Elgin Lumber Co. v. Langman

23 Ill. App. 250, 1886 Ill. App. LEXIS 284
CourtAppellate Court of Illinois
DecidedJune 9, 1887
StatusPublished
Cited by11 cases

This text of 23 Ill. App. 250 (Elgin Lumber Co. v. Langman) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elgin Lumber Co. v. Langman, 23 Ill. App. 250, 1886 Ill. App. LEXIS 284 (Ill. Ct. App. 1887).

Opinion

Baker, P. J.

The objects of this bill, filed by the Elgin Lumber Company, were to enforce a lien under the statute for lumber and materials furnished by them to George Utman and used by him in the construction of a dwelling house on a lot in Elgin owned by him, and which house was destroyed by fire before it was finished; and also to obtain a decree that the mortgagelien of Solomon Langman for purchase money of the premises was secondary and subordinate to their lien as material men in respect to the insurance money due ou account of the burning of the house. Before the hearing the insurance company paid into court the amount of®the loss on the house, and the money was held to abide the order of the court.

Waiving for the present the matter of a rehearing, it is urged that there are two errors in the decree that was entered in the Circuit Court. One of these alleged errors is, that it was error to decree that the mortgage was a prior lien on the lot. It is virtually conceded that the admissions made in the bill, and the proofs and admissions made at the hearing, fully justified the court in the findings recited in the decree, that the verbal contract for furnishing materials for the building, made between the appellant corporation and Utman, was entered into on the 24tli day of April, 1885 ; and that the note and mortgage to Langman, to secure the unpaid purchase money of the lot, were executed and delivered on the 14th day of April, 1885. There is no finding in the decree in regard to the time when the mortgage was filed for record. It is, however, stated in the decree that the mortgage was introduced in evidence, and the same fact is stated in the certificate of evidence; and in this latter the mortgage is copied at length with the certificate of the recorder indorsed thereon, showing that said instrument was filed for record at 2:15 o’clock p. m. of the 24th day of April, 1885. In that state of the case, there being no testimony to indicate at what hour of the day the contract for lumber was entered into, the presumption of tlie law is that making the contract and filing the mortgage for record were simultaneo ns acts, and the rule is that where there are equal and competing equities the oldest equity will prevail. It was not, therefore, error to decree that the mortgage for purchase money executed and delivered on the 14th of April was a prior lien on the lot, and had precedence over the contract for materials made on the 24th of April.

The other error assigned in respect to the decree rendered, is that it was error to adjudge that Langman had a prior lien on the insurance money deposited in court. The mortgagor covenanted in the mortgage to keep all buildings on the premises insured and make the loss, if any, payable to the mortgagee, as further security for the mortgage indebtedness. It appears, however, he failed to do this. On the 15th day of May, 1885, the German Fire Insurance Company of Peoria issued a policy insuring Utman, the mortgagor, against loss or damage by fire, “ loss, if any, payable to S. Langman.”

The evidence shows that Langman himself procured this insurance and paid the premium therefor, and did this for the purpose of making his notes more secure. The written policy itself must determine who was the assured and whose interest was insured; and upon the authority of Continental Ins. Co. v. Hullman, 92 Ill. 145, we must hold that by the terms of this policy Utman was the assured and that it was his interest that was insured. The case cited, however, was an action at law, and was between the insurance company and Hull man & Cox, the mortgagees, and persons designated in the policy as the parties to whom the loss, if any, should be paid, and involved only the question of the "legal liability of the company upon the policy. Ho such question arises here; the liability has been admitted and the insurance money deposited in court; and the matter in hand is the distribution of this fund to be made by the court of chancery. It may be remarked, in passing, that it does not appear here, as it did in the case mentioned, that the premium paid for the insurance was either changed to the mortgagor or included in the notes and mortgage.

It is a familiar principle that equity, in order to do justice, will frequently treat the money derived from property as it would the property itself, and will follow it as long as it can be identified. Appellants claim that this equitable principle is, under some circumstances, held to apply to insurance money; in which event the insurance money is held to represent the buildings destroyed and to be subject to the same liens, exceptions and rights.

This contention must be at once conceded, as many cases of that sort are to be found in the books, and one of the most recent of these is the case of the Grange Mill Co. v. Western Assurance Co., 118 Ill. 396. One answer made by appellee to this claim of appellants is that their lien for lumber and materials is merely statutory and is only upon the lot and house and appurtenances, and is in derogation of common law, and must be strictly construed, and not extended to embrace cases that are not within the language of the statute. We think this an insufficient answer. In the early case of Gaty v. Casey, 15 Ill. 189, the materials furnished and attached to the freehold had become severed therefrom by fire, and sold by the purchasers under a deed of trust upon the premises, and it was held that a court of equity would treat the money derived from such sale as it would the property before a sale, and in behalf of the persons entitled to the mechanic’s lien would pursue it into the hands of the party who had converted the property into money.

This decision sufficiently indicates the rule to be that where the property to which the statutory lien attached has been converted into money, the court will, in a proper case, and for the benefit of the holders of the lien, treat the money as substituted for the property. It is a circumstance of no controlling importance, that in the one case the conversion is effected by selling the property and thereby putting it beyond the reach of the court, and that in the other case the same result is reached by means of an insurance and subsequent destruction by fire. If Utman himself had procured this insurance and paid the premium, and the insurance had been upon his interest in the premises, and the loss was payable to himself, then a very clear case for the application of the rule urged by appellants would be presented.

It will be noted that in Gaty v. Casey, supra, the conversion was in violation of the prior right of the lienor. So, also, in the case we have above supposed; and assuming the house destroyed by fire had been constructed out of lumber, and materials furnished by appellants, the appropriation of the insurance money to his own use by either Utman or appellee, leaving appellants unpaid, would have been in violation of their rights as material men. But, in the case at bar, we are unable to see that any right vested in them has been infringed upon, or that they have been placed in any worse position by that which was done by appellee.

It is true that the statute provides in express terms that no incumbrance upon land, created before or after the making of a contract under the provisions of such statute, shall operate upon the building erected or materials furnished, until the lien in favor of the person doing the work or furnishing the materials shall have been satisfied.

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Cite This Page — Counsel Stack

Bluebook (online)
23 Ill. App. 250, 1886 Ill. App. LEXIS 284, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elgin-lumber-co-v-langman-illappct-1887.