Shellabarger v. Binns ( 1877 )

The opinion of the court was delivered by

"Valentine, J.:

This was au action on a promissory note, and to foreclose a mechanic’s lien. Judgment was rendered in the court below in favor of the plaintiffs on the promissory note, but against them on the mechanic’s lien, and they now bring the case to this court, claiming that the judgment with regard to the mechanic’s lien is erroneous. The facts with reference to the mechanic’s lien, as the same appear, from the evidence in the case, are substantially as follows: The plaintiffs were lumber and building-material merchants; the defendant was a carpenter and builder. The defendant, for some time prior to 28th May 1872, purchased building materials of the plaintiffs, and on that day owed them something therefor, not to exceed $308.50. Also, prior to that time, to-wit, on 28th November 1871, the defendant bought a town lot with a carpenter shop on it from the plaintiffs, for which he was to pay them the sum of $275, in installments, and the plaintiffs were to make and deliver to him a deed for the property when all the purchase-money therefor was paid. On said 28th of May, $75 of said purchase-money had been paid, and $200 thereof still remained unpaid. On that day, (28th May 1872,) the defendant made a contract with the plaintiffs, that they should furnish him with building materials for a house which he was about to build for himself. The materials were afterward, and in May and June, so furnished, the bill therefor amounting in the aggregate to $818.96. The defendant also purchased other building materials from the plaintiffs during the months of May, June, and July, amounting in the aggregate to a sum not exceeding $203.70. The items however of this extra building material were kept separate, in the plaintiffs’ account, from those for the defendant’s house. None of this building material was paid for "at the time it was delivered.The defendant however paid the plaintiffs during the months of June and July the sum of $450. And it may be possible that more than that sum was paid during the summer and fall of 1872, not however to exceed the sum of $140.65 in addition to said $450. That is, if the defendant owed the plaintiffs, on May 28th 1872, $308.50, and afterward purchased $818.96 worth of building materials for his house, and $203.70 worth of extra building material, aggregating $1,331.16, then there must have been not only the said $450 paid, but also the said $140.65, aggregating the $590.65; for on 9th December 1872 the defendant was owing the plaintiffs, for building materials, only $740.51. On 9th December 1872, the plaintiffs, by Mr. Leidigh, furnished the defendant with a statement which showed that the defendant owed the plaintiffs for building materials $740.51, and for said lot and shop $200, with $8.97 interest, making a total of $949.48. Two days later, 11th December, the parties settled in accordance with this statement, and the defendant paid the plaintiffs $350, and gave his promissory note (the one sued on) for the balance, $599.48. There was nothing said by either of the parties, at the time said payments were made, as to how any part of the sum paid should be appropriated. That is, nothing was said as to whether they should be applied in payment for materials for the defendant’s house, or for some other portion of the defendant’s indebtedness to plaintiffs. The evidence however shows that the defendant was unable to pay for any of said building materials at the time the same should have been paid for, and that the plaintiffs thereupon agreed to be lenient with regard to the payment for such of said materials as were put into the defendant’s house, but never consented to extend the time for payment for any of the other materials. This would seem to indicate that the parties intended that any payment that might be made should first be applied in payment of such of said materials as were not put into the defendant’s house, before any part of such . payment should be applied to any of the other indebtedness. And this was reasonable and equitable. For the most of the indebtedness which accrued for the materials which were not put into the defendant’s house was contracted prior to contracting the indebtedness for any of the other materials. And even where both classes of materials were received at the same time, those which were not to be put into the defendant’s house were to be paid for first according to contract. Besides, the plaintiffs had no security, and could get none except with the consent of the defendant, for payment for any of the materials which were not put into the defendant’s house, but they had security for all the other indebtedness. That is, the plaintiffs could at any time after furnishing the materials for the defendant’s house, and within four months after the completion thereof, perfect their mechanic’s lien on said house to secure payment for the materials which were put into the house; and the plaintiffs retained and held the legal title to the shop and lot to secure payment for such shop and lot. Also, at the very time that the parties made their said final settlement, and on the same day that the defendant paid said $350, the plaintiffs (by Mr. Leidigh, to whom the same was paid,) appropriated $208.97 thereof to the payment of the indebtedness for said shop and lot, and the balance thereof, to-wit, $140.03, in partial payment for said building material. And probably this is just what the defendant expected would be done; for it would seem from the evidence that at this time, and also sometime in February or March 1873, Mr. Leidigh told 'the defendant that they (the plaintiffs) would execute and deliver to the defendant a deed for said shop and lot, and plaintiffs afterward did so execute and deliver said deed, and the defendant accepted the same and said it was all right. Before this deed was so executed and delivered, the defendant himself mentioned the matter to Mr. Leidigh, as though he (the defendant) was expecting the deed. Now according to the original contract for the shop and lot, the defendant was not entitled to a deed for the same until such shop and lot were paid for. All this would seem to indicate that both parties thought that the shop and lot were paid for. At the time said sum of $350 was paid, and even up to and after the time when this suit was commenced, it would have made biit little difference to the plaintiffs whether any part of said $350 should be considered as applied in payment for said shop and lot or not. For up to and after the time when this suit was commenced, the plaintiffs had not executed, or delivered the deed for said shop and lot, and therefore up to and after the time when this suit was commenced they would have had their vendor’s lien on said shop and lot for the full amount of the purchase-money therefor, if such purchase-money had not yet been paid. (Stevens v. Chadwick, 10 Kas. 406.) But it is now different. The plaintiffs have now executed said deed for said shop and lot, and if the purchase-money therefor is still unpaid, then the plaintiffs have no security for its payment. They have lost their vendor’s lien by the execution and delivery of said deed. (Simpson v. Mundee, 3 Kas. 172.)

