Peterson, David L

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North Dakota Law Review Volume 43 Number 1 Article 8 1966 Liens - Mechanics' Liens - Right to and Protection of Liens David L. Peterson Follow this and additional works at: https://commons.und.edu/ndlr  Part of the Law Commons Recommended Citation Peterson, David L. (1966) "Liens - Mechanics' Liens - Right to and Protection of Liens," North Dakota Law Review: Vol. 43 : No. 1 , Article 8. Available at: https://commons.und.edu/ndlr/vol43/iss1/8 This Case Comment is brought to you for free and open access by the School of Law at UND Scholarly Commons. It has been accepted for inclusion in North Dakota Law Review by an authorized editor of UND Scholarly Commons. For more information, please contact und.commons@library.und.edu. RECENT CASESCourt to take the initiative and break with an archaic, unjust rule.North Dakota has a constitutional barrier greatly limiting thescope of the court's power by providing that "suits may be broughtagainst the state in such manner, in such courts, and in suchcases, as the legislative assembly may, by law, direct. 3 3 Municipalcorporations, as creatures of the state, " are therefore liable onlyas established by statute. This is also the rule regarding countiesin North Dakota, 5 but a different rule was established by the courtfor charitable institutions, which are no longer immune.3 6 The Legis-lature has provided for suits against municipal corporations forinjuries arising because of defective streets, sidewalks, and bridges.3 7The North Dakota Court considered the governmental immunitydoctrine in a 1965 case,3 8 and, noting that the previous LegislativeSession had recognized the doctrine when it amended and reenacteda statute concerning the "right to claim governmental immunity"by political subdivisions which purchase liability insurance,3 9 thecourt upheld the doctrine. Therefore, it would appear that if anyrelief is to be forthcoming in the State of North Dakota regardinggovernmental immunity, such a change will have to be made bystatute or constitutional amendment.JOHN D. OLSRUDLIENS-MECHANICS' LIENS-RIGHT TO AND PERFECTION OF LIENS-Plaintiff brought action to foreclose a mechanics' lien against theproperty owners and also a mortgagor and judgment creditor whoclaimed first priority on the property Plaintiff's claim to the me-chanics' lien hinged on whether a certain item delivered was actuallyused in construction of the defendant's house and whether plaintiffhad perfected his lien according to statute. The Supreme Court ofKansas held that the mechanics' lien would not attach because itwas not proven that the item in question was actually used inconstruction and thus the statement required to perfect the lien33. N.D. CONST., § 22.34. N.D. CONST., § 130. See Fetzer v. Minot Park Dist., 138 N.W.2d 601 (N.D. 1965).35. Mayer v. Studer & Manion Co., 66 N.D. 190, 262 N.W 925 (1935).36. Granger v. Deaconess Hosp. of Grand Forks, 138 N.W.2d 443 (N.D. 1965)Rickbeil v. Grafton Deaconess Hosp., 74 N.D. 525, 23 N.W.2d 247 (1946).37. N.D. CENT. CODE § 40-42-01 (1960).38. See Fetzer v. Minot Park Dist., 138 N.W.2d 601 (N.D. 1965).39. N.D. CENT. CODE § 40-43-07 (Supp. 1965). For a discussion of the effect of liabilityinsurance on governmental immunity, see 39 N.D.L. REv. 358 (1963).122 NORTH DAKOTA LAW REVIEWwas not filed in time. Seyb-Tucker Lumber and Implement Co. v.Hartley, 415 P.2d 217 (Kan. 1966).Mechanics' liens date back to 1791 when the Maryland legislatureadopted a statute creating their mechanics' lien law 1 Because allmechanics' liens are statutory, the requirements for perfecting mustbe strictly pursued2 but the provisions of the statutes are liberallyapplied.Most statutes state that the material furnished must be used,8but there are two doctrines of use. One doctrine requires actualuse and demands that the materials are actually used in the con-struction of the building before a mechanics' lien can attach.4The rationale of the actual use doctrine is that a lien should notbe attached to property for materials which never entered into itsconstruction. 