Case ID: utah_26/html/0086-01.html
Source: Caselaw Access Project
Author: {"author": "McCARTY, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOHN P. CAHOON and REYNOLDS CAHOON, Co-partners, doing business as J. P. CAHOON & BROTHER, Appellants, v. THE FORTUNE MINING AND MILLING COMPANY, a Corporation, SIMON BAMBERGER, SIMON BAMBERGER, Trustee, MOSES MARKS, WILLIAM E. SMEDLEY, MARY A. SMEDLEY and THE CUNNINGTON COMPANY, a Corporation, Respondents.
    No. 1416.
    (72 Pac. 437.)
    1. Mechanic’s Lien: Termination of Contract: Subsequent Delivery: Foreclosure of Lien.
    Plaintiffs contracted with defendant, a mining and milling company, to furnish material for the construction of its mill, and delivered materials almost daily till in July, when the mill was completed, with the exception of some alterations and the construction of some ore bins. The mill was put in operation at this time — all the mechanics engaged in its construction leaving, except one, who remained to make repairs and alterations —and it was kept in operation till in December, when it was closed. During all this time, changes, alterations, and repairs were made in the mill; and plaintiffs delivered more materials in September, and again in the following January. Held, that the materials delivered in January were not furnished pursuant to the original contract, so as to entitle plaintiffs to a mechanic’s lien for the balance due on all the material furnished by filing their claim within sixty days after this last delivery.
    2. Same.
    Plaintiffs contracted with defendant, a mining and milling company, to furnish material for the construction of a mill. Several months after the practical completion of the mill, and after plaintiffs had ceased furnishing materials for its construetion, another and subsequent • contractor foreclosed a mechanic’s lien against defendant, without any protest from plaintiffs, or notice of a claim for a prior lien, whereupon plaintiffs, one of whom was a stockholder in the defendant corporation, delivered additional materials, not contemplated in their original contract, and not needed or used for the mill, and, just before the expiration of the statutory sixty days sfter this last delivery, filed their claim for a mechanic’s lien for the balance due on all the materials, including those furnished under the original contract. Held, that plaintiffs could not, by this last delivery, revive their right to a lien for the materials furnished under the original contract, and thus defeat the lien already foreclosed.
    (Decided April 24, 1903.)
    Appeal from the Third District Court, Salt Lake County. — Hon. W. G. Hall, Judge.
    Action to foreclose a mechanic’s lien. From a judgment in favor of the plaintiffs (granting insufficient relief), they appealed.
    Affirmed.
    
      Messrs. G. F, & F. G. Loofbourow for appellants.
    A lien may he established for all the materials furnished under one single contract, although some of them may have been furnished for alterations, repairs, etc., after the mill was put in operation, German Bank v. Schloth, 59 Iowa 316; Helena Bank v. Wells, 40 Pac. 78; Lamb v. Haniman, 40 Iowa 41; Kearney v. Worde-man, 33 Mo. App. 447; Fulton Works v. Mining Co., 80 Mo. 265; Chase v. Coal Co., 90 Iowa 25; Henry & Coates-worth v. Fisherback, 37 Neb. 224; Salt Lake Litho. Co. v. Ibex Mining Co., 15 Utah 440; Field v. Daisy Gold Mining Co., 25 Utah 76, 69 Pac. 528; Boisot v. Liens, sec. 482 and 3; Phillips, M. Liens, sec. 525 and 6; 2 Jones on Liens, sec. 1436.
    Our statute provides that “Materialmen furnishing materials to be used in the construction, alteration, addition to or repair, etc., ’ ’ shall be entitled to the lien created by the statute. It has never been held, so far as we know, under a statute like ours, that a materialman must show that the materials furnished by him were actually in the structure upon which he seeks to establish his lien, but only that they were furnished by him to be used for that purpose. If the owner, without the ma-terialman’s knowledge, diverts the material or any part of it to other uses, this will not affect the right to a lien. Beckel v. Peticrew, 6 Ohio St. 251; Eslinger v. Henper, 22 Wis. 602; Wilson v. Ry. Co., 51 Iowa 190; Mechanics etc., Co. v. Cooper, 32 Pac. 1073; Barnes v. Lewell, 48 Minn. 425; Central Trust Co. v. Ry. Co., 54 Fed. 603; Wats v. Whittensen, 48 Md. 357; Bank v. Rockáway Mf ’g Co., 14 N. J. Eq. 189; Lindle Co. v. Refining Co., 23 Atl. Rep. 800; O. F. Hall etc. v. Messer, 24 Pa. St. 507; Hinchman v. Graham, 2 S. and R. 170; Sierre Nevada Lumber Co. v. Whitmore, 66 Pac. 781, 24 Utah 130.
    
