Herron v. Whitely Malleable Castings Co. , 47 Ind. App. 335 ( 1910 )

Rabb, J.

— In December, 1896, and January, 1897, appellant’s intestate sold to the Terre Haute Manufacturing Company certain machinery, which was used in the construction and equipment of said company’s factory, and on January 25, 1897, said intestate having died in the meantime, the company executed to the administratrix of his estate its negotiable promissory notes for the balance due on said machinery. At the time said machinery was so sold and said notes were so taken for the purchase price thereof, said company was insolvent. On May 11, 1897, said company executed a mortgage upon all of its property, including its factory in which such machinery was so used, to appellees McKeen, Bindley, Starr, Dulaney National Bank and the Terre Haute Savings Bank, to secure to them, respectively, antecedent debts owing to them from said company amounting to an aggregate of $28,000. In June, 1897, appellee Whitely Malleable Castings Company began suit in the circuit court against the Terre Haute Manufacturing Company, seeking to dissolve the company, on the ground that it was an insolvent corporation, and asking for the appointment of a receiver to wind up its affairs. Such proceedings were had therein that a decree was entered by said court dissolving said corporation, and appointing a receiver for said purpose, who, under proper orders of the court, sold all its property, including said factory, in the construction of which said machinery was so used.

After the appointment of said receiver, the administratrix of appellant’s decedent filed the notes so executed by the company, as a claim against the receiver, and the claim was duly allowed by him, and thereafter, and after the sale of the property by the receiver, appellant filed an intervening petition in said cause, averring the facts before related, and claiming priority of payment for the purchase price of said machinery over said mortgage out of the proceeds derived from the sale of the factory in the hands of the receiver. To this petition the mortgagees demurred, and the demurrer was sustained by the court, and this presents the only question arising on this appeal.

It is appellant’s contention that, notwithstanding the fact that no notice of the intention to hold a mechanic’s lien on the premises was filed by his decedent, or any one representing him, as required by the provisions of the statute, he is entitled to such lien and priority payment under the provisions of section one of the act of 1889 (Acts 1889 p. 257), relating to mechanics’ and laborers’ liens, as it had been construed by the Supreme Court prior to the time the machinery in question was sold by his decedent; that the doctrine of stare decisis applies to this ease, and that the rights of appellant are not to be affected by any change subsequently made in the interpretation of the statute in question by the Supreme Court.

1. The decisions of the courts of last resort, while generally regarded as of binding authority by lower tribunals, beyond the limits of the case in which the decision is rendered, strictly speaking, are not law. They are simply evidence of law of greater or less persuasive force, as these decisions are harmonious, apparently well considered and of long standing. They are not addressed to the public generally, but to the ease under consideration, and are not to be presumed to influence the actions of those not parties to the proceeding in which they are rendered, at least, until they have been published in the reports provided by law for their publication, or are of such long and unchallenged standing that they may reasonably be presumed to have become publicly known. Paul v. Davis (1885), 100 Ind. 422; Board, etc., v. Allman (1895), 142 Ind. 573, 39 L. R. A. 58; Yates v. Lansing (1812), 9 Johns. *396, 6 Am. Dec. 290; Henry v. Bank of Salina (1843), 5 Hill 523.

2. If, however, a principle of law, doubtful in its character or uncertain in the subject-matter of its application, or the construction of a statute, couched in language the meaning of which is uncertain or obscure, has been settled by the decision of a court of last resort for such length of time, and is of such a character as to have become an established rule of property or of contract, such rule or statutory construction will not be overthrown so as to affect the property or contractual rights acquired upon the faith of such decision. Rockhill v. Nelson (1865), 24 Ind. 422; Grubbs v. State (1865), 24 Ind. 295; Harrow v. Myers (1868), 29 Ind. 469; Hines v. Driver (1883), 89 Ind. 339; Gross v. Board, etc. (1902), 158 Ind. 531, 58 L. R. A. 394; Diamond Plate Glass Co. v. Knote (1906), 38 Ind. App. 20.

3. But such rule can have no application where the decisions relied upon are conflicting, not well considered, or were made so recently before the contract or property right to be affected was made or acquired that it could not reasonably be presumed to have been made or acquired upon the faith of the decisions relied upon.

4. Here, prior to the sale of the machinery in question, the section of the statute, under which appellant claims a lien upon the funds in the hands of the receiver paramount to the mortgagees’ right, came before the Supreme Court for construction in three different eases at different times. The first decision was rendered in the ease of Goodbub v. Estate of Hornung (1891), 127 Ind. 181, in which it was held that those who furnished material and performed labor in the erection of a structure for an insolvent owner, were, by the terms of the statute in question, entitled to preference over common creditors in the payment of their claims out of the estate of such insolvent owner of the structure, where it had been sold by his administrator, and the proceeds were held as assets of the estate.

The second appearance of the question in the Supreme Court is in the ease of McElwaine v. Hosey (1893), 135 Ind. 481, where it is expressly held that under the provisions of this section of the statute no lien attaches to the structure in favor of those who perform work or furnish materials for its construction, without giving notice required by the subsequent section, of the act, and that the preferred claims referred to in the first section of the act are limited to claims for the services of employes in operating factories.

The last instance in which the question was presented to the Supreme Court, before the machinery in question was sold by appellant’s decedent, is the case of Jenckes v. Jenckes (1896), 145 Ind. 624, in which it was again held, in harmony with the decision in Goodbub v. Estate of Hornung, supra, that the terms of the statute in question include, as preferred claims against insolvents, not only debts to laborers for wages, but also debts to mechanics and material-men, contractors and others furnishing labor and materials in the construction of the building upon which the lien is claimed, or the funds arising from its sale, out of which a preference is claimed. The court referred to both of the previous decisions. That such decision was hastily considered is evidenced by the fact that the ease of McElwaine v. Hosey, supra, is referred to as already stated, and not overruled or criticised, but cited as an authority supporting the court’s decision, whereas, they are squarely in conflict.

It is this last decision that is mainly relied upon by appellant as supporting his contention that the rule of- stare decisis should be applied to the question as it arises here. This decision was handed down on September 24, 1896, within three or four months of the time when the machinery is' alleged to have been sold by appellant’s decedent to the insolvent company. The party against whom the case was decided had sixty days in which to file a petition for a rehearing, and until then the case was still in fieri. "Whether a petition for a rehearing was filed, and if so, when overruled, does not appear, but the decision could not have been published in the reports until long after the contract of the sale here involved was made, and the state of the decisions upon the question could afford no ground for the application of the rule of stare decisis.

Since then, the question of appellant’s right under the statute to a preference of payment out of the proceeds of the sale of the premises has been thoroughly settled, adverse to appellant’s contention, by the decisions of the Supreme Court, in the cases of Sulzer-Vogt Mach. Co. v. Rushville Water Co. (1903), 160 Ind. 202, and National Supply Co. v. Stranahan (1904), 161 Ind. 602, and the eases of Goodbub v. Estate of Hornung, supra, and Jenckes v. Jenckes, supra, have been expressly overruled.

No error intervened in sustaining appellee’s demurrer to appellant’s intervening petition. Judgment affirmed.