Bryant v. Grady , 98 Me. 389 ( 1903 )

Wiswell, C. J.

This action to enforce a lien upon a building was reported for the determination of this court upon the facts found by the justice presiding at nisi prius. From that report the following facts, material to the issues involved, appear:—

The Higgins Classical Institute, the owner of the school building attached, and upon which the plaintiff seeks to enforce his lien, made a contract*with the defendant for the construction of this building and "also'another building, to be used as a dormitory. Subsequently the plaintiff made a contract with the defendant to furnish him certain labor and material to be used in the construction of these buildings, and in pursuance thereof, and witli the consent of the owner, did furnish labor and material to the amount of $1G92.42 which were used in the construction o*f the building attached. This amount is to be reduced by credits of $917.05. The plaintiff seasonably filed his lien claim in proper form and seasonably began this action and caused an attachment to be made of the building upon which the lien was claimed; no question is made as to the regularity of these proceedings.

But the owner of the building claims that further credits should be given upon the plaintiffs account, at least so far as his lien claim is concerned, and this question, which arises under• the following-facts, is the only one involved. The plaintiffs general account for labor and materials furnished for both buildings commenced Nov. 1, 1901; on January 24, 1902, in response to an application for a payment upon account the defendant gave him his negotiable promissory note for $1000 on thirty days time, which the plaintiff took, had discounted at a bank and gave the defendant credit on his ledger for that amount. The entry on the plaintiff’s ledger being “1902, Jan. 24, Cr. by note, 30 ds. $1000.” On March 14, 1902, the architect, in charge of the construction gave to the defendant a certificate that he was entitled under his contract with the owner to a payment of $1000. The defendant indorsed the certificate to the plaintiff and also gave him an order on the treasurer of the owner for $1000, which sum was paid by the treasurer direct to the plaintiff and charged by the treasurer to the defendant, the contractor. The plaintiff applied this sum to the payment of the defendant’s note of like amount which had become due on the 24th of the preceding month.

Again, on April 22, 1902, in response to a request for a payment, the defendant sent to the plaintiff his negotiable promissory note for $500, for which amount the plaintiff gave the defendant credit on his books as cash, and had the note discounted at the bank. It does not appear from the report when this latter note matured. But on May 22, 1902, the architect gave the defendant another certificate that he was entitled to a payment of $1000 under his contract from the owner, which the defendant indorsed over to the plaintiff and gave him at the same time an order for the payment of this sum, as before. The treasurer of the owner paid this sum of $1000 upon the architect’s certificate and the defendant’s order direct to the plaintiff, who applied $500 of it to the payment of the defendant’s note of April 22, preceding, and credited the remaining $500 on his account.

The owner of the building claims that the plaintiff by taking these notes received pro tanto payments upon his account which he now seeks to enforce against the building, and further, that when these two payments of $1000 each were made as above stated by the owner to the plaintiff upon the order of the defendant, the plaintiff should have applied them to his general account and had no right to apply the whole of the first payment and half of the second to the payment of the notes above referred to.

We are unable to agree with the owner in either of these contentions. While it is well settled in this State that the acceptance of a negotiable promissory note, in the absence of any testimony or circumstances to the contrary, is presumed to be a payment of the indebtedness for which it was given, it is equally well settled that this presumption may be rebutted and 'controlled by evidence that such was not the intention of the parties; and, as a general rule, this presumption will be overcome by the fact that the acceptance of a note in payment would deprive the creditor taking the note of the substantial benefit of some security. Bunker v. Barron, 79 Maine, 62, 1 Am. St. Rep. 282. In this case the court below found that the plaintiff, in taking these two notes, did not intend to release or reduce his lien claim on the building, nor did he suppose that he had done so, and that the defendant did not claim that any lien had been affected thereby. The fact that the plaintiff gave credit to the defendant upon his book for the amounts of these two notes is only a circumstance bearing upon the question of whether or not the notes were in fact taken as payment. In view of the finding of facts upon this question by the court below and the sti’ong improbability that the plaintiff intended to accept these notes in payment, pro tanto, of his account, thereby releasing the valuable security of his lien upon the buildings, we are satisfied that they cannot be regarded as such payments in this case.

The notes not having been taken in payment when given, their subsequent negotiation would not have been affected bjr the plaintiff’s right, if they had not been paid, to take them up at maturity, cancel or redeliver them to the defendant and enforce his lien claim precisely as if they had not been given. Davis v. Parsons, 157 Mass. 584; McLean v. Wiley, 176 Mass. 233.

But, even if these notes had been taken by the plaintiff as payment on account of his lien claim, it would not affect the result. The payments which were applied, in the case of the first one in full, and as to the second one to the extent of one-half, were not made by the owner to the plaintiff, they were payments made by the defendant to the plaintiff. When the architect gave certificates that the defendant was entitled under his contract to these two payments of $1000 each, and those certificates were indorsed by the defendant to the plaintiff, with orders from the defendant to pay the amount to the plaintiff, and these amounts were paid upon the certificate and in pursuance of the orders, the effect was for the owner to pay the defendant these amounts and for the defendant to pay the plaintiff the same. Whether or not the owner under its contract with the defendant had the right to use the money due the contractor for the jmrpose of satisfying the lien claims of those who furnished either labor or material, we do not know, because the contract is not made a part of the case, but whether they had the right or not they did not exercise it in this case. These payments upon the order of the defendant were equivalent to payments made directly to him, and this was undoubtedly recognized by the treasurer because he charged these amounts to the defendant. The payments of these two sums, therefore, were in substance and effect made by the defendant to the plaintiff, and the application of the first sum and one-half of the second sum to the payments of these two notes, was, as found by the court below assented to by the defendant. No one can have a better right to determine as to the application of payments than the persons making and receiving the same, when they have agreed as to such application nothing further remains to be done. So that if these two notes had been taken in payment, pro tanto, of the plaintiff’s lien claim, still the plaintiff had a perfect right to apply this money to the payment of these notes, because the person making the payment assented thereto.

It follows, the defendant having already been defaulted, that the plaintiff is entitled to a lien judgment against the building and land attached for the sum of $775.37, and interest from the date of the writ.

Judgment for plaintiff' as above.