5 Under this doctrine the burden of proof is on thematerial-man and often it would be more of a burden than a benefitto establish the lien." It is also notable that this rule appears toplace the burden of proof on the one not m the best position toestablish the truth of a statement. The second doctrine is "presump-tive use" which states that merely furnishing or delivering goodsto the construction site will be prima facze evidence of, or raise apresumption that, the goods were used. 7 This position is justifiedon the basis that the owner is in a better position to prove non-usethan the materialman is to prove use," and is the position adoptedin a majority of jurisdictions.9Notably, some jurisdictions apply different theories of use de-pending on whether goods were delivered directly to the owner orrouted through a contractor 10 These jurisdictions hold that deliveryto the owner will allow presumptive use and allow the lien toattach, however actual use must be proven if the goods are routedthrough a contractor 1 There are also two basic groups of statutorywording. One group refers to furnishing material in designatedcircumstances such as "for the construction" of a building or "in1. See, generally, 3 WILLIAMETTE LAW JOURNAL 73 (1964).2. E.g., Logan-Moore Lumber Co. v. Black, 185 Kan 644, 347 P.2d 438 (1959).3. N.D. CENT. CODE § 35-27-01 (1961), MINN. STAT. ANN. § 514.01 (1945) S.D. CODE§ 39.0701 (1939) MONT. REV. CODE § 45-501 (1947), KAN. STAT. ANN. ch. 60 § 1101(1963).4. E.g., Unit Sash & Sales Co. v. Early, 117 Kan. 425, 232 Pac. 232 (1925) Pitts-burgh Plate Glass Co. v. Leary, 25 S.D. 256, 126 N. W 271 (1910).5. See, generally, 39 A.L.R.2d 425.6. W Bateson & Co. v. Baldwin Forging & Tool Co., 75 WVa. 574, 84 S.E. 887 (1915).7. See, e.g., David v. Doughty, 96 Kan. 556, 152 Pac. 660 (1915) , State Loan Co. v.White Earth Coal Mining, Brick & Title Co., 34 N.D. 101, 157 N.W 834 (1916).8. See, generally, 39 A.L.R.2d, op. cit. supra, at 434.9. State Loan Co. v. White Earth Coal Mining, Brick & Title Co., supra note 7.10. See, generally, 39 A.L.R. 2d, op. cit. aupra at 435.11. Francis & Nygren Foundry Co. v. King Knob Coal Co., 142 Wis. 619, 126 N.W. 39(1910), States that the owner has no control of goods delivered to the contractor thusmechanics' lien should not attach.RECENT CASESerecting" a building or "to be used in the construction of a build-ing."' 12 Statutes of this type are the ones generally to be construedas adopting the presumptive use doctrine and delivery is consideredsufficient for the lien to attach, s except in those jurisdictions whichdistinguish between delivery to the owner and delivery to a con-tractor The other group of statutes declare that a lien shall begranted only under designated circumstances, such as "for deliveryof material" or to materialmen "who deliver material in connectionwith construction" and here proof of actual use is essential.14All mechanics' lien statutes require certain steps to perfect thelien. 15 The most important is that the lien must be filed withina specified period of time following delivery of the last item usedin the project.' 6 This statutory time differs from state to state,17but its importance is illustrated by the instant case where the courtconcluded that the owner had rebutted the presumption that the lastitem delivered to the site was used for his project and thus thelien failed because it was not filed within the statutory time. Anextension of the statutory period for filing may be achieved byfurnishing some comparatively small item at a much later dateif the item was furnished in good faith,"" however, if the goodswere furnished merely to provide an extension of time it will notbe allowed.19 There is also a divergence of opinion on the effective-ness of the lien when the claimant fails to file within the statutorytime limit. Some statutes state that the lien is lost entirely if notfiled in time,2 whereas, others merely provide that the mechanics'lien is