Eisenberg, Ernest O.

English

Marquette University Law School

Marquette Law ReviewVolume 16Issue 4 June 1932 Article 11Personal Property - Mechanic's Lien - Waiver byJudgment on NoteErnest O. EisenbergFollow this and additional works at: http://scholarship.law.marquette.edu/mulrPart of the Law CommonsThis Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion inMarquette Law Review by an authorized administrator of Marquette Law Scholarly Commons. For more information, please contactmegan.obrien@marquette.edu.Repository CitationErnest O. Eisenberg, Personal Property - Mechanic's Lien - Waiver by Judgment on Note, 16 Marq. L. Rev. 278 (1932).Available at: http://scholarship.law.marquette.edu/mulr/vol16/iss4/11THE MARQUETTE LA I REVIEIFPERSONAL PROPERTY-MECHANIC'S LIEN-WAIVER BY JUDGMENTON NOTE. Roseliep v. Herro et al --- Wis.., 239 N.W. 413 Sup.Ct. Wis. Dec. 8, 1931. This case is noteworthy in that it establishes aWisconsin precedent in a field of law where over-emphasis upon legaltechnicalities is apt to muddle and confuse the principle involved. Thequestion in this case concerns itself with the right of a lien claimant tosecure a foreclosure of his lien after he had already secured a judg-ment on a promissory note which was issued in payment of the prop-erty on which the lien was secured.One A. F. Leitgabel had installed a heating system in a buildingowned by the defendants. Leitgabel filed a claim for a mechanic's lienin accordance with Wisconsin Statutes 289.41, and also received apromissory note from the Herros, on Nov. 8, 1928, for $3,836 payablein thirty-six equal monthly installments. Subsequently, Leitgabel as-sigrfed both note and lien to the Heating & Plumbing Finance Corpo-ration. Upon default on the note by Herros, the Heating & PlumbingFinance Corp. commenced an action against the Herros, receivingjudgment by default for $3,593.28 due on the note, and for $547.84 incosts, and disbursements. The judgment was not satisfied, so thatwhen the plaintiff, Chas H. Roseliep, brought an action against thedefendants, Herros, to foreclose on a mortgage given by the defend-ant, Herros, the Heating & Plumbing Finance Corp. by petition becamea party to the defense, and cross claimed against Herros for foreclosureon the lien. Herros did not answer the cross complaint, but the trialcourt held that the Finance Corp. could not have two judgments, rulingthat it waived its mechanic's lien by commencing action upon the noteand receiving judgment, and therefore dismissed the cross complaint.Defendant appealed.Thus, this case clearly resolves itself into two questions: the firstand the most important, "did the Finance Corp. by. taking judgment onits note vaive the right to foreclose on its lien?"; and the second, reallya subsidiary of the first, "did the Finance Corp. by taking judgmenton its note for an amount in excess of that due Leitgabel for his workwaive the right to foreclose on its lien ?"Justice Nelson of the Wisconsin Supreme Court answers the firstand the major question by lining up with the weight of authority inthe United States. In his decision, he states that it has been consistentlyheld by the Supreme Court of Wisconsin that the lien statutes of Wis-consin provide new or additional remedies supplementary to the com-mon law remedies, and that such laws should be liberally construed forthe purpose of aiding material men and laborers to obtain compensa-tion for their materials and services. He further quotes the WisconsinStatutes, section 289.05, to the effect that the "taking of a promissoryNOTES AND COMMENTnote or other evidence of indebtedness for any such work, labor, ormaterials done or furnished shall not discharge the lien therefor herebygiven unless expressly received as payment therefor and so specifiedthereon." Thus he limits the question of waiver to the intention of theparties, supporting his decision by the precedent established in the casesof Phoenix Mfg. Co. v. McCormick Harvesting Machine Co., 111 Wis.570, and Carl Miller Lumber Co. v. Meyer, 183 Wis. 360.There is no Wisconsin precedent, however, in regard to the ques-tion of whether the taking of a judgment on the promissory note actsas a waiver to the lien when the judgment is merely entered and notsatisfied. Justice Nelson therefore quotes the general rule that thelien claimant may bring a personal action against the owner for theamount of the debt for which a lien is claimed as a cumulative remedywithout waiving the right to the lien. The following cases were citedin support of this view: West v. Fleming, 18 Ill. 248, 68 Am. Dec. 539;Southern Surety Co. v. York Tire Service, 209 Iowa 104, 227 N.W.606; Kirkwood