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Malicki v. Holiday Hills

MAY 16, 1961.




Appeal from the Circuit Court of McHenry county; the Hon. WILLIAM M. CARROLL, Judge, presiding. Judgment affirmed.


This is an appeal from an order of the Circuit Court of McHenry County dismissing Count II of plaintiff's complaint as to all defendants. In effect, Count II of the complaint sought to enforce an alleged contractor's mechanics lien on certain property. This count was dismissed on defendant's motion for failure of the complaint to state a cause of action. Pursuant to Section 50 (2) of the Civil Practice Act (Ill. Rev. Stat. 1959, Chapter 110, par. 50 (2)), the court ordered that no just reason existed to delay appeal of the cause, pending an adjudication of all of the issues, and so we may consider this order of the court dismissing the complaint although it disposes of fewer than all of the issues.

Plaintiff also requests that certain other orders of the trial court be reviewed and the trial court likewise has found that no reason exists to delay the appeal of these issues. Unfortunately, however, no appealable orders exist as to the other issues. This appeal then, must necessarily be limited solely to a review of the propriety of the court's order dismissing Count II of the complaint.

In order that there be an understanding of the issues, a lengthy recitation of the allegations of the complaint is necessary. Plaintiff was employed by Holiday Hills, Inc. on February 1, 1956, and on March 4, 1956, these parties entered into an oral agreement whereby the plaintiff was to supervise the construction of custom homes in the Holiday Hills Subdivision for Holiday Hills, Inc. Plaintiff alleges he was to be paid a salary and commission by Holiday Hills, Inc. He states that he performed services on certain lots in the subdivision and that the defendants who claimed some interest as owners, purchasers, encumbrancers, investors, lien holders, mortgagees, trustees, beneficiaries of trusts and note holders, authorized or knowingly permitted Holiday Hills, Inc. or Riverview Home Builders, Inc., the assignee and successor to Holiday Hills, Inc., to contract with the plaintiff for the improvement of their (the owners) real estate. It was alleged that all defendants acquired their interest in the premises with knowledge that the plaintiff was improving or had improved their real estate and knew that plaintiff was entitled to compensation for his work. Plaintiff alleged that he was not paid according to the terms of his contract with Holiday Hills and requested, among other things, that he be granted a lien on the lots in Holiday Hills Subdivision said to have been improved by his labor.

Holiday Hills, Inc. and Riverview Home Builders, Inc. were contractors who erected homes for home owners according to the home owners' specifications. Apparently the homes were erected after Holiday Hills, Inc. or Riverview Home Builders, Inc. had contracted with the individuals for the particular home and not built speculatively. According to the complaint, plaintiff claims to have commenced work on certain of the homes on February 1, 1956 and alleges that all homes that are the subject of this litigation were completed by August 1, 1957 except for one unit owned by defendant, Riverview Home Builders. This unit was completed on September 1, 1957. In all, plaintiff asserts liens on forty-eight homes in the subdivision. This suit to enforce the claimed lien was filed on August 12, 1959.

Defendants filed a motion for involuntary dismissal on the ground that the cause of action to foreclose a lien was not brought within the time limited by law for the commencement of an action. This motion was supported by an affidavit of counsel wherein it was asserted that construction on all residences was completed on or before August 1, 1957 and that the plaintiff failed to file any claims for liens within two years of completion of construction and failed to commence this action within two years of completion of construction. The motion to dismiss the complaint was allowed and plaintiff has perfected this appeal.

Plaintiff's claim for lien is based upon his assertion that he is an original contractor and entitled to a lien as an original contractor under Section one of the Mechanics Lien Act [Ill Rev Stats 1959, c 82, § 1]. He contends that under Section one of the Mechanics Lien Act he is entitled to a lien on each home on which he has labored, provided only that his suit shall have been commenced within two years of the completion of all construction under his agreement with Holiday Hills, Inc. His contention is that he has a "blanket lien" on any property on which he has labored under his contract with Holiday Hills, Inc. or Riverview Home Builders, Inc. as long as he filed his claim for lien or suit to enforce the lien against any owner within two years of any work done by him on any lot in the subdivision. He claims that his contract with Holiday Hills, Inc. is a continuing contract and claims that this contract gives rise to his right to claim a lien against any owner.

That portion of Section one of the Mechanics Lien Act relied upon by the plaintiff provides that the contractor shall have a lien, "and in case the contract relates to two or more buildings on two or more lots or tracts of land, upon all such lots and tracts of land and improvements thereon for the amount due to him for such material, fixtures, apparatus, machinery, services or labor. . . ."

Plaintiff also calls to our attention the following portion of Section nine of the Mechanics Lien Act: "And in the event that the contract relates to two or more buildings or two or more lots or tracts of land, then all of said buildings and lots or tracts of land may be included in one complaint or petition."

We believe that this language has reference to the situation where a single owner enters into a single contract for the erection or improvement of more than one building on one or more lots. In the instant situation we have forty-eight contracts on forty-eight lots with forty-eight owners. If plaintiff's contentions were to be adopted, the time for filing a lien as against the owners would be dependent only upon the length of time required to complete a subdivision plus two years. In this era when subdivisions include hundreds and even thousands of homes, it would not be unusual or unlikely that a mechanic could have ten or even twenty years or more in which to impress a lien of many thousands of dollars on a single home which had been completed for years. This was not the intention of the legislature, nor does such an interpretation represent the plain meaning of the statute. Neither has our attention been called to any case in any jurisdiction where such a result has been reached. More than that, our independent research has convinced us that there is no authority to support plaintiff's position.

Plaintiff's contract was not with the owners, except as to the lot owned by Riverview Home Builders, Inc., nor was his contract one "authorized or knowingly permitted" by the owner. The owners would reasonably have understood that the plaintiff was working for the contractor. The contractor's authority extended to making of contracts in its own behalf in furtherance of its contracts with the owners and the contractor does not become the agent of the owners. A contractor should be distinguished from an architect who, under certain circumstances, may well be authorized to act for the owner. In the performance of his contract, however, the contractor is acting in his own behalf in the expectation of a profit.

In the instant case, plaintiff had actual knowledge of the existence of the individual contracts with the different owners. He cannot ignore this knowledge and escape the plain meaning of the statute. In Ideal Cement Stone Co. v. Dohse, 16 N.W.2d 151, (Nebraska), there were two separate contracts and the contractor sought to assert a single lien. The court said, "The materialman had actual and constructive knowledge of the existence of the two contracts and for the purpose of the mechanics lien was bound thereby."

In the instant case, each of these homes was built according to a separate and distinct contract and with one exception were all completed more than two years prior to the filing of the suit to enforce a lien. "A completed transaction for which a lien will lie will not be seized by the law as a means to resuscitate a defunct lien pertaining to an entirely distinct transaction." Darlington Lumber Co. v. Harris, 80 S.W. 688. (Missouri).

If we were to adopt plaintiff's interpretation, the result could well be chaotic. A contention of a similar nature was discussed in Florida Steel Supply Corp. v. Carpenter, 66 So.2d 476 (Florida). There, the claimant sought to assert a lien on one property for the value of steel used in many different homes. The court said, "The appellant here claims the benefit of the statute but leaves the appellee owners in the position of having a lien on their lands — not for the value of the materials in their homes — but for the ...

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