Hollister v. Sweet

WHITING, P. J. Plaintiff Hollister brought an action against defendants Mary V. Sweet and Matilda Sweet, seeking the specific performance of an agreement whereby said defendants' had agreed to give plaintiff a note and real estate mortgage to secure certain advances to be made, and which it was alleged had been made by said plaintiff. Plaintiff Snelson brought another action against Mary V. Sweet and against Hollister, the plaintiff in the first-mentioned action, seeking to enforce a mechanic’s lien which he claimed against real estate of Mary V. Sweet. Defendant Hollister was made a party to this second action for the purpose of having said mechanic’s lien declared prior to any claim of Hollister against said land; the land being part of the land against which Hollister in her action was seeking to be decreed a mortgage lien. Snelson did not seek a personal judgment against Hollister. The two causes being pending at the same time, they were, by agreement of the parties and order of the court, consolidated and tried as one cause. Such trial was had before the court without a jury. The court made findings of fact which, so far as material to this appeal, were in substance as follows: Defendant Mary V. Sweet was the owner of two certain lots in Iroquois, S. D., and with her sister — the defendant Matilda Sweet —lived upon said property. Plaintiff Hollister was the owner of and ran a lumber yard at Iroquois; the same being managed by S. W. Hollister, her husband. Mary V. -Sweet entered into an oral contract with' plaintiff Hollister through her husband, under which Hollister agreed, provided plaintiff Snelson -secured the contract for rebuilding the house upon her lots, that she would furnish said Mary Y. Sweet the sum of $1,500 with which to pay for the necessary material and labor for the rebuilding of said house. Mary V. Sweet agreed to borrow said money from Hollister for said purpose, and, to secure Hollister for said amount, agreed to give her note for $1,500 payable on or 'before five years from the date thereof with interest at 10 per cent, per annum, payable annually, and further agreed to secure.said note by a first mortgage on the lots upon which the house stood. Mary V. Sweet [145] entered into a contract with plaintiff Snelson, whereby he agreed to rebuild the house, and to furnish all material therefor for the sum of $1,500, this contract being in writing and known to the plaintiff Hollister, who in her oral contract with Mary V. Sweet agreed to furnish the material required for the building and to advance the amount for the labor in all not exceeding the $1,500. Snelson completed the house August 12, 1909, at which time defendants took possession, and have since been living therein. Hollister furnished material, all of which was used in the construction of said house, and was of the value of $648.53. She also paid the contractor, Snelson, for his labor the sum of $358.40. This material was furnished and money paid before defendant Mary V. Sweet notified Hollister not to pay any further labor bills or any further amounts to said Snelson. During the time the house was being built, the material furnished, and labor paid for, defendants lived upon the same lots, saw the house being constructed, and knew that material was being furnished by plaintiff and the labor 'being paid for by plaintiff. Hollister acted in good faith in carrying out her contract with the defendant Mary V. Sweet until she was stopped by Mary V. Sweet from making further payments. Hollister is now ready, willing, and able to complete said contract, and to furnish the full sum of $1,500 agreed upon. Snelson in building said house furnished material in the sum of $6.50, which was not included in the contract with defendant Sweet. Snelson failed to complete the house in accordance with said contract, and, owing to such failure, was entitled to $285 less than the contract price] leaving a balance due Snelson from defendant Mary V. Sweet of $214.57, with interest from August 12, 1909, to the time the findings were made —in all, the sum of $232.07. As conclusions of law the trial court found that plaintiff Snelson is entitled to recover $232.07 from defendant Mary V. Sweet, and that said amount should he paid by Hollister to- Snelson under the contract above referred to; that Hiollister is entitled to a decree giving her a first mortgage upon the property for $1,006.93 and interest at 7 per cent, making $1,089.60, and also for the $232.07 yet due Snelson, or a total of $1,321.73, the same to be due in five years from October 11, 1910, the date of the findings, with interest at 10 per cent, per annum [146] from said date, and that plaintiffs Hollister and Snelson are entitled to judgment for their costs in said suit. Upon these findings