Marianna Hotel Co. v. Livermore Foundry & Machine Co.

• Decision Date: 03 March 1913
• Citation: 154 S.W. 952,107 Ark. 245
• Parties: MARIANNA HOTEL COMPANY v. LIVERMORE FOUNDRY & MACHINE COMPANY
• Court: Arkansas Supreme Court

154 S.W. 952

107 Ark. 245

MARIANNA HOTEL COMPANY v. LIVERMORE FOUNDRY & MACHINE COMPANY

Supreme Court of Arkansas

March 3, 1913

[Copyrighted Material Omitted]

Appeal from Lee Circuit Court; Hance N. Hutton, Judge; reversed.

STATEMENT OF FACTS.

This is a suit by the appellee against the appellant in the Circuit Court of Lee County to have a judgment for building material furnished by the appellee which it alleged was used in a certain hotel building belonging to the appellant. The complaint set up that the material was furnished to B. M Nelson, the contractor, who had been employed by the appellant to construct the building in the city of Marianna. The complaint was filed on the 27th of July, 1911. It had as an exhibit an itemized account showing a balance due for materials furnished in the sum of $ 412.79. There was a prayer for judgment in this sum, and that same be declared a lien upon the building.

The answer denied the material allegations of the complaint. Denied that the materials were furnished within ninety days before the suit was brought and the lien filed. It set up that all of the material furnished by the appellee under its original contract was sold on November 30, 1910; that the small amount for sash weights, $ 77.87, was furnished on April 29, 1911; and it averred that all except this amount was out of date and barred; that the other material included in the account was furnished under a different contract. The answer also set up that there had been payments made upon the account leaving a balance due January 30, 1911, of $ 334.92. The answer further set up that the contractor abandoned his contract before the building was completed and that the appellant was compelled to complete the building, and did so according to the original plans and specifications, paying therefor a greater sum than the original contract price. It averred that it had paid no part of the contract price to the contractor for his own use. It alleged that it had paid the sum of $ 23,442.48 in strict accordance with the terms of the contract before the contractor abandoned the same, and that it had paid $ 7,346.20 to complete the building according to the original plans and specifications.

The manager of the appellee testified that appellee's account was for structural iron and some other small articles furnished the contractor for appellant's building; that the largest item of the account was for structural iron furnished on November 30, 1910.

The material was all used in the building. The last shipment was made May 2, 1911. The account shows that on April 29 there was furnished sash weights amounting to $ 77.87. Witness testified that the structural iron was furnished under a written proposal made by his company to the contractor, which he accepted on condition that the company would furnish sash weights at a certain price. The company agreed to that and agreed to protect him on the price on a rise in the market. There was nothing said about that in the written proposal nor in the acceptance endorsed on the proposal. There was but one contract; that was in writing, regarding the structural iron. The contractor signed an acceptance and put his name on the proposal and put it there upon that condition. But this condition was not in the proposal or in the acceptance endorsed on the back thereof. The sash weights are not classed as structural iron.

Witness stated that "the condition of his (the contractor's) giving the written contract for the structural iron was that we were to protect him on the rise in the price of certain window weights, and furnish them to him at a certain market price. We agreed verbally that when he ordered these window weights that we would protect him. "

The testimony on behalf of the appellant tended to show that it entered into a contract with one B. M. Nelson to construct the hotel building for the price of $ 26,185. The contractor abandoned the contract before the building was completed.

The testimony was voluminous, and without setting it out in detail, it tended to show that the sum of $ 23,342.48 was paid in checks at the time the contractor quit work, and that this amount was paid to the material men and laborers. Most of the checks state on their face for what purpose they were issued. They were made payable to the contractor, but went to the material men and laborers.

The evidence tended to show that the money was paid out by the appellant to the contractor before he quit work, towit, the sum of $ 23,342.48, for the purpose of paying for material and labor that went into the building, and that none of it was paid to the contractor for his own use.

The appellee, over the objection of appellant, introduced testimony tending to show that the contractor on one occasion took $ 62.50 out of the sack that contained the pay roll money and converted it to his own use by paying same on a private debt for money borrowed.

The testimony on behalf of the appellant tended to show that it paid out after the contractor abandoned the contract the sum of $ 7,346.20 for the completion of the building. A witness was asked the following question: "Was that building completed according to the plans and specifications?" and answered, "Practically so. After we took charge we made one or two changes. Things not made before. We changed the tile in the lavatory and put some cement in the columns that was not in the original contract, and I don't recall anything else. The heating was changed and pipes put through underground."

Witness testified that there was no difference in the cost of the tiling.

There is a stipulation in the record as follows:

"After the court had declared the law as shown by the instructions the defendant offered to introduce a witness W. S. McClintock, for the purpose of showing by the said W S. McClintock that there are now pending the following actions against the hotel company for the purpose of enforcing accounts and claims for liens against the said hotel building, and that liens upon said accounts had been filed as provided by law in the Lee Circuit Court, as follows: W. F. Kershaw $ 569.95, Carl Sutton $ 49.60, and a suit in the United States District Court by Crane Company seeking to enforce a lien amounting to $ 3,013.97."

The court refused to allow the testimony to be introduced, to which appellant duly excepted.

The court, at the request of appellee, granted, among others, the following prayers:

"1. You are instructed that if you find from the evidence that plaintiff filed this action within ninety days from the date it furnished the last material to the defendant it is not necessary to give the ten days' notice as provided by the statute, or file its amount with the clerk as provided by the statute."

"2. If you find from the evidence that plaintiff furnished the materials as alleged in the complaint; that the same were used in the building of the defendant and that the amount charged for said material was less than the contract price for the construction of said building and has not been paid, then plaintiff has established a prima facie right to a lien on said building for the balance due it, and casts the burden of proof on defendant to show that plaintiff is not entitled to a lien, provided this suit to recover said money due and established said lien was filed within ninety days after the last material was furnished."

"3. You are instructed that if you find from the evidence that defendant paid B. M. Nelson, the contractor any moneys which were used by him for other purposes than the payment of debts due for labor or material used in the construction of the building, then you will find for plaintiff, provided such sums paid to the said Nelson are in excess of the amount of plaintiff's claim. If you find the sums of money paid said Nelson less than the amount of plaintiff's claim you will find for plaintiff for such amount."

"4. You are instructed that even though you find from the evidence that the defendant has expended in the construction of its building more than the amount originally contracted therefor, such finding will not defeat the plaintiff's right, as the plaintiff would be entitled to pro rate with all lien holders. To arrive at the ratio of payment due all lien holders you will deduct the amount necessary to complete the building from the original contract price, and add thereto any amount you find was paid by the defendant to the contractor and used by him for purposes other than the payment of liens on the building. This will be the amount to be pro rated among the lien holders. The amount of liens to be allowed are the amounts paid out by the contractor before the abandonment of the original contract, and the amount of plaintiff's claim herein."

"6. You are instructed that it is incumbent on the defendant to show that any moneys paid out directly to the contractor Nelson were used by him for the purpose of paying for labor done and material furnished on defendant's building."

"7. You are instructed that the issuance of checks by the hotel company payable to the contractor, B. M. Nelson and his endorsement thereon, showing that he received the proceeds of said checks, is prima facie evidence...