Opinion
Decided January 5, 1928.
Mechanic's lien — Implied waiver of rights — Materialman paid by mortgagee from mortgage fund for materials furnished — Materialman waives right to lien from date first material furnished, when.
1. The right to a mechanic's lien, or the right to have a mechanic's lien operative from a particular date, may be impliedly waived.
2. A merchant, without an entire contract therefor, furnished materials from time to time for the construction of a building; while the building was under construction, the owner executed a mortgage thereon and instructed the mortgagee to pay all liens and claims then due against said property, which was done, and said merchant, knowing said facts, accepted payment for the materials so furnished by him; thereafter, from time to time, as ordered, said merchant furnished additional materials, which were used in the construction of the building, some of which were paid for out of said fund, and, in perfecting a mechanic's lien on said building, said merchant set forth in his account said materials for which he had been paid, and claimed a lien as of the date of his first delivery of materials upon the job; held that, as against said mortgagee, said merchant impliedly waived his right to a mechanic's lien effective from the date of the first furnishing of materials, which were paid for as stated.
APPEAL: Court of Appeals for Summit county.
Messrs. Rockwell Grant, for plaintiff.
Messrs. Motz Morris, for defendant Falls Lumber Co.
In this case we find that, without an entire contract therefor, the Falls Lumber Company between April 16, 1925, and June 29, 1926, furnished materials to J.H. Brumit for use by him in the construction of his house; that previous to June 29, 1926, there was a mortgage on Brumit's property and also a mechanic's lien, and that just previous to said date Brumit gave a mortgage to the Falls Savings Loan Association for an amount sufficient to pay said first mortgage, said mechanic's lien and the claim of said Lumber Company, and probably to finish said house; that from the proceeds of said mortgage of the Falls Savings Loan Association said other mortgage and said lien and the amount then due said Lumber Company were paid, that thereafter Brumit bought other materials from said Lumber Company for use in finishing his house, some of which materials were paid for by the Falls Savings Loan Association from the proceeds of its mortgage, by direction of Brumit, and were treated by said Lumber Company as cash transactions, and others of which materials so furnished after June 29, 1926, were charged against Brumit.
Said Lumber Company furnished no materials after November 20, 1926, until June 18, 1927, a period of about seven months, when, for the purpose of perfecting a mechanic's lien on Brumit's property, the Lumber Company solicited Brumit to, and he did, purchase a small amount of materials which the Lumber Company delivered at Brumit's house on June 18, 1927, and on the same day, and before noon, said Lumber Company filed an affidavit for a mechanic's lien on an account which not only included the materials purchased by Brumit on credit after June 29, 1926, but also the materials purchased before that date, and which had been paid for by the Falls Savings Loan Association, as hereinbefore stated.
The Lumber Company is now claiming that its lien dates from April 16, 1925, and is superior to the mortgage of the Falls Savings Loan Association.
We find from the evidence in this case that it was the intention of all of the parties to this action that the account of the Lumber Company against Brumit previous to June 29, 1926, should be and in fact was extinguished by the payment of the same on that day by the Falls Savings Loan Association, from the proceeds of its mortgage, and that the Lumber Company impliedly waived its right to a lien for the items of the account previous to June 29, 1926; and, there being no entire contract, said account could not thereafter form the basis of a mechanic's lien.
The contract which the law implied from the mere purchase and delivery of materials previous to June 29, 1926, was fully satisfied by the payment made under the circumstances here indicated, and the contract which the law implied from the subsequent purchase and delivery of materials was a separate and distinct contract, and constituted a new account, and, there being no general contract for the construction or the furnishing of materials for said building, the lien of the Lumber Company dates from the date of the first delivery of materials furnished by it after June 29, 1926, to wit, July 2, 1926, which said lien is inferior to the lien of said mortgage of the Falls Savings Loan Association.
While it is true that a period of seven months elapsed between the last and the next preceding item of said account, and that but for the last item no lien could have been perfected, we find that Brumit knew of the purpose of said last transaction and acquiesced in it and is bound thereby, and as we have already found, for the reasons hereinbefore stated, that it does not affect the rights of the Loan Company, it is not necessary to determine the question of the validity of the lien as against the Loan Company.
We do not find that the mortgage of the Falls Savings Loan Association is invalid because it was acknowledged before a notary who was a stockholder, but not an officer, of the company, and was witnessed by a person who was the secretary of the company. Read, Assignee, v. Toledo Loan Co., 68 Ohio St. 280, 67 N.E. 729, 62 L.R.A., 790, 96 Am. St. Rep., 663.
A decree may be drawn in accordance with this decision.
Decree accordingly.
FUNK and PARDEE, JJ., concur.