Bovey-Shute Lumber Co. v. Erickson

170 N.W. 628 | N.D. | 1918

Lead Opinion

Christianson, J.

This action was brought to foreclose a mechanic’s lien. The lien is claimed for certain building material which it is alleged that the plaintiff sold and delivered to the defendant Oscar Erickson between April 7, 1907, and April 20, 1907. And it is alleged that such material was used in the construction, alteration, and repair of a certain dwelling house and barn situated on' the premises involved in tbis action. The defendant Northern land & Mortgage Company appeared and answered. It denied that the plaintiff had a mechanic’s lien, and asserted that the said Northern Land & Mortgage Company is the owner of the premises by virtue of a sheriff’s deed received by it upon the foreclosure of a certain mortgage against said premises.

The material facts in the case are undisputed. The defendant Oscar Erickson was an entryman upon the premises involved in this action, under the homestead laws of the United States of America. On April 4, 1907, he submitted his final commutation proof upon such homestead, at the local land ofiice. The receiver’s final certificate was not issued upon such proof until April 6, 1907. On April 4, 1907, after the final proof had been submitted, but two days before the final certificate was issued, Erickson contracted with the plaintiff’s agent for the building material involved in the action. The evidence shows, and the trial court found, “that on April 4, 1907, and after said final proof was made . . . the said Oscar Erickson did enter into a contract with the plaintiff pursuant to which the plaintiff agreed to furnish building materials necessary for the erection, alteration, and repair of a certain bam on said premises, and the said plaintiff did on April 4, 1907, agree to and with the said defendant Oscar Erickson to furnish and deliver to said Oscar Erickson certain building materials as would be necessary for the erection, alteration, and repair of said building on said premises; that thereunder and pursuant to said contract the plaintiff furnished all of said materials in amounts and on the dates” specified in the findings of fact. The first load of building material was delivered on April 4, 1907, and the remainder on April 12, 13, and 20, 1907. The mechanic’s lien was filed in the office of the clerk of the district court on August 10, 1907. The lien was filed in the office of the district court on August 10, 1907. It recited, “that between the 4th day of April, 1907, and the 20th day of April, 1907, said Bovey-Shute Lumber Company furnished certain material for the erection, alteration, and repair of a certain barn (on the land in controversy) under and pursuant to a contract therefor made with Oscar Erickson, who was then the owner of said land.” The first load of building material was delivered on April 4, 1907, and the remainder on April 12, 13, and 20, 1907.

On April 13, 1907, the defendant Oscar Erickson, who was an unmarried man, for value received, executed, acknowledged, and delivered to the Northern Land & Mortgage Company a mortgage covering the premises involved in this controversy to secure the payment of the sum of $800. This mortgage was duly recorded in the office of the register of deeds on April 16, 1907. Such mortgage was subsequently duly foreclosed by advertisement and the premises sold to the Northern Land & Mortgage Company at such foreclosure sale in March, 1913. No redemption was made from such sale, and a sheriff’s deed was issued to the appellant on March 13, 1914.

The trial court made no allowance for the materials delivered on April 4, 1907, but adjudged the lien to be a valid first lien upon the land for the materials furnished on April 12, 13, and 20, 1907. The usual decree of foreclosure was entered, and the defendant Northern Land & Mortgage Company appeals.

The questions presented on this appeal are: (1) Did the mechanic’s lien claimed by the plaintiff ever attach to, and become a valid lien against, the land? and, (2) if such lien is valid, is it prior to the lien of the mortgage under which appellant received the sheriff’s deed for the premises?

A determination of the first question depends upon and involves a construction of § 2296, U. S. Lev. Stat. Comp. Stat. § 4551, 8 Fed. Stat. Anno. 2d ed. p. 575, which reads as follows: “No lands acquired under the provisions of this act shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor.”

The power of Congress to create the exemption provided by § 2296, supra, is settled beyond question. And it is wholly beyond the power of a state in any manner to limit or impair the exemption granted by the Federal statute. 32 Cyc. 1082, 1083; Anderson v. Carkins, 135 U. S. 483, 34 L. ed. 272, 10 Sup. Ct. Rep. 905. The authorities are all agreed that the exemption extends to those who have commuted their homestead entries. See McCorkell v. Horron, 128 Iowa, 324, 111 Am. St. Rep. 201, 103 N. W. 988; Clark v. Bayley, 5 Or. 343.

