action between them, may have been the means of doing him an injustice. If the monthly settlements were made by Camp and received by Wilson without protest or explanation, or notice of a purpose upon his part to hold Camp responsible for the damages for which he now sues, then the doctrine enunciated in American Manganese Co. v. Virginia Manganese Co., 91 Va. 272, 21 S. E. 360, is conclusive of the case in favor of plaintiff in error. It is there stated: "If one owing a sum of money, the amount of which is not ascertained and fixed, offers his creditor a certain sum, declaring that it is in full for all that is owing him, which sum is accepted by the creditor, such acceptance is in full discharge of the demand." And again: "If the defendant knew of any irregularity, or had ground of complaint at the time these monthly settlements, returns, and payments were made, it was the duty of the defendant to have made known and insisted upon its objections then; but if, instead of doing so, it accepted such payment, and gave receipts in full for the amounts shown to be due by such settlements and returns, it is concluded by the original amounts as fully as if formal and final settlement of accounts had been made between the parties, and the defendant cannot now go behind such settlements and receipts in full without showing that there was fraud or mistake."

It

The contention, however, of Wilson is that damages for which he now sues were not embraced in any of the monthly settlements made with Camp, and that the latter fully understood that he was to be called upon to account for them upon a final settlement. should have been left to the jury upon the evidence to say which version of the dealings they believed and accepted. In other words, the monthly settlements, in the absence of fraud or mistake, should have been held as final and conclusive between the parties, unless, from all the evidence, the jury believed that they were made with knowledge upon Camp's part that he was to be held responsible in the final settlement between himself and Wilson for the damage claimed in Wilson's declaration.

Without passing upon the remaining assignment of error, which is to the ruling of the court in refusing to set aside the verdict as contrary to the law and the evidence, we are of opinion that the judgment of the circuit court should be reversed, and a new trial awarded, in accordance with the views expressed in this opinion.

HARRISON, J. (dissenting). Isaac T. Wilson and W. N. Camp entered in to a written contract under seal, by which Wilson agreed to cut, haul, and deliver to Camp on the cars of certain railroads, from the timbered lands belonging to the Gay Manufacturing Company, 20,000,000 feet of merchantable sawmill logs; it being agreed that an average of about 40,000 feet per day, or an aggregate 33 S.E.-38

of about 10,000,000 feet per annum, was to be delivered within the period of two years.

W. N. Camp agreed to furnish Wilson with a locomotive, and sufficient iron rails, switch stands and fixtures, fish plates, and spikes, and all necessary cars to carry the logs, and to pay $2.45 per 1,000 feet for all logs delivered. This suit was brought by Wilson to recover damages for the alleged failure by Camp to perform his part of the contract, whereby the plaintiff was, without default on his part, prevented from hauling all the logs, and thereby deprived of a large part of his legitimate profits.

The suit resulted in a verdict for $1,500 in favor of the plaintiff, Wilson, which we are asked to set aside.

The petition for a writ of error states that "the questions to be passed upon by this court are-First, did the lower court err in refusing to give the instructions asked for? and, that being disposed of in the negative, then did the court err in refusing to set aside the verdict of the jury because same was, and is, contrary to the evidence, and is excessive?"

The instructions asked for by the defendant and refused, together with those given in lieu thereof, designated as Nos. 7 and 13, will be found in the opinion of the court, and need not appear here.

The question presented by the refusal of the court to give the first instruction is the liability of the defendant, Camp, to furnish Wilson with the standing timber to be cut and hauled by him. It is true there is no express covenant in the written contract on the part of W. N. Camp to furnish to Wilson the timber to be cut, but the whole spirit of the writing imports an implied covenant that he is to provide Wilson with the standing timber of the Gay Manufacturing Company, in order that the contract between them might be carried out. That Wilson did not own the timber, or have any control over it, appears to have been well known to Camp. Wilson was not selling timber to Camp, but was an employé, performing the labor of cutting and hauling timber, at an agreed price per thousand feet for such work; and his agreement to cut, haul, and deliver the logs for and to Camp, and the agreement of Camp to pay him therefor, import an implied covenant on the part of Camp to furnish the agreed quantities of timber for that purpose. White's Adm'x v. Toncray, 5 Grat. 188. Further, that Camp was to provide the timber to be cut and hauled is the practical construction put upon the contract as shown by the dealings of the parties, and by their evidence, not objected to. There was no dealing, in respect to the matter, between Wilson and the Gay Company; while, on the other hand, it appears that its dealing was with Camp, who admits that he "was to furnish the timber the Gay Company had, and that Wilson so understood it." A proper construction of the contract justified the court's rejection

of the first instruction asked for by the defendant, and its substitution of that designated as No. 7, given in lieu thereof.

