Henry & Coatsworth Co. v. Bond

• Decision Date: 06 June 1893
• Citation: 37 Neb. 207,55 N.W. 643
• Court: Nebraska Supreme Court
• Parties: HENRY & COATSWORTH CO. v. BOND ET AL.

37 Neb. 207

55 N.W. 643

HENRY & COATSWORTH CO.

v.BOND ET AL.

Supreme Court of Nebraska.

June 6, 1893.

Syllabus by the Court.

1. M. held a mortgage on certain city lots, on which the owner desired to negotiate a large loan for the purpose of building thereon an hotel, contracts for furnishing the material for which were held by H. & C., who promised M. in writing if he would release his mortgage they would pay him the amount thereof out of the payments made to them for material from time to time, as the building progressed. M. released. Payments for material were made to H. & C., but they paid nothing to M. In a suit by H. & C. to foreclose mechanics' liens on the lots and hotel, held, that the release by M. of his mortgage was a sufficient consideration for the promises of H. & C.; that they were estopped from claiming liens on the property prior to M.; and that their liens should be charged with the amount due M. on his mortgage.

2. Under the law of this state the lien of a mechanic or laborer attaches at the commencement of the furnishing of material, or at the commencement of the performance of labor by him, and not from the beginning of the construction of the improvement on which he labors or for which he furnishes material.

3. A person commencing to furnish material for, or commencing to labor on, an improvement on real estate must at the time take notice of the interest and title in the premises of the person with whom he contracted, as shown by the public records, as his lien for labor and material, aside from the improvement itself, attaches only to such interest.

4. A party taking a mortgage on real estate is bound at the time to know whether material has been furnished or labor performed in the erection, reparation, or removal of improvements on the premises within the four prior months.

5. The lien of a mortgage on real estate, taken while a building is in process of erection thereon, is subject to the claims of material men and laborers for material already and thereafter furnished, and for labor already and thereafter performed in the erection of such building, when the commencement of such furnishing of material or the commencement of the performance of such labor was prior to the record of said mortgage.

6. Under the Nebraska statute there are no priorities among liens for material furnished or labor performed, but this rule of equality applies only to those lienors who commenced the furnishing of material or commenced the performance of labor on the faith of the same estate,--as, if A., B., and C. commence the furnishing of material for an improvement on certain real estate, and afterwards the owner mortgages to D., and thereafter E., F., and G. commence the performance of labor on the improvement, here the liens of A., B., and C. are prior to D.'s mortgage, and prorate among themselves, being of the same class, and attaching to the same estate; while the liens of E., F., and G. would be subject to D.'s mortgage, but would prorate among themselves, being of the same class, and attaching to the same estate.

7. The oath attached to the “account of the items” for material furnished, and for which a lien was claimed, was as follows: “J. A. B., being first duly sworn, * * * says * * * is a * * * correct * * * of material furnished by this affiant. * * * [Signed] Capital City Planing Mills. Per J. A. B., Sec'y.” The account of the items was headed: “M. I. B., to Capital City Planing Mills, Dr.” Held, to show that the lien was claimed by the Capital City Planing Mills, and not by J. A. B., and a substantial compliance with the statute.

8. The oath required by section 3, c. 54, Comp. St., may be made by the agent of the claimant of a lien, whether a person or corporation.

9. When more than four months intervene between items of an account for material furnished, a mechanic's lien will not attach for the items preceding the hiatus, unless it is made to appear by competent evidence that all the items were furnished pursuant to one contract; and the affidavit attached to the “account of the items” is not competent evidence to prove that fact.

10. A vendor of an elevator furnished for and put up in an hotel in process of erection by contract with the owner retained in himself the title until the fixture should be paid for, and reserved the right to retake possession thereof if default should be made in the payment for the same. Held not a waiver of the vendor's right to a material man's lien on the hotel and the land occupied by it.

11. The assignee of a mechanic's lien is subrogated to all the rights of his assignor; and the taking of a mortgage by the assignee on the property affected by the lien, the consideration of which mortgage was used in the purchase of the lien, will not merge the latter in the mortgage, unless it appears such was the intention of the parties, and justice requires it. That intention may be established, not only from the acts and declarations of the assignee, but from a view of the situation as affecting his interests.

