Ellison v. Tubb

• Court: Arkansas Supreme Court
• Writing for the Court: DUDLEY; NEWBERN; NEWBERN
• Citation: Ellison v. Tubb, 295 Ark. 312, 749 S.W.2d 650 (Ark. 1988)
• Decision Date: 02 May 1988
• Docket Number: No. 88-38,88-38
• Parties: Aubrey ELLISON d/b/a Ellison Refrigeration, Appellant, v. Bobby TUBB, Samuel A. Millican, Debra D. Millican and First National Bank of Magnolia, Appellees.

Page 650

749 S.W.2d 650

295 Ark. 312

Aubrey ELLISON d/b/a Ellison Refrigeration, Appellant, v. Bobby TUBB, Samuel A. Millican, Debra D. Millican and First National Bank of Magnolia, Appellees.

No. 88-38.

Supreme Court of Arkansas.

May 2, 1988.

Anderson, Crumpler & Bell, Magnolia, for appellant.

Byron Thomason, Magnolia, for appellees.

DUDLEY, Justice.

On April 6, 1979, the governor signed Act 746 of 1979, which modified the materialman's lien statute to provide that, effective October 1, 1979, notice must be given to a landowner before there is a delivery of materials in order for a materialman's lien to be perfected against the land. See Ark.Stat.Ann. §§ 51-608.1, -608.2, and -608.3 (Supp.1985) and Ark.Code Ann. § 18-44-115 (1987). On April 23, 1979, after the passage of the act but before its effective date, the landowners, appellees Samuel and Debra Millican, entered into a contract with appellee Billy Tubb for construction of a home. Tubb, in turn, later entered into an oral subcontract with appellant Aubrey Ellison to install the heating and air conditioning unit in the home. On June 20, 1979, after passage of the act but still before its effective date, appellant Ellison furnished materials and labor. On October 16, and October 23, 1979, after the effective date of the act, he also furnished materials and labor. No materialman's notice was given to the landowners before the delivery of any materials. The landowners, the appellees, paid Tubb, the contractor, for the house but Tubb did not pay the subcontractor, appellant Ellison. Tubb was subsequently discharged in bankruptcy. The appellant filed suit to perfect his lien. The chancellor found the transaction between the contractor and subcontractor was a single contract to furnish the heating and cooling system. Therefore, the suit for the entire amount was filed within the allowable 120 day period, see Ark.Code Ann. § 18-44-117 (1987). The chancellor further found that the appellant was entitled to a lien only for those materials and labor furnished before the effective date of the 1979 notice act. We affirm.

We first consider the issue raised on cross-appeal, whether the trial court erred in ruling that the transaction was a single contract. Whether a contract is entire or severable is determined from the intention of the parties. Intention may be ascertained from the subject matter of the contract, the circumstances of the transaction, and the language of the parties. Jones v. Gregg, 226 Ark. 595, 293 S.W.2d 545 (1956). When, as in this case, the parties probably never thought about whether their contract was entire or severable, and there were periodic payments, a court must determine whether there were periodic payments under one contract, or whether there were several different contracts with each contract calling for full payment at its completion.

17 Am.Jur.2d, Contracts § 325 (1964) provides in pertinent part:

As a means of ascertaining the intention of the parties, various tests have been adopted. According to some authorities, the criterion is to be found in the question whether the quantity, service, or thing as a whole is of the essence of the contract. If it appears that it is to be performed only as a whole, the contract is entire. Thus, the best test is said to be whether all of the things, as a whole, are of the essence of the contract: that is, if it appears that the purpose is to take the whole or none, the contract is entire; otherwise, it is severable. Another test supported by a number of authorities is that a contract is entire when, by its terms, nature, and purpose, it contemplates that each and all of its parts are interdependent and common to one another and to the consideration, and is severable, when, in its nature and purpose, it is susceptible of divisions and apportionment, and has two or more parts in respect to matters or things contemplated and embraced by the contract which are not necessarily dependent upon each other.

Determining the intention of the parties is an issue of fact, and we affirm a chancellor's finding of fact unless it is clearly against the preponderance of the evidence. ARCP Rule 52(a). The facts reveal the following.

There was no written instrument to be construed, and the primary evidence regarding the nature of the agreement between appellant, the subcontractor, and Tubb, the contractor, came from the testimony of the appellant. Tubb did not testify. A part of appellant's testimony is fairly abstracted as follows:

My deal with Bobby Tubb was that Tubb would call and tell me to air condition the house, usually if it was a heat pump or gas. If we had gas, we normally used gas. If we didn't have gas, we normally used a heat pump; but he would tell me what to use in each case. He didn't tell me what size to use. He would give me a set of plans. He didn't take bids with anybody else at this point. I don't know of any other bids. He didn't know what size unit I was going to put in there nor the exact price. He would give me the floor plan and tell me to put the job in. He asked that I bill him as I did the work. We stock equipment. At that time I was stocking heavier than I am now; usually in the neighborhood of $40,000.00 worth of equipment in the building so I took equipment out of my stock and put it on the job. I hadn't special ordered anything in all probability. He told me to do the whole job so when I went out there the first job and did the first part of it, I had already been asked to do the rest of it.

Some other parts of appellant's testimony seem contradictory to the concept that he and Tubb intended for him to do the whole job, but, taken as a whole, we cannot say the chancellor's ruling was clearly against the preponderance of the evidence. Therefore, we affirm the holding that the transaction was one entire contract, and the lien proceeding was timely filed.

On direct appeal the appellant argues that Act 746 of 1979, as applied by the chancellor, is a law which impairs the obligation of this contract in violation of article 2, section 17 of the Constitution of Arkansas and article 1, section 10 of the Constitution of the United States. The argument, in summary, is as follows:

a. The entire transaction was a single contract.

b. When the contract was entered into, which was before the effective date of the act, no preliminary notice was required for the remedy of perfecting a lien.

c. Before the contract was finished, but after the effective date of the act, Act 746 required a materialman to give the preliminary notice in order to perfect a lien.

d. The...