Johnson v. Yates

• Decision Date: 22 February 1922
• Docket Number: 251.
• Citation: 110 S.E. 603,183 N.C. 24
• Parties: JOHNSON v. YATES ET AL.
• Court: North Carolina Supreme Court

110 S.E. 603

183 N.C. 24

JOHNSON v. YATES ET AL.

No. 251.

Supreme Court of North Carolina

February 22, 1922

Appeal from Superior Court, Wake County; Bond, Judge.

Action by H. H. Johnson against T. B. Yates and others, copartners doing business under the name of the Auto Repair & Welding Company. Judgment for plaintiff, and defendants appeal. Reversed.

The following are the facts submitted:

"(1) Plaintiff is and was at the time this controversy arose a citizen and resident of Franklin county, N. C., and defendants were at said time and are citizens and residents of Wake county, N. C., and engaged as a partnership in business as mechanics and artisans in expert automobile repairing under the name of Auto Repair & Welding Company with their place of business in Raleigh, N. C.

(2) On or about May 22, 1920, plaintiff sold one J. W. Stewart, a Liberty Six automobile, motor No. 7K27580, model 1919, taking from said Stewart a chattel mortgage and note in the sum of $500 as balance purchase money for said automobile.

(3) The chattel mortgage, a copy of which is attached hereto and made part of this agreement, was duly recorded on May 22, 1920, in Book 323, page 323, in the registry of Franklin county.

(4) Various payments have been made on said note by J. W Stewart, and the balance now due and unpaid is $117.

(5) On December 3, 1920, subsequent to the recording of said chattel mortgage and note, J. W. Stewart, without the actual knowledge and without the actual consent of plaintiff, and without notifying plaintiff, drove the said automobile to the shop of defendants in Raleigh, Wake county, N. C., and at the request of said Stewart, certain repairs were made on said automobile by defendants, which increased the value thereof, and a just and reasonable charge for the work done and material furnished in making said repairs is $460.55, and bill for said amount was rendered to J. W. Stewart, and not paid by him within more than 90 days after the repairs were made, and said bill has never been paid.

(6) That at the time said repairs were made, defendants had no actual knowledge of the existence of the mortgage from J. W. Stewart to plaintiff, and had no actual knowledge of an indebtedness of said Stewart to plaintiff.

(7) That at the time of making said mortgage and at the time of the driving of said automobile to the shop of defendants in Raleigh, J. W. Stewart was a resident of Franklin county, N. C.

(8) The repairs to said automobile were made by the defendants without actual knowledge or actual consent of plaintiff.

(9) At the time said repairs were made, J. W. Stewart was in possession of said automobile as mortgagor under the mortgage held by plaintiff as mortgagee, and said Stewart had been in possession of said automobile at all times since the execution of said mortgage, and was using and driving same with the knowledge and without objection on the part of the mortgagee.

(10) That after the repairs were made, and as soon as plaintiff ascertained that said automobile was in possession of the defendants, he made demand for the possession of same for the purpose of foreclosing his mortgage and thereby collecting the balance due on the note of J. W. Stewart, but defendants refused, and still refuse, to deliver the automobile to plaintiff, claiming the right to hold said automobile and sell it under the provisions of section 2435 of Consolidated Statutes, and apply the proceeds to the payment of their bill for repairs ahead of plaintiff's claim for balance due on the note of J. W. Stewart secured by mortgage.

(11) Plaintiff claims the right to the possession of said automobile under his mortgage and the right to sell same under the mortgage and apply the proceeds to the satisfaction of balance due on note of J. W. Stewart ahead of payment of the bill of defendants for repairs.

(12) That said automobile is now in possession of defendants and has at all times been in their possession since it was first left at their shop by J. W. Stewart to be repaired.

(13) That the purpose of the submission of this controversy is to determine whether the plaintiff by virtue of his mortgage is entitled to the possession of said automobile, and has right to sell same under said mortgage and apply the proceeds of sale first to the satisfaction of balance due on note of J. W. Stewart, or whether the defendants have the right to retain possession of said automobile and sell same under the provisions of section 2435 of Consolidated Statutes and apply the proceeds first to the payment of the charge of defendants for repairs.

Submitted by consent of plaintiff and defendants."

Upon the facts judgment was entered for plaintiff, and defendants excepted and appealed.

Clark, C.J., dissenting.

Murray Allen, of Raleigh, for appellants.

Wm. H. & Thos. W. Ruffin, of Louisburg, for appellee.

