Savage v. Nee

MONROE, J. pro tem.

*

In 1958 defendants and appellants Nee, being the owners of real property in Buena Park, California, entered into a contract with Mr. R. L. DeJager for the construction on their property of an apartment building. Mr. DeJager entered into a contract with J. C. Guiles, named as a defendant herein and who, as subcontractor, undertook to do the plastering in the apartment building for a full contract price of $24,375. The plaintiffs, doing business as Certified Materials Company, furnished materials to the subcontractor, Guiles. The total price of the materials thus furnished was $9,108.89. The plaintiffs filed their notice of materialmen’s lien, claiming that they had received the sum of $2,958.36, and asserting their right to a lien in the amount of $6,150.53. Thereafter, this action was brought to foreclose

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the lien. From a judgment in favor of the plaintiffs for the foreclosure of a lien in the amount as claimed, the defendants Nee appeal.

The defendant Guiles could not be located for service of process and made no appearance.

The main controversy between the parties centers around the application of funds disbursed by the loan agency from whom the defendants and appellants had obtained a construction loan. Insofar as is material to this controversy, the payments in question were represented by four checks as follows:

1. A check dated September 23, 1958 for $6,000.

2. A check dated September 30, 1958 for $6,000.

3. A check dated October 7, 1958 for $10,000.

4. A check dated October 14, 1958 for $2,375.

These checks so issued were made payable to Mr. Nee, Mr. DeJager and Mr. Guiles jointly. It is to be noted that they are in the total amount of Mr. Guiles’ subcontract. Apparently in each instance the checks were endorsed by Mr. Nee and Mr. DeJager and delivered to Mr. Guiles.

The first check for $6,000, dated September 23, 1958, was delivered by Mr. Guiles to the plaintiff Savage, who deposited it in his bank account. He thereafter issued a check in the amount of $3,000 to Mr. Glen Gardner, who was engaged in doing lathing work for the sub-contractor, and also issued a check for $1,000 to Mr. Guiles, retaining $2,000, which was credited to the account of the materials furnished for the new apartment by plaintiffs. There is some uncertainty in the record as to what was done with the proceeds of the other three checks from the loan agency. It appears that a day or so after the check dated October 7, 1958 was delivered to Mr. Guiles, the latter gave to the plaintiffs his check for $4,500. This check was deposited and was returned by the bank marked insufficient funds but some days later was redeposited and paid.