Case Name: WILLIAM G. PHILLIPS vs. BENJAMIN F. GILBERT, HORACE BOUGHTON, W. BOWEN MOORE, AND CONNECTICUT GENERAL LIFE-INSURANCE COMPANY
Court: Supreme Court of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1875-09
Citations: 2 MacArth. 415
Docket Number: No. 3272
Parties: WILLIAM G. PHILLIPS vs. BENJAMIN F. GILBERT, HORACE BOUGHTON, W. BOWEN MOORE, AND CONNECTICUT GENERAL LIFE-INSURANCE COMPANY.
Judges: 
Reporter: Reports of cases argued and determined in the Supreme Court of the District of Columbia (District of Columbia - reported by Mackey)
Volume: 9
Pages: 415–419

Head Matter:
WILLIAM G. PHILLIPS vs. BENJAMIN F. GILBERT, HORACE BOUGHTON, W. BOWEN MOORE, AND CONNECTICUT GENERAL LIFE-INSURANCE COMPANY.
In Equity. —
No. 3272.
A mechanic who has filed a lien upon certain real estate for work and materials furnished in the erection of houses thereon, and releases it for the purpose of enabling the owner to secure a new loan, cannot afterward claim to enforce the same lien as against the party making such loan upon the security of the property.
STATEMENT OE THE CASE.
The facts apparently established by the testimony are substantially these:
In the month of August, 1871, the complainant entered into an agreement with the defendant Gilbert to erect six dwelling-houses on certain lots in the city of Washington, for which he was to be paid the sum of $32,000. On the 23d day of May, the complainant filed in the clerk’s office a notice of his intention to hold a lien on the property for labor and materials of the value of $27,540.00.
The property had been heavily encumbered by Gilbert, and in November, 1872, a sale thereof was made, by virtue of certain trust-deeds held by one Eastwood, and the complainant, Phillips, became the purchaser at such sale. After the complainant had purchased the property he entered into negotiations for a loan of the sum of $36,000 from the defendant, the Connecticut General Life-Insurance Company, to be secured by a trust-deed on the premises in question. These negotiations were conducted by the complainant with J. G. Bigelow, the agent of the insurance company in this city. The abstract of thó title to the property had been furnished to Bigelow by the complainant, and had been forwarded to the insurance company at Hartford. With the abstract was also forwarded a formal release and discharge, duly executed by the plaintiff, of the lots described in the bill from the ef feet and operation of the claim for mechanic’s lien filed by him.
But before the negotiations for the loan had been completed, a.nd before the premises had been convey ed to the complainant by the trustees who made the sa le, Gilbert effected a sale thereof to Messrs. Boughton & Moore. Gilbert, at the time, was largely indebted to the said firm, and they agr eed to buy the property from him, pay off whatever mi ght be found due to Phillips from Gilbert for the work done a nd materials furnished by him under the agreement between them, an d also to remove the incumbrance put on the property by Gilbert, and then to complete the houses, sell them, and apply any surplus there might be tokthe reduction of the debt due from Gilbert to them. The complainant assented to this arrangement, and abandoned the purchase he had made, and thereupon the lots were conveyed in fee by Gilbert to Bough-ton & Moore. At about the same time, and in consummation, •of the same arrangement, a bargain was made between the complainant and Boughton & Moor e, whereby the complainant agreed.to complete the buildings for Boughton & Moore, ■and they agreed to pay him the price originally agreed upon between him and Gilbert, deducting such p ayments as had been made by Gilbert prior to that time. The complainant ■asserted that Gilbert was in his debt for materials and work to the extent of $4,000, but Gilbert claimed that he was entitled to more credits than the complaina nt had given him. It was also a p art of the agreement between the plaintiff and Boughton & Moore, and it was also understood and approved by the agent of the insurance company, that Boughton & Moore should take up the negotiations for the loan where the complainant stopped, and procure the loan on the same property. It was a condition of making the loan, imposed by the insurance company, that out of the fund the prior incumbrances should be removed, in order that its security might constitute the first incumbrance. And it was a part of the agreement between the complainant and Boughton & Moore, that, after the debts secured by deeds of trust on the ground had been paid, the complainant should be paid out of the loan whatever sum might be found due to him for work done and materials furnished -for Gilbert. It was also agreed that a certain note for $3,000, made by Gilbert and given to complainant, and then overdue and unpaid, should also be taken up, and that the balance of the loan should be paid to him for the materials furnished and labor performed by him for Boughtbn & Moore, under his agreement with them. The insurance company, some time in February, 1873, relying upon the abstract of title, and the release of the lien of the complainant held by it, made the loan and advanced the sum of $36,000 upon the security of the property. The complainant thereupon went to work to complete the houses for Boughton & Moore, as agreed upon between them. The money loaned was paid out by Bigelow, the agent of the company, and he paid the sum of $18,873 to take up the trust-deeds outstanding on the lots; he paid the overdue note for $3,000, as agreed, and he paid to the complainant, out of the fund, the sum of $6,000. The complainant proceeded with the work until some time about the 11th of June, 1S73, and then abandoned the houses, and filed the bill in this court to enforce the old claim for lien filed against Gilbert.
