Citizens' Bank v. H. A. Klyce Co.

Mr. Justice Green delivered the opinion of the Court. This case presents a contest between a mortgagee and a mechanic claiming a statutory lien. The Hess Warming & Ventilating Company installed certain machinery in the plant of defendant Klyce Company at Dyersburg. The work was completed March 7, 1908. The cost of the job was $8,400. Of this sum, $1,400 was paid in cash, and seven notes given for the balance. These notes matured, respectively, on August 3, 1908, November 3, 1908, February 3, 1909, May 3, 1909, August 3, 1909, November 3, 1909, and February 3, 1910. In the summer of 1908, defendant Klyce Company executed a mortgage upon all its property to secure an Indebtedness due the complainant Citizens’ Bank and others. This mortgage was recorded in. September, J 90S. Litigation arose among these parties, instituted by the Hess Company prior to March 7, 1908, the old ails of Avhich it is not necessary to set out. The Hess Company claims a mechanic’s lien upon the property for ’the work done by it. and insists that said lien is su-■ypferíórt'ó the mortgage-of-the bank.’ [671] The chancellor held that the lien of the Hess Company was superior to the mortgage to the extent that the notes of said company matured during the twelve months next after the job was completed, but was of opinion that the mortgage lien was superior to any claim against the property for the payment of notes maturing after the twelve months had expired. The court of civil appeals affirmed the chancellor’s decree, and we think both courts made a proper disposition of the casg. Section 3531 of Shannon’s Code provides for a mechanic’s lien; but section 3539, dealing with the duration of the lien, provides that it shall only “continue for one year after the work is finished or materials are furnished, and until the decision of any suit that may be brought within that time for the debt due said mechanic or undertaker.” While it may be conceded that a mechanic will not waive his lien by taking a promissory note of the owner of the property for the cost of the work, it is well settled that any agreement whereby the lien claimant extends credit to the owner to á time beyond the statutory duration of the lien has the effect of extinguishing such lien. Such an extension prevents the lien claimant from beginning suit for the enforcement of his lien- until the time has expired, in which, by the terms of the statute, such a suit must be begun. Where the right to enforce an indebtedness for which a lien might otherwise be claimed is postponed until after the expiration of the lien, such a lien is necessarily renounced. This court has virtually held as much in Manufacturing Company [672] v. Weatherly, 101 Tenn., 318, 47 S. W., 432. See, also, 27 Cyc., 269; 20 Am. & Eng. Ency. of Law, p. 496; Air Brake Co. v. Railroad, 137 Fed., 26, 71 C. C. A., 1; Ehlers v. Elder, 51 Miss., 495; Flenniken v. Liscoe, 64 Minn., 269, 66 N. W., 979; Pryor v. White, 16 B. Mon. (Ky.), 605. Other questions raised in the case have been fully considered. We are of opinion that there is no error in the decrees of the lower courts, and the petition for certio-rari will accordingly bo denied.