In Re: Rehearing

• Citation: 42 Idaho 60
• Parties: On Rehearing.
• Decision Date: 08 May 1926
• Court: Idaho Supreme Court

42 Idaho 60

On Rehearing.

Supreme Court of Idaho

May 8, 1926

BUDGE J.

-Application for rehearing was made and granted in this cause. Briefs were filed by the respective parties and have been examined, together with a re-examination of the record.

Appellants Day and Moorman in their petition for rehearing urge that a finding in favor of appellant bank is a finding in their favor; that this court has misunderstood the testimony with regard to the deposit made by Day with the bank, and the soundness of the opinion with respect to the status of the farm labor claims is questioned.

We have not misunderstood the record; neither are we of the opinion that a finding in favor of the bank is a finding in favor of appellants Day and Moorman, but quite the contrary. The ordinary duty of a bank receiving paper for collection, as was done in the instant case, is to make a proper demand, and to give notice of nonpayment, protest, etc., as may be necessary to fix the liability of other parties. (7 C. J 609.) As a general rule, after a bank makes a collection it becomes a simple contract debtor for the amount, less the commission charged. (7 C. J. 616.)

It is clear from the testimony that Day desired to be relieved from the burden of making the proper distribution of the proceeds from the sale of the seed. He made no application of such proceeds upon any claim in particular. His deposit was made with the understanding that the bank should pay the money out to other parties as and when the rights of those parties were ascertained. He made the deposit with the bank for a specific purpose, and his deposit, as to respondent and the lien and mortgage claimants, was in the highest degree conditional. It was not payment of respondent's notes. It is Day's contention that the deposit was made with the bank as Nohrnberg's agent for the purpose of protecting respondent. We may admit that the reason why the deposit was made with the appellant bank was that the bank held the notes for collection, but that is not admitting nor conceding that the evidence shows that the deposit was payment. The undertaking by the bank to ascertain the rights of the claimants to the deposit was gratuitous as to Day; it owed him no duty of that kind. In receiving the money from Day and agreeing to see to its proper disbursement the bank, even though it held respondent's note for collection, was rather an agent of Day than agent of respondent. (Ripley Nat. Bank v. Connecticut Life Ins. Co., 145 Mo. 142, 47 S.W. 1.) Whatever the relation was between the appellant bank and Day, it terminated by Day's consent when he received the money back from the bank, and under such circumstances we do not think it lies in the mouth of that appellant to complain that the bank violated any duty to respondent. (Bradbury v. McClure, 93 Cal. 133, 28 P. 777.) The bank's undertaking to distribute the money was gratuitous as to Day as it was outside the collection contract. As a mere agent to receive payment, the bank could not bind respondent by the proposed distribution. The extent of the bank's authority was known to Day. A deposit with the bank is no discharge unless tendered upon respondent's notes as a payment thereon. The parties for whose benefit the deposit was made or received cannot complain of the return of the money, as they did not show a present right to the payment of

any portion of the money while it was in the hands of the bank. None of them changed their legal status upon the faith of the deposit. (Winkley v. Foye, 33 N.H. 171, 66 Am. Dec. 715; McGorray v. Stockton Sav. & Loan Soc., 131 Cal. 321, 63 P. 479.)

Appellants Day and Moorman protest against the conclusion drawn from the opinion of this court that before a laborer's claim of lien can be safely paid it must be filed, and if not paid, a civil action must be commenced to enforce it. The obvious answer is that the appellants cannot undertake to adjudicate the rights of the respondent without his consent.