“The theory of the homestead law is that the homestead shall be for the exclusive benefit of the homesteader.” Anderson v. Carkins, supra. Section 2296, supra, was enacted to effectuate this policy and encourage tbe settlement of tbe public lands. 32 Cye. 1082. While the courts are all agreed as to the validity of the section, and the duty of the courts to enforce it, they have differed as to the construction to be placed upon it. Some courts have held that “ ‘the issuing of the patent’ refers to the time when the patent ought to issue, and not to the mere clerical work of issuing it, and hence the homestead is liable for debts contracted after the right to a patent became complete, although before it was actually issued;” but other courts have held “that the date of the actual issuance of the patent fixes the time when the liability of the land begins, and it is not liable for debts contracted before that time, although after the right to the patent was complete.” 32 Cyc. 1083. The Supreme Court of the United States has never passed upon the question.

It will be noticed that Congress used the term “the issuing of the patent.” It did not say, “The issuing of the final receiver’s receipt” The lawmakers were certainly familiar with the various steps in the acquisition of lands under the homestead laws. They were aware that upon a final proof a final receiver’s receipt was first issued by the local land office, and that at some subsequent date a patent was issued through the General Land Office. There are fundamental distinctions between the two instruments. The final receiver’s receipt “is an acknowledgment by the government that it has received full pay for the land, that it holds the legal title in trust for the entryinan, and will in due course issue to him a patent. He is the equitable owner of the land. It becomes subject to state taxation, and under the control of the state laws in respect to conveyances, inheritances, etc.” United States v. Detroit Timber & Lumber Co. 200 U. S. 321, 337, 338, 50 L. ed. 499, 505, 506, 26 Sup. Ct. Rep. 282. The significance of the patent, however, should not be overlooked. For “it must be remembered that the latter is the instrument which passes the legal title, and that until it is issued the legal title remains with the government, and is subject to investigation and determination by the Land Department.” Ibid. See also Healey v. Fornan, 14 N. D. 449, 105 N. W. 233. In other words, the issuance of receiver’s final certificate does not devest the government of title to, or the Land Department of jurisdiction over, the land. The title remains in the government until patent is issued, and the Land Department has jurisdiction over the land and may cancel tbe entry and final certificate at any time prior to tbe issuance of patent, or tbe confirmation of tbe entry by tbe following provision in § 7 of tbe Act of March 3, 1891, chapter 561, 26 Stat. at L. 1095, 1099, Comp. Stat. §§ 5116, 5118, 8 Fed. Stat. Anno. 2d ed. pp. 825, 868. “That after tbe lapse of two years from tbe date of tbe issuance of tbe receiver’s receipt upon tbe final entry of any tract of land under tbe homestead, timber-culture, desert-land, or pre-emption laws, or under this act, and when there shall be no pending contest or protest against tbe validity of such entry, tbe entryman shall be entitled to a patent conveying tbe land by him entered, and the same shall be issued to him.” See Lane v. Hoglund, 244 U. S. 174, 61 L. ed. 1066, 37 Sup. Ct. Rep. 558.

It is suggested by respondent’s counsel that this case is in effect controlled by Adam v. McClintock, 21 N. D. 483, 131 N. W. 394. We believe counsel is in error. Adam v. McClintoek involved a mortgage, — a lien voluntarily created by virtue of contract. Tbe courts are generally agreed that the exemption created by the Federal statute is designed merely to protect tbe settler against tbe involuntary liens arising by operation of law, and does not preclude him from voluntarily creating a lien by way of mortgage. 32 Cyc. 1084. See also Hafemann v. Gross, 199 U. S. 342, 50 L. ed. 220, 26 Sup. Ct. Rep. 80; Weber v. Laidler, 26 Wash. 144, 90 Am. St. Rep. 726, 66 Pac. 400. This being so, tbe mortgage is subject to tbe familiar equitable principles that tbe mortgagor is estopped from denying the recitals and assertions of title contained in tbe mortgage, and that tbe after-acquired title inures to tbe benefit of tbe mortgagee. But tbe lien involved in this case is an involuntary one. And tbe authorities all agree that a mechanic’s lien is within the prohibition of tbe Federal statute. 27 Cyc. 28; Green v. Tenold, 14 N. D. 46, 116 Am. St. Rep. 638, 103 N. W. 398; Spiess v. Neuberg, 71 Wis. 279, 5 Am. St. Rep. 211, 37 N. W. 417; Weber v. Laidler, supra. Whether a mechanic’s lien filed under our present statute, which requires tbe written consent of. tbe owner before a lien may be filed, also falls within tbe prohibition of tbe statute, is not before us, and on this question we express no opinion.

