bock told the president of the Supplier — the only time she saw him on the job — that she wanted changes in the by then installed cabinets and when he demurred, she told him he would not act that way if she had not paid in full for the cabinets, and he made no reply. The testimony of the title and settlement attorney, who was paid for his services by the Bocks, was stipulated. He would not have completed the settlement and disbursed the funds without a release of liens and he did not record the deed and disburse the purchase price until January 16, 1969.

The Supplier employed counsel and learned of the release of lien the first week in January 1969. It had to be aware, or at least its counsel did, of the custom in Montgomery County not to finalize a settlement by disbursing the purchase money for ten days or two weeks or longer after the figures are agreed on and the deed and money are delivered in escrow. For a period of at least ten days from the time it learned of the execution of the release and the intended reliance on it by the Bocks and Cuzzins, the Supplier,