269 P. 566 | Cal. Ct. App. | 1928
This appeal involved three actions brought by the plaintiff to foreclose three separate mortgages and actions by the defendant Hammond Lumber Company, a corporation, and C.B. Kahl to foreclose certain liens. Judgment was entered covering the respective cases establishing the priority of the mechanic's lien. From this judgment the plaintiff Bank of Italy, as administrator, and Harshman appeal. All the actions were tried as one and are presented upon one transcript. The appeals are taken upon the judgment-rolls alone.
The transcript shows that the defendant B.D. MacGill was, on and prior to the tenth day of February, 1923, and also prior to the twenty-fourth day of February, 1923, the record owner of the title to the lots involved in this action. On the tenth day of February, 1923, the said B.D. MacGill *230 executed three separate mortgages on three separate lots, each being for the sum of $3,000, in favor of the Scarborough Company, which mortgages were thereafter recorded on the twenty-fourth day of February, 1923, and some time prior to the beginning of this action, assigned to the plaintiff herein. While the title to the lots in question stood in the name of B.D. MacGill, one A.E. Harshman was the real owner of all of said lots. At a date not stated, but prior to the twenty-fourth day of February, 1923, the said A.E. Harshman entered into a contract with the defendants Hammond Lumber Company and C.B. Kahl for the furnishing of certain labor and materials for the erection of a building upon each of the three lots involved in this action. At a date not stated, but prior to the twenty-fourth day of February, 1923, the defendant C.B. Kahl commenced work under his contract upon each one of the three lots included in the mortgages assigned to the plaintiff in this action. Likewise, prior to the twenty-fourth day of February, 1923, the defendant Hammond Lumber Company began delivering building materials for the erection upon each of said lots of buildings, which material was thereafter used in the erection of buildings upon each of said three lots. The building material, however, was not placed upon the lots on which the buildings were actually erected, but were placed upon adjoining lots.
On or about the twelfth day of February, 1924, the defendant A.E. Harshman, by an arrangement with the defendants Hammond Lumber Company and C.B. Kahl and apparently for the purpose of obtaining sufficient material and the performance of labor to complete said buildings, transferred all his interest in and to the lots involved in this action to one W.T. McAllister, said conveyance being made subject to all the liens and encumbrances upon said property. The conveyance also covered a large number of lots other than the three lots involved herein. Thereupon, the said W.T. McAllister executed a trust declaration in the following words and figures:
"This trust agreement, dated this 12th day of January, 1924, is to certify that the undersigned, W.T. McAllister, has taken title to the following described real estate in Los Angeles county, California, to-wit: Lots 63, 65, 66, 67, 68, 70, 72, 123, 124, and 125 of Tract 5906 as per map *231 recorded in book 62, pages 13, 14 and 15 of maps in the office of the county recorder of said county.
"Lots 52, 53 and 54, Block `A' of Tract 5006, and 126, 128 and 130 of Tract 5906, subject to possession until sold; lots 2 and 4, Block 3, in Emery Park Tract and lot 1, block 4, in Emery Park Tract; also contract of sale with Meyering Land Company for purchase of lots 5 and 7, block 11, Emery Park Tract, and lot 27, block 12, Emery Park Tract, also order for deed on Hellman Commercial Trust and Savings Bank, whereby the trustee is about to take title to lot 127 of said Tract 5906; also notes and trust deeds as follows:
"Emma Fay, lot 129, in said Tract 5906, for $1750.00; Annie Richardson, lot 131 in said Tract 5906, for $1750.00; Walter and Pansy Williamson, lot 132 in said Tract 5906, for $1650.00;
"and that he will hold, dispose of and convey the same, together with any other property received hereunder and any and all securities and moneys or other property received or derived in any way, therefrom in trust for the use and benefit of the following named beneficiaries according to their respective interests as follows, to-wit:
"First: First, and in priority over any other interests hereunder, Hammond Lumber Company and others furnishing materials and labor to the extent of actual cost of labor and materials used to complete houses, garages and improvements on above lots and other accounts, including interest at seven (7%) per cent per annum, from their due dates, all such bills and accounts to be first approved by C.S. Anderson. For checking said construction work and accounts during the progress of the work, the Hammond Lumber Company may employ a suitable person to be on the job at a salary not exceeding that usually paid a carpenter foreman, upon advising the trustee in writing that this course appears to be required to safeguard their interests, and thereupon the trustee shall out of the trust fund reimburse the said company the cost of such employment as a part of his current expenses hereunder. The accounts payable to the Hammond Lumber Company hereunder include three thousand three hundred ($3,300.00) dollars, which covers amount of accepted orders on mortgagee, and accepted by said mortgagee, on the following completed jobs now due: Lots 52, 53 and 54, block `A,' Tract 5006; lots 29 and 30, *232 block `E,' and lots 11 and 12, block `F,' all in Tract 4689; which shall be the first item paid said company, and for the purpose of conserving the cash available for construction work, and agreeable to said company, such accounts may be deferred in favor of other accounts payable under this paragraph until after May 1st, 1924.
