Hercules Powder Co. v. Knoxville, L. & J.R. Co.

• Decision Date: 29 October 1904
• Citation: 83 S.W. 354,113 Tenn. 382
• Parties: HERCULES POWDER CO. et al. v. KNOXVILLE, L. & J. R. CO.
• Court: Tennessee Supreme Court

83 S.W. 354

113 Tenn. 382

HERCULES POWDER CO. et al. v. KNOXVILLE, L. & J. R. CO.

Supreme Court of Tennessee.

October 29, 1904

Appeal from Chancery Court, Anderson County; Hugh G. Kyle Chancellor.

Bill by the Hercules Powder Company and another against the Knoxville, Lafollette & Jellico Railroad Company. From the decree rendered, complainants appeal. Reversed.

Shields Cates & Mountcastle, for appellants.

Cornick Wright & Frantz and X. Z. Hicks, for appellee railroad company. Norman B. Morrell, for appellees Cole & Co.

WILKES J.

This bill seeks to fix a lien upon the railroad company for the cost of powder and other blasting material furnished to construct the railroad and blast a tunnel on its line known as "Dossett's Tunnel."

Mason Hoge & Co. had a contract with the railroad company to build the road, excavate the tunnel, and furnish all the necessary material for that purpose. They sublet the excavating and boring of this tunnel to Cole & Co., who in terms agreed to do all the work and furnish all necessary material and labor for that purpose. Cole & Co. made a contract with each of the complainant companies, to wit, the Hercules Powder Company and the Repauno Chemical Company, by which they agreed to buy from these companies all of the explosives and explosive supplies which would be required in the excavation or boring of said tunnel.

The powder company furnished under its contract four bills or lots--one October 13, 1902, amounting to $2,200; one May 27, 1903, $2,200; one July 8, 1903, $480; and the last September 18, 1903, $384.36.

Cole & Co. paid on account $721.46, leaving due $4,543.90. All of the material bought by this company was used in the construction and boring of this tunnel.

The chemical company furnished in March, 1903, $4,534.03 of explosive material, and Cole & Co. paid it on account $3,636.76, leaving a balance unpaid of $897.36.

About October 1, 1903, Cole & Co. announced to its creditors that they were insolvent, and could not complete their contract with the railroad.

On October 10, 1903, each of complainant companies notified the railroad company that they had furnished explosive materials to Cole & Co., for which they had not been paid, as before stated, and that they claimed liens upon the railroad company for the amounts due them.

Upon the hearing the chancellor held that complainants had no lien for the explosive materials furnished Cole & Co. as against the railroad, and dismissed the bill, and complainants appealed.

In the Court of Chancery Appeals the majority of that court were of the opinion that explosives used in excavating a roadway through a tunnel in building a railroad was material within the meaning of the Acts of 1883 and 1891, and that complainants under these acts were entitled to liens upon the railroad property, provided proper notices were given the railroad as provided by those acts.

It held, however, that the Repauno Chemical Company had not given such notice, and was entitled to no lien, and that the Hercules Powder Company was entitled only to a lien for the explosives furnished Cole & Co. within 90 days of November 10, 1903, when notice of the lien was given the railroad company; and under this holding adjudged the powder company entitled to a judgment for $384.36.

The Hercules Powder Company assigns as errors that part of the holding and decree of the Court of Chancery Appeals which finds and adjudges that it is only entitled to a lien upon the Knoxville, Lafollette & Jellico Railroad Company's railroad and property for the blasting materials furnished to Cole & Co. within 90 days from November 10, 1903, the date of said notice, and that it is not entitled to a lien for the whole balance due to it for blasting materials furnished under its said contract with Cole & Co., amounting to $4,543.90.

The Court of Chancery Appeals found that G. H. Cole & Co. agreed and contracted with the Hercules Powder Company to buy from it all of the explosives needed in the excavation of Dossett's tunnel under their contract with Mason, Hoge & Co.; that said explosives were to be furnished in the quantities and as ordered by G. H. Cole & Co., and were to be paid for within 30 days after they were used; that the Hercules Powder Company actually delivered goods to Cole & Co. under said contract on September 18, 1903, and that on October 10, 1903, the Hercules Powder Company gave the notices required by the Acts of 1891 of the fact that it had furnished said material and claimed said lien.

