Raeford Lumber Co. v. Rockfish Trading Co.

• Decision Date: 22 October 1913
• Citation: 79 S.E. 627,163 N.C. 314
• Parties: RAEFORD LUMBER CO. v. ROCKFISH TRADING CO.
• Court: North Carolina Supreme Court

79 S.E. 627

163 N.C. 314

RAEFORD LUMBER CO. v. ROCKFISH TRADING CO.

Supreme Court of North Carolina

October 22, 1913

Appeal from Superior Court, Hoke County; Lyon, Judge.

Action by the Raeford Lumber Company against the Rockfish Trading Company. From a judgment for plaintiff, defendant appeals. Affirmed.

A purchaser having notice of an opposing claim is thereby placed upon inquiry and charged with notice of every fact which a proper inquiry would have discovered.

This is an action to enforce a material lien against real property. During the spring and summer of 1911 W. N. Campbell bought of the plaintiff material with which to build his house at Rockfish, N.C. The last item of material, as indicated in the notice of lien, was furnished July 13, 1911. The defendant Campbell gave plaintiff his promissory note for 90 days which was not paid, and then a renewal note for the same amount for another 90 days, which was not paid, and which was due about the 1st day of March, 1912. The notice of lien was duly filed on the 13th day of March, 1912, more than 6 and less than 12 months after the last of the material was furnished, and after the registration of the deed from W. N Campbell to the Rockfish Trading Company. The defendants filed answers, denying any liability, and the defendant Rockfish Trading Company further pleaded that it was a purchaser of said property for value and without notice of the alleged claim of plaintiff, and that more than 6 months had elapsed since plaintiff furnished said material and its notice of lien.

At the trial A. A. Williford, president of plaintiff corporation testified that the last of the material was furnished July 10, 1912, and July 19th thereafter he took defendant's note for said amount, and discounted it at the Bank of Raeford. When this note matured, it was renewed for another 90 days, and again discounted. He further testified that probably about the 1st of January he told J. W. McLauchlin an officer of the Rockfish Trading Company, that Campbell had not paid them for the material used for building his house at Rockfish. J. W. McLauchlin testified in behalf of the Trading Company that it bought the house in which Campbell lived, and paid value and probably more for it, and that some considerable time before the purchase. Williford had said something about plaintiff's claim against Campbell, and that there was no incumbrance on the record against the property. The deed from Campbell to the Rockfish Trading Company, reciting a consideration of $2,000, was introduced. There was no dispute as to the amount due the plaintiff. The jury returned the following verdict: "(1) Is the defendant W. N. Campbell indebted to plaintiff on account for material furnished? If so, in what amount? Answer: Yes; $290, with interest. (2) Did defendant Rockfish Trading Company purchase the land for value and without notice of lien for material furnished by plaintiff? Answer: No." There was a motion for judgment of nonsuit by the Trading Company, which was overruled, and it excepted. His honor charged the jury that the burden of proof was on the defendant Trading Company on the second issue, and it excepted. Judgment on the verdict for the plaintiff, and the Trading Company excepted and appealed.

J. W. Currie, of Raeford, and J. G. McCormick, of Wilmington, for appellant.

Thomas & Whitley, of Raeford, for appellee.

ALLEN, J. (after stating the facts as above).

The motion to nonsuit rests on two grounds: (1) That it is admitted that the defendant is a purchaser for value, and there is no evidence that it had notice of the lien. (2) That the acceptance of a note for the amount due for material and its renewal is a waiver of the right to a lien. The correct settlement of these questions requires a consideration of section 2028 of the Revisal, which, as amended by chapter 32, Public Laws of 1909, reads as follows: "Notice of lien shall be filed, as hereinbefore provided, at any time within twelve months after the completion of the labor, or the final furnishing the materials, or the gathering of the crops: Provided, that as to the rights of a purchaser for value and without notice the notice of lien must be filed within six months."

The statute evidently means that, if the materialman wishes to protect himself against a purchaser for value without notice, he must file his notice of lien within 6 months, and that as against purchasers for value with notice he may do so within 12 months. It also marks the distinction between "notice to the purchaser" and "notice of lien," using the language, "as to the rights of a purchaser for value without notice, the notice of lien must be filed within 6 months."

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