Soule v. Borelli , 80 Conn. 392 ( 1908 )

The defendants except to certain of the facts found by the court. Among them are several which lie at the very foundation of the plaintiffs' case. Our examination of the evidence fails to disclose that any material fact, whether of major or minor importance, has been found without evidence from which the conclusion reached could reasonably have been drawn. The finding must therefore stand. Nogga v. Savings Bank, 79 Conn. 425,426, 65 A. 129.

With the facts established as found, certain of the questions of law attempted to be raised are either entirely eliminated or greatly simplified. Among these are all those addressed to the validity of the lien sought to be foreclosed, or to its right of precedence over the two mortgages placed upon the premises after the commencement of the rendition of the services and the furnishing of the materials covered by it.

T. Soule Co. — as the party who in negotiation with Mrs. Borelli, the property owner, stated to her and her husband, who accompanied her, the terms upon which it was willing to undertake the work desired by her to be done, and then and there received from her directions to proceed therewith upon the terms proposed, and thereupon, pursuant to such direction, did so proceed and did render the services and furnish the materials desired and so directed to be rendered and furnished — was, within the full meaning and intent of the statute, and original contractor, and one who rendered the services and furnished the materials for which the lien is claimed under an agreement with the landowner. General Statutes, §§ 4135, 4137. One is an original contractor whose contract of employment imposes a direct obligation upon the property owner resulting from the latter's participation therein, either personally or through an authorized intermediary.

The lien, by the express provision of the statute, took precedence of any incumbrance originating after the contractor began to furnish materials. General Statutes, § 4135. This date was June 10th, 1902. The first of the mortgages sought to be foreclosed was not placed upon the property until August 11th, 1902. The lien is, therefore, entitled to priority over them. The fact that labor and material was furnished after the last mortgage was given, the value of which exceeded the amount found due upon the completion of the work, or that the payments to the contractor may have exceeded the charges upon its books at or subsequent to the date of either mortgage, or that the proceeds of a mortgage loan may have been used in making payments to the contractor which, when credited upon its books, exceeded in the aggregate the charges then thereon, or that the contractor knew that the money paid to him, with the result indicated, was the proceeds of such loan, would not, one or all of them, if established, suffice to postpone the lien to the mortgage. The statute is too explicit to admit of any such construction. The contract was a single, indivisible one, comprehending all that was done, and its execution was unbroken in its continuity. By force of the statute there was embodied in it the power to charge the property, as of the time its execution was begun, for all the materials furnished and services rendered by virtue of it.

The overstatement in the lien of the amount due, as the court has found it, did not invalidate the lien. The statement in the lien was made in good faith, with no intention to deceive or defraud, and no one has in fact been deceived or misled to his injury thereby. In so far as the overstatement resulted from the inclusion in the account of the small items properly chargeable to the husband, it was due to inadvertence. In so far as it resulted from mistakes or clerical errors in the contractor's ledger account, they were not intentional. In so far as what the court regarded as excessive charges swelled the book balance for which the lien was filed, these charges were made under a fair claim of right, in good faith, and under the belief that they were justified under the terms of the contract. We have repeatedly held that such a state of facts was not sufficient to avoid a lien. Bank of Charleston v. Curliss, 18 Conn. 342,349; Hopkins v. Forrester, 39 id. 351, 354; Marston v.Kenyon, 44 id. 349, 356; Kiel v. Carll, 51 id. 440, 441.

There remains to consider the right of these plaintiffs, who were the sole members of the firm of T. Soule Co., now dissolved, to maintain this action to enforce the lien by foreclosure in their individual names. The debt which the lien secured was personal estate, whose legal as well as equitable title vested in the partnership of T. Soule Co. The interest created in the real estate of Mrs. Borelli by virtue of the lien placed thereon, was, on the other hand, an interest in land, and as such the legal title thereto did not vest in the partnership but in its individual members.Goodman v. White, 26 Conn. 317; Beardsley v. Beecher, 47 id. 408, 415; Sigourney v. Munn, 7 id. 11, 19. The only interest which the partnership had in the lien was one recognized and enforced in equity. Sigourney v. Munn,7 Conn. 11, 19; Frink v. Branch, 16 Conn. 260, 269. This familiar principle was recognized when the present lien was filed in the name of the plaintiffs, who claimed the lien in their individual capacities, although they described themselves as being partners in the firm. When the partnership was dissolved by the plaintiff Soule transferring all his interests therein to his son — except that this debt and lien was reserved out of the transfer, and the two partners of the old firm agreed that they would retain and jointly hold them as between themselves — the debt became aparted from the partnership assets and transferred to the partners, who thereupon became the owners and holders thereof. No formal or written assignment was necessary to accomplish this distribution of the partnership assets. With this transfer of the debt to the persons in whom the legal title to the lien was vested, the facts out of which a court of chancery would create an equitable title therein in the partnership ceased to exist, the equitable title became extinguished or passed over with the ownership of the debt to the two partners, in whom the title to the debt and the legal title to the lien had vested, and the title and interest, both legal and equitable, in and to both debt and lien thereupon became merged in the plaintiffs. A perfected mechanic's lien passes, as an incident, with the assignment of the demand for which it stands as security.McDonald v. Kelly, 14 Rawle I. 335, 338; Wiley v. Connelly,179 Mass. 360, 60 N.E. 784; Rauer v. Fay, 110 Cal. 361,367, 42 Pac, 902; Trueblood v. Shellhouse, 19 Ind. App. 91,95, 49 N.E. 47; Jones v. Hurst, 67 Mo. 568; 27 Cyc. 258. The situation presented is precisely analogous to that which would have arisen had the Borellis given a mortgage of their property to secure the debt. Goodman v. White,26 Conn. 317; Beardsley v. Beecher, 47 id. 408, 415. The legal title to the premises would have vested in the individual members of the firm. The partnership, as the owner of the debt, would have had the equitable title. Huntington v. Smith, 4 Conn. 235, 237; Chamberlain v. ConnecticutCentral R. Co., 54 id. 472, 484, 9 A. 244. A transfer of the debt would have carried with it the beneficial interest in the security. Smith v. Stevens, 49 Conn. 181,187; Chamberlain v. Connecticut Central R. Co., 54 id. 472, 484, 9 A. 244; Farrell v. Lewis, 56 Conn. 280, 283,14 A. 931. If the transferee was also the holder of the legal title to the land under the mortgage, he would then have the full legal and equitable title to both the debt and security merged in him. Lockwood v. Sturdevant, 6 Conn. 373,390. The action to enforce the lien by foreclosure was therefore rightfully brought in the plaintiffs' names.

There is no error.

In this opinion the other judges concurred.