Manley v. MacFarland
| Decision Date | 21 January 1958 |
| Docket Number | No. 8545,8545 |
| Citation | 80 Idaho 312,327 P.2d 758 |
| Court | Idaho Supreme Court |
| Parties | R. E. MANLEY, Sam L. Gross, Sidney Moore and Sterling R. Miller, Plaintiffs-Respondents, v. Jack R. MacFARLAND and Jean R. MacFarland, husband and wife, Boise Payette Lumber Co., a corporation, Thomas E. Mangum and Emily R. Mangum, husband and wife, Defendants-Appellants. BOISE PAYETTE LUMBER CO., a corporation, Cross-Complainant-Appellant, v. Jack R. MacFARLAND and Jean R. MacFarland, husband and wife, Thomas E. Mangum and Emily R. Mangum, husband and wife, R. E. Manley, Sam L. Gross, Sidney Moore, Sterling R. Miller, Clifford C. Adamson, Ollie M. Taylor, doing business as Taylor & Sons Linoleum Store, and D. J. Hall, Cross-Defendants. |
Richards, Haga & Eberle, J. L. Eberle and W. D. Eberle, Boise, for appellants.
Frank F. Kibler, Nampa, for respondents.
Plaintiffs joined in this action to foreclose their several claims of mechanics' liens, recorded March 6, 1954, directed against real property situate near Nampa, described in the complaint, owned by defendants MacFarland and wife. The claims represented plaintiffs' unpaid wages for carpenter work performed in the construction of a dwelling in and upon the real property. Defendant Boise Payette Lumber Co., herein referred to as the Company, was named a defendant as the owner and holder of a first mortgage encumbering the real property, recorded September 11, 1953, to secure payment of $13,000. Defendants Mangum and wife were named defendants as holders of a second mortgage, encumbering the premises, recorded April 6, 1954.
The Company in its answer and cross-complaint included as cross-defendants, parties in addition to plaintiffs, i. e., Clifford C. Adamson, Ollie M. Taylor, doing business as Taylor & Sons Linoleum Store, and D. J. Hall, who allegedly claimed an interest in the real property.
The defaults of defendants MacFarland and wife, and Mangum and wife, and of cross-defendants Clifford C. Adamson, Ollie M. Taylor, doing business as Taylor & Sons Linoleum Store, and D. J. Hall, were duly entered for failure to answer and plead in the action.
The Company, by its cross-complaint, sought to foreclose its mortgage and have the principal sum of the promissory note, the interest, and incidental sums and expenses secured by the mortgage, adjudged a first lien against the lands and premises ahead of plaintiffs' mechanics' liens.
Plaintiffs, by their answer, affirmative defense, and new matter alleged, sought to assert their several liens as first priorities against the real property, ahead of the Company's mortgage, on grounds hereinafter discussed, although they commenced work on the dwelling after the Company had recorded its mortgage.
The district court at the conclusion of the trial, entered findings of fact and conclusions of law. Its judgment of foreclosure of all the liens, then entered December 14, 1956, adjudged the lien of the Company's mortgage to be prior and superior to the several liens of plaintiffs, excepting however, as to the liens of plaintiffs Manley, Gross and Moore for their work performed after February 1, 1954, together with interest on the respective amounts, and for their incidental expenses incurred in perfecting such portion of their liens. The amounts so adjudged in favor of those plaintiffs, with priority ahead of the Company's mortgage, appear as follows:
Atty
Name Labor Interest Fee Recording Total
------------ ------- -------- ------- --------- -------
R. E. Manley $383.62 $56.01 $110.00 $5.00 $554.63
Sam E. Gross 321.75 47.09 100.00 5.00 473.84
Sidney Moore 363.37 52.94 100.00 5.00 521.31
The Company appealed from the portion of the judgment adjudging and decreeing such partial priorities to the named lien claimants.