As contemplated by the contract, the parties settled each month an account for the logs actually cut and hauled the preceding month, Camp paying the amount shown to be due on that account, and Wilson giving a receipt therefor. The contention of the plaintiff in error is that these monthly settlements were mutual accounts stated between the parties, and that the plaintiff cannot now go behind them to assert his claim to damages for the breach of the contract by Camp. This proposition is embodied in the second instruction asked for by the defendant, the rejection of which constitutes the second assignment of

error.

An account stated is an agreement between persons who have had previous transactions, fixing the amount due in respect of such transactions, with a promise, either express or implied, on the part of the debtor, to pay the balance ascertained to be due. The minds of the parties must meet, as in making other agreements, and they must both assent to the account and the balance as correct. An account stated is not, however, absolutely conclusive on the parties. It establishes prima facie the accuracy and correctness of the items, and, unless this presumption is overcome by proof of fraud, mistake, or error, it becomes conclusive; but the converse of this proposition, namely, that an account stated may be impeached by fraud, mistake, or error, is very well settled. See on this subject the valuable note, and authorities there cited, by Mr. Freeman, to Lockwood v. Thorne (N. Y.) 62 Am. Dec. 85; also, Perkins v. Hart, 11 Wheat. 237. In the latter case it is said, in speaking of the conclusiveness of a settled account: "If it be confined to particular items of account, it concludes nothing in relation to other items not stated in it."

In the case at bar the contract provided that all logs cut should be measured by "Doyle's log rule," and counted as by board measure, and paid for at the price named, between the 10th and 15th of each succeeding month, and in no case later than the 15th of the month. In pursuance of this understanding, an account showing the actual number of feet hauled, and the amount due therefor, was made out by a bookkeeper employed by Camp, and it is not disputed or denied that these monthly accounts were paid by Camp, and correctly stated the amount due for logs actually hauled. These accounts, however, were confined to the one item of amount due under the contract for logs then cut and hauled; they made no reference to any other subject; and it is clear, from the evidence, that the parties never understood, at the time, that they were settling any matter between them but the amount due for logs actually cut and hauled. The settlements for logs hauled were not necessarily connected with, or

dependent upon, an ascertainment of the damages now claimed. Indeed, it is difficult to see how damages for the failure of Camp to perform his contract, thereby causing Wilson delay and loss of time in accomplishing his work, could have been ascertained and agreed upon, and made the subject of a monthly settlement; for the delay caused by Camp one month might have been made up by his extra diligence in furnishing facilities the next.

That Camp did not himself regard the last monthly payment for logs hauled as a final adjustment of all matters between the parties is shown by the fact that several months afterwards he found on his books a balance against Wilson, antedating the last settlement for logs hauled, amounting to $60 or $70, and presented the claim to Wilson, and demanded its payment. Wilson replied: "I am not going to pay it; you owe me a lot more than that."

The evidence satisfactorily establishes that only a settlement for logs hauled was contemplated by the monthly accounts adverted to; that the parties never intended those settlements as final adjustment of all matters between them, and never designed that either should be thereby estopped from asserting any other demand.

Camp and Wilson not having understood that the monthly settlements for logs hauled were final adjustments of all matters between them, the court cannot disregard the understanding of the parties themselves, and decree an adjustment between them contrary to their own understanding in the matter.

There is no conflict between this view and the principle laid down by this court in the case of American Manganese Co. v. Virginia Manganese Co., 91 Va. 272, 21 S. E. 466. In that case the parties were operating under a contract for mining and shipping ore, and were to be paid every month for the number of tons of ore taken out and delivered the preceding month. It was not clear from the contract whether the ore was to be weighed as it came wet from the washer, and a royalty of two dollars per ton paid on that weight, or whether it was to be weighed after it dried out, and the royalty paid on its dry weight. The ore was weighed as it came from the washer, and shipped, and was also weighed by the railroad company when it reached its destination, and upon such railroad weights, at the place of destination, the freights were paid, the royalties adjusted, and each month the account settled, and a receipt taken in full for the amount shown to be due. The defendant frequently made objection to the deductions made on the weights at the place of shipment, but continued during a period of seven years to receive the monthly statements, returns, and payments, and to give receipts in full for the balance due each month. This court very properly held that, although the method of ascertaining the weight of the ore may not

have been in accordance with the contract, yet the long acquiescence of the defendant in the method of weighing adopted, with full knowledge of all the facts, was a waiver of its right to insist upon the terms of the contract. The question involved was the right of the defendant, after acquiescing for seven years in the method adopted for weighing the ore, to go behind such settlements and receipts in full, and insist upon recovering upon another and wholly different method of determining its weight. The long acquiescence in the method of weighing the ore, and the continued monthly settlements on that basis, constituted an implied agreement between the parties to be bound by the method of weighing pursued, and the parties were held to the agreement thus evidenced by their conduct. There could have been no settlement unless a method of weighing had been determined upon. Each monthly statement of the account depended entirely upon the weight of the ore, and could not have been made out or settled until that fact was ascertained.