With all due respect for tbe authorities to tbe contrary, we are of tbe opinion that § 2296, supra, means what it says. Its language is plain and unequivocal. It says that lands acquired under tbe provisions of the homestead laws shall in no event “become liable to the satisfaction of any debt contracted prior to the issuance of the patent thereforIf Congress had intended that the exemption should apply only to debts contracted prior to the issuance of the receiver’s final certificate it would doubtless have said so. In order to ascertain the legislative intention the primary rule is that a statute is to receive that meaning which the ordinary reading of its language warrants. And if the language is clear and admits of but one meaning, the lawmaking body should be deemed to have meant what it has plainly expressed, and in such case there is no room for construction. 26 Am. & Eng. Enc.- Law, 598; 36 Cyc. 1114.

The statute under consideration was enacted for the protection of the homesteader. The prohibition is clear and direct. It was the intent of the lawmakers as expressed in the statute that the homesteader should be protected against all involuntary liens arising by virtue of debts “contracted prior to the issuing of the patent.” It is our duty to enforce the statute as enacted, and give effect to the intention of the lawmakers as expressed by the plain and unequivocal language which they have used. It. may be noted that the interpretation which -we place upon the statute is in harmony with the views of the United States district court of this district, and those of the supreme court of our sister state, South Dakota. See Re Cohn, 171 Fed. 568; Blair v. Mayer, 24 S. D. 563, 565, 140 Am. St. Rep. 797, 124 N. W. 722.

In the opinion of the writer, speaking for himself alone, no court has ever , passed upon the precise question presented in this case, and the facts in this case readily distinguish it from all the authorities that have been cited. In the instant case it is undisputed that the debt was contracted on April 4, 1907, — two days before the final receiver’s receipt, was issued. The first material was delivered on that day. We therefore have a situation where the debt in satisfaction of which an involuntary lien is sought to be enforced was contracted before the receiver’s final certificate was issued. The cases cited by respondent involved a situation where the debt had been contracted subsequent to the' issuance of the receiver’s final certificate, and prior to the issuance of the patent. And in Buddy v. Bossi, 28 Idaho, 376, 154 Pac. 977, which respondent cites as the most recent judicial expression bn the subject, the majority opinion lays great stress on the fact that the debt bad been contracted after receiver’s final certificate had been issued, and virtually distinguishes between such debts and debts contracted before the issuance of such certificate. And the dissenting opinion in that case assumes that the issuance of the final certificate is the point which the majority members deemed controlling. The holding of the majority on this particular question is reflected in ¶ 1 of the syllabus, which reads: “Under § 2296, U. S. Rev. Stat. Comp. Stat. § 4551, 8 Fed. Stat. Anno. 2d ed. p. 575, relating to homesteads, and providing that no lands acquired under such section shall become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor, land so acquired is not liable for a debt contracted prior to the making of final proof and receiving final certificate entitling the entryman to a patent.” Respondent’s counsel contends that in Leonard v. Ross, 23 Kan. 293, the debt arose before the receiver's final certificate had been issued. An examination of the opinion, however, does not sustain the contention. It is true the decision does not show that final certificate had been issued, nor is any reference made in the opinion either to the issuance or nonissuance thereof. It does appear, however, from the statement of facts that the entryman made final proof and paid the purchase moneys to the local land office on May 19, 1874, and that the debt for which the land was held liable arose just before October 12, 1874. It is a matter of common knowledge to anyone familiar with the practice of local land offices that a receiver’s final certificate is issued, if possible, on the same day that the proof is submitted and the purchase moneys paid to the officers of the local land office. If the receiver’s final certificate is not issued on the same day that the final proof is submitted at the local office, it is issued shortly thereafter, except in cases where there is some occasion for delay arising either by reason of defects in the final proof testimony, such large amount of other business at the local land office as prevents the officers from acting upon the final proof, or some other unusual cause. But where business is normal the receiver’s final certificate is ordinarily issued either on the day final proof is submitted or within a very short time thereafter. Hence, it seems clear that the •finid certificate must have been issued in Leonard v. Ross before the debt involved in that case arose, and so far as the opinion shows the final certificate may have been and probably was issued on May 19, 1874, or very shortly thereafter. .

It follows from what has been said that the mechanic’s lien claimed by the plaintiff in the instant case never attached to the land, and that the judgment of the court below to the contrary is erroneous and must be reversed. The judgment is therefore reversed and the cause remanded, with directions that judgment be entered in harmony with the views expressed in this opinion.

