The H. B. McCray Lumber Company v. Matney

• Citation: 278 P. 746,128 Kan. 529
• Decision Date: 06 July 1929
• Docket Number: 28,784
• Parties: THE H. B. MCCRAY LUMBER COMPANY, Appellee, v. H. B. TERRY and GEORGE H. MATNEY, Appellants
• Court: Kansas Supreme Court

278 P. 746

128 Kan. 529

THE H. B. MCCRAY LUMBER COMPANY, Appellee, v. H. B. TERRY and GEORGE H. MATNEY, Appellants

No. 28,784

Supreme Court of Kansas

July 6, 1929

Decided July, 1929.

Appeal from Wyandotte district court, division No. 3; WILLIAM H MCCAMISH, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. EVIDENCE -- Parol Evidence Affecting Writing -- Building Construction Contract. The proceedings considered in an action by a subcontractor to foreclose a mechanic's lien, and held, the written building contract between owner and contractor containing a provision, promptly executed, for payment of a sum of money to the contractor on signing of the contract, for faithful performance by the contractor, was not subject to impeachment by parol evidence offered to show the payment was made for purposes other than those stated in the contract.

2. MECHANIC'S LIEN--Effect of Payment by Owner When Contract Signed. A payment by the owner to the contractor for performance of the contract, made at the time the contract was signed, was made at the owner's risk, so far as a duly filed lien of a subsequent subcontractor was concerned.

3. SAME--Waiver. No agreement of the subcontractor to waive a mechanic's lien was pleaded, and no evidence was offered tending to prove such an agreement.

4. SAME--Trial Generally. Assignments of procedural errors considered, and held to be without merit.

Louis R. Gates and Rush L. Fisette, both of Kansas City, for the appellants.

A. L. Berger and Jerome S. Koehler, both of Kansas City, for the appellee.

OPINION

BURCH, J.:

The action was one to foreclose a subcontractor's mechanic's lien. Plaintiff recovered judgment against Terry, the contractor, for the price of lumber sold and delivered to Terry which Terry used in building a house for Matney, and recovered judgment against Matney for foreclosure of mechanic's lien. Both defendants appeal.

The contract between Terry and Matney was in writing, and was dated September 30, 1925. Apparently the date should have been September 29, but the mistake is not material. The contract provided that Terry would furnish material and labor to build and complete a house according to annexed plans and specifications, and contained the following recital:

"For the faithful performance of the above, the party of the second part [Matney] agrees to pay to the party of the first part [Terry] the sum of four thousand five hundred ($ 4,500)--$ 2,000 at the signing of this contract, . . ."

Matney gave Terry a check for the cash payment of $ 2,000, receipt of which was acknowledged in the contract. The check was presented and paid, and for a portion of the amount Terry took a cashier's check for $ 1,000, dated September 29, 1925, and payable to his order. Terry was already indebted to the lumber company in a sum in excess of $ 1,000 for lumber previously purchased, and on the day he received the cashier's check he indorsed it and delivered it to the lumber company. The lumber company applied the check on Terry's existing indebtedness. Construction of Matney's house was not begun until the latter part of October. The first material was furnished on October 21.

A jury was impaneled. The petition contained an itemized account of the material sold to Terry for the Matney house, the answer was unverified, and as the trial proceeded defendants admitted the account was correct. On further consideration of the case the court discharged the jury, and on the pleadings and the evidence found the lumber company was entitled to recover from the contractor the balance due on the account, with interest.

Terry's answer said H. B. McCray, president of the lumber company, knowing Terry's embarrassed financial condition, persuaded and induced Terry to advance to the lumber company $ 1,000 of the Matney money, which McCray knew was paid to Terry to buy lumber for Matney's house--

"Telling this defendant that when this defendant realized on the building he was constructing at 1400 South Twenty-sixth street, Argentine, Kan., as aforesaid, he could replace the $ 1,000 to the Matney fund that he had advanced to the McCray Lumber Company, as requested to relieve the strain of said McCray Lumber Company, which it was represented at said time by said H. B. McCray was pressed for money."

The building contract was introduced in evidence. It disclosed that the $ 2,000, part of which Terry used in purchasing the cashier's check, was not given "to buy lumber." The purpose for which the check was given was stated in the contract. It was given generally for performance of the contract, and the court properly declined to permit a condition to be attached to the contract by parol evidence which would limit the use the contractor could make of the money, and which would follow the money into the hands of any creditor of the contractor who had notice of the source from which it was derived.

It will be observed the answer did not assert that Terry loaned $ 1,000 to the lumber company. The lumber company was not to replace the money. Terry was to replace the money in his "Matney fund" when he realized on another contract. The answer did not assert that there was any agreement between Terry and McCray to make future application of the money to indebtedness which might arise on account of future purchase of material for the Matney house. Of course the answer did not assert that Terry directed application of the cashier's check when he delivered it, and his attorneys admitted at the trial he gave no direction as to how it should be applied. The result was that, so far as the answer was concerned, the lumber company was at liberty to apply the check on Terry's existing indebtedness.

Terry was permitted to tell about delivery of the cashier's check to the lumber company. In some of his testimony he enlarged on his answer. He said he loaned the $ 1,000 to McCray; he gave McCray the money as a friend; he let McCray have $ 1,000 to relieve him temporarily, "and apply it further on." In other portions of his testimony Terry acknowledged he paid the $ 1,000 on lumber he had purchased from the lumber company:

"Q. Now, then, on the same date that you got this check from Mr. Matney, September 30, 1925-- A. Yes, sir.

"Q. You then paid to the McCray Lumber Company $ 1,000 on lumber you had bought from them; A. Yes.

. . . .

"Q. That is the cashier's check you delivered to the H. B McCray Lumber Company? A. I delivered to them, evidently, it is signed by me.

"Q. That went to pay for some lumber...