J. J. McDonald & Co. v. Kelly

• Decision Date: 19 January 1884
• Parties: J. J. MCDONALD & COMPANY, Trustees for Horace A. Jenckes, v. THOMAS F. KELLY.
• Court: Rhode Island Supreme Court

14 R.I. 335

J. J. MCDONALD & COMPANY, Trustees for Horace A. Jenckes, v. THOMAS F. KELLY.

Supreme Court of Rhode Island.

January 19, 1884

A. by special contract made July 29, 1880, engaged to build a house for B. December 1, 1880, A. assigned the contract to C. At the time of the assignment A. had taken no steps to secure a mechanic's lien. B. consented that C. should proceed under the contract and finish the house.

Held, that B.'s consent to C.'s proceeding under the contract was a consent to the transfer of the contract to C.

Held, further, that C. was entitled to perfect and enforce a mechanic's lien, using the name of the assignors.

Held, further, that a mechanic's lien though inchoate is assignable, passing in equity with the debt or contract for which it is security.

It not appearing that C. entered into any contract with B. or that A. was ever released by B.:

Held, that C. proceeded properly in using the name of A.

A mechanic's lien has, under Pub. Stat. R.I. cap. 177, § 1, precedence over any other lien which originates after the work has begun; hence over a mortgage given after the work has begun.

PETITION for the enforcement of a mechanic's lien. On exceptions to the master's report.

Charles E. Gorman & Francis L. O'Reilly, for petitioner.

George J. West & John J. Heffernan, for respondent.

DURFEE C. J.

This is a petition for the enforcement of a mechanic's lien. The petition was preferred in the names of John J. McDonald and David Miller, copartners, under the firm of J. J. McDonald & Company, trustees for Horace A. Jenckes. The case was referred by consent to a master to take the testimony, hear the parties, and report whether the petitioners are entitled to the lien; if so, for what amount they are entitled to it and what shall be sold to satisfy it. The report of the master finds that the petitioners are entitled to a lien, that the amount for which they are entitled is $1,508, and that the lot of land described in the petition should be sold and the proceeds, after payment of costs, & c., should be applied: first, to the payment of said $1,508; second, to a mortgage held by John H. Kelly; and third, to the payment of $50 to H. A. Jenckes, and the residue to the defendant. The case comes before us on exceptions to the report.

The work for which the lien is claimed is chiefly work under a special contract in writing, made July 29, 1880, by and between the defendant and J. J. McDonald & Company. By the contract the defendant was to pay $500 when the house was framed and shingled, $500 when it was plastered, and $950 when it was finished and ready for occupation, $1,950 in all. The house was to be finished by November 1, 1880, and if not finished then the balance due was to be reduced at the rate of $20 per month for every day afterwards until it was finished. On December 1, 1880, the house being incomplete, the contract was assigned by McDonald & Company to Jenckes. The defendant had then paid only $105 on account of it. Jenckes claimed before the master that with the consent of the defendant be finished the work under the contract, and that he was entitled to a lien for the contract price less the $105 paid, and to $50 besides for extra work. The master finds that the work performed by McDonald & Company was badly performed, in many respects not according to contract, and that they did not act in good faith, and that the damages suffered by the defendant by reason of their delinquency amount to $325.

It appeared that McDonald & Company before their assignment had taken no steps to secure the lien. The defendant contended before the master that this being so, the contract and lien were not assignable. The master, however, while conceding that McDonald & Company could not transfer their contract without the defendant's consent, finds that as a matter of fact the defendant did consent that Jenckes should proceed under the contract and finish the work, and holds that this was tantamount to a consent to the transfer. We think, the facts being conceded, this view is correct. He also finds that the assignment of the contract carried with it the right to perfect the lien in the names of the assignors. The defendant also contended that Jenckes is not entitled to perfect the lien because McDonald & Company, in the work which they had done, had not complied with the terms of the contract, and Jenckes had not made good their defaults. The master finds, however, that in point of fact it was understood between Jenckes and the defendant that he, Jenckes, should go on and finish the house, leaving the work done and materials furnished by McDonald & Company as they were, and that likewise any claim for damages for not completing the house by November 1 was impliedly if not expressly waived. He finds, therefore, that in this view there was nothing to prevent Jenckes from perfecting the lien.

The exceptions cover certain of the master's findings in both law and fact. The exceptions to the findings of fact are not pressed. The exceptions in matter of law are: first, that the lien or right of lien was not assignable second, that the petition and notice are not correct in point of form; and third, that the mortgage is entitled to...