The evidence does not show facts sufficient to charge the appellant bank with the conversion of the alfalfa seed or the proceeds thereof. The respondent's complaint is for a conversion and not for a breach of a contractual liability. If it was the duty of the bank to hold the Day deposit for respondent, that duty arose only because of the fact that the bank held the Boley-Nohrnberg notes, and if there was any such duty at all it is clear that it was a contractual duty. Being a contractual duty it does not concern the other appellants. But the breach of that contractual duty, if one existed, is urged by the respondent and the other appellants as a ground why in this action of conversion a judgment should be rendered against the bank for the breach of that contractual duty. There was no conversion by the bank for the reason that it did not sell the seed or convert the proceeds of the sale of the seed, and had no connection with that transaction. Respondent has not a contractual action against the bank for the amount of the deposit, as the same was not made under such circumstances or with such direction as would constitute it payment upon the respondent's note. The most that can be said, so far as the bank is concerned, is that it was a temporary gratuitous stakeholder of the proceeds of the crop, deposited for a specific purpose. It cannot be logically contended that it follows as a consequence that the bank, innocent of any wrongful intent, in the absence of a wrongful conversion and admittedly not having aided or abetted in the unlawful sale of the alfalfa seed, would be

guilty of a conversion merely because the proceeds of the sale were deposited with it for a specific purpose and thereafter withdrawn by the depositor, which he had a clear right to do so far as the bank was concerned. The original opinion directed the dismissal of the action as against the bank and will, therefore, stand.

We call attention to the case of Hill v. Twin Falls etc. Water Co., 22 Idaho 274, 125 P. 204, wherein reference is made to the section of the statute covering mechanics' and materialmen's liens, the provisions of which are analogous to the section concerning farm laborers' liens. The court said:

"Under this statute the legislature evidently intended to grant the right to claim a lien to any person who contributes labor or material for the construction, alteration, or repair of a building or structure upon real property. It will also be observed from the language of this statute that it was clearly the intent of the legislature to grant an absolute lien direct upon the property, to the person who performs labor.... without reference to whether such person is an original contractor or a subcontractor, or a laborer or a materialman.... Of course this right is limited by requiring the person claiming the lien to file the olaim within the time fixed by the statute, and otherwise complying with the law."

It will be observed that the court says "of course" (giving the impression that it was a matter over which there could be no controversy and one which was susceptible of no other construction) "this right" (i. e., the right of lien) "is limited by requiring the person claiming the lien to file the claim within the time fixed by the statute, and otherwise complying with the law." In other words, the filing of the claim within the time and compliance with the law are prerequisite essentials to convert the "right to lien" into a "lien." C. S., sec. 7373, is supported by the construction given in the above case. That section provides that "any person claiming the benefit of this article" must do certain things. This language itself negatives any construction that the lien exists without any steps being taken on the part of the laborer. He must claim the benefit of the article

relating to farm laborers' liens by positive action specified by statute and not by passive silence.

"Laborers upon a farm have no lien for their wages upon the crops produced unless given by statute or by special contract These acts, providing as they generally do for a remedy summary in its character and contrary to the course of the common law, must receive a strict construction. Claimants under them must bring themselves strictly within the terms of the acts." (Jones on Liens, 3d ed., vol. 1, sec. 776.)

The laborers "must bring themselves within the terms of the acts" to obtain a lien, and the law does not grant them a lien without action on their part. They are required to file for record a verified claim of lien "within 60 days after the close of said work or labor, with the county recorder of the county in which said work and labor was performed." That was not done within sixty days by the laborers whose claims are sought to be set off as against respondent's mortgage, or at any other time, and may never have been filed. Many of the items were not lienable. This claim is required by C. S., sec. 7373, to contain so much of the facts required to be stated in the form of lien found in C. S., sec. 7362, and includes, among other things, a description of the property upon which the lien is claimed, the name of the owner or reputed owner, the contract for the labor, the performance of the contract, the time of performance, the date of the close of the work, the amount claimed, statement that the same has not been paid, and the amount due. No claim being filed by the laborers in this case, it follows that no such statements were made.

While the statute should be liberally construed, under the rule adopted in this jurisdiction, every material requirement should be complied with. In Bradbury v. Idaho etc. L. I Co., 2 Idaho 239, 10 P. 620, it was held by this court that "the mechanics' lien law must be strictly construed." See, also, White v. Mullins, 3...