12. Where the agent of the obligee in an indemnity bond against mechanics' liens presented the obligation to H. and D., and requested them to sign it as sureties, promising them that A., S., and one Hughes, whose names were printed in the body of the bond as sureties, would also sign it, H. and D. signed on the agreement with the agent that, if the others named as sureties did not sign, the bond should be “invalid.” None of the others named as sureties signed. The agent, without the knowledge of H. or D., erased the other sureties' names by drawing an ink line across them, and delivered the bond in this condition to her principal. Held, the delivery of the bond was unauthorized, and H. and D. were not liable thereon; and, held further, that H. and D., by afterwards taking security to protect themselves from loss, (being then ignorant of the fact that the other sureties had not signed,) did not thereby ratify the delivery of the bond, as the knowledge of the existence of a right or defense, and the intention to relinquish it, must concur in order to estop a party by waiver.

Commissioners' decision. Appeal from district court, Lancaster county; Field, Judge.

Action to enforce a mechanic's lien by the Henry & Coatsworth Company against M. Isabel Bond, owner, Leonidas K. Holmes, contractor, and others, mortgagees and lien-holders. From the decree entered, defendants Rudge & Norris and others appeal. Reversed.

Marquitt, Deweese & Hall, Trimble & Braley, E. E. Brown, Robert Ryan, F. I. Foss, Holmes, Cornish & Lamb, and Talbor & Bryan, for appellants.

S. J. Tuttle, Webster, Rose & Fisherdick, A. G. Wolfenbarger, Clark & Allen, and Leese & Stewart, for appellees.

RAGAN, C.

In June, 1889, M. Isabel Bond owned lots C, D, E, and F, of Bigelow's subdivision of lots 11 and 12, block 27, in the city of Lincoln. On the 29th of this month she entered into an agreement with the appellee Holmes, in and by which he was to furnish the brick and perform the labor for the erection for Mrs. Bond of a four-story brick hotel on said property. At that time the appellant Marquette held a mortgage on these lots to secure a debt of $2,200 and interest owing to him by Mrs. Bond. On the 18th day of July, this year, Mrs. Bond made application to the appellant the Missouri, Kansas & Texas Trust Company (hereinafter called the Trust Company) for a loan of $34,000, to be secured by a mortgage on the above-described property, or, as the application expressed it, Mrs. Bond appointed the Trust Company her agent for procuring such loan. The appellant Drexel made a loan through the said trust company to Mrs. Bond on said property for $30,000, and to secure the same took a mortgage on said real estate, bearing date August 1, 1889, but not recorded until the 26th day of that month, and not executed until about that date. The payment of this mortgage was guarantied to Drexel by the Trust Company. On the date of the mortgage Mrs. Bond and the Trust Company, as agent of Drexel, entered into an agreement in writing, in and by which, after reciting that Mrs. Bond had executed her obligation to Drexel for $30,000, and secured the same by a mortgage on said property, it was provided that Mrs. Bond should at once erect a five-story stone and brick building on said lots, and that the Trust Company, as agent for Drexel, should pay the proceeds of said loan to Mrs. Bond as the erection of said building progressed. These payments were to be made upon the delivery to the Trust Company or its agents of receipted bills of an equal amount to the payments due for labor and materials entering into the construction of the building. Before the recording of the Drexel mortgage Mrs. Bond and the appellees Holmes and the Henry & Coatsworth Company) hereinafter called the Coatsworth Company) agreed in writing with the appellant Marquette that, if he would release his mortgage on said lots, Holmes would pay him thirty (30) and the Coatsworth Company forty (40) per cent. of the estimates or money that might become payable to them for materials furnished in the erection of the building on said lots; and, relying on said promises, the appellant Marquette did release his mortgage. Mrs. Bond as principal, and the appellees Holmes and Doolittle as sureties, executed to the appellant Drexel, on the 1st day of August, 1889, a bond in the sum of $25,000, to protect and indemnify Drexel and his agents against all liens for labor or materials that might be filed against said lots and building. This bond recited that the time allowed by statute for filing of mechanics' liens had not expired; that Mrs. Bond should pay for all work done and all material furnished for said building, and keep the same clear from all liens on account therefor; that, in case she failed to perform her contract, Drexel or his agent, the Trust Company, might take possession of the building, and complete the same, and pay for the labor and...