In the case at bar, the only fact to be known, in order to make the monthly settlement provided for in the contract, was the number of feet of timber hauled the preceding month. Those settlements did not depend upon the amount Camp might eventually owe on account of damages for failing to fully perform his obligations under the contract.

If, in the case at bar, Wilson was seeking to go behind his settlements for the logs hauled, and to recover upon another and different mode of measurement, the case cited would be directly in point, and would effectually deny his right to do so. This suit was not brought, however, for any such purpose. The settlements for the logs hauled are admitted to be correct. The suit was brought to recover damages from Camp for us breach of contract in failing to furnish Wilson with the facilities agreed upon for cutting and hauling the logs, thereby causing him great delay, and depriving him of the ability to deliver 20,000,000 feet within two years, as provided by the contract. Of this default on his part Camp had due notice, and was repeatedly, during the progress of the work, warned by Wilson that he would have to compensate him in damages for whatever loss he might suffer in consequence of such default; and in response to a threat of suit by Wilson, on one occasion, Camp said: "Wait until I get through with the Gay Company, to see what they are going to do." As already seen, the right of Wilson to make this demand is not affected by his monthly settlement of the amount due for the logs he was permitted to deliver, and hence there was no error in the court's refusal to give the second instruction, nor was there any prejudice to the defendant in giving, in lieu thereof, the instruction designated as No. 13. The third assignment of error is the court's

refusal to set the verdict aside-First, because contrary to the evidence; and, second, because excessive.

In this action of the court there was no error. The evidence tended strongly to sustain the plaintiff's claim, and, upon well-settled principles, the verdict cannot be set aside upon either of the grounds urged.

For these reasons I am of opinion that the judgment of the circuit court should be affirmed.

WRIGHT v. VAUGHAN et al. (Supreme Court of Appeals of Virginia. July 11, 1899.)

MECHANICS' LIENS-PRIORITY-MORTGAGES. A building contract provided that part of the price should be paid in cash when the roof was erected, part in cash when the building was finished, and the balance in notes secured by deed of trust on the premises. The owner had previously obtained a loan on deed of trust on the premises, and out of it the cash payments were made to the contractor, he having actual knowledge of the facts, as well as constructive notice, the deed being on file when the contract was made. On completion of the work, the contractor accepted the notes, but he never called for his deed of trust, which, however, was nevertheless executed, and held subject to his order. Held, that a mechanic's lien afterwards filed by the contractor was subordinate to the lender's deed of trust.

Appeal from hustings court of city of Roanoke.

Bill by John H. Wright, assignee, against M. P. Vaughan and others, to enforce a mechanic's lien. From a decree for defendants, complainant appeals. Affirmed.

John H. Wright, in pro. per. Smith & King, for appellees.

CARDWELL, J. This is an appeal from a decree of the hustings court of Roanoke city, and the facts out of which the case arises are as follows:

The Security Investment Company owned a certain vacant lot on Commerce street in the city of Roanoke, and, with the view of erecting buildings and improvements thereon, applied to the Southern Building & Loan Association for a loan to be secured by trust deed on this property, but was refused because of a rule or by-law of the Southern B. & L. Association prohibiting loans to a corporation, whereupon the Security Investment Company conveyed the lot to M. P. Vaughan, and in his name obtained from the Southern B. & L. Association a loan of $2,000, and secured it by deed dated March 1, 1883, executed by Vaughan and wife, upon the lot, to Roy B. Smith, trustee, and this deed was duly recorded in the clerk's office of the hustings court of Roanoke city March 13, 1893. On the 25th day of March, 1893, the Security Investment Company, by W. S. Gooch, its general manager, entered into a contract with D. B. Barbour, whereby Barbour agreed to build a certain house upon the lot then standing in

