Fine v. Dyke Bros.

300 S.W. 375, 175 Ark. 672, 58 A.L.R. 907, 1927 Ark. LEXIS 615
CourtSupreme Court of Arkansas
DecidedDecember 5, 1927
StatusPublished
Cited by16 cases

This text of 300 S.W. 375 (Fine v. Dyke Bros.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fine v. Dyke Bros., 300 S.W. 375, 175 Ark. 672, 58 A.L.R. 907, 1927 Ark. LEXIS 615 (Ark. 1927).

Opinion

Smith, J.

On March 1, 1920, J. H. Fine owned a five-acre tract of land, which he contracted to sell to C. H. Law for the sum of $1,500, of which $35 was cash in hand paid and the balance was to be paid in monthly installments of $35 each, all evidenced by the notes of Law to the order of Fine, and hearing interest at the rate of eight per cent, per annum. The contract of sale provided that the title should remain in Fine until the consideration had been fully paid, and that, if Law should default in his payments, or any of them, Fine should have the option of declaring the contract void, and that “all sums paid thereon shall be forfeited to the said party of the first part as rent for said property, and as liquidated damages by reason of his possession of the same, and the said party of the first part shall be entitled to immediate possession of the said property, which the said party of the second part hereby agrees peaceably to yield.” It was further provided in the contract of sale that if and when Law had made all the payments as, agreed, Fine should convey the land to him by warranty deed.

Upon the execution of this contract and the payment of the $35 as there recited, Law took possession of the land, and he soon thereafter contracted with Dyke Brothers for certain material to be used in repairing an old building on the land which could not be occupied without the repairs. Dyke Brothers furnished building material to the value of $169.42, which Law used in repairing the building. Fine was aware of the fact, but was not a party to that contract. Law made two of the deferred monthly payments, and then defaulted, and failed thereafter to make any other payment. The building material was not paid for, and Dyke Brothers brought this suit, and alleged that they are entitled to a lien upon the said building and upon one acre of land surrounding it, and prayed that this lien be declared and foreclosed.

After Law made default, Fine elected to declare the sale contract void, and took possession of the land. After doing so, he sold the land to O. W. Dameron, who made application for a loan on the security of the land to a building and loan association. The building and loan association declined to make the loan unless and until Fine had indemnified it against the claim of Dyke Brothers for a lien. This Fine did iby making a cash bond in the snm of $175. Service was had upon Law by the publication of a warning' order, and he made no appearance in the case. Fine answered, and set up the contract of sale above referred to, and alleged default thereunder, and denied that Law had authority to create a lien for any material used in the repairs or for other purposes.

The court denied the claim for a lien against the land, but adjudged that the plaintiffs were entitled to a lien on the $175 in the hands of the building.and loan association, and directed the association to pay the money into the registry of the court in satisfaction of the plaintiffs’ claim. Fine excepted to that order, and has appealed, and Dyke Brothers have perfected a cross-appeal from the order refusing to declare a lien in their favor on the improvement and the adjacent ground.

The facts in the ease of Gunter v. Ludlam, 155 Ark. 201, 244 S. W. 348, are very similar to those of the instant case. Gunter and Pate owned a lot in the city of Fort Smith, which they contracted to sell to Ludlam for a payment in cash and other payments to be made monthly. A clause of the contract provided for the acceleration of the maturity of all installments in the event of default in the payment of any installment. Ludlam erected a house on the land with material purchased from parties to the litigation, who claimed liens on the property for the value of their material. Suit was begun by Pate and Gunter to foreclose their lien as vendors for the unpaid purchase price, and Gunter also claimed a mechanic’s lien by way of subrogation to the rig'hts of the person who had built the foundation for the house. The court rendered a decree against Ludlam in favor of Pate and Gunter for the amounts claimed by them, and also a decree in favor of each of the parties asserting liens for labor and material, and declared the liens of those claimants superior to that of the vendors. This court, on the appeal from that decree, held that it was error to subordinate the lien of the vendors to that of the materialmen, as the vendors, having placed Ludlam in possession under a contract of sale, were in the attitude of vendors who had conveyed the property and had accepted a mortgage iback as security for the debt.

What was there said on the question of estoppel is also applicable here. It was there said that mere knowledge on the part of the vendors that labor and material were furnished for the construction of the building, or even their consent thereto, in the absence of some affirmative act which indicated a willingness to subordinate their claim to that of the subsequent lienors, was not sufficient to operate as an estoppel. It was there further said:

“Ludlam was in possession of the property as a mortgagor, and had an alienable interest upon which he could create a lien, therefore his construction of the building and the creation of a lien for labor and material was referable to his own interest in the property, and acquiescence on the part of appellants las mortgagees did not constitute such an affirmative act as would operate as an estoppel to the claim of a superior lien. ’ ’

The doctrine of that case was reaffirmed in the casé of Judd v. Rieff, 174 Ark. 362, 295 S. W. 370, which is also similar to the instant case under the facts. It was there said:

“The effect of the sales and purchase contract under review, in equity, was to create a mortgage in favor of the vendor, Mrs. Judd, to secure the purchase money. Wicker, in effect, became the vendee and equitable owner and mortgagor and Mrs. Judd the mortgagee. Fairbairn v. Pofahl, 144 Ark. 313, 222 S. W. 16; Gunter v. Ludlam, 155 Ark. 201, 244 S. W. 348. Section 6933 of C. & M. Digest provides that every person for whose immediate use, enjoyment or benefit a building, erection or other improvement shall be made shall be concluded by • the words ‘owner or proprietor thereof.’ The above language is sufficiently comprehensive to include, and does include, the vendee in possession under a contract of purchase such as that under review. Wicker was the equitable owner or proprietor, and in possession of the lot in controversy at the time he purchased the materials from Rieff which were used in the building of a garage. The purchase and use by Wicker of the materials in the building of a garage on the lot in controversy gave to Rieff the right to perfect a lien under the statute on the lot to the extent of Wicker’s interest therein. See Gunter v. Ludlam, supra; 27 Cyc. 29, 18 R. C. L. 885.”

Dyke Brothers do not ask that their right to a lien be perfected to the extent of Law’s interest in the land; on the contrary, the relief asked is that it be adjudged that they are entitled to a lien on the building* into the repair of which their material entered and upon an acre of land surrounding the building. The court properly denied this relief.

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Bluebook (online)
300 S.W. 375, 175 Ark. 672, 58 A.L.R. 907, 1927 Ark. LEXIS 615, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fine-v-dyke-bros-ark-1927.