On 11th March 1873, the plaintiffs filed with the clerk of the district court a statement for a mechanic’s lien for the amount of their claim on said house of the defendant. At that time said house was not finished, and indeed it has not yet been finished. Said statement seems to be formal and sufficient in every respect. Said statement shows that the' original amount of the claim for materials furnished for said house was $818.96; that $219.48 thereof had been paid; that $599.48 thereof was still due, and that a promissory note for this last-mentioned amount had been given. Upon the foregoing facts the jury found that the plaintiffs had no mechanic’s lien. This finding we think was wholly against the evidence, and should have been set aside. The plaintiffs were in all probability entitled to their mechanic’s lien for the full amount of their claim. But they were certainly entitled to their mechanic’s lien for some portion thereof. In our opinion, all of said payments except $219.48 thereof should be applied to the payment of other indebtedness than that created for materials for the defendant’s house. And if so, then the plaintiffs should have their mechanic’s lien for the full amount of their claim. The court below probably misled the jury by the instructions given and refused. The objectionable instructions given are, the 7th, 8th, and 9th, given on the court’s own motion, and the 3d and 5th given at the request of the defendant. And the instruction refused, which should have been given, is the 3d asked for by the plaintiffs. It would have been proper for the court to instruct the jury to find in favor of the plaintiffs’ mechanic’s lien for some amount, and we think it would have been proper for the court to have designated the amount as $599.48, with interest. Where a debtor owes his creditor several debts, we think the rule for the appropriation of payments is about as follows: when the debtor makes a payment, he may apply it .to any one of the debts he chooses; but. if he does not make the application, then the creditor may do so; but if neither makes any such application, then the law will make the application in the manner which is most equitable; and in doing so, the law will generally apply the payment to the oldest debt, or to the earliest items of the same debt, or to a debt which is due in preference to one which is not due; and generally, where one debt is secured and the other is not, the law will apply the payment to the debt which is not secured. (See Phillips on Mechanics’ Liens, ch. 25, §287, et seq., and cases there cited; and also, see cases cited in brief of counsel for plaintiffs in error.)

As we have before stated, we think the verdict with reference to the mechanic’s lien, is clearly against the evidence in the case and the law of the case; and therefore we think the court below erred materially in refusing to set aside the verdict, and in refusing to grant to the plaintiffs a new trial. A proper motion was made to the court for that purpose, and the court overruled the motion. Taking the most unfavorable view of the evidence for the plaintiffs — supposing that everything in the evidence unfavorable to them is true, and everything favorable to the defendant is true — and still the verdict is against the evidence. There was no necessity in this case for weighing and reconciling contradictory and conflicting evidence, for there was no such evidence of a material character in the case. All the evidence, so far as it went, and the evidence was sufficient, showed that the plaintiffs had a good mechanic’s lien.

The judgment of the court below will be reversed, and the cause remanded for further proceedings.

All the Justices concurring.