the name of M. P. Vaughan for the sum of $2,100, of which $550 was to be paid when the roof was put on the house, $550 when the house was completed, and a negotiable note for $1,000, to be executed by the Security Investment Company, indorsed to Barbour, payable 90 days from its date, and secured by a trust deed on the said house and lot. At the time the loan of $2,000 was obtained from the Southern B. & L. Association there was a prior deed of trust on the lot, upon which there was due about $800, and it was understood that this was to be paid off out of the $2,000 loaned by the Southern B. & L. Association, and the residue thereof applied by the Southern B. & L. Association to the payment to Barbour of the amount due him for building the house, to be paid to him as authorized by the Security Investment Company. The prior deed of trust was paid off by the Southern B. & L. Association, and upon orders drawn by W. S. Gooch, general manager of the Security Investment Company, the Southern B. & L. Association paid to Barbour the balance of the $2,000, with the exception of some small amounts recovered by Barbour's subcontractors, and certain dues, interest, or premiums to the Southern B. & L. Association, not paid by the Security Investment Company or Vaughan on the $2,000 loan; the amount paid to Barbour being $960, leaving due him $1,000 on the contract price of the building. July 3, 1893, after the completion of the building, the Security Investment Company, by Gooch, its general manager, to accommodate Barbour, executed and delivered to him six notes made payable to the Rosa Mill Manufacturing Company 90 days from their date, one of the notes being for $500 and the others for $100 each, and at the same time a deed was prepared to be signed by Vaughan and wife conveying the house and lot in question to a trustee to secure their payment; Barbour then being told that the trust deed would be ready for delivery to him as soon as the signature of Mrs. Vaughan could be obtained. Barbour accepted these notes, and endeavored to have them discounted, but, failing in this, and without calling for the deed of trust securing them, which had been duly executed, and held by Gooch, subject to his order, he filed in the clerk's office of the hustings court of the city of Roanoke a mechanic's lien upon the house and lot, claiming a balance due him of $1,140 for building the house. Barbour having assigned this mechanic's lien to John H. Wright, the latter instituted this suit to have it enforced.

The right of appellant to the benefit of this lien is contested by the Southern B. & L. Association and Roy B. Smith, its trustee, appellees, upon the grounds that, when Barbour entered into his contract with the Security Investment Company for the building of the house in question, not only was appellees' trust deed duly of record in the clerk's office of the hustings court of Roanoke, but he also had actual notice thereof, and knew that the

money he was to get on his contract for building the house was to come out of the money secured by this trust deed, after payment of the prior lien on the property; and made his contract with full knowledge of these facts, and expressly agreed to accept, and did accept, notes for the amount of the balance due him by the Security Investment Company, secured by trust deed on the house and lot, known and understood by him to be subor dinate to the trust deed of appellees thereon; and that the idea of filing a mechanic's lien was only an afterthought of Barbour's when he found that he could not sell or discount the notes.

The commissioner to whom the cause was referred, upon the depositions of the parties to these transactions and of other witnesses and the exhibits filed with the pleadings and depositions, made report to the court sustaining appellees' contention, and placing their deed of trust as a prior lien to the claim asserted by appellant on the property, and the lower court so decreed.

We are of opinion that the evidence fully sustains that decree, and it is affirmed.

BUCHANAN, J., absent.

(97 Va. 311)

HALL V. CALDWELL. (Supreme Court of Appeals of Virginia. June 29, 1899.)

TRUSTS-LEGAL TITLE HELD FOR THE BENEFIT OF ANOTHER-TENANTS IN COMMON.

Complainant was joint owner with defendant's father of certain real estate, and, by reason of the father's failure to pay his share of the purchase money, the property was sold under a deed of trust, and he purchased it from the purchaser at the trustee's sale, and the title was taken in the name of defendant, who advanced the purchase money with full knowledge of all the facts and of complainant's rights in the property. After paying off the debt and the costs of the sale, the trustee paid the balance of the purchase money to defendant. Held, that complainant was entitled to a conveyance from defendant of his undivided interest in the property, subject to a lien for what remained unpaid of the amount advanced, after deducting the balance refunded by the trustee, and after crediting the remainder and interest thereon by the rents derived by defendant since the conveyance to him, and by the fee-simple value of that half of the property owned by the father.

Appeal from circuit court, Pulaski county. Bill by D. F. Hall against M. M. Caldwell. There was a decree for defendant, and complainant appeals. Reversed.