RobiNsoN, J. (dissenting). This is an appeal from a judgment decreeing the validity and superiority of plaintiff’s lumber lien for the sum of $47.70, with interest, amounting to $105.10, and a sale of the premises to satisfy the same. From this judgment the Northern Land & Mortgage Company appeals and demands a retrial of the entire case. As alleged in the complaint it appears that in April, 1907, the plaintiff sold and delivered to defendant Oscar Erickson lumber and material to be used and which was used in the construction of a barn on the land in question. The delivery was at dates and in amounts thus:

1907. April 4, . $23.45

“ 12, . 30.70

“ 13, . 15.80

" 20, . 1.20

Total amount . $71.15

On October 15, 1907, Erickson made to the plaintiff his promissory note for $71.15 due in one year, with interest at 12 per cent, and it is wholly unpaid. On April 29, 1907, there was duly filed a mechanic’s lien for the material. On the same land to secure $800 and interest, Erickson made to appellant a mortgage. It was dated April 12, and filed April 16, 1907. The mortgagee objects to the priority of the lumber lien on these grounds:

1. The insufficiency of evidence to show that the lumber was used in the construction of the building on the land.

2. For the reason that at the time of contracting for the lien on April 4, 1907, Erickson did not own the land.

On the first point the evidence does fairly show — as found by the trial court — that tbe lumber was bought and used for tbe eonstniction. of a barn. Erickson was in possession and in need of a bam .on tbe land, and tbe proof is that tbe lumber was taken and used in tbe building, and when Erickson gave tbe mortgage, the bulk of tbe lumber was on tbe ground or in tbe barn on tbe land, and that was constructive notice to tbe mortgagee. On April 4, 1907, Erickson made final proof before tbe United States Land Office at Minot and commuted a homestead entry on tbe land in question. He paid for it to the. receiver of tbe United States Land Office $177.13. Tbe receiver’s receipt for tbe same was issued on April 6 and recorded April 16, 1907. Of course, tbe patent did not issue until several months afterwards. Erickson contracted for tbe lumber and made final proof and payment for tbe land two days before tbe issuing of tbe receiver’s receipt, and long before tbe issuing of a patent. Hence, the. principal claim of appellant is based on this section of tbe United States Revised Statutes:

Section 2296 (Oomp. Stat. § 4551, 8 Eed. Stat. Anno. 2d ed. p. 575) : No land acquired under tbe provisions of this chapter shall in any event become liable to tbe satisfaction of any debt contracted prior to tbe issuing of a patent therefor. But that statute does not apply to this case because Erickson did not acquire tbe land under tbe homestead laws; He commuted bis homestead entry and made final proof and payment for tbe land “as provided by law granting pre-emption rights.” Hence, on bis making such proof and payment bis title was that of a purchaser under tbe pre-emption laws.

Tbe moment Erickson made bis final proof and payment be became the real owner of tbe land, and bis title was not different from that of any other purchaser. Tbe government held in trust for him only tbe bare legal title.

Counsel cites as directly in point, Paige v. Peters, 70 Wis. 178, 5 Am. St. Rep. 156, 85 N. W. 328. In that case tbe party contesting a lien for material claimed tbe land under tbe homestead laws, • and not as a purchaser or commuted homestead pre-emption cash entry, and tbe debt was contracted for material furnished and used two months prior .to tbe time of tbe making of final proof. Tbe Wisconsin decision was entirely correct, but it is not at all in point. As this court has held tbe Mechanic’s Lien Law is remedial and equitable, and it should be liberally construed to effect its purpose.

On April 4, 1907, when Erickson bargained for tbe lumber, be bad a perfect equitable title to tbe land. There is no dispute concerning tbe lumber wbicb was furnished to Erickson on April 4, 12, 13, and 20, a. n. 1907. It amounted to $71.15.

On October 15, 1907, Erickson gave bis promissory note for tbe same, with interest at 12 per cent. As a subsequent lien bolder tbe mortgage company does rightfully object to interest in excess of 7 per cent. Hence, tbe judgment should be corrected by striking out tbe words “forty-seven and seventy-one hundredths dollars,” wherever tbe same occurs, and 12 per cent, and in lieu thereof inserting “seventy-one and fifteen hundredths dollars, and annual interest thereon at 7 per cent per annum,” and as thus modified tbe judgment should in all things be affirmed.

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Concurrence Opinion

Bruce, Ch. J.

I concur in tbe result reached, but not in tbe distinction sought to be made by Judge Robinson between a commutation proof and one under tbe homestead laws proper.