v. Hoxie, 95 Mich. 62, 54 N.W. 720; Kinzel v. Joslyn,158 Minn. 194, 197 N.W. 217; Erickson v. Russ, 21 N.D. 208, 129N.W. 1025.This general rule is given fuller treatment in 65 A.L.R. 313. In thecase of the Germania Bldg. & L. Asso. v. Wagner, 61 Cal. 349, thecourt stated that there is' no waiver when the lien holder takes judg-ment for the same account as that covered by the lien, first, becausethere is a merger of the claim, and not the security; and second, be-cause a waiver occurs when a creditor has gained a higher security, andthe taking of judgment does not increase the security.In Kinzel v. Joslyn, supra, it was held that where a personal judg-ment had been recovered by the lien holder, the personal action torecover the amount of the debt and a proceeding to enforce the liencould be maintained simultaneously, and that the lien was not waivedby bringing a personal action on the claim, nor by the recovery of ajudgment therein. The facts in the case of Hale v. Pettigrove, 10 Hun.(N.Y.) 609, are perhaps most similar to the facts in the present case.In that case, the plaintiff made an agreement with the defendant torepair a building at a stipulated price, taking a mortgage on the prem-ises to secure payment, and on the completion of the work, filed alien, foreclosed the mortgage, and entered a personal judgment for thedeficiency. The court held that he had not waived his right to a lien,because he was entitled to pursue all the remedies he had, until herealized the amount of his claim.In regard to the second and minor question, the plaintiff held thatsince the note, due to financing charges and the fifteen per cent attor-ney charges in case of default, promised an amount in excess of thatTHE MARQUETTE LAW REVIEWdue Leitgabel, the acceptance of the note and the securement of ajudgment on it acted as a waiver of the lien. The case of Miller-Piehlv. Mullen, 170 Wis. 378, 174 N.W. 542, was cited in support of thisview. The court, however, answered this contention by showing thatin the case cited a note secured by a mortgage on four acres of landwas given to cover a lien filed on one acre of land and an additionalindebtedness. In the case under discussion, on the other hand, theintention of the parties clearly shows that the note was not to waivethe lien, since payment of the note was to be made in installments, andsince Leitgabel was to retain his lien until the last payment was made.After all, the note did not give Leitgabel any additional security. Underordinary circumstances Leitgabl should have received payment withina short period of time; instead he gave the defendants, Herros, theopportunity of paying for the work in installments, receiving as con-sideration financing charges. Consequently, it can be seen that Leitgabeland the Finance Corp. did not receive any valuable consideration inthe form of the note. They were entitled to payment for the work done;they were entitled to the financing charges for carrying the Herrosalong on the installment basis; and they were entitled to the costs, ex-penses, and disbursements incurred in securing a judgment upon thenote after the Herros had defaulted in payment.But a judgment rendered upon parties incapable of meeting it is ahollow mockery. It would be a travesty of justice to state that a manhaving a mechanic's lien upon property should lose that lien merelybecause he secured a judgment for the amount due him, when theholder of the property is insolvent and cannot meet that judgment.Legal red tape, under such circumstances, would confuse the very pur-pose of the law. The lien holder in the last analysis does not desire themere formality of securing a judgment. What he desires is the pay-ment of the amount due him, or else the recovery of his property. Asfar as he is concerned, a judgment without payment is a scrap of paperand no remedy at all. The exercise of his lien, consequently, by neces-sity becomes his only choice of action. To deny him that right wouldbe to countenance every form of trickery and knavery.Thus, it is with satisfaction that the writer'observes this decisionof the Wisconsin Supreme Court which declares that there is no waiveror release of the lien herein resulting by virtue of the entry of judg-ment under the circumstances of the case, thereby reversing judgmentwith directions to enter judgment in favor of the Heating & PlumbingFinance Corp. on its claim for its lien.ERNEST 0. EISENBERG

Personal Property - Mechanic\u27s Lien - Waiver by Judgment on Note

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Personal Property - Mechanic\u27s Lien - Waiver by Judgment on Note

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