J. C. Wysor, for appellant. Longley & Jordan, for appellee.

HARRISON, J. John W. Echols and wife, by deed dated February 19, 1890, conveyed to D. F. Hall and G. C. Caldwell, jointly, a certain house and lot in the city of Radford, in consideration of $1,000. It appears that D. F. Hall paid his half of the purchase money in full, and that G. C. Caldwell as sumed to pay off, as part of his half, certain

unpaid purchase money due to the grantor of John W. Echols, which was secured by deed of trust on the property at the time of the joint purchase by Hall and Caldwell. There being default in the payment of a balance of this purchase money due to the grantor, Echols, amounting to $171.25, the trustee in the deed securing the same advertised the property for sale on the 16th day of July, 1894, when it was knocked down to one B. H. Smith, as the highest bidder, at $280. Neither Hall nor Caldwell appear to have known that the property was advertised until after the sale was made. On the 21st day of July, 1894, B. H. Smith united with the trustee in a deed conveying this property to M. M. Caldwell, a son of G. C. Caldwell, in consideration of $290.

The bill in this case was filed in August, 1894, by D. F. Hall, setting forth his interest in the property in question, and alleging that G. C. Caldwell was the real purchaser thereof from B. H. Smith; that M. M. Caldwell had advanced the $290 to enable his father to make the purchase, and was the holder of the mere legal title to the property, for the purpose of securing himself the money so advanced; that M. M. Caldwell knew on the day the property was conveyed to him, and for two or three years prior thereto, that the complainant owned an undivided half interest therein; that in buying the property from B. H. Smith he had acted as the agent of his father, who was the joint owner with complainant, and also acted with full knowledge of all the equities, claims, and interests of complainant in and to the property.

The prayer of the bill is that M. M. Caldwell may be treated as the holder of the legal title for the benefit of complainant and G. C. Caldwell as the interest of each may appear; that if M. M. Caldwell is entitled to a lien on said property for the $290 advanced by him, it may be held to be a lien only upon the interest of G. C. Caldwell; and that M. M. Caldwell may be compelled to convey complainant an undivided half interest in the property, free from all incumbrance.

M. M. Caldwell filed a demurrer and answer to the bill, in which he denies the allegations thereof, and insists that he, through the agency of his father, bought the proper ty in question from B. H. Smith for himself, paid for it with his own money, and that D. F. Hall has no interest therein; that whatever interest he may have had was disposed of by the trustee when the property was sold on the 16th day of July, 1894, to B. H. Smith, to satisfy a prior lien thereon. The demurrer was properly overruled. The evidence in the case establishes the following facts: That, after the sale by the trustee, G. C. Caldwell went to B. H. Smith, the purchaser, and bought from him the property for $290, saying that, if he had known of the sale, it would never have gone at a sacrifice; that the $290 paid to Smith

was advanced by M. M. Caldwell; that M. M. Caldwell knew of the relation existing between his father and D. F. Hall as joint owners of the property, and further knew that the unpaid purchase money for which the property had been sold was due from his father; that, on the day after the sale by the trustee, M. M. Caldwell called on W. R. Wharton, the attorney for the trustee and for the beneficiary under the trust deed, and complained that the property had been sold without any notice to him, saying that, had he known of the sale, it never should have occurred, that he would have paid the amount due and saved costs. He further stated that he recognized that D. F. Hall had a half interest in the property, and that he would take no advantage of Hall in the matter, and only wanted the deed made directly to himself in order to secure the money he had advanced; that Hall being uneasy, and insisting upon having his rights in the property recognized by M. M. Caldwell in writing, W. R. Wharton prepared a paper to that effect, to be signed by the parties, and presented it to M. M. Caldwell, who said he would take it to his father, and that he was acting in the matter for his father, and would not sign unless he agreed to it; that he subsequently returned the paper unsigned, saying that his father would not agree to it. These admissions were made by M. M. Caldwell more than once. It fur ther appears that, on the morning after the sale, G. C. Caldwell told W. R. Wharton that he need not say anything to Hall about the sale, that he had or would arrange the matter with Smith, and that it was not necessary to bother Hall about it.

It further appears that, after the trustee had disbursed the purchase money in paying the debt due and the costs of sale, there remained in his hands a balance of $26.78, which he paid over to M. M. Caldwell. This balance M. M. Caldwell would not have been entitled to, had he been the purchaser of the property. He was only entitled to receive it upon the theory that he was advancing to his father only a sum sufficient to enable him to pay off the balance that he owed on the property as joint purchaser with D. F. Hall.

Upon these facts, our conclusions are that G. C. Caldwell was the purchaser from B. H. Smith; that the purchase was made by him for the purpose of redeeming the property and restoring himself and Hall to their original rights as joint owners; that the amount due from G. C. Caldwell was advanced by his son, M. M. Caldwell, to enable the father to redeem the property; that the deed was made to M. M. Caldwell for the purpose of securing him the money he had advanced, and gave him no other or greater interest therein; that the claim now set up by M. M. Caldwell-that he bought the property for himself, and that D. F. Hall had no rights therein-is an afterthought, and