"Second: Thereupon, and subject to the above, this trust is to cover each of the miscellaneous accounts of A.E. Harshman in favor of said Hammond Lumber Company and others furnishing material for said job, and interest thereon at seven (7%) per cent per annum from January 2, 1924, as per statements hereto attached and approved by said Harshman subject to credit of three thousand three hundred ($3300.00) dollars, when paid under preceding paragraph and any collections from collateral held by said company, the release of which collateral shall be made upon full payment hereunder.
"The present amount of money held by the Scarborough Company is thirteen thousand five hundred sixty-four and 12/100 ($13,564.12) dollars, as verified by W.T. McAllister, and the trustee is to expend this amount for the completion of the buildings and payment of accounts approved by said C.S. Anderson, covering the lots mentioned in this agreement. Should there be any surplus remaining in this fund after the buildings have been completed it is agreed that the trustee shall cause such surplus to be paid to Hammond Lumber Company, who are then to credit the same to the general account of Harshman as reported by statement of Hammond Lumber Company attached hereto.
"Third: Thereupon, and subject to the above A.E. Harshman, the balance and remainder of the trust property and income therefrom. All compensation of the trustee and his attorney, as such shall be chargeable to and deducted solely from the amount payable under this item `Third.' In the event there is no surplus to be distributed to said A.E. Harshman, hereunder, then the said expense shall be paid by the said A.E. Harshman. Distribution shall be made from time to time as funds are received from sales or otherwise, and at the same time, and whenever it shall be required by the trustee to convey title to any lot, or lots held hereunder, any lien or claim held by or under the beneficiaries hereunder, in respect to labor or materials furnished *233 for any building or improvement on any of the trust property required to be conveyed free therefrom, shall be duly released and waived in consideration of the beneficial rights hereunder.
"The trustee shall have full power to manage and control the trust property and to deal fully and expeditiously therewith; the purpose hereof and powers respecting real estate being subject to the provisions of the Civil Code of California; to sell, transfer and convey any of the real estate at any time held by him hereunder, at such price, not less than the scheduled price approved by said C.S. Anderson, hereto attached, and upon such terms and conditions as the trustee may determine, and to take in part payment therefor the note or notes of the purchaser, secured by first or second mortgage or deed of trust upon the property sold and conveyed by him and or other property, and to take in part payment therefor, to an extent not exceeding one-third of the sale price in any case, any other real estate of the purchaser, at such valuation as he shall determine, and to exercise all the rights of owner and holder of such notes, securities or other property, and to sell, assign, pledge, transfer and otherwise dispose of and turn to account any notes, securities or other property, at any time held by him hereunder; to cause any real estate to be transferred to a third person for the purpose of providing for the refunding of any loan secured thereby; to pay all taxes, liens, or charges of whatever nature at any time existing against any of the trust property; and to pay or satisfy any debts or claims on such terms and upon such evidence as the trustee may determine. It shall not be the duty of the purchaser of any part of said property to see to the application of the purchase money paid therefor; nor shall anyone other than C.S. Anderson who may deal with said trustee be privileged or required to inquire into the necessity or expediency of any act of said trustee, or of the provisions of this instrument.
"The trustee shall be entitled to deduct from the income or proceeds of sale arising hereunder, any commissions at the board rate, costs or expenses incurred by him incidental to the execution of the trust hereunder, and likewise to be reimbursed therefrom all sums of money to the payment of *234 which he, by reason of being trustee, may be held liable or subjected by way of damages, penalty or fine.
"The trustee may resign his trust at any time by written instrument executed by him and delivered to any one or more of the beneficiaries, and in the event of vacancy in the office of trustee, however, caused while this trust shall subsist, and so often as the same shall occur, Hammond Lumber Company, W.B. Scarborough Company and A.E. Harshman of Los Angeles, California, or any two of them are hereby authorized and empowered by any writing executed and acknowledged by them in the manner provided for the execution of deeds to real estate in the State of California, to nominate and appoint any person to be trustee thereof, in the place of the trustee previously acting hereunder, and thereupon and so often as a new trustee shall be so appointed, the trust property and all powers, authorities and discretions herein given to the trustee shall immediately vest in the new trustee so appointed as fully and effectually as if he had been the original trustee hereunder.
