Henry & Coatsworth Co. v. Fisherdick

37 Neb. 207 | Neb. | 1893

Ragan, C.

In June, 1889,'M. Isabel Bond owned lots C, D, E, and F of Bigelow’s subdivision of lots 11 and 12, block 27, in the city of Lincoln. On the 29th of this month she-entered into an agreement with, the appellee Holmes, in and by which he was to furnish the brick and perform the labor for the erection for Mrs. Bond of a four-story brick hotel on said property. At that time the appellant Marquett, held a mortgage on these lots to secure a debt of $2,200' and interest owing to him by Mrs. Bond. On the 18th day of July, this year, Mrs. Bond made application to the appellant the Missouri, Kansas & Texas Trust Company (hereinafter called the Trust Company), for a loan of' $34,000, to be secured by a mortgage on the above described property, or, as the application expressed it, Mrs. Bond appointed the Trust Company her agent for procuring such loan. The appellant Drexel made a loan through the said Trust Company to Mrs. Bond on said property for $30,000, and to secure the same took a mortgage on said real estate, bearing date August 1, 1889, but not recorded until the 26th day of that month and was not executed until about that date. The payment of this mortgage was guaranteed to Drexel by the Trust Company. On the date of the mortgage, Mrs. Bond and the Trust Company, as agent of Drexel, entered into an agreement in writing, in and by which, after reciting that Mrs. Bond had executed her obligation to Drexel for $30,000 and secured the same by a mortgage on said property, it was provided that Mrs. Bond should at once erect a five-story stone and brick building on said lots and that the Trust Company, as the agent of Drexel, should pay the proceeds of said loan to Mrs. Bond as the erection of said building progressed. These payments were to be made upon the delivery to the Trust Company, or its agents, receipted bills of an equal amount as the payments due for labor and materials entering into the construction of the building.

Before the recording of the Drexel mortgage, Mrs. Bond and the appellees Holmes and the Henry & Coatsworth Company (hereinafter called the Coatsworth Company) agreed in writing with the appellant Marquett if he would release his mortgage on said lots, that Holmes would pay him thirty (30) and the Coatsworth Company forty (40) per cent of the.estimates or money that- might become payable to them for materials furnished in the erection of the building on said lots, and relying on said promises the appellant Marquett did release his mortgage.

Mrs. Bond, as principal, and the appellees Holmes and Doolittle, as sureties, executed to the appellant Drexel, on the 1st day of August, 1889, a bond in the sum of $25,000 to protect and indemnify Drexel and his agents against all liens for labor or materials that might be filed against said lots and building. This bond recited that the time allowed by statute for filing mechanics’ liens had not expired; that Mrs. Bond should pay for all work done and all material furnished for said building, and keep the same clear from all liens on account therefor; that in case she failed to perform her contract/ Drexel, or his agent, the Trust Company, might take possession of the building and complete the same and pay for the labor and materials from the funds remaining from the Drexel loan.

On the 28th day of December, 1889, Mrs. Bond executed a mortgage to the appellees Holmes and Doolittle, sureties on her indemnity bond, the conditions of which mortgage were as follows: “ This mortgage is given to indemnify said Doolittle and Holmes against loss that may accrue to them by reason of their having become sureties for said bond in a certain indemnity to the Trust Company and Drexel for the completion and payment for material and labor in the construction of a building on said lots above described.”

On February 17, 1890, Mrs. Bond and the appellant the Trust Company entered into a written agreement which, after reciting the ownership of the lots by Mrs. Bond, that she had begun the erection thereon of a hotel, that Drexel had a mortgage on the same for $30,000 which was unpaid, that the appellees Doolittle and Holmes had executed a bond to Drexel to hold him harmless against any liens that might be filed against said hotel, that there were large sums of money owing and unpaid to certain persons who claimed to have performed labor and furnished material for said building, provided that for the. purpose of giving additional security for the fulfillment of said bond of indemnity, and for the purpose of raising money to pay for such labor and materials furnisher!, and to complete said building, Mrs. Bond should at once execute to the appellant Braley a mortgage upon the property to secure a note of $30,000, due one year from February 17, 1890, and that said appellant should at once take possession of said hotel and complete the same, and should from the proceeds of the new mortgage pay for such of the work done and material furnished as he should deem best. Braley was the agent of the Trust Company and the Trust Company was the agent of Drexel. In pursuance of this agreement, and on the same date, Mrs. Bond executed and delivered to Braley a mortgage on all the above described real estate and other property for $30,000, due in one year, and surrendered possession of the hotel and lots on which the same is situate.

