Wilhelm v. Roe

Pattison, J., delivered the opinion of the Court. This is an appeal from an order of the Circuit Court for Baltimore County, in equity, overruling the exceptions of Paul J. Wilhelm, the appellant, to the allowance of the mechanics’ lien claims of the Stebbins-Anderson Coal & Lumber Company and Thomas B. Hewcomb, in the auditor’s account in the case of Cornelius V. Boe, assignee, against the South-land Company, in which proceedings five lots of gnound, mentioned and described therein, were sold under a clause contained in a mortgage, executed on March 8th, 1927, by the Southland Company to the Oakmont Bealty Company, to secure a loan of $20,000. The loan was made to the South-land Company and secured by said mortgage, to enable that company to build, or have built, a house on each of said lots of ground. In pursuance of the agreement between the mortgagor and mortgagee, the money so loaned to the Southland Company was paid over to John H. Morgan, trustee, to be disbursed by him as the building progressed.

As disclosed by the record, the work upon the construction of the houses started in March, 1927, and on March 26th, thereafter, the Stebbins-Anderson Coal & Lumber Company made its first delivery of lumber and material upon the premises, to be used in the building of said houses, and continued to make deliveries thereafter until they had delivered lumber and material to the amount of at least $8,649.25, which amount, with interest, is still owing to it. ' On August 20th, 1927, the Southland Company leased unto the Home Building & Contracting Company for the ⁶¹⁷ term of ninety-nine years the said five lots of grounds, and on the same day it conveyed the reversionary interest in said lots of land unto the appellant, Paul J. Wilhelm. On March 23rd, 1928, its claim not having been paid, the Stebbins-Anderson Coal & Lumber Company filed a mechanic’s lien against said five lots of ground, naming the Home Building1 & Contracting Company as the owner, or reputed owner; and on Ebbrnary 28th, 1928, Thomas B'. New-comb, the other appellee, filed his mechanic’s lien against three of said lots, for work done and materials furnished in painting the houses thereon, naming the Southland Company and Allen L. "Rains as the owners, or reputed owners, of said lots. - After the ratification of the mortgage sale, petitions were filed by the Stebbins-Anderson Coal & Lumber Company and Thomas B. Newcomb, on the 29th day of January, 1929, and the 4th day of Eebruary, 1929, respectively, alleging therein that the proceeds of such sale were largely in excess of the amount required to pay the mortgage debt, interest, and costs, and asked therein that such surplus be applied to the payment of their claims.

The audit was made and filed on the 4th day of "February,. 3 929, allowing said claims, but, before its final ratification, the appellant, Paul J. Wilhelm, on Fbbruary 7th, 1929, filed exceptions to the allowance of the claims of both the StebbinsAnderson Coal & Lumber Company and Thomas B. New-comb, alleging therein that the mortgaged property had been leased on August 20th, 3927, by the Southland Company to the Home Building & Contracting Company for the term of ninety-nine years, and that the reversionary interest therein had, on that day, been conveyed to him; that the claim of the Stebbins-Anderson Coal & Lumber Company was not a valid lien against his interest in said property, and that he, .as such grantee, was entitled to have said surplus paid over to him, and a like allegation was made as to the claim of Thomas B. Newcomb. Upon the petition of the Stebbins-Anderson Coal & Lumber Company, filed on April 24th, 3 929, the mechanics’ lien, ⁶¹⁸ as stated by the court in bis opinion, was amended so as to include the names of the Southland Company and Paul J. Wilhelm, as the owners of the property mentioned in these proceeding's. We will first consider and pass upon the action of the court in ratifying the audit in respect to the claim of the StebbinsAnderson Coal & Lumber Company. The contention is made by the appellant, Paul J. Wilhelm, that the mechanic’s lien claim of the Stebbins-Anderson Coal & Lumber 'Company is invalid because the materials mentioned in the lien claim was not furnished by the company upon' the authorization or contract of the owner, the South-land Company, or Paul J. Wilhelm, or with any agent of the owner, and, this being true, the Stebbins-Anderson Coal & Lumber Company gave no- notice to the owner of the property against which the lien claim was filed of its intention to file such lien, as required by section 11 of article 63 of the Code, which provides: “If the contract for furnishing such work or materials or both, shall have been made with any architect or builder, or any other person except the owner of the lot on which the building may be erected, or his agent, the person so> doing work or furnishing materials, or both shall not be entitled to a lien unless, within sixty days after furnishing the same, he or his agent shall give notice in writing to such owner or agent, if resident within the city or county, of his intention to claim such lien.” The question thus to be determined is by whose authority or upon whose contract or agreement was the material furnished by the Stebbins-Anderson Coal & Lumber Company.