and conclusions decree entered against Mary V. Sweet, the decree conforming to such conclusions except thgt under such decree the $1,321.73 was to- bear interest from the 12th day of August, 1909, instead of the nth day of October, 1910, -thus doubling interest between August, 1909, and October, 1910. Mary V. Sweet moved for -a new trial. Her motion being overruled, she appealed to this court, assigning as error certain of the findings, the conclusion of said court to the effect that said plaintiff Hollister should pay to 'Snelson the said sum of $232.07, and that said sum should be added to the amount due Hollister and included in the decree herein, the granting of any decree in favor of Hollister, and the denial of appellant’s motion for a new trial. ' We have carefully considered the assignments relating to the insufficiency of the evidence to support the findings, and are satisfied that such findings are fully supported by such evidence, and further that no useful purpose could be subserved by a review of such evidence. [1] The only question remaining for our consideration is whether or not Hollister was entitled to a decree requiring Mary V. Sweet to specificalfy perform the contract, and, if entitled to such decree, for what amount it should secure her. A right to specific performance cannot rest upon the oral contract merely, but rather upon equities growing out of what has been done under and by virtue of such oral contract, whereby the party relying thereon has placed himself in a position where a refusal of performance by the other party amounts to a fraud. We think, under all the authorities, respondent Hollister was clearly entitled to a decree requiring appellant to give her a note and mortgage covering the value of the material furnished as well as the money appellant had advanced to Snelson. Baker v. Baker, 2 S. D. 261, 49 N. W. 1064, 39 Am. St. Rep. 776; Dean v. Anderson, 34 N. J. Eq. 496. [2] We can see no ground upon which the trial court can be sustained in decreeing that Hollister should pay Snelson the balance due Snelspn, and that said sum should be included in the decree' in favor of Hollister; reason for including this sum has [147] been suggested by respondent. If the facts were such as would have entitled Snelson to have brought an action against Hollister and recovered this amount — basing his right to recovery upon the contract between Hollister and Sweet — the situation would be entirely different and -the court might have been warranted in protecting Hollister against such a liability. Snelson made no personal claim against Hollister, and, moreover, under the facts proven and under the findings of this court, he had no legal claim against her. Even disregarding that provision of our statute of frauds (section 1238, Civ. Code) declaring invalid an oral agreement to answer for the 'debt, default, or miscarriage of another, and treating the contract between Sw^eet and Hollister as though it had been in writing, yet section 1193 of the Civil Code provides: “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” And this court held in Fry v. Ausman, 135 N. W. 708, 39 L. R. A. (N. S.) 150, that in order for a third party, who claims that a contract has been made for his benefit, to recover under said contract of the promisor therein, it must appear, as stated in the statute, that such contract was made “expressly for the benefit of a [such] third party.” In the case before us, not only was there no finding that the said contract was made expressly for the benefit of Snel-son,- but it clearly appears that the evidence would not support any such finding, it appearing therefrom that the condition in said contract — under which Sweet was to have Snelson repair said house — was one made for the benefit of Hollister rather than Snelson. [3] Both Hollister and Sweet have alleged that the real estate in question is the homestead of appellant. That being true, there could be no mechanic’s lien arising in favor of Snelson against which Hollister could claim a right to protection in equity. Hollister not being personally liable to Snelson and Snelson not having any right to a lien against this property, there existed no equities arising in any manner under and by virtue of the oral contract that entitled Hollistei* to a decree authorizing her to pay the balance due Snelson and to hold a lien therefor. It follows that the judgment appealed fiom should be modified by striking from the provision directing Hollister to pay Snelson [148] the said sum of $232.07, and by reducing the amount for which Hollister should ’be decreed a lien to $1,006.93, the. amount of materials furnished and money paid, which sum should bear interest at 10 per cent, from August 12, 1909. ■ And so modified the judgment is affirmed without costs.