The appellant Holmes began the furnishing of material and performing of labor under his contract on the 5th day of August, 1889. The Coatsworth Company began the furnishing of material under its contract on August 21, 1889. All the other lien claimants commenced the furnishing of material or the performance of labor after the 26th day of August, 1889.

A large number of mechanics’ liens were filed against the property by various parties to this suit. All of said liens were duly assigned to the Trust Company, except the following: Holmes, the Coatsworth Company, Baird Bros., the Capital City Planing Mill Company, H. B. Dodge & Co., the Crane Elevator Company, and the Reliance Wire Works Company. Thus matters stood when the appellee the Coatsworth Company brought this action to foreclose its lien against the hotel and lots for material furnished by it in the erection of the hotel. A large number of persons were made defendants or intervened, all of whom, except four, filed answers or cross-petitions, claiming liens on the building and lots. The appellants Drexel, the Trust Company, and Braley filed their answer and cross-petition setting out the Drexel mortgage, the mortgage made by Mrs. Bond to Braley, the indemnity bond given to Drexel by Mrs. Bond, Holmes and Doolittle, and the failure of Mrs. Bond to keep the building free from mechanics’ liens. Appellant Marquett intervened in said action, and filed a cross-petition setting out the mortgage he held upon said premises and the release of the same at the request and on the strength of the promises made to him by Bond, Holmes, and the Coatsworth Company, and prayed to be subrogated to the rights of Holmes and the Coatsworth Company. The district court rendered a decree in and by which it divided the liens into five classes, as follows:

a. The first lien was given to Holmes and the Coats-worth Company, prorating.

b. The second lien was given to Drexel on his mortgage.

c. The third lien was given to Baird Bros., the Capital City Planing Mill Company, H. B. Dodge & Co., the Crane Elevator Company, and the Reliance Wire Works Company, prorating.

d. The fourth lien to the appellant Marquett.

e. The fifth lien was given to the Trust Company on the mortgage executed to Braley, February 17, 1890. • This lien was made up of the amount of various mechanics’ liens purchased by and assigned to the Trust Company. •

/. The court found and decreed that the appellants Holmes and Doolittle were not liable as sureties on their indemnity bond.

All parties to the suit appeal except Holmes, Bond, Doolittle, and the Coatsworth Company.

We will first dispose of Marquett’s appeal. The appellants Holmes and the Coatsworth Company promised Marquett in writing that if he would release his mortgage upon the property of Mrs. Bond, Holmes would pay Marquett thirty (30) per cent, and the Coatsworth Company forty (40) per cent of their estimates on each story of the hotel until the full payment of Marquett’s claim. Marquett relied upon these promises and released his mortgage, and his debt remains wholly unpaid. Holmes and the Coatsworth Company received a valuable consideration for these promises and they must be held to their performance. They are now estopped from claiming liens on this property prior to Marquett. To permit this would be unfair, inequitable, and unjust. Marquett is entitled to be subrogated to the extent of his claim to whatever lien Holmes and the Coatsworth Company may have upon this property, and their liens should have been charged with the amount due Marquett. The decree of the district court, in that it did not do this, was in that respect erroneous.

It is claimed by the appellants, and especially by the Trust Company, that the finding of the district court that Holmes had a balance of $8,250 and interest, due him from • Mrs. Bond, is incorrect. Holmes’ entire claim amounted to $12,100, which he had credited with $3,850.

On the trial there were put in evidence receipts signed by Holmes amounting to $6,900, and it is contended that he should be bound by them and thus increase his credits the difference of $6,900 and $3,850. It appears from the record that the method by which this part of the business was conducted was as follows: As before stated, the Trust Company was to disburse the $30,000 of the Ur ex el mortgage, as the work on the hotel progressed, on orders from Mrs. Bond. Mrs. Bond would give Holmes an order for, say, $2,000; he would take this to the Trust Company’s-agents, leave it with them with his receipt for $2,000 and procure from the agents $1,400 in money; and in this way Holmes receipted for $6,900, when, as a matter of fact, he only received $3,850 in money. The Trust Company’s agents and Mrs. Bond were witnesses at the trial, and none •of them- claim that Holmes had áctually received more money than $3,850. We do not think that the district court was wrong in its finding as to the amount due Holmes.

