Gerard B. Allen & Co. v. Frumet Mining & Smelting Co.

73 Mo. 688 | Mo. | 1881

Lead Opinion

Hough, J.

This was a suit to enforce a mechanic’s lien

for the sum of $6,802.80, alleged to be the balance due on an open running account extending from February 2nd, 1871, to August 23rd, 1875. The dealings represented by this account were originally had between Gerard B. Allen & Co. and Wm. Einstein & Co. Allen & Co. were engaged in the manufacture of iron work and machinery in the city of St. Louis, and Einstein & Co. were about to engage in the business of reducing lead ores, and for that purpose had erected buildings on their property at Erumet, Missouri, in connection with which they required a variety of machinery and fixtures, which Allen & Co. agreed to furnish them from time to time. On the 13th day of April, 1871, the firm of Gerard B. Allen & Co. became incorporated under the corporate name of Gerard B. Allen & Co., and said corporation succeeded to all the property, rights and credits of the firm of Gerard B. Allen & Co., ; j <• mi n id a liabilities. In other words, the business of the firm was continued by and in the name of the corporation, without interruption or change. On the 3rd day of June, 187 ¥m, Einstein & Co. became incorporated under tbe name of the Frumet Mining & Smelting Company. Said corporation in like manner succeeded to all the property, rightsi and credits of the firm of Einstein & Co., and assumed all its liabilities, and the account sued on was continued between the successors of the original parties thereto, as if there had been no change in the legal status of either. On July 1st, 1872, the Frumet Mining & Smelting Company executed to the defendant, Obear, as trustee, a deed of trust on the land sought to be charged with a lien, to ■secure certain bonds issued by said company. The circuit court rendered judgment for the balance claimed to he due, but refused to declare it to he a lien on the property sought to be charged, and, the plaintiff has appealed.

1. mbchani o>s ■I,TEN-

One objection made to the account as a lien, is, that it contains items for repairs. We think these items fairly come within the understanding or implied agreementofthepartiesthattheplaintiff would .furnish whatever should'be. required in the way of fixtures and machinery for the works at Frumet. The statute expressly allows a lien for repairs, and a running account like the one before us might very properly include such additions, improvements or repairs as should from time to time be needed in connection with the works.

2 _. deed o£ *rust-

The account filed seems to have included all the transactions between the parties, and it contains an. item of $3,7.35 for machinery furnished under a special contract dated April 4th, 1871. But this item was extinguished by payments made before the execution of the trust deed. The debtors not having made any application of their payments at the time of making them, they were applied by the plaintiff to the oldest items of indebtedness.

3_. error Jn account filed.

A number, of items in the account filed aggregating $1,779, were. not furnished for.any building or other improvement on the acre of land described in the lien; but fora furnace situated beyond the limits of said acre, and for a track connecting it with the works. The testimony, however, clearly shows that this was the result of inadvertence and mistake ás to the location of the furnace at the time of filing the lien, and not of any desire or intent to defraud ; an innocent mistake of this character should not, in our judgment, invalidate the whole lien, especially where no one has been injured by the mistake, and the items are easily separable from the balance of the account. In the case of Edgar v. Salisbury, 17 Mo. 271, cited by defendant’s counsel, the items for which a lien was given could not be separated from those for which no lien was given. Nor is the case at bar like that of Fitzgerald v. Thomas, 61 Mo. 499. There the mechanics sought to cover four separate and distinct houses upon four contiguous lots by a single lien, and we held that it could not be done. No such case is presented here.

4contract Rysutistnute: essary-

The most difficult question which the case presents is, whether the account filed can, in view of the changes which took place in the legal status of the contract-mg parties, be deemed to be a continuous running account. . We are of opinion- that the continuity of a running account is broken when the party or firm with whom it is made discontinues business and sells out to another party to whom he also transfers his accounts, although the debtor may thereafter choose to continue dealing with the successor of the person or firm with whom he first dealt. Of course the account may be assigned, but whether the assignee can file a lien in his own name, based upon the account assigned, has not been decided by this court. After the lien has beeu filed the debt may be assigned, and the assignee will then be entitled to the benefit of the lien, and may enforce it in his own name. Jones v. Hurst, 67 Mo. 568. It is essential to the validity of a mechanic’s lien that it should be filed within a stated period after the date of the last item of the account, and when the materials or labor have been furnished under distinct contracts it is necessary that the lien should be filed under each contract within the time limited. Livermore v. Wright, 33 Mo. 31.

In the case at bar it required a new contract, either express or implied, to establish an open running account between Einstein & Co. and the corporation of Gerard B. •Allen & Co., and this being a distinct accouut from that made with the firm, a separate lien should have been filed within the time prescribed by law on the account with the firm. The fact that the name of the corporation was the same as that of the firm, and that the stockholders therein ■were the members of the firm, can make no difference. In the eye of the law, the firm and the corporation are different persons.

Similar observations may be made in regard to the interruption which took place when the Frumet Mining & .Smelting Company succeeded Einstein & Co.

All the judges who were present at the argument of this cause are of opinion that the plaintiff' is entitled to a lien for all the items of the account furnished by it to the Frumet Mining & Smelting Company, and which entered into and became a part of the machinery, fixtures and improvements on the acre described in the petition. The judgment will be reversed and the cause remanded, to be proceeded in in accordance with this opinion ; Ray, J., not sitting.

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Rehearing

On Motion for Rehearing.

Henry, J.

5. APPLICATION OP payments: corporation: partnership.

The case is correctly stated in the foregoing opinion, and it will be observed, that when the firm of Gerard B. Allen & Co. became incorporated, the corporation acquired all the property and credits, and assumed all the liabilities of the firm, and that when the firm of Einstein & Co. ceased to exist, and the Frumet Mining & Smelting Company was incorporated, the latter succeeded to all the property and fights, and assumed all the liabilities of the firm of Einstein & Co. Hence, all the debts contracted by Einstein & Co. became the debts of the Mining & Smelting Company, and Gerard B. Allen & Co. had the right, which was exercised, to apply payments made on the account in controversy, either by Einstein & Co. or the Mining & Smelting Company to the first items of the account in the order in which they were made, in the absence of any special application by the party making the payment. The fact that a person was a stockholder in the Mining & Smelting Company who was not a member of the firm of Einstein & Co., did not affect the right in question, because the corporation assumed the debt of the firm' and thereby made this the debt of the corporation. We, therefore, adhere to the original opinion, as a correct enunciation of the law applicable to the facts of the ease.

All concur.