The Company by certain of its assignments questions whether plaintiffs' answer, which includes the affirmative defense and allegations of new matter, states facts sufficient to constitute a counterclaim of first priority of plaintiffs' several mechanics liens as against the allegations of the Company's cross-complaint, of first priority of its mortgage lien. In that connection the Company asserts that plaintiffs, in their answer to the Company's cross-complaint, 'have not asked for any relief or stated a claim of action in fraud.'
Plaintiffs, by their answer, affirmative defense and allegations of new matter, traverse the Company's allegation of first priority of the lien of its mortgage. Plaintiffs then allege that the transaction between the Company and MacFarlands in essence was to arrange construction of a dwelling house under an agreement whereby the Company was to pay for labor performed, and construction materials furnished in furtherance of its business of selling such materials, from funds the repayment of which was secured by its mortgage; that the Company's Nampa agent and retail yard manager knew that plaintiffs had performed labor on the dwelling and had not been paid, and that plaintiffs, through plaintiff Moore, informed said agent and yard manager that since they had not been paid 'they might as well quit and file liens on the property.' Plaintiffs then ground their right to first priority of their several mechanics liens upon alleged representations of the Company's agent and yard manager made February 1, 1954, under alleged apparent authority, to the effect that if plaintiffs would continue working as carpenters until completion of the dwelling, the Company 'would take the same over and pay the labor, or sell the same and pay the labor'; that plaintiffs, relying upon such representations, and believing them to be in good faith, continued the construction of the dwelling to substantial completion without claiming liens thereon or pursuing any course of action to procure payment of their labor, by work stoppage or legal action. Plaintiffs contend, by reason of such circumstances and resultant inequities, that the Company should be estopped from asserting first priority of its mortgage lien ahead of plaintiffs' several liens.
Simply stated, plaintiffs allege that the Company's agent and yard manager represented with apparent authority that if plaintiffs would continue their work on the building to substantial completion the Company would, by certain procedures, see to it that they were paid. Such constituted a material statement of fact relating to the then present status of things, the then existent transaction, and not a promissory statement or expression of opinion as to the future. Such is true simply because the Company possessed the ability by virtue of its mortgage to convert the fruits of the labor to cash. It is axiomatic that plaintiffs' labor on the building allegedly performed at the instance and request of the Company resulted in enhancement of the value of the property, securing payment of the Company's mortgage. Moreover plaintiffs by their allegations claim inequitable conduct on the part of the Company.
Appellant's assignment is without merit. Plaintiffs' counterclaim and new matter alleged state facts sufficient to constitute a counterclaim of first priority of their several liens for labor, against the Company's allegations of first priority of its mortgage lien.
The Company, by its several assignments, questions the sufficiency of the evidence to sustain the trial court's adjudication of first priority, in part, of the several mechanics liens of plaintiffs Manley, Gross and Moore, ahead of the Company's first mortgage lien. The Company, in support thereof, asserts insufficiency of the evidence to show Mr. Norell's apparent authority exercised on the Company's behalf whereby the Company must be held to have recognized the rights of plaintiffs Manley, Gross and Moore to priority payment of the portion of their several liens, securing their wages earned after February 1, 1954, ahead of amounts secured by the Company's mortgage.
The trial court found certain basic facts, hereinafter related, concerning which there appears to be no substantial dispute.
The mortgage, executed September 13, 1953, securing payment to the Company of MacFarlands' demand note of $13,000, was of record when plaintiffs commenced working as carpenters on the dwelling. The mortgage, among other things, was given to secure---- 'the faithful performance of the certain agreement between the parties hereto dated the 11th day of September, 1953, relating to the construction of improvements upon the above described premises.' (Emphasis supplied).
The parties entered into the referred to agreement September 11, 1953; it will hereinafter be referred to as the Agreement. The Company, under the Agreement, was authorized to advance from time to time the moneys, repayment of which was secured by the mortgage. The Agreement, among other things, contained the following provisions:
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