The same objection is urged by the appellants against the amount found due the Coatsworth Company; but as this claim is based on the same theory as the objection to Holmes’ claim, and the method of conducting the business of the Coatsworth Company was substantially the same, the answer to the objection must be like the one to the objection of the Holmes claim, and the finding of the ■court as to the amount of the Coatsworth Company’s claim approved.

The Trust Company, however, insists that the credits .acknowledged by Holmes and the Coatsworth Company should be increased so as to equal the amount of their receipts, and this contention appears to be based on the assumption that the Trust Company was, by the orders and receipts, led into paying out, on the orders of Mrs. Bond, a greater sum of money to her than the work done amounted to. Now, whether or not the value of the work done at a given date was equal in amount to the orders given was a question of fact; perhaps the burden was on the Trust Company to establish that it was not; and whether the Trust Company or its agents paid these orders in full .without knowing the orders exceeded the work are questions of fact. We cannot say that the evidence is insufficient to sustain the court’s finding in this respect.

It is also insisted by the appellant Drexel that his mortgage should have been made a first lien.

Holmes and the Coatsworth Company both began the furnishing of materials for the building prior to August 26, the date of the l’ecord of Drexel’s mortgage, and by the statute a lien of a mechanic or laborer dates from the commencement of the furnishing of materials or from the commencement of performing labor. The appellants Holmes and the Coatsworth Company are therefore entitled tokens on this property prior to Drexel.

A party taking a mortgage on real estate is bound to know whether material has been furnished or labor performed in the erection of improvements on the real estate within the four immediate prior months. Drexel’s mortgage was a lien only on the interest of Mrs. Bond in the mortgaged property. Her interest-was the estate she conveyed to Drexel, less the amount due and to become due Holmes and the Coatsworth Company for labor or material, the commencement of the doing or the furnishing which was prior to the date of the record of- Drexel’s mortgage.

On the other hand, some of .the appellants claim that Drexel’s mortgage should have been postponed to the liens of all parties who furnished material or performed labor in the erection of the hotel. To sustain this it is argued: (1) that there are no priorities amongst mechanics’ liens for labor or material on the same improvement; (2) that the-true meaning of our statute is that all parties performing labor or furnishing material for an. improvement on real estate have a lien therefor from the commencement of the improvement; or,to state the second argument differently, after an improvement has been begun, a mortgage placed thereon is subject to a lien for labor done or material furnished, the commencement of which was subsequent to the record of the mortgage. In support of this counsel cite Phillips, Mechanics’ Liens, sec. 216; Neilson v. Iowa Eastern R. Co.} 44 Iowa, 71. An examination of the first authority shows that the statute on which the author is commenting provided that the building should be subject to the payment of debts of the mechanics, etc., “before any other lien which originated subsequent to the commencement of said house or other building.” In the Iowa case the syllabus is as follows: “A mechanic’s lien attaches from the commencement of the building and takes precedence over a mortgage executed after that time, although the particular work for which the lien is claimed' was not commenced until after the execution of the mortgage.’’ But it will be seen from an examination of the opinion that the conclusion reached was based upon the revision of the Iowa statute, which, the court say, “ provides in substance that mechanics’ liens shall have priority over a mortgage executed upon the land and building after the commencement of the building or improvement.” These authorities, then, are .not in point.

Section 3, chapter 54, Compiled Statutes of Nebraska, provides: “And shall from the commencement of such labor or the furnishing such materials * * * operate

as a lien.” . While this court has held that this statute is remedial and should be liberally construed, it has never arrogated to itself the right, if it had the disposition, to put a construction on the law that would, to all intents and purposes, amount to an amendment of it. By the Nebraska statute a person who performs labor or furnishes material for an improvement on real estate is given a lien thereon from the date he commences such labor or commences furnishing of materials; but this lien attaches only to the interest of the contractee in the property on which the improvement is to be erected, at the date of the commence-1 ment of the labor or the commencement of furnishing material. The material-man or laborer, furnishing material or performing labor for an improvement on real estate, must then take notice of his contractee’s title and interest in the' property as shown by the public records at that date.