not lost for failure to file but it will be subordinated to theclaims of a purchaser or encumbrancer for value.2 1The Kansas Supreme Court says it has adopted the presumptiveuse doctrine and is applying it in this case, but, they found no usebecause the plaintiff could not prove definitely that the item wasused in the building. It becomes evident, therefor, that in substance12. See. generally 39 A.L.R. 2d, op. cit. supra, at 452.13. See, e.g., Thompson-McDonald Lumber Co. v. Morawetz, 127 Minn. 277, 149 N.W300 (1914) State Loan Co. v. White Earth Coal Mining, Brick & Title Co., supra note 7.14. Hill v. Bowers, 45 Kan. 592, 26 Pac. 13 (1891).15. See, e.g. N.D. CENT. CODE § 35-27-13 (1961) MINN. STAT. ANN. § 514.08 (1945)S .D.CODE § 39.0708 (1939) MONT. REV. CODE § 45-502 (1947) KAN. STAT. ANN. ch. 60 §1102 (1963).16. Ibid.17. Id., North Dakota, Minnesota and Montana require filing within 90 days of thelast delivery. South Dakota reqires filing within 120 days and Kansas calls for filingwithin 4 months.18. W.B. Martin Lumber Co. v. Noss, 256 Minn. 471, 99 N.W.2d 65 (1959).19. Guy T. Bisbee Co. v. Granite City Investing Corp., 59 Minn, 442, 199 N.W 17(1924).20. MONT. REV. CODE § 45-502 (1947).21. N.D. CENT. CODE § 35-27-14 (1961).NORTH DAKOTA LAW REVIEWthe court utilized the actual use doctrine in finding that the lienhad not been filed in time to meet the statutory requirement.Jurisdictions adjacent to North Dakota have adopted varyingviewpoints as to which doctrine to apply That Montana takes astricter view as to use is demonstrated by the fact that Montanaby statute22 and through case interpretation 23 places the burdenof proof on the lien claimant, and he must show actual use orno lien attaches. South Dakota courts state that the requirementof actual use is the better rule and further state that it is incumbenton the contractor to see that his goods are actually used.24 Minnesotahas one of the most generous courts in allowing mechanics' liens25and consequently adopts the more liberal presumptive use doctrineunder which delivering or furnishing of goods is sufficient for a liento attach unless the owner rebuts the presumption.Although the North Dakota statute requires use, 26 our courtshave adopted a liberal viewpoint 27 and follow the presumptive usedoctrine. This interpretation relieves the materialman of the burdenof watching his material until it is put into the structure or consumedin the process and places the burden of proof on the owner who isin a better position to prove non-use than is the materialman toprove actual use. Notably North Dakota's statute goes further thansome others as it allows the mechanics' lien to attach the land onwhich the structure is located as well as the structure itself.2 8 NorthDakota also allows the mechanics' lien priority over all other at-tachments if filed within the statutory period, however, failure tofile within the statutory period will not bar the lien, but the prioritywill then be determined by the order in which they are filed.2 9DAVID L. PETERSONEVIDENCE-ADMISSIBILITY OF A DECLARATION AGAINST PENALINTEREST-SUFFICIENCY OF TRUSTWORTHINESS-Plamtiff sued dece-dent's estate for the return of stolen money An accomplice, while22. MONT. REV. CODE § 45-502 (1947).23. Rogers-Templeton Lumber Co. v. Welch, 56 Mont. 321, 184 Pac. 838 (1919).24. Pittsburgh Plate Glass Co. v. Leary, 25 S.D. 256, 126 N.W 271 (1910).25. See, generally, 39 A.L.R.2d 406.26. N.D. CENT. CODE § 35-27-01 (1961).27. McCauli-Webster Elevator Co. v. Adams, 39 N.D. 259, 167 N.W 330 (1918).28. N.D. CENT. CODE § 35-27-19 (1961).29. N.D. CENT. CODE § 35-27-22 (1961). It should also be noted that the UniformCommercial Code which is now effective in North Dakota has no effect on statutory lienssuch as the mechanics' liens. This Is stated in 41-09-04.

Liens - Mechanics\u27 Liens - Right to and Protection of Liens

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Liens - Mechanics\u27 Liens - Right to and Protection of Liens

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