Godeffroy v. Caldwell

The opinion of the Court was delivered by

The mechanics’ lien law provides exclusively for the security of material-men and labourers; and one who advances money as *492a loan, although it is expressly for the payment of materials and labour devoted to the erection of a building, can have no claim to the benefit of the law. The case of the appellant must, therefore, be considered upon its strict equity, aside from any claim to a mechanic’s lien. It is a well settled rule of all courts of equity, that the owner of land who stands by and sees another sell it, without making known his claim, is forever estopped from setting up his title against an innocent purchaser. In strict analogy to this rule, it is also a familiar principle, that one who knowingly and silently permits another to expend money upon land, under a mistaken impression that he has title, will not be permitted to set up his right.

The equity set up by the appellant in this case, is much stronger than in the case stated in the rule. Instead of Wells being a silent and passive spectator of the expenditure made by the appellant, he actually directs or invites it, giving at the same time, a specific promise of protection. It follows, that as between Wells and Rodgers, there can be no doubt of the equitable right of the latter.

The respondent became the assignee of Wells, with full notice of the claim of Rodgers before the assignment. It is true that the claim was called a mechanic’s lien, when it had no validity as such, but all the circumstances under which it came into existence were fully and particularly detailed; and the designation of a contract by an improper term, cannot be allowed to take away a substantial right. The information was sufficient to put the party upon full inquiry, and to enable him to ascertain by legal advice, the exact rights of all parties.

Is, however, the parol "contract between Wells and Rodgers within the statute of frauds ? It will be seen that it was a stipulation that Rodgers should advance money to be expended in building upon the lot in question, and should be protectéd for his expenditure. The performance of his stipulation,' on' the part of Rodgers, was complete; and it is well established that in some cases part performance only, will take a case out of the statute of frauds. But this is not, as is contended, the case of a release of a mortgage, or a release of an interest in land, strictly speaking. Mortgages at the present day,' are considered as *493merely securities for the payment of money, and no breach of their conditions can possibly vest the title in the mortgagee. The contract, according to its most simple and direct interpretation, is a promise to repay money expended for improvements, out of a specific fund, to wit, out of the mortgaged premises; and Chancellor Kent says, that a parol promise to pay for the improvements made upon land, is not within the statute of frauds; 4 Kent, 450.

This view of the proper construction of the contract, also disposes of the question raised in reference to the power of attorney from Skinner to Wells. Indeed, the power given to Wells, is extensive enough to authorize any fair disposition of the mortgaged premises; and it is only by force of this construction, that Godeffroy himself, (who claims under an assignment made by Wells, as attorney of Skinner,) can have any rights to be enforced.

The decree of the Court below is reversed with costs, and the case remanded.