In Choteau v. Thompson, 2 O. St., 114, it is said: “If A. and B. commence work or the furnishing of materials and afterwards the owner mortgage the premises to C., and after this D. and E. begin to work or to furnish materials, here A. and B, have priority over C. and C. has priority over D. and E. In such case A. and B. must receive what they would be entitled to if C.’s mortgage had no •existence; the residue must be applied next to the satisfaction of the mortgage; and whatever may remain after that must be distributed to D. and E. pro rata.” The statute •considered in that case appears to have been substantially like the Nebraska statute.

In Crowell v. Gilmore, 18 Cal., 370, it is said: “The mechanic making the first contract, or first commencing work on a building, has no priority over others commencing work subsequently. The statute places all claimants •on an equality and directs the property to be sold and the proceeds applied to all without preference. This rule of equality would not apply if some mechanics began work before a mortgage was executed, by the owner of the property, and some afterwards. In such case the first lien-holders would have priority over the mortgagee, while the latter would not. The first class would be paid in full before the mortgage; then the mortgage; then the last class, each lienholder having equal claims with the others of his class.” An examination of the opinion in this case leads to the conclusion that the California statute on which the opinion is based is very similar to the Nebraska statute.

In the case at bar all liens, except those of Holmes and the Coatsworth Company, were for labor performed or material furnished, the commencement of the doing and the furnishing which was after the recording of the Drexel mortgage. This mortgage was then, correctly decreed by the court below, a lien on the property prior to all liens except those of Holmes and the Coatsworth Company.

The district court gave the third lien to only a part of those who claimed liens for material furnished for the improvement, the commencement of which was after the Drexel mortgage, viz., Baird Bros., the Capital City Planing Mill Company, H. B. Dodge & Co., the Crane Elevator Company, and the Reliance Wire Works Company. These were, by the decree, to prorate each with the other, but the court postponed to these liens the following, also for material furnished in the erection of the improvement, the commencement of which furnishing was after the Drexel mortgage, viz.: Korsmeyer & Co.; Pomeroy Coal Company; W. H. Tyler; C. N. Deitz; Nicholls Roofing Company; S. E. Moore; the Adamant Wall Plaster Company; C. E. Hedges; Rudge & Morris; the Lincoln Glass Company; G. Andrew; the Midland Electric Company; F. A. Nason & Co.; William Gaiser; William Robinson; A. T. Leming; R. S. Young, and J. H. O’Neill. All these postponed liens had been assigned to the appellant Trust Company, and it claimed, and claims now, it stood in the same situation as its assignors.

It is clear from the authorities that all the liens for materials furnished or labor performed, the commencement of the doing or the furnishing which was after the recording of the Drexel mortgage, belonged to the same class, and are entitled to and do prorate with each other. Why, then, should not the assignee of some of these claims be allowed to prorate if his assignor could? “Under our law, the assignee (of a mechanic’s lien) is subrogated to all the rights of the assignor.” (Chief Justice Maxwell in Rogers v. Omaha Hotel Co., 4 Neb., 59.) The district court appears to have postponed these assigned liens on the theory that they were merged in the mortgage given by Mrs. Bond to the appellant Braley, agent of the Trust Company, on February 17, 1890, as the consideration for this mortgage was used in buying up these liens for and in the name of the Trust Company. But did the liens merge in the mortgage?

In Smith v. Roberts, 91 N. Y., 470, it is said (I quote from the syllabus): “While a merger at law follows upon a union of a greater and a lesser estate in the same ownership, it does not follow in equity, and estates will be kept separate where such is the intention of the parties and justice requires it. That.intention'may be gathered not only from the acts and declarations of the party, but from a view of the situation as affecting his interests.”

Now there is no direct evidence in the record that either the assignors or the assignee of these liens intended they should merge in the mortgage; and if we turn our attention to the situation of the assignee, the Trust Company, it certainly was against its interests they should merge. We can almost say that had the Trust Company expected them to merge, it would never have advanced the money for the purchase of the liens; and, to apply the doctrine of merger here, would be manifestly unfair and unjust. Had the Trust Company not bought these liens, they would have prorated with the others of their class, so that the others are not in the least prejudiced by their not merging, but the Trust Company is prejudiced if they are. We adopt the rule in the above case as both sensible and just, and conclude that the decree of the district court, postponing the liens assigned to the Trust Company, was erroneous. .

