A builder's lien held not to have attached where a builder took
a real security for payment of the work which he was to do, and
afterwards, the work being all done, gave it up and took a mere
note.
Strong filed a bill in equity in the court below against Grant
to establish a mechanic's lien for the sum of $1,547. There was no
denial that work was done, nor that it was of the value alleged,
nor that it was of that character for which liens are allowed by
the laws of the District.
The question was whether, under all the circumstances of the
case, such a lien ever attached.
The material facts were these:
On the 14th day of October, 1869, the parties made an agreement
that Strong should do the brickwork on sixteen houses which Grant
was building. The price of the work per thousand bricks was agreed
upon, and that Strong should take one of the houses in payment for
his work, the price of which was also fixed; and this contract was
reduced to writing. A conveyance was made by Grant of the lot which
Strong was to have, and the deed duly acknowledged and recorded and
placed in the hands on Enoch Totten, as an escrow, to be delivered
to Strong when the work was completed. During the progress of the
work, dissatisfaction arose between the parties after the larger
part of it had been done, and on the 27th of November, a new
written contract was made. This, after reciting the former
agreement, says that it is agreed that Strong shall finish all the
brickwork up to the first floor joists without delay. The price was
changed, but the old agreement was referred to for the mode of
measurement. It is then said that the same is to be paid for in
Grant's negotiable note, payable within three months from the date
of the completion of the work, and then the agreement of October 14
shall be cancelled and declared
Page 85 U. S. 624
null and void and of no effect, and the escrow in the hands of
Totten be delivered up to Grant, otherwise said agreement to remain
in full force and effect.
Another paper, signed by both parties, dated January 1, 1870,
recites the former agreements and that the work had been finished
and measured, and that Grant had given his promissory note for the
amount, according to the contract of November 27, and that
therefore the escrow in Totten's hands is declared null and void
and is to be delivered to Grant by Totten.
A good deal of evidence was found in the record as to what was
said and done by the parties in the matter, and the court below
decreed that a lien existed. From that decree this appeal was
taken.
MR. JUSTICE MILLER delivered the opinion of the Court.
We have much argument in the case as to the effect of the note
as a negotiable security operating as a release of the mechanic's
lien. We think this has but little pertinency to the case. We admit
that when a lien has once attached, the taking of such a note does
not of itself operate as a release. The question whether a lien is
obtained, or is displaced when it once attaches, is largely a
matter of intention to be inferred from the acts of the parties and
all the surrounding
Page 85 U. S. 625
circumstances. In the case before us, much conflicting testimony
as to what was said and done by the parties is found in the record.
We need not consider this, for in our view the decision of the case
must rest on the written agreements we have mentioned, and from
them we are forced to the conclusion that the appellee always
relied wholly upon other security than a mechanic's lien for his
pay, which he deemed sufficient, and which he voluntarily agreed to
surrender.
It is very clear that under the first contract, the one under
which the larger part of the work was done, he was to take his pay
not in money, but in the lot on which one of the houses was built,
and that to secure the completion by Grant of the sale when the
work was done, the deed was made and placed in the hands of Totten.
Under these circumstances, no lien could accrue for the work on
that or on the other buildings. When the second contract of
November 27 was made, Strong did not give up this security, but
still retained and relied on it, and it was made a part of the new
contract that the escrow should remain in the hands of Totten and
should be in full force until the work was completed, measured and
the sum due on it paid by the promissory note of Grant. Now with
this security in Totten's hands during all the time the work was
going on, looked to and relied upon by Strong, how can it be said
that Strong relied upon a mechanic's lien or that Grant intended,
in addition to that deed for one lot, to allow Strong to obtain a
lien upon all the others? And so much reliance was placed on this
escrow by Strong that only after all was settled, the work measured
and paid for, as the parties had stipulated by Grant's note, did
Strong sign the order for the delivery to Grant of the deed. During
this time, all the facts repel the idea of a lien.
We do not think that the giving up of the escrow and the taking
of the note in its place, according to the terms of an agreement
previously made, and which obviously did not look to a mechanic's
lien as part of the transaction, would create a lien where none
existed before.
In short, we are of opinion that these agreements show an
Page 85 U. S. 626
acceptance and reliance by Strong on another and very different
security for the payment for his work, inconsistent with the idea
of a mechanic's lien, and that no such lien ever attached in the
case.
Decree reversed with directions to dismiss the
bill.
MR. JUSTICE SWAYNE dissenting.