LITTLE HORN STATE BANK v SCHESSLER
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No. 83-52 I N TI-IE SUPRE?E COURT O THE STATE O t.IOPJTANA F F 1934 LITTLE HORN STATE BANK, a banking c o r p o r a t i o n , P l a i n t i f f and X e s p o n d e n t , SCHESSLER-MILLER R A Y M I X , E D et al., D e f e n d a n t s and A p p e l l a n t s . APPEAL FROfiI: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County o f C a r b o n , The H o n o r a b l e C h a r l e s Luedke, J u d g e p r e s i d i n g . COUNSEL O RECORD: F For Appellants : Herman Law F i r m ; L a r r y D. Ilernan f o r S c h e s s l e r - M i l l e r Ready Mix, L a u r e l , Montana Roy J o h n s o n f o r Peavey S u p p l i e s , B i l l i n g s , Montana For Respondent: D o u g l a s Freeman, H a r d i n , Montana S u b m i t t e d on B r i e f s : Decided: - Clerk January 2 6 , 19Rd Jane 1 4 , 1984 Mr. Justice Daniel Court. J. Schessler-Miller Shea delivered the Opinion o: the f Ready Mi, Lnc., and Garcia Cement Company appeal an order of the Carbon County District Court denying their motion to reconsider and amend a summary judgment entered against them holding their mechanics' liens invalid. Although the two companies raise three issues relating to the validity of their mechanics' essence is affidavit whether that the a lien claimant cont.ents of the liens, the who lien fulfil-led the statutory requirements of issue in asserts are in true an has section 71-3-511, YCA, that an affidavit verify that the amount claimed is "a just and true account after allowing all credits." The lien claimants argue: first, that section 71-3-511, MCA, prescribes no particular form for a mechanic's lien; second, that the notice of lien does not have to contain the language "a just and true a-ccount;" and third, that their liens are sufficient on which to base a charge of periury, under Saunders Cash-Way Lumber v. Herrick and Brown (1978), 1-79 Mont. 233, 587 P.2d 947. We reverse the trial court and order the liens reinstated. On November 16, 1978, Ronald D. Kohl and Mary Lou Kohl borrowed $59,000, at 10 percent interest, from Little Horn State Bank of Hardin, Nontana. The Kohls gave the Rank a promissory note for the loan, and executed a mortgage on property described. as "Tract C, Certificate of Survey No. 993, Carbon County, Montana" as security. The note came due on June 1, 1979, but the Kohls failed to pay the note. Tn 1979 and 1980, the Kohls contracted with the various defendants to build a house on their property. It is not clear from the record whether a house was ever completed, but the defendants all filed mechar.icsl liens in (section 71-3-502 (4), MCA) statute 1980. BY a mechanic's lien has priority over a previously filed mortgage. On May 26, 1981, the Eank filed a complaint to foreclose on the mortgage, because the note was still unpaid. The Rank claimed as due the $59,000 note, plus interest from November 16, 1978 to May $75,058.46. 22, 1981 ($16,058.46), totaling The Bank notified the Kohls and the lien holders of record that it intended to foreclose on the mortgage and to quiet title in the Bank's name. The Kohls failed to respond, and default judgment against them. the court entered The Eank moved for summary judgment against Schessler-Miller, Garcia Cement, and Peavv Building Supplies, arguing that the liens of these companies were invalid, the effect of which gave priority to the Bank's mortgage. Schessler-Miller's I ien is in the amount of $1,061.97, Garcia Cement's lien is for $1,957.00, and Peavy Supplies' two liens totaled $13,388.36. The three companies and the Bank stipulated that the only issue to be decided by the trial court was whether the affidavits of the three companies' mechanics' liens were sufficient to satisfy the statutory requirements for a valid lien. The trial court held that Peavy Building Supplies' liens were val-id and that the Bank has not appealed. trial court also held liens were However, the that Schessl-er-Miller and invalid because amount due was a net amount. Garcia's they did not verify that the Although a valid mechanic's lien has priority over any mortgage on the 71-3-502 (4), MCA, section property, to perfect the lien, a lien claimant must follow the procedures of section 71-3-511, MCA. The disputed. requirement is in section 71-3-511(1). It states that a lien claimant must file a "just and true account of the amount due him, after allowing all credits, containing a correct description of the property The . . . verified mechanics' by affidavit liens of . . ." Schessler-Miller and Garcia consisted of a statement of the amount owing, real property description, names of the owners, the dates of completion, and a signed affidavit that the facts in the lien were true and within the knowledge of Schessler-Miller indebtedness of stated a $1,061.97," the affiant. precise and the The lien of indebtedness lien of Garcia " a. n a-lso stated a precise indebtedness "an indebtedness of $1,957.00." However, the two mechanics' liens did not contain language referring to the account as a just and true account. Implicit in a statement of an amount due and owing is that it is a net amount, after accounting for all debits and credits. To verify the account as a net account a lien cla.imant is not required. to use the statutory words "just and true account . . . after al-lowing credits." The purpose of the statute is to give notice to the public and property owner that a mechanic's lien has been filed for a certain amount and on specifi-c property. Clearly, the liens of the lien claimants here sive the required notice to the public and to the property owner. The third issue is whether the lien claimants' liens are valid under the standard set forth in Saunders Cash-Way Lumber v. Herrick a.nd Brown (1978), 179 Mont. 233, 587 ~ . 2 d Under Saunders, the affidavit verifying the amount due 947. must be sufficient on which to base a periury charge if the statement. is fa.1-se. In holding that the I-ien claimants' statements did not meet this test, the trial court stated: ". . . it is apparent that in neither the announcement of the amount of indebtedness set forth in the notice nor in the statement of account attached as Exhibit 'A' has the lien claimant made any commitment that the figures given represent 'a just and true account of the amount due him, after allowing all credits Although the affidavit is one upon which perjury could be assigned, it is not so assignable as to all of the necessary elements of the lien." ... In Saunders we upheld the trial court's denial of a mechanic's lien because the affidavit conditioned the truth of the lien on the affiant's knowledge, information and belief, and therefore it did not constitute a statement under oath by a person who had personal knowledge of the facts. Saunders, the affiant would not have been In subject to a perjury charge if the amcunt due failed to reflect payments, and therefore we held that the affidavit was insufficient. The language of the statute itself is sufficient to put potential lien claimants on notice that the amount they claim as due must be correct, that is, it must be a net amount. Section 71-3-511(1, MCA, provides that the affidavit must ". . . a just and true account . . . after allowing It does not say that these statutory credits . . ." set forth all words must be incanted in the body of the a.ffidavit supporting the filing of a mechanic's lien. As we ha-ve held, implicit in any lien claim is a belief that the amount claimed is a net amount, and that such statement of amount owed will subject a lien claimant to a charge of perjury. The affidavits of Schessler-Miller and Garcia clearly meet the standard of Saunders. They swore that they knew the contents of the lien, that the facts were true, and that the a.ffiant had personal knowledge concerning the facts stated. It can be determined from reading the liens that the amounts stated are net amounts, and that the affiants believed those amounts to be net amounts. Therefore, the liens have met the perjury standard and are valid. The District Court order granting summary judgment in favor of the Bank is reversed. We Concur: / Justices
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