Complaint is made by some of the numerous appellants of the allowance by the court below of liens to certain parties, viz., the Capital City Planing Mill Company. The- objection to this lien is that the affidavit filed is not sufficient to entitle the claimant to a lien. The affidavit (omitting the formal parts) was as follows: “ John A. Buck-staff, being first duly sworn, on his oath says: * * * is a true and correct account * * * of materials * * * furnished by this affiant.” * * * It is signed “Capital City Planing Mills, Badger Lumber Company, owners, per J. A. Buckstaff, Sec’y.” The heading of the itemized statement, to which the affidavit for a lien is attached, is as follows: “Lincoln,Nebraska,Apr. 15,1890. Mrs.M.Isabelle Bond, To Capital City Planing Mills, Badger Lumber Company, Owners, Dr.” Section 3, chapter 54, Compiled Statutes, provides: “Any person entitled to a lien under this chapter shall make an account in writing of the items * * * and after making oath thereto,” etc. This affidavit is not -within the letter of the statute. Is it within the spirit of the law ?

In Rogers v. Omaha Hotel Co., 4 Neb., 58, Chief Justice Maxwell, speaking for this court, said: “ The object of the law under consideration (mechanic’s lien law). being to secure the claim of those who have contributed to the erection of a building, it should receive the most liberal construction to give full effect to its provisions.” This case is, cited with approval in White Lalce Lumber Co. v. Russell, 22 Neb., 126.

In Delahay v. Goldie, 17 Kan., 263, it is said: “Under the mechanic’s lien law * * * the statement required to be filed may be verified by an agent of the claimant.”

This affidavit and account as filed sufficiently show that the Capital City Planing Mill Company had furnished material to Mrs. Bond for the erection of the hotel, and while the affidavit bears on its face the evidence of carelessness,. it sufficiently shows that Buckstaff was the agent of the claimant. We hold, therefore, that it sufficiently complied with the statute. (See also Phillips, Mechanics’ Liens, sec. 366, and cases there cited.)

The Crane Elevator Company. — The objection to this lien is that by the contract between the elevator company and Mrs. Bond, under which the fixture was delivered to her, it was provided: “ The title and possession of the elevator shall remain in the Crane Elevator Company until the final payment shall be made, and they shall have the right at all times, on the failure on your part to make all payments as provided, to remove the elevator and retain possession of it, and also to retain all payments that have been made, as liquidated damages for non-fulfillment of the contract.”

Section 1, chapter 54, Compiled Statutes, provides: “Any person who shall * * * furnish any fixture.” ■* * * The elevator, within the meaning of this law, is a fixture; and, uninfluenced by authority and looking only to this statute, we would say that to entitle a party to a lien for this fixture he must part with the possession, the right to the possession, and with the title to it. The contract between the elevator company and Mrs. Bond was and is good as between them, and as to all other persons except purchasers without notice and judgment creditors of Mrs. Bond. (Aultman v. Mallory, 5 Neb., 178; McCormick v. Stevenson, 13 Id., 70.)

In Clark v. Moore, 64 Ill., 279, one of the questions was whether the retention by the vendor of the right to the possession and title was a waiver of the vendor’s right to a mechanic’s lien, the court say: “ It is also insisted that appellees waived their lieu when they sold the property by reserving a lien upon it in the written contract; that they thereby received and held additional security that operated to destroy any lien that would otherwise have attached. * * * In their effort to retain a lien on the machinery furnished by appellees they took no collateral or independent security. * * * The lien attaches to and incumbers the property to improve which the material is furnished, and the efforts to acquire a more specific and exclusive lien thereon in nowise manifests an intention to release the property from all lien and to look to other security for payment, but it shows the very opposite intention, an intention to hold, if possible, the property furnished liable for the payment of their claim.”

In Case Mfg. Co. v. Smith, 40 Fed. Rep., 339, it is said: “Retention by a seller of title to machinery placed on land until the price is paid, with a reservation of the right in case of default in payment, to take possession of and remove such machinery without process, is not a waiver of the lien given by the code.” (Tenn., sec. 2739.) The opinion cites enough of the Tennessee code to show that it is not materially different from the Nebraska law. It also cites Anthony v. Smith, 9 Humph. [Tenn.], 508, and Fogg v. Rogers, 2 Cold. [Tenn.], 290, as sustaining the doctrine laid down in the trial case.

Following these authorities, which we do with reluctance, we have reached the conclusion that the finding and decree of the district court giving the Crane Elevator Company a lien must be sustained.

