Lehmann Tire & Supply, Inc. v. Mashuda Construction Co.
Court: Wisconsin Supreme Court; June 27, 1961; Wisconsin; State Supreme Court
The case involves a dispute regarding a contract for highway construction in Columbia County, Wisconsin, between the state and Mashuda Companies. The contract required Mashuda to pay all claims for labor and materials, as stipulated by Wisconsin Statute sec. 289.16. Fidelity Deposit Company provided a bond for Mashuda. Mashuda subcontracted Plerbert A. Carlson to supply road-building materials. Lehmann Tire Supply provided tires and equipment to Carlson, which were fully consumed in the project, totaling $1,784.01, of which $1,530.11 remains unpaid. Lehmann filed a claim with the highway commission on October 16, 1958, in compliance with sec. 289.53, after Carlson failed to pay. Following Carlson's bankruptcy filing on February 5, 1959, the appointed trustee argued that the funds owed under the highway contract should be paid to Mashuda for the benefit of Carlson’s creditors.
Lehmann seeks to establish a lien against these funds under sec. 289.53, which allows individuals providing labor or materials for public improvements to claim a lien on funds due to the contractor, provided they notify the relevant governmental body of their claim before payment is made to the contractor. The trustee contends that the term "any contractor" in the statute does not encompass subcontractors, based on statutory language and legislative history. Originally enacted in 1921, the statute has undergone amendments that expanded the types of lienable items but maintained that the lien applies solely to the contractor directly contracted with the state.
The court has not decided whether the statutory remedy is available to suppliers of subcontractors. In the case of Muller v. S. J. Groves, the issue was raised but not addressed in the court's opinion, which focused solely on the lienability of the equipment and labor provided to the subcontractor. The court noted that the trial court suggested a lack of lien entitlement due to the plaintiff's relationship with the general contractor, but this was not a presumption the appellate court could make. The language in Gilson Bros. Co. v. Worden-Allen Co. did not affirmatively interpret the statute in favor of subcontractor relationships. The original statute's wording limits lien rights to those supplying lienable items to the general contractor, as indicated by the use of the word "such." The court emphasized that the 1945 revision of the statute did not change its original meaning significantly. The interpretation that restricts lien rights to suppliers of the general contractor is deemed consistent with the statutory language, as opposed to concerns raised about subcontractors potentially depriving suppliers of rights through bankruptcy. The court stated that legislative action would be necessary to address these public policy issues, rather than judicial interpretation. Comparisons to Texas law reveal differences, with Texas statutes interpreted more broadly to include subcontractors, while Wisconsin's statutes are seen as unambiguous in excluding them. Ultimately, the court reversed the judgment and instructed the dismissal of the complaint.