      Messrs. Pierce, CritcMow & Barrette for respondents.
    The courts are in conflict upon the point as to whether the materials must actually be used in the building before a lien for their value can be included in a lien. Mr. Boisot, in his work on Mechanics Liens, sec. 119, cites numerous cases either way. In addition to those there cited holding that no lien for such material can be obtained, we cite: Hunter v. Blanchard, 18 Ill. 318; Fitch v. Howitt (Ore.), 52 Pac. 192; Hill v. Bowers (Kan.), 26 Pac. 13; Chapin v. Persse, 30 Conn. 472; McGarry v. Arvill (Kan.) 31 Pac. 1082; Taggard v. Buckmore, 42 Me. 77; Deardorff v. Everhartt, 74 Mo. 37; Scliulenberg v. Institute, 65 Mo. 295; Heltzell v. Ry. ■ Co., 20 Mo. App. 435.
    It is stated by appellants that the rule is otherwise in this State, and they cite in support thereof Sierra Nevada Lamber Co. v. Whitmore, 24 Utah 130. An examination of the case shows that the rule contended for was not adopted save with reference to the peculiar facts of that ease. The court holds that since the subcontractor delivered the material to the owner, and since the contractor actually finished the houses according to his contract with the owner, the fact that the particular goods furnished were not used by the contractor but by him taken elsewhere, gave the owner no right to make any deduction. So long as the contract was filled by the original contractor, the latter had no ground to complain. This it will be seen is a very different case from the one at bar, and by no means bears out appellants’ contention.
    STATEMENT OF FACTS.
    Plaintiffs are partners engaged in selling lumber, coal, and building material at Murray, Utah. On November, 1899, at Salt Lake City, Utah, they entered into an oral agreement with the defendant, the Fortune Mining & Milling Company, a corporation, to furnish lumber and building material for the construction of an ore concentrating mill about to be erected by the defendant the said Fortune Mining & Milling Company in the West Mountain mining district, Utah — a distance of about eighteen miles from plaintiffs’ lumber yards at Murray. No certain, specified amount of material was agreed upon, but the contract, in general terms, provided for sufficient amount to build the mill. The terms of payment agreed upon were that one of the plaintiffs should take 1,000 shares of the company’s capital stock in payment of $400 oh the price of the material, and that the remainder of the purchase price should be paid as the material was delivered. The plaintiffs, in pursuance of the contract then entered into,- on December 4, 1899, commenced shipping lumber from their yards at Murray to the company’s mill site, in West Mountain mining district, Utah, and continued thereafter to deliver material almost daily until July 18, 1900, about -which date the mill, with the exception of a few alterations to be made, and the construction of ore bins and tanks, was completed. No more material was ordered or delivered until September 13, 1900, when plaintiffs again made a small shipment amounting to $35. On January 29, 1901, more than four months after the September consignment, plaintiffs again delivered a small load, amounting to $27.45, no part of which was needed or used in or about the mill. The entire amount of material thus furnished came to $4,124.22. The company made payments which, including the $400 paid for in capital stock before mentioned, in the aggregate amounted to $3,400.89; the last one being a payment of $500, made October 10,1900, leaving a balance of $723.33 due the plaintiffs. . Before the last shipment was made, one of the plaintiffs called once or twice on Mr. Hill, the president and business manager of the comp.any, to see about getting money on the balance due for material, but failed to get it. He also consulted their attorney about their account against the company. In December, 1900, the mill was shut down, the building closed up tight, and the foreman of the mine put in eharge of it. On March 29, 1901, plaintiffs filed with the county recorder of Salt Lake county their notice of