H. B. Dodge & Co. — There are two objections to this claim. The first is that the affidavit filed with the itemized account was made by H. B. Dodge and that it recited that the materials were furnished by the affiant; the affidavit was signed by H. B. Dodge. An examination of the account attached to the affidavit, however, discloses the fact that the account was between H. B. Dodge & Co. and Mrs. Bond, and it sufficiently appears that the material was furnished by H. B. Dodge & Co. In view of what has been said above in reference to the affidavit of the Capital City Planing Mill Company, we think this affidavit sufficiently complies with the statute, and that the finding and decree of the district court giving Dodge & Co. a lien was not erroneous so far as the affidavit is concerned.

Second objection. — The account attached to the. lien in this case consisted of two items, as follows: May 9, 1890, to bill Venetian blinds, as per contract, $540; Oct. 1, 1890, to bill Venetian blinds, as per contract, $12.96. It is here claimed that as more than four months elapsed between the date of the furnishing of these two items, that Dodge & Co. can have a lien for nothing more than the last item. The language of the affidavit attached to this lien is, “that said materials were furnished by said affiant to the said M. Isabel Bond at the time stated in said account.” Now if we are limited to the date the account shows on its face, and to the affidavit in this case, then the contention of the appellants is correct. The solution of the question depends upon whether these two items are parts of one running account, or, in other words, whether they were both furnished under one contract made prior to furnishing the first item. On looking into the evidence we find that the two items were furnished pursuant'to one contract made prior to the date of the first item, and that the second item was a completion of the contract.

In Fulton Iron Works v. North Center Creek Mining & Smelting Co., 80 Mo., 265, a question precisely like the one we are considering arose, and the court said : “A mechanic’s lien is enforceable for all the items of an account furnished by the original contract * * * in the construction- of the building, * * * where it is inferable from the evidence that they were furnished under one contract.” We approve the doctrine laid down in this case. It follows, therefore, that the decree of the district court in allowing the claim of H. B. Dodge & Co. was correct.

The finding and decree of the district court that Holmes and Doolittle, sureties on the undertaking given .by Mrs. Bond to Drexel to indemnify him against liens on the property, were not liable on the bond is assailed as erroneous.

It appears from the evidence that an agent of the Trust Company, or Drexel, came to Lincoln and informed Mrs. Bond that she would have to give Drexel an undertaking to protect him against mechanics’ liens on the property on which he was about to lend her the $30,000 represented by his mortgage, and inquired what sureties she could furnish. She named to him E. D. Appleget, George B. Skinner, L. K. Holmes, and William B. Hughes. The agent then investigated through a commercial agency the financial standing of these gentlemen and found it satisfactory. He returned to Kansas City and there had a bond prepared on a type-writing machine with “M. Isabel Bond, as principal, E. D. Appleget, George B. Skinner, L. K. Holmes, and William B. Hughes, as sureties.” At the foot of the bond were left five spaces for signatures, opposite each of which the word “Seal” was printed. The agent then sent this prepared undertaking to Mrs. Bond for execution by her and the parties named as sureties. Holmes signed the bond on the last space for signatures and Doolittle signed below that. Appleget, Skinner, and Hughes neither signed the bond, and across their names an ink line with a pen was drawn, and the name of Doolittle was written above in the same line. In this condition the bond was returned by Mrs. Bond to the obligee thereof. There was evidence on the trial that Mrs. Bond promised Holmes that Appleget, Skinner, and Hughes would all sign, and that Holmes and Doolittle signed on the condition and understanding and agreement with her that if Appleget, Skinner, and Hughes did not sign, the bond was to be invalid and returned to them, Holmes and Doolittle. That the names of Appleget, Skinner, and Hughes were not erased when Holmes and Doolittle signed.

In Cutler v. Roberts, 7 Neb., 5, the present chief justice, speaking for this court, said: “Where a bond contains.in the obligatory part the names of several persons as sureties, if a part sign the same with an understanding and on the condition that it is not to be delivered to the obligee until it is signed by all whose names appear in the obligatory part thereof as sureties, it will not be valid as to those that do sign until the condition is complied with.”

In Hagler v. State, 31 Neb., 144, Justice Norval, speaking for this court, said: “Where an official bond is altered after the same has been signed, but before its delivery and approval, by an erasure of the name of one of the sureties thereon, and the alteration is plainly noticeable, all the sureties are released who had no knowledge of or did not consent to the alteration or ratify it.”

