Healey Ice Mach. Co. v. Green
| Decision Date | 03 October 1910 |
| Docket Number | 293. |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | HEALEY ICE MACH. CO. v. GREEN et al. |
Skinner & Whedbee, S. Brown Shepherd, and T. H. Calvert, for defendants.
This cause was set down for hearing upon the pleadings. The facts for the purpose of the hearing and disposition at this time are not controverted. Complainant company, a resident of the state of Illinois, on the 21st day of April, 1906, entered into a contract with defendant Robert L. Green, a resident of the county of Pitt, in the Eastern district of North Carolina, whereby it undertook and obligated itself to deliver and erect 'in his building in the city of Greenville, North Carolina, on foundations to be built by him, one of its improved ice-making machines, with steam engine, boiler condenser, freezing tank,' and other machinery incident thereto, for the price of $5,000, one-third of which was to be paid when the machine was shipped, and the remainder 'when the machine is fulfilling guarantee named in contract. ' A copy of the contract is attached to the original bill.
Complainant alleges that it delivered, erected, and set up the machine in accordance with its contract, and in all respects complied therewith; that one-third of the purchase price was paid by defendant Green according to his contract; that he has not paid the balance, or any part thereof; that the machine was erected on a tract or lot of land lying in the town of Greenville, Pitt county, owned by defendant Robert Green and his wife, Louisa A. Green, by virtue of a deed executed to them jointly; that on the 28th day of September, 1906, defendants Robert Green and wife executed to John W. Aycock a deed of trust conveying the said real estate upon which said machine was erected, for the purpose of securing the payment of a note for $1,250, executed by said defendants, payable to defendant the National Bank of Greenville; that this deed was duly registered; that on December 4, 1906, complainant, pursuant to the provisions of the Constitution and statutes in force in North Carolina, filed notice of lien in the office of the clerk of the superior court for Pitt county 'for work and labor done and material furnished in the erecting, putting up, constructing, and equipping of the said ice machine hereinbefore described, ' etc. A copy of said notice of lien is attached to the original bill herein.
Defendants Robert L. Green and wife filed an answer, admitting the execution of the contract set up in the original bill and the terms thereof. They admit the shipment of certain machinery and the erection thereof on the lot of land described in the bill, but deny that said machinery was either delivered or set up in accordance with the contract, or the guaranties therein. They further allege that the machinery set up was defective and inadequate for the manufacture of ice, etc., and failed in many respects to comply with the terms of the contract. They deny that they are indebted to complainant in any sum whatever. They admit the execution of the trust deed to defendant J. W. Aycock, and allege that they are indebted to the National Bank of Greenville in the sum of $1,250, as therein set forth. They admit that the real estate upon which the machinery was erected belongs to them jointly, subject to the trust deed to defendant Aycock, and deny that complainant was entitled to, or could acquire, any lien thereon. Defendant R. L. Green, by leave of the court, filed a cross-bill alleging a breach of warranty in the sale, construction, and erection of the machine, whereby he had sustained large damage, etc. A further reference to the allegations of the cross-bill need not here be made.
Thereafter complainant filed a supplemental bill, alleging that, subsequent to filing the original bill and the answer thereto, defendants R. L. Green and wife sold the lot upon which said machine was erected, with the buildings, machine, etc., to R. L. Hill and D. B. Johnson for the price of $4,000, of which $500 was paid cash, and notes executed for the remaining part of said purchase price; that said notes were deposited with J. F. Forbes, cashier of the National Bank of Greenville; that on May 4, 1908, said Hill and Johnson took out policies of insurance in the companies named in the supplemental bill on said property to the amount of $4,000, payable to said R. L. Hill and D. B. Johnson, Robert L. Green and wife, and the National Bank of Greenville, 'as their interest may appear'; that on the night of September 8, 1908, the said ice factory and building, with all of its contents, was destroyed by fire; that the insurance companies adjusted the loss at $3,845. Complainant alleges that by virtue of the alleged lien on said property it is entitled to the proceeds of the policies of insurance. It prays that process issue against Hill and Johnson, the insurance companies, and J. F. Forbes, cashier of the National Bank of Greenville; that the insurance companies be directed to pay the proceeds of the policies into court; and that the same be adjudged and decreed to represent the said property, and that the lien of complainant be transferred to said proceeds, and the same be applied to the payment of the amount due from defendant Robert L. Green, and for other and further relief, etc.
Process having issued as prayed, defendants Robert L. Green and wife, Louisa A., Hill and Johnson, and J. F. Forbes, filed separate answers, in which they admit the sale of the property and the disposition of the notes as alleged, except that they say that one of said notes for $400 was assigned to T. B. Mosely for value and is now owned by him. Said defendants deny that complainants have any interest in or claim to the proceeds of said policies, or any part thereof, and allege that the same should be applied, first, to the discharge of the balance due on the note (a part thereof having been paid) due the National Bank of Greenville; second, to defendants Robert L. Green and wife to the extent necessary to discharge the amount due them on account of the purchase price (the amount received by the bank being a part thereof); third, the balance to Hill and Johnson.
Thereafter H. A. White filed his petition in the cause, alleging that since filing the supplemental bill and answer thereto said Hill and Johnson had assigned all of their interest in said funds to him, and asking that whatever sum was found to be due them from the proceeds of said insurance policies be paid to him. Pursuant to a consent order made in the cause the several insurance companies paid the amount of the loss into the registry of the court.
While the North Carolina statute (Revisal 1905, Sec. 2027 et seq.) gives an action at law for the enforcement of a mechanic's lien, it seems that, upon the authority of Sheffield Furnace Company v. Witherow, 149 U.S. 574 13 Sup.Ct. 936, 37 L.Ed. 853, the Circuit Court of the United States, sitting in equity, has jurisdiction to entertain a bill for that purpose. This is especially true when, as in this case, there are conflicting liens upon the property, which a court of equity alone can adjust. It is by no means clear that the complainant's case comes within the language of the Constitution giving a lien, article 14, Sec. 4,...
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