HOKE J.

Section 2435 of the Consolidated Statutes provides as follows:

"Any mechanic or artisan who makes, alters or repairs any article of personal property at the request of the owner or legal possessor of such property has a lien on such property so made, altered or repaired for his just and reasonable charge for his work done and material furnished, and may hold and retain possession of the same until such just and reasonable charges are paid; and if not paid for within thirty days, if it does not exceed fifty dollars, or within ninety days if over fifty dollars, after the work was done, such mechanic or artisan may proceed to sell the property so made, altered or repaired at public auction, by giving two weeks public notice of such sale by advertising in some newspaper in the county in which the work may have been done, or if there is no such newspaper, then by posting up notice of such sale in three of the most public places in the county, town or city in which the work was done, and the proceeds of the said sale shall be applied first to the discharge of the said lien and the expenses and cost of keeping and selling such property, and the remainder, if any, shall be paid over to the owner thereof."

This statute passed in the valid exercise of the police powers of government is applicable to any and all contracts by mortgage or otherwise subsequently made and entered into and affects their interpretation to the extent that its provisions are pertinent. House v. Parker, 181 N.C. 40, 106 S.E 137; White v. Kincaid, 149 N.C. 415, 63 S.E. 109, 23 L. R. A. (N. S.) 1177, 128 Am. St. Rep. 663; Brine v. Insurance Co., 96 U.S. 627, 24 L.Ed. 858; Bishop on Contracts, § 437. In its effect and purpose the law is in affirmance of the common-law lien given to artisans who have altered or repaired articles of personal property and are in possession of same, with the superadded right of foreclosure by sale in order to make the lien effective, and from a perusal of the terms it clearly appears that where such a claim is allowed to prevail it is, and is intended to be, a primary lien superior to that by an existent mortgage or others. The statute providing that the mechanic or artisan may hold and retain possession till his reasonable cost and charges are paid, and the power of foreclosure conferred being by sale of "the property" itself and not of any special interest therein. A further consideration of the statute will disclose that the lien provided for can only arise when the alterations or repairs are made at the instance of the owner or legal possessor of the property. And from the meaning and purpose of the statute and under the authoritative and better considered decisions dealing with the subject, both in the application of the common-law principles involved and in the construction of statutes of similar import, these terms must be understood and interpreted to include all owners of the property and all persons in possession and use of same with the knowledge and assent of the owner and under circumstances giving express or implied authority from him to have such reasonable and necessary repairs made as may be required in the use of the property contemplated by the parties. Smith Auto Co. v. Kaestner, 164 Wis. 205, 159 N.W. 738; Mortgage Securities Co. v. Pfaffmann, 177 Cal. 109, 169 P. 1033, L. R. A. 1918D, 118; Reeves & Co. v. Russell, 28 N.D. 265, 148 N.W. 654, L. R. A. 1915D, 1149; Watts, Trustee, v. Sweeney, 127 Ind. 116, 26 N.E. 680, 22 Am. St. Rep. 615; Broom & Son v. Dale & Sons, 109 Miss. 52, 67 So. 659, L. R. A. 1915D, 1146; Case v. Allen, 21 Kan. 217, 30 Am. Rep. 425; Drummond Carriage Co. v. Mills, 54 Neb. 417, 74 N.W. 966, 40 L. R. A. 761, 69 Am. St. Rep. 719; Hammond v. Danielson, 126 Mass. 294; Ruppert v. Zang, 73 N. J. Law, 216, 62 A. 998; City Nat. Bank v. Laughlin (Tex. Civ. App.) 210 S.W. 617; Williams et al. v. Allsup (10 C. B.) 140 Eng. Reprint, p. 514; 1 Jones on Liens, § 744; 6 C.J. p. 1138. In illustration and support of the position as it prevailed at common law in case where a dray wagon under a duly registered valid mortgage was left with the mortgagor for use in the latter's business, and the same was repaired at the instance of the mortgagor on a question of priority of the mechanic's lien, it was held that, where a mortgagee permits the mortgagor of chattels to retain and use them, authority is impliedly conferred upon the mortgagor to have necessary repairs done on the chattels and the lien of an artificer for repairs done under employment of the mortgagor will have priority over the lien of a mortgage, although the latter be duly recorded. And in the case from the English court of Williams et al. v. Allsup, where a mortgagor in possession and use of a ship with assent of the mortgagee had certain necessary repairs done thereon, it was claimed that a certain statute had modified the common-law principle giving...