The Southland Company, with J. Elmer Weisheit as its president, had for years, prior to the transactions here involved, been engaged in the development of real estate in and around the City of Baltimore. The Stebbins-Anderson Coal & Lumber Company, of Towson, Baltimore County, had on previous occasions furnished materials to the Southland Company in other work done by it, and, upon learning of the contemplated improvements to be made upon the property here involved, M. B. Shearman, sales manager and secretary ⁶¹⁹ of the Stebbins-Anderson Coal & Lumber Company, called upon Mr. Weisheit, president of the Southland Company, with the view of selling to him or his company material to be used in the erection of the proposed buildings, and, as testified to by Shearman, Weisheit told him “they were going to construct five houses in Southland Hills, and I asked him if they (we) could give him prices on them, and he said, yes, and when he was ready, he furnished a list for the lumber and a set of plans and we gave him a price on the lumber and a price on the millwork for the five houses,” and these prices were accepted by Weisheit, and the material when delivered was charged to the Southland Company. Shearman further testified that, upon his first visit to Weisheit, he was told by him that he was undecided whether the houses would be built by him or his company, or by some one else, “and as far as I can remember that was not decided until the last minute,” when Mr. Weisheit said “to keep this straight, * * * charge that account to1 the Home Building Company,” a company, which, at that time, existed only in the minds of Weisheit and one Rains, a carpenter, who for several years had done work for the Southland 'Company, and who was to do the work upon the building's then to bo erected. The witness, when asked, said at that time he knew neither the Home Building Company nor Rains; his negotiations, he said, were with Weisheit.

The Home Building & Contracting Company came into existence through the efforts of Mr. Weisheit, for, in his testimony, he states, “Mr. Rains h&d a judgment or two judgments against him, and therefore he did not want to involve this transaction or have it affected by these judgments * * * and he asked that we incorporate this company for him,” which was done, though there was- a delay of “three, four or five months,” resulting from the selection of the name “The Home Building Company,” which was found to be the name of an existing corporation. And although Weisheit looked after and directed the incorporation of the Home Building & Contracting Company, he seemed to know little or nothing about it after its incorporation, more than the ⁶²⁰ fact that Rains was. its president, and that neither he nor the Southland Company had any connection with it. Henry Russo, who was employed by the Stebbins-Anderson Coal & Lumber Company, in the capacity of credit man, bookkeeper, and. treasurer, testified that the original estimate for the materials, made by Mr. Shearman on February 4th, 1927, as shown by it, was for the Southland Company, and was later changed to the Home Building Company. He further testified that “about December 15th, 1927, I called Mr. Weisheit of the Southland Company, in reference to payment on the five houses in Southland Hills, that we had delivered the material on and he, at that time, told me that just as soon as the houses were completed that he would see if he could not arrange to get me some money.

Then time elapsed for about a month and didn’t get any response from Mr. Weisheit. I called him again and at this time I told Mr. Weisheit that if I did not get some money I would have to prepare my papers to file a lien against the property.” This last conversation “was about the first week in January and he, at that time, told me to' hold off, that as soon as the houses were completed if he didn’t have them sol^l, he was going to refinance and pay us, and I didn’t hear from him for a period of another month and about * * * the first week in February, I again called him up, and this time, he could not give me any definite answer as to the money,” whereupon he immediately proceeded to- prepare the papers for the filing of the lien. On cross-examination he testified that, at the time the change was made upon the books of the company from the Southland Company to the Home Building Company, the majority of the material furnished had been delivered. Allen L. Rains testified that his understanding was that $3,325 of the construction loan was to be used in the erection of each of the houses, the estimated cost of which was $7,000, and, as stated by him, “when the