13 P.2d 775 | Cal. Ct. App. | 1932
This is an appeal by the plaintiff from the judgment of the trial court, sitting without a jury, in a suit to foreclose a materialman's lien on certain real property.
The principal question presented by this appeal is the matter of priority between a certain materialman's lien and a certain deed of trust.
In the complaint, which is in the ordinary form for the foreclosure of a mechanic's lien, defendant Sam Naslund is *36 sued as the owner of the premises and the purchaser of the building materials furnished by appellant. The trial court found, in substance, that, at all times involved in the action, defendant Stapp was the owner of the real property in controversy; that said property stood of record in the name of the defendant Naslund, but that Naslund had no right, title or interest in the premises, except a possessory interest, but held the record title for the sole benefit of Stapp; that Naslund commenced the erection of a building on said premises on July 7, 1927, on which day Naslund made a contract with appellant under which appellant, on July 7th, began the delivery of materials to said premises for said building, and continued to deliver such materials for said building until September 24, 1927; that, on November 26, 1927, appellant filed for record in the office of the county recorder of Kern County its claim of lien for said building materials. The trial court further found that, on June 21, 1927, Naslund executed and delivered to Stapp his promissory note, negotiable in form, for $2,500, payable three years after date, and at the same time and as part of the same transaction Naslund executed and delivered to Stapp a deed of trust of said premises, securing the payment of said note; that in said trust deed defendant Security Trust Company was named as trustee and Stapp was named as beneficiary; that the trust deed was recorded in said county recorder's office on July 6, 1927, one day before plaintiff began to furnish said building materials. The trial court further found that, on or about November 26, 1927, for value received, the promissory note was indorsed by Stapp to respondent Hasenjaeger, and at the same time the trust deed was assigned and transferred to Hasenjaeger; that thereafter Hasenjaeger indorsed the note and assigned and transferred the trust deed to defendant Marthasville Bank, and thereafter, for value received, said bank reindorsed the note and reassigned the trust deed to Hasenjaeger, who has been ever since the owner and holder of the note and trust deed and all rights of the beneficiary thereunder. The trial court further found that the execution of said promissory note and said trust deed by Naslund to Stapp was without any consideration, but that neither Hasenjaeger nor the Marthasville Bank had any knowledge or information or belief that the execution of the note and *37 trust deed was without consideration, and each of said last-named defendants became the holder of the note before maturity, and took the same in good faith and for value, and neither of them had any notice of any infirmity in said note or of any defect in the title thereto. The trial court adjudged that the deed of trust was prior to appellant's materialman's lien.
Appellant's lien attached to the premises as of July 7, 1927, that being the date on which appellant began to furnish materials for the building. (Code Civ. Proc., sec. 1186; McClain v.Hutton,
[1] Appellant contends that the materialman's lien is prior to the trust deed for the reason that, although the trust deed was recorded the day before the accrual of appellant's lien, still, as the execution of the note and trust deed was without consideration, it follows that the trust deed did not constitute an encumbrance within the meaning of section 1186 of the Code of Civil Procedure; and that, if the deed of trust ever did acquire a legal status, it must have been when the note and trust deed first changed hands for a valuable consideration, which was after appellant's lien accrued.
In this connection appellant cites a number of authorities holding, in effect, that, where a deed of trust which is recorded prior to a mechanic's lien, does not require the beneficiary to advance the entire amount for which it is given as security, but gives the beneficiary an option as to whether or not he will advance such sum, advances made by such beneficiary, after notice of the lien claimant's rights, are voluntary payments, and the mechanic's lien is prior to the trust deed as to those payments. (See Owens-Parks Lumber Co. v. McCarty,
So far as the promissory note is concerned, considered apart from the trust deed, there is no doubt that Hasenjaeger purchased it free and clear of all equities and defenses against it. (Civ. Code, secs. 3133 and 3138.) This is conceded by appellant in its opening brief, which states, "Appellant does not question the liability of any of the parties to the note." Prior to the 1923 amendment to section
It becomes important, therefore, to consider in what way, if at all, this amendment affects a mortgage or trust deed given as security for the payment of a negotiable instrument. The lien of a mortgage or trust deed is a mere incident of the debt or obligation which it is given to secure; or, as expressed in section
The materialman's lien is based upon the title of the owner and the lienholder "stands in the shoes" of the *40
owner, so far as an innocent purchaser is concerned. If the quality of negotiability which is possessed by the note is imparted to the trust deed which secures its payment, it follows that the holder of a subsequent materialman's lien cannot impeach the trust deed by reason of the absence of consideration for the execution of the note and trust deed, when such trust deed is held by an innocent purchaser. We are of the opinion that, since the amendment of 1923 to section
[2] In the case at bar, even under the principles of equity applicable to non-negotiable instruments, appellant's lien should be subsequent to the trust deed. The evidence shows that the respondent Hasenjaeger took every reasonable precaution to protect his rights before purchasing the note and trust deed. He caused a search of title to be made by a title company, he ascertained when appellant began the delivery of the materials, and he learned that the trust deed had been recorded prior to the time the materialman's lien accrued. There was nothing on the face of the promissory note or the trust deed to impeach their validity, or which disclosed any infirmities or defects of title, or which would ordinarily arouse the suspicion of a prudent man that the transaction was irregular or fraudulent in any respect. Since the said amendment to said section
Contrast Hasenjaeger's precaution with appellant's conduct. The trust deed was on record before it began to furnish materials, and a trust deed which is duly recorded has precedence over any materialman's lien for materials the furnishing of which was subsequently commenced; the *42
record of the trust deed being constructive notice to persons who thereafter furnish such materials (Code Civ. Proc., sec. 1186; 18 Cal. Jur., p. 125; Middleton v. Arastraville Min. Co.,
It follows, therefore, that the trial court did not err in its conclusion of law and judgment that the trust deed held by Hasenjaeger is prior to appellant's materialman's lien.
[3] Appellant next contends that the trust deed was not admissible in evidence under section
[4] Appellant advances the further contention that the trial court's finding to the effect that the note and trust deed were delivered before appellant's lien accrued, is not supported by the evidence. But the witness Naslund testified, in substance, that he executed the trust deed in controversy to Stapp; that, at the time, he (Naslund) understood that he was executing a trust deed of the property involved in this action to Stapp; that he signed the note in controversy and thereupon he "handed it back to Mr. Stapp". Again, in answer to a question by the court, he testified as follows: "The court: . . . and then you made this note and trust deed and gave it back to him (Stapp) . . .?" To which question the witness answered "Yes". In addition to this, Stapp testified that he got the trust deed from Naslund. Such evidence warranted the trial court in making the finding complained of