intention to claim and hold a mechanic’s lien on the mill and premises in question for the sum of $723.33, balance due them for the material furnished as above stated. On October 22,1901, plaintiffs commenced their action to foreclose their lien. The defendants Simon Bamberger, trustee, Moses Marks, William E. Smedley, and Mary A. Smedley, and Cunnington Company, a corporation, filed their respective, answers, putting in issue all the material allegations of plaintiffs’ complaint. Simon Bamberger pleaded title in himself to the mill and premises. Moses Marks, by cross-complaint, set up a note, secured by a mortgage covering the premises in question, executed to him by the defendant Fortune Mining & Milling Company. Cunnington Company claimed a judgment lien on the premises, and "William E. and Mary A. Smedley also claimed a judgment lien on the property. At the trial the following statement of facts was agreed upon by and between the parties to the action: “The defendant Cunningham & Co. obtained a general judgment against, the Fortune Mining & Milling Company on February 12, 1901, for $960.80. In that suit there was no effort to establish any lien. It was suit on account, and a general judgment was rendered, and the only lien that Cunnington & Co. have is a general lien, which attached to their judgment. Defendants William E. Smedley and Mary A. Smedley obtained a judgment against the Fortune Mining & Milling Company June 26, 1900, on which a balance of $623.90 and interest remains unpaid. No lien was established or claimed in that suit upon the premises now in controversy, and the only lien which that judgmént constituted is the general lien which the law attaches’ to a judgment. The defendant Moses Marks has a •mortgage upon the premises in question, of date May 2, 1900, for $10,000, and interest. The mortgage was recorded May 3, 1900, and is the one which is sought to be foreclosed by the cross-complaint of the defendant Moses Marks. As to the claim of defendant Simon Bamberger, the Salt Lake Hardware Company claimed a mechanic’s lien upon the premises in controversy for goods furnished from August 1, 1900, to October 30, 1900, in the sum of $1,241.47. That lien was filed December 21, 1900. Judgment foreclosing it was entered in favor of the Salt Lake Hardware Company, and against the Fortune Mining & Milling Company, January 22, 1901. Under that judgment, sale was made July 17, 1901, and Mr. Bamberger was the purchaser, and now has the sheriff’s deed upon that sale, dated January 20, 1902. The amount of his bid was the full amount of the judgment of the Salt Lake Hardware Company, with costs. The plaintiffs, J. P. Cakoon & Bro., were not parties in any of these suits. The first case in which they have been parties, in any way affecting this property, is the present suit to foreclose their mechanic’s lien. Simon Bamberger holds the sheriff’s deed of the mining’ claims known as the ‘Fortune Group’ of date January 20,1902. The defendant Moses Marks offered in evidence his note of May 2, 1900, executed by the Fortune Mining & Milling Company, for $10,000, due six months after date, with interest at eight per cent, and reasonable'attorney’s fees, with no indorsement as to either principal or interest; also the mortgage given by the Fortune Mining & Milling Company to secure said note, recorded May 3,1900. ’ ’ The court found that the material delivered by plaintiffs at the mill January 29, 1901, was not furnished in pursuance of the original contract made in November, 1899, but under a subsequent contract entered into between the plaintiffs and the defendant Fortune Mining & Milling Company, and that plaintiffs had failed to acquire any lien on the property in question, or any part thereof, as the time .in which they.had a right to claim a lien had expired long before their notice was filed. A decree was entered providing that plaintiffs recover from the Fortune Mining & Milling Company the balance due them for material, and ordered the property sold to satisfy the several claims and liens, in the order of their priority. Plaintiffs appeal.
   McCARTY, J.,

