Fleshman v. Whiteside

• Decision Date: 17 July 1934
• Citation: 148 Or. 73,34 P.2d 648
• Parties: FLESHMAN v. WHITESIDE et al.
• Court: Oregon Supreme Court

34 P.2d 648

148 Or. 73

FLESHMAN v. WHITESIDE et al.

Supreme Court of Oregon

July 17, 1934

Department 2.

Appeal from Circuit Court, Benton County; G. F. Skipworth, Judge.

Suit to foreclose mechanics' liens by Vern W. Fleshman against Clarence J. Whiteside, May Whiteside, the Willamette Petroleum Syndicate, R. W. Foster and wife, and L. L. Timby. Decree for plaintiff, and all defendants, except defendants Whiteside, appeal.

Reversed and rendered without prejudice to plaintiff's right to sue at law.

Harry G. Hoy and R. F. Hollister, both of Portland, for appellant.

Walter T. Durgan and Fred McHenry, both of Corvallis, for respondent.

BAILEY, Justice.

This suit was instituted by the plaintiff to foreclose his own and two assigned mechanics' liens. From a decree foreclosing the liens on certain personal property for the amount found due plaintiff from the Willamette Petroleum Syndicate, all the defendants except Clarence J. Whiteside and May Whiteside, who are not shown to have any interest in that property, prosecute this appeal.

The two principal questions here presented involve the construction of section 51-107, Oregon Code 1930, reading as follows "No lien provided for in this act shall bind any building, structure, or other improvement for a longer period than six months after the same shall have been filed unless suit be brought in a proper court within that time to enforce the same; or if a credit be given, then six months after the expiration of such credit; but no lien shall be continued in force for a longer time than two years from the time the work is completed by any agreement to give credit."

The three notices of claim of lien in this case were filed on September 19, 1931, were in the usual form, and were for balance due for labor performed "in the construction of and drilling" an oil well in Benton county, Or. The complaint in the suit to foreclose the liens was not filed until August 31, 1932.

It is the plaintiff's contention that (1) the time in which to institute suit to foreclose these liens was extended by certain transactions between the lien claimants and the defendant Willamette Petroleum Syndicate; and (2) that the section of the Code above quoted is a statute of limitations and, since the defendants did not, either by demurrer or answer, raise the question that the suit had not been brought within the time prescribed by law, they thereby waived that defense.

The only allegations of the complaint with which we are here concerned are those contained in paragraph 12 of that pleading, reading as follows: "That within six months from the date of filing said lien and on the 18th day of March, 1932, the defendant, Willamette Petroleum Syndicate, for the purpose of extending the time for the foreclosure of said lien, did on said March 18, 1932, make a partial payment upon said amount due upon said lien of $10.00, for the purpose of, and with the understanding that said payment should operate as a payment for the purpose of extending the time for foreclosing said lien; that said payment is evidenced by a letter of said Willamette Petroleum Syndicate, dated March 18, 1931 [1932], filed with the county clerk of Benton county, Oregon, on March 19, 1931 [1932], a copy of which is hereto attached, marked 'Exhibit A-1' and by reference made a part hereof; that six months have not elapsed since the 18th day of March, 1932."

The letter referred to in the foregoing paragraph is dated at Portland, Or., March 18, 1932, signed by the Willamette Petroleum Syndicate, addressed to the plaintiff, and in the following words: "Enclosed herewith find check No. 110 bearing date of this letter in the amount of $10.00. This check is a partial payment upon wages due you by the company for which wages you have filed a lien in Benton county Oregon, but this payment is made without prejudice to any rights the company may have as to the amount of the lien claimed."

Similar allegations are contained in the other two causes of suit, including mention of identical letters, with the exception that the latter had been addressed to the other two lien claimants.

It is evident from the quoted allegation of the complaint and the testimony of plaintiff's attorney and the argument in his brief, that the plaintiff is relying entirely on the payment of $10 on each claim as being sufficient in and of itself to extend for six months the time within which suit could be brought to foreclose the three liens. No contention is made that the defendants are in any way estopped from insisting that the suit was not brought in time by any agreement had between the various claimants and the defendant corporation, other than the agreement implied by the payment and the acceptance of $10 on each claim.

The question is whether or not the payment by the defendant corporation to the three lien claimants of a part of the amount due each on his lien is a credit within the meaning of the statute above quoted. Were it not for the fact that the article "a" precedes the word "credit" in the statute where the latter word is first used, there would be nothing on which to base such an interpretation of the law. The expression "a credit," standing alone, might be construed to mean an acknowledgment or entry of payment. However, the word "credit" is next used without the article "a," clearly in its meaning of a period allowed for deferring payment. If used as denoting a payment or the entry of a bookkeeping credit, then the use of the term "after the expiration of such credit" in connection therewith would be meaningless. If we were to construe the word "credit" as meaning a payment, the phrase under discussion would then read, substituting the word "payment" for "credit," as follows: "Or if a payment be given, the six months after the expiration of such payment." Since a payment is not generally referred to as being given, we should further be obliged to substitute the word "made" for "given." Then for the word "expiration" it would be necessary to substitute either "date" or "making," so that the phrase would then speak of "the date of such payment" or "the making of such payment." If, however, we are to make the changes above suggested and substitute the word "payment" for the word "credit," then the last sentence of the above-quoted section of the Code would, without any change made therein, be completely without meaning; equally so, if we were to substitute the word "payment" for the word "credit" appearing in the sentence without making further changes or substitutions.

The word "credit" as used in the statute, therefore, must be understood as referring to a period of grace, so to speak, an extension of time granted to the debtor within which to pay. "A credit," an acknowledgment of indebtedness reduced, is a finality, having neither duration nor expiration. Hence it is clear that, in speaking of the "expiration" of credit given, the statute must refer not to the instance of any payment made on the indebtedness, but to the expiration of an additional period of grace, or credit extension, accorded the debtor. We therefore hold that a payment on the claim of a lienor does not, within the meaning of section 51-107, extend the time within which to institute foreclosure proceedings.

The foregoing conclusion is in accord with the decision of this court in the cases of Allen v. Roufs, 30 P.2d 766, and Capital Lumbering Co. v. Ryan, 34 Or. 73, 54 P. 1093. See, also, in this connection, Boise Payette Lumber co. v. Weaver, 40 Idaho, 516, 234 P. 150.

The defendants did not either by demurrer or answer raise the point that the suit had not been brought within six months of the date of the filing of the liens, but they did on the trial strenuously contend that the liens created by the filing of the three notices of claim of lien had expired before this suit was instituted. The plaintiff, both in the circuit court and this court, insisted that the section of the Code hereinbefore quoted in a statute of limitation, and that therefore the defendants waived the benefit thereof by raising the question for the first time during the introduction of testimony in the circuit court.

Relative to the foreclosure of mechanic's liens, we find in 5 Bancroft's Code Practice and Remedies (1928) p. 4845, § 3629, this observation: "The time within which the action must be brought is prescribed by statute. A common provision is substantially to the effect that no lien binds any improvement for a longer period than ninety days after the same has been filed, unless proceedings be commenced in...