"This trust agreement shall not be placed on record in recorder's office of said Los Angeles county, and the recording of the same shall not be considered as notice of the rights of any person hereunder, derogatory to the title of said trustee or his successor in trust. Three years from date, if any property remains in this trust, the trustee shall convert the same into cash by selling such property at public auction, upon notice of sale, published at least once a week for three successive weeks in a newspaper of general circulation, published in the city of Los Angeles, California, and distribute the proceeds to the beneficiaries hereunder, after deducting the expenses incidental thereto.
"In witness whereof, said W.T. McAllister has hereunder affixed his signature and seal the day and date above written.
"W.T. McALLISTER. (Seal)
"In the presence of "ALVA E. HARSHMAN.
"Accepted:
"C.S. ANDERSON, for Hammond Lumber Co."
Only two questions are involved, which are: First: Whether or not the Hammond Lumber Company furnished materials previously to the recording of the plaintiff's mortgages; second: Whether or not the defendants Hammond *235 Lumber Company and C.B. Kahl waived their right to mechanics' liens.
[1] The findings of the court are to the effect that the defendant C.B. Kahl had begun work upon the lots in question, and that there were visible evidences upon the lots in question of the work being performed by C.B. Kahl prior to the time when the mortgages in question were recorded by the plaintiff's assignor. The court also found that the Hammond Lumber Company had begun the delivery of building materials for the erection of buildings upon the lots in question prior to the date of the recording of the mortgages now held by the plaintiff. The point made by the appellant as to the delivery of materials is that materials delivered by the Hammond Lumber Company were not actually placed or delivered upon the lots on which the buildings were erected, but that the lumber and other building material was piled or placed upon an adjoining lot, and, therefore, that the plaintiff's mortgages should be given priority. Appellant's argument in this behalf is interesting but not very convincing. Section 1186 of the Code of Civil Procedure, which gives a materialman a mechanic's lien, does not provide that a lumber company shall pile the lumber actually delivered for the building upon the lot where the building is to be erected. That section reads: "The liens provided for in this chapter are preferred to any lien, mortgage, or other encumbrance which may have attached subsequent to the time when the building, improvement, or structure was commenced, work done, or materials were commenced to be furnished; also, to any lien, mortgage, or other encumbrance of which the lienholder had no notice, and which was unrecorded at the time the building, improvement, or structure was commenced, work done, or the materials were commenced to be furnished." By this section, the lien attaches as soon as the work is begun or as soon as materials are commenced to be furnished. In the case at bar the findings show that work had been begun upon the premises on which the buildings were to be erected. It is true that the work begun upon the lots in question was work being done by the defendant C.B. Kahl, but the work, as found by the court, being upon the lots adjoining, on which the lumber was piled, gave visible evidence and information to anyone as to the lots upon which the buildings *236 were to be erected, and for which buildings the materials were being delivered. We cannot shut our eyes to what is common knowledge to everyone who lives in a city, that building materials are not piled upon the lot where the building is to be erected or is being erected, but is ordinarily and commonly delivered upon and piled upon the streets. We can see no logical distinction between delivering materials upon the streets and upon adjoining lots. If the work is being done upon the lots, indicating, as found in this case, where the buildings are to be erected, all persons having to do with the lots are immediately placed upon notice.
[2] The court having found that labor was being performed by the defendant C.B. Kahl and materials also being furnished by him, and also that materials were being furnished by the defendant Hammond Lumber Company prior to and at the time of the recording of the mortgages upon which plaintiff bases its actions, it becomes wholly unnecessary for us to review the argument based upon the case of McClain v. Hutton,
[3] This brings us to the only question having any merit presented by these appeals, to wit: Have the defendants Hammond Lumber Company and C.B. Kahl waived their mechanics' liens? The title to the lots involved, and which were apparently placed under the control of the said W.T. McAllister, was not vested in either one of the defendants. The fact must also be taken into consideration that a large number of lots were included in the trust declaration, and, therefore, we conclude, were covered by the deed of conveyance made to McAllister. The deed referred to is not set out in the findings, and as these appeals are *237
based upon the judgment-roll alone, we cannot assume anything as to the contents of the deed which would be detrimental to the interests of the respondents upon these appeals. It cannot be assumed that this deed was made conditional upon the waiver of any mechanic's lien to which the defendants then had a right or might subsequently acquire by reason of their performance of labor and the furnishing of building material. There is nothing in the record which would place the defendants Hammond Lumber Company and C.B. Kahl in the position of mortgagees having only one right of action, to wit, to foreclose a mortgage under section
The cases cited by the appellant to the effect that the taking of additional security is a waiver of a lien are all reviewed by the Supreme Court in the case of Martin v. Becker,
The judgment of the trial court is affirmed.
Finch, P.J., and Hart, J., concurred. *241