after stating the facts, delivered the opinion of the court.

The controlling and decisive question involved in this case is, did the court err in holding that the last bill of lumber, amounting to $27.45, and shipped by plaintiffs on January 29,1901, to defendant Fortune Mining & Milling Company, was not furnished under the same contract upon which the bulk of the material was delivered? It is contended by appellants that there was only one contract entered into by them and the Fortune Mining & Milling Company for the furnishing of material, and that such contract did not terminate until the last load was delivered, January 29, 1901; ‘ ‘ that it was practically a continuous transaction. ’7 Respondents contend that plaintiffs’ contract to furnish material for the construction of the mill was completed July 18, 1900, which they claim was about the time the mill was finished.

Section 1386, Revised Statutes 1898, so far as material in this case, provides that “every original contractor, within sixty days after the completion of his contract, and every person save the original contractor claiming the benefit of this chapter, must, within forty days after furnishing the last material . . . file for record with the county recorder of the county in which the property, or some part thereof, is situated, á claim in writing containing a notice of intention to hold and claim a lien . . . with a statement of the terms, time given, and conditions of his contract specifying the time when . . . the first and last material was furnished . . The foregoing provisions of the statute are plain and free from ambiguity. It will be observed that a subcontractor has forty days from the time of the furnishing the last material in which to file a notice of intention to claim a lien, and an original contractor has sixty days from the time of the completion of his contract. It therefore becomes important’ to determine when the mill in question was completed, as the terms of the contract under consideration were that plaintiffs should furnish the lumber necessary to build the mill. "When the mill was completed, plaintiffs ’ contract for furnishing material terminated, and they had sixty days thereafter in which to file their notice of intention to claim a. lien for whatever balance was due them under the contract. While there is some apparent conflict in the testimony on this point, we think the great preponderance of the evidence shows that the mill was completed long before plaintiffs made their last two shipments of material. When the mill was put in operation, in July, 1900, the mechanics who constructed'it and put the machinery in place all quit work and left, except one, who -was retained to make impairs and such changes and alterations as are usually necessary and incident to the starting of new machinery. The mill stopped running in December, 1900, at which time a few repairs were made, the building closed tend locked up, and a watchman put in charge of it. Mr. Bamberger, one of the respondents, testified that he was at the mill in June or July, when the carpenters and builders were there, and saw it again after they quit work and left, and when the mill was in operation; that the building was complete; and that there were no particular changes made after the mill started, except to adjust the machinery. Mr. Hill, the president and business manager of the mill and mine, and the party who made the contract in question for the company, was sworn in behalf of the plaintiffs, and testified, in part, as follows: The building of the mill progressed satisfactorily from January 23d [1900] to the time it was completed and went into operation, about the 15th of July [1900]. It began turning out its products, subject to such delays as a new mill might ordinarily ha,ve. The machinery was pretty hearly all installed, and the mill was all inclosed. The ore bins were made later — the bins for the concentrates. The ore bins at the mill were constructed in June, July and August, and in fact never were finished yet.” This witness also stated in general terms that the mill was not completed in July, and then proceeded to explain in what respect it was incomplete, as follows: ‘ ‘ The boxes for carrying the ore through the mill were put in with no grade to amount to much, and we had to fake them all out. Some changes were necessary to be made all along from time to time after the mill started. The ore would wear those boxes away, and we had to renew them, and we had always to see where we could, change them and make them better. Alterations were necessary to be made in and about the mill after it started, and we made them from time to time as it became necessary.” And again he says: “Repairs have been going on at the mill. It has been closed up tight and a watchman there. There has been fixing all the time, more or less — getting the tanks soaked np, cleaning up around the mill, and fixing different things around the bins; fixing up around the pumps covering up the pipes to keep them from freezing.” It will readily he observed that the changes, alterations, and repairs spoken of by the witness had no connection with the building of the mill in the first instance, and the material furnished for such alterations and repairs did not come within the scope and terms of plaintiffs ’ original contract for the furnishing of material. “Occasional repairs subsequently made cannot be added to work doné months before, so as to render the whole work one continued performance, for which a single lien can be claimed within sixty days after the last repairs. ’ ’ Phillips on Mechanics’ Liens, 827; Davis v. Alvord, 94 U. S. 545, 24 L. Ed. 283; Appeal of Harman et al. (Pa.), 17 Atl. 140.

The last order for material was handed to John P. Oahoon, one of the plaintiffs, by Mr. Hill, the president and general manager of the Fortune Mining & Milling Company, at the company’s office, one or two days before the shipment was made. Plaintiffs’ attorney, with whom John P. Cahoon had been talking about the account with the company, was present at the time. This incident, together with the fact that the order was for lumber not needed at the mill, and the further fact that the plaintiffs were willing to thus ex-, tend additional credit to a company that had shown itself to be either unwilling or financially unable to pay its obligations, and thereby add to an account long past due, and one which their own testimony shows they re-regarded as somewhat doubtful — one of them having made one or two ineffectual attempts to collect money on it — tends to give color to the contention of the respondents that the order was given and filled for the purpose of enabling plaintiffs, one of whom was a stockholder in the company, to revive and extend the time of filing their notice of intention to claim a lien, and not for the purpose of discharging any mutual obligation growing ont of the contract of November, 1899, that the parties were nnder to each other. To permit a contractor, long after the completion of his contract, to revive or keep alive his right of lien by tacking on and adding to his account by filling additional orders for labor or material not contemplated by his original contract, would throw open wide the doors to fraud and collusion, and in many cases defeat the very purpose and object of the statute, as it would enable the favored creditor to keep alive indefinitely his right to a lien, and at the same time prevent the property subject to lien from being reached by other lienholders whose contracts were entered into subsequent to that of his qwn. “It is particularly as regards the rights-of bona fide purchasers and incumbrancers that the claimants of this lien are held to the strictest compliance with the statutory provisions as to the time of its enforcement. Mechanics and materialmen, it is said, should understand that any unreasonable delay in giving public notice of their intention to hold a lien is dangerous, as the public, in purchasing the property, have nothing to warn them after the building is substantially completed, and the statutory period of filing the notice of lien has expired. ’ * Phillips, Mech. Liens, 327a; Flint v. Raymond, 41 Conn. 510; Sanford v. Frost, Id. 617.

In this case, while the Salt Lake Hardware Company was foreclosing and subjecting the property in question to the payment of its- claim, the plaintiffs stood quietly by, without filing any notice of their intention to claim a lien, and permitted the property, by virtue of such proceedings, to pass into the hands of an innocent purchaser. Under these circumstances, to permit the plaintiffs to establish a right to a prior Hen by tacking onto their account an additional item five or six months after the completion of their contract, and calling it all “one-continuous transaction,” would not only be in contravention of the statute, but contrary to every principle of justice and equity.

The judgment of the lower court is affirmed; costs of this appeal to he taxed against the appellants.

BASKIN, 0. J., and BARTCH, J., concur.