The finding and decree of the district court were within the principles of these cases. This undertaking was void from the beginning. It had never been valid so far as-these sureties were concerned, and Mrs. Bond’s delivery of it to her principal was unauthorized. Appellants, however, insist that Holmes and Doolittle were liable on this bond because Mrs. Bond executed to them a mortgage on the property to indemnify them from loss by reason of having signed it. In other words, the taking of the indemnity mortgage was a ratification by Holmes and Doolittle of the unauthorized delivery of the mechanics’ lien, bond. To this it is answered by the sureties: “ That at the-time they took the indemnity mortgage they had no-knowledge that the mechanics’ lien bond had not been-signed by Appleget, Skinner, and Hughes; that on the-17th day of February, 1890, Drexel’s agent, Braley, procured them to deliver to him the indemnity mortgage (it had never been recorded) on the promise that another loan would be made to Mrs. Bond by the Trust Company, and secured by a second mortgage on the property, and out of the proceeds of this mortgage all of the mechanics’ lien claims against the property would be paid.” To sustain these allegations there is abundant evidence. Certain it is that Drexel and the Trust Company’s agent, Braley, did get possession of the indemnity mortgage made to Holmes- and Doolittle; that at about that date Mrs. Bond made a second mortgage to Braley for $30,000 on this and other property and surrendered possession of the hotel. Another significant circumstance is that across the face of this indemnity mortgage is written “Canceled: M. Isabel Bond, February 17, 1890.” This, it will be remembered, is the date of the second mortgage to Braley for the Trust Company.

In Livesey v. Omaha Hotel Co., 5 Neb., 50, the late and lamented Justice Gantt, speaking for this court, said: “Waiver is an intentional relinquishment of a knowii right, and there must be both knowledge of the existence of the right and an intention to relinquish it.”

The sureties brought themselves within the doctrine of this case, and the finding and decree of the district court that they had not waived their right to object to the unauthorized delivery of the mechanics’ lien bond is supported by the evidence.

There are in the arguments and proofs of counsel other grounds which answer the claim of ratification by the sureties — grounds fully supported by the record, but the foregoing are sufficient, and they will not be further noticed. The decree of the district court' is reversed and judgment and decree rendered here as follows, the amounts of judgments to draw interest from June 17, 1891:

1. In favor of Turner M. Marquett, against the estate of M. Isabel Bond, Leonidas K. Holmes, and the Henry & Coatsworth Company, for $2,560, with seven per cent interest; the same to be a first lien on lots C, D, E, and F, Bigelow’s subdivision of lots 11 and 12, block 27, in the city of Lincoln, Lancaster county, Nebraska.

2. In favor of Leonidas K. Holmes, against, the estate of M. Isabel Bond, for $7,867.35, with interest at seven per cent; and in favor of the Henry & Coatsworth Company, against the estate of M. Isabel Bond, for $4,654.65, with seven per cent interest; the last two to be second liens on the above described real estate and to prorate one with the other.

3. In favor of Anthony J. Drexel, against the estate of M. Isabel Bond, for $33,777, with six per cent interest; the same to be a third lien on said real estate.

4. In favor of Baird Bros, for $91; in favor of Capital City Planing Mill Company for $740; in favor of H. B. Dodge & Co. for $585; in favor of Crane Elevator Comrpany for $3,212; in favor of Reliance Wire Works Company for $358; in favor of Missouri, Kansas & Texas Trust Company for $21,905. Each of these judgments to be rendered against the estate of M. Isabel Bond, each to draw interest at the rate of seven per cent, and to be fourth liens on the above described real estate and prorate each with the other.

5. Judgment in favor of Leonidas K. Holmes for $1,-392.65. Judgment in favor of the Henry & Coatsworth Company for $1,167.35. Both these judgments to.be rendered against the estate of M. Isabel Bond; both to draw interest at the rate of seven per cent, and to be fifth liens against the real estate above described and to prorate one with the other.

6. Judgment releasing and discharging Leonidas K. Holmes and John Doolittle from liability as sureties on the mechanics’ lien bond given by them to Anthony Drexel.

Irvine, C., concurs. Ryan, C., having been of counsel in the case, took no part in the argument or the decision here.

Case Details

Case Name: Henry & Coatsworth Co. v. Fisherdick

Court Name: Nebraska Supreme Court

Date Published: Jun 6, 1893

Citation: 37 Neb. 207

Docket Number: No. 5189

Court Abbreviation: Neb.