The court below, July 8,1875, passed a decree dismissing the bill with costs. An appeal was taken to the general term by the complainant:
Appleby & Edmonston for complainant:
It appears from the testimony that, at a sale made by the trustee, under a deed of trust from Gilbert prior in date to Phillips’s lien, Phillips bid for the property, but did not comply with the terms of sale, and that a dispute arose between Gilbert and. the trustee as to the validity of the sale. The sale was made in October or November, 1872. After Phillips had bid at this sale, J. G. Bigelow, the agent of the Connecticut Life-Insurance Company, expressed to Phillips the opinion that he could negotiate a loan of $36,000 with said company. Phillips procured an abstract of title, which showed a lien filed by himself for $27,000. When Bigelow was about to go to Hartford, Conn., to secure this loan, Phillips signed a release of lien.
On the part of the complainant, it is contended that this release delivered to Bigelow was only to be used in case the loan was made to Phillips, and returned to him in case the loan was not made to him. Phillips, in his testimony in rebuttal, page 2, says:
“I think I gave him (Bigelow) such release. .When he was about to start for Hartford with the abstract) he suggested to me it would be necessary to have a release of lien to place in the hands of the company to give them authority to release the lien before the loan could be made to me. That, was to be used only if the loan was made to me, and returned in the event of my not getting the loan.”
The written release of lien not being given either to the debtor or his agent, or to the proper officer of the. court, to whom it was directed, the discharge of the lien was not complete. Phillips on Mech. Liens, see. 295; Wetherill vs. Harbert, 2 Barr. Penn. St., 348. The lien of a mechanic is not waived or released except by plain acts. Hindman vs. Lybrand, 14 S. and R., 31.
Enoch Totten, for defendant, contended that complainant-cannot maintain this action, because—
1st. He practically joined in-the conveyance from Gilbert to Boughton & Moore, and therefore is estopped from setting up this lien against them. Phillips on Mech. Liens, sec. 390 ; Bigelow on Estoppel, 369; Doub vs. Barnes, 4 Gill, 1; Alexander vs. Slavens, 7 B. Mon., 356.
2d. He accepted the promise of Boughton & Moore to pay for the work done and materials furnished by him for Gilbert-,, and actually received $6,000 by virtue of the promise. By accepting the personal obligation of third persons to pay the debt, he waived and discharged his lien. The acceptance of said security is inconsistent with the intention of holding a lien. Strong vs. Grant, 18 Wall., 623; Brady vs. Anderson, 24 Ill., 113; Kingley vs. Thomas, 28 Ill., 505; Bennerson vs. Thayer, 23 Ill., 374; Whiting vs. Joslin, 108 Mass., 103; 4 Kent’s Com., 153; 2 Sugden on Vendors, 59; Brown vs. Gilman, 1 Mas., 212; Fish vs. Howland, 1 Paige, 20; Williams vs. Roberts, 5 Ohio, 35 ; Conover vs. Warren, 1 Gilm., 501.
3d. The plaintiff cannot maintain a suit on the lien filed for work done and materials provided under the contract with Boughton & Moore. To enable a builder to enforce a lien of this kind,.the labor and materials must have been furnished in pursuance of a contract with the owner of the lots, and through the instrumentality of a notice of an intention to hold a lien upon the property for the particular work and materials. Rev. Stat., D. C., secs. 692, 693.
4th. The lien was discharged by the delivery of the release to the insurance company. The complainant,' after inducing the insurance company to part with its money on the faith of the release, and having received a large part of that money himself, is estopped from.setting up the lien. Bigelow on Estoppel, 369.

Opinion:
Mr. Justice Wylie
delivered the opinion of the court:
The simple question in this case is, whether a mechanic who had filed a lien upon a certain piece of property, and* released it to enable the parties owning the land to make a loan, can afterward claim the lien as against those who have advanced the money. We think not. The decree appealed from is therefore affirmed.