Title: Ellison v. Tubb
Citation: 295 Ark. 312, 749 S.W.2d 650
Docket Number: 88-38
State: Arkansas
Issuer: Arkansas Supreme Court
Date: May 2, 1988

749 S.W.2d 650 (1988) 295 Ark. 312 Aubrey ELLISON d/b/a Ellison Refrigeration, Appellant, v. Bobby TUBB, Samuel A. Millican, Debra D. Millican and First National Bank of Magnolia, Appellees. No. 88-38. Supreme Court of Arkansas. May 2, 1988. Anderson, Crumpler &amp; Bell, Magnolia, for appellant. Byron Thomason, Magnolia, for appellees. DUDLEY, Justice. On April 6, 1979, the governor signed Act 746 of 1979, which modified the materialman's lien statute to provide that, effective October 1, 1979, notice must be given to a landowner before there is a delivery of materials in order for a materialman's lien to be perfected against the land. See Ark. Stat.Ann. §§ 51-608.1, -608.2, and -608.3 (Supp.1985) and Ark.Code Ann. § 18-44-115 (1987). On April 23, 1979, after the passage of the act but before its effective date, the landowners, appellees Samuel and Debra Millican, entered into a contract with appellee Billy Tubb for construction of a home. Tubb, in turn, later entered into an oral subcontract with appellant Aubrey Ellison to install the heating and air conditioning unit in the home. On June 20, 1979, after passage of the act but still before its effective date, appellant Ellison furnished materials and labor. On October *651 16, and October 23, 1979, after the effective date of the act, he also furnished materials and labor. No materialman's notice was given to the landowners before the delivery of any materials. The landowners, the appellees, paid Tubb, the contractor, for the house but Tubb did not pay the subcontractor, appellant Ellison. Tubb was subsequently discharged in bankruptcy. The appellant filed suit to perfect his lien. The chancellor found the transaction between the contractor and subcontractor was a single contract to furnish the heating and cooling system. Therefore, the suit for the entire amount was filed within the allowable 120 day period, see Ark.Code Ann. § 18-44-117 (1987). The chancellor further found that the appellant was entitled to a lien only for those materials and labor furnished before the effective date of the 1979 notice act. We affirm. We first consider the issue raised on cross-appeal, whether the trial court erred in ruling that the transaction was a single contract. Whether a contract is entire or severable is determined from the intention of the parties. Intention may be ascertained from the subject matter of the contract, the circumstances of the transaction, and the language of the parties. Jones v. Gregg, 226 Ark. 595, 293 S.W.2d 545 (1956). When, as in this case, the parties probably never thought about whether their contract was entire or severable, and there were periodic payments, a court must determine whether there were periodic payments under one contract, or whether there were several different contracts with each contract calling for full payment at its completion. 17 Am.Jur.2d, Contracts § 325 (1964) provides in pertinent part: Determining the intention of the parties is an issue of fact, and we affirm a chancellor's finding of fact unless it is clearly against the preponderance of the evidence. ARCP Rule 52(a). The facts reveal the following. There was no written instrument to be construed, and the primary evidence regarding the nature of the agreement between appellant, the subcontractor, and Tubb, the contractor, came from the testimony of the appellant. Tubb did not testify. A part of appellant's testimony is fairly abstracted as follows: Some other parts of appellant's testimony seem contradictory to the concept that he and Tubb intended for him to do the whole job, but, taken as a whole, we cannot say the chancellor's ruling was clearly against the preponderance of the evidence. Therefore, we affirm the holding that the transaction was one entire contract, and the lien proceeding was timely filed. On direct appeal the appellant argues that Act 746 of 1979, as applied by the chancellor, is a law which impairs the obligation of this contract in violation of article 2, section 17 of the Constitution of Arkansas and article 1, section 10 of the Constitution of the United States. The argument, in summary, is as follows: In Robards v. Brown, 40 Ark. 423 (1883), in discussing the federal constitutional prohibition against passing laws which impair contractual obligations, we wrote: In Padgett v. Bank of Eureka Springs, 279 Ark. 367, 651 S.W.2d 460 (1983), we quoted with approval the following paragraph from 16A Am.Jur.2d Constitutional Law § 675 (1979), discussing the difference between the impairment of a vested right and a remedy or mode of procedure: At the time the parties entered this contract, Act 746 of 1979 was in existence and was to become effective October 1, 1979. *653 The parties are "conclusively presumed" to have contracted with reference to the existing law. Robards v. Brown, 40 Ark. 423 (1883). Thus, it must be presumed that they contracted with reference to Act 746, and that the appellant was aware of the new procedure to perfect a lien. In addition, the act did not impair the validity of vested rights in the contract itself. The contractual obligations were just as valid after the act became effective as they were before it became effective. The act merely substituted the procedure to be followed in perfecting the lien, and did not substantially deprive a materialman of the remedy of a materialman's lien. Accordingly, the act did not unconstitutionally impair vested rights under the contract, and we affirm the trial court's ruling that the appellant had to give notice after the effective date of the act in order to perfect a lien. NEWBERN, J., concurs. NEWBERN, Justice, concurring. The majority opinion is correct in stating that the failure to comply with the notice requirement of Act 746 of 1979 had no effect on Mr. Ellison's rights established in his contract with Mr. Tubb. There was no need for the trial court to consider whether the contract was severable, and thus there is no need for us to consider it. The issue the appellant should have addressed is whether any constitutional provision or other law prevents the notice requirement from taking effect with respect to materials furnished on a job begun before the law went into effect. To the extent Ellison may have a lien, it is created by statute and not by his contract with Tubb. The basis of the materialman's lien claim is Ark.Code Ann. § 18-44-101(a) (1987). I find nothing in that statute indicating that a lien which may accrue at the beginning of any particular job, contract, or project, is "unseverable." In pertinent part the statute provides, "Every ... person ... who shall ... furnish any material ... for any building ... under any ... contract with the owner ... or his ... contractor ... upon complying with the provisions of this subchapter, shall have, for his ... materials... furnished, a lien upon the building... and upon the land belonging to the owner...." The "provisions of this subchapter" were changed by Act 746, now codified at Ark.Code Ann. § 18-44-115(a) (1987), and thus, in my view, compliance with that section was necessary with respect to "any material" furnished after it became the law. I fully concur in the result reached by the majority opinion, but I would delete the discussions of the singleness of the contract and impairment of contract, as I find them unnecessary.