It is assigned as error that under these facts the Court of Chancery Appeals should have held, and erred in not holding, that the contract to furnish said blasting material was an entirety, and that the Hercules Powder Company had 90 days from the date that the last material was delivered under said contract within which to give said notice, and that the giving of said notice on October 10, 1903, entitled the complainant to a lien for the full balance due to it for the material furnished as aforesaid, which is found by the Court of Chancery Appeals to be the sum of $4,543.90.

The Repauno Chemical Company assigns as error that part of the decree of the Court of Chancery Appeals which finds and adjudges that it is not entitled to a lien upon the Knoxville, Lafollette & Jellico Railroad Company's railroad and property for the balance due it for the materials furnished by it to Cole & Co., with which to excavate said Dossett's tunnel. It is claimed that said court should have held, and erred in not holding, that the Repauno Chemical Company was entitled to a lien upon said railroad company's railroad and property under chapter 220, p. 296, of the Acts of 1883, as amended by chapter 98, p. 215, of the Acts of 1891, and should have decreed, and erred in not decreeing, that complainant was entitled to have said railroad company's railroad and property sold for the satisfaction and payment of complainant's said claim.

The Court of Chancery Appeals based its decree denying the Repauno Chemical Company said lien on the ground that it did not deliver any of said material within 90 days of the date of its said notice to the railroad company that it claimed said lien. With reference to the facts governing this claim the Court of Chancery Appeals said:

"The complainant Repauno Chemical Company made a contract with Cole & Co., as before stated, to furnish all the explosives and explosive supplies needed in their contract with Mason, Hoge & Co., and all the material actually furnished under this contract by the Repauno Chemical Company was shipped on March 9 and March 17, 1903, to Cole & Co., and aggregated in value the sum of $4,534.03. Under its contract with Cole & Co. the powder used in each month was to be paid for by Cole & Co. in the following month. Cole & Co. are entitled to credit on said amount of $3,636.76, leaving a balance due the Repauno Chemical Company of $897.27.

"About October 1, 1903, Cole & Co. announced to their creditors that they were insolvent, and could not complete their contract. At this time Cole & Co. had ordered other goods from the Repauno Chemical Company under their contract with it, and said goods were in transit to Cole & Company. The delivery of the same, however, was stopped by the Repauno Chemical Company upon receiving information that Cole & Co. were insolvent, and they afterwards sold to Mason, Hoge & Co."

The Repauno Chemical Company gave its notice October 10, 1903.

The complainants assign as error that part of the decree of the Court of Chancery Appeals dismissing the bill as to the Repauno Chemical Company, and denying the Hercules Powder Company a lien for the full amount of the balance due it for explosive materials furnished to G. H. Cole & Co. and in taxing complainants with a part of the costs.

It is contended that the Court of Appeals should have found and decreed, and erred in not finding and decreeing, that the complainants were entitled to a lien against the railroad and property of the Knoxville, Lafollette & Jellico Railroad Company for the full amount of the respective claims sued for by them in this cause, together with interest and all the costs of this cause.

The defendant, by its assignments of error, and in defending against complainants' assignments, raises the question whether the explosive supplies furnished by complainants constitute material within the sense and meaning of the statutes and laws of Tennessee relating to liens of furnishers of materials used in the construction of railroads as set out in the Acts of 1883 and 1891.

The complainants rely for their liens upon the provisions of the Acts of 1883, p. 296, c. 220; the first section of which is in the words and figures following: "Section 1. Be it enacted by the General Assembly of the State of Tennessee, that where any railroad company contracts with any person or persons, for the grading of its roadway, the construction or repair of its culverts and bridges, the furnishing of cross-ties, the laying of its track, the erection of its depots, platforms, wood or water stations, section houses, machine shops or other buildings, or for the delivery of material for any of these purposes, or for engineering or superintendence there shall be a lien upon such railroad in favor of the person or persons with whom the railroad company contracts for the performance of the work, or the delivery of the materials to the amount of the debts contracted therefor, which lien shall continue in force for six months after the performance of the work or the delivery of the material, and until the terminal of any suit commenced within the time for its enforcement;" and upon the provisions of chapter 98, p. 215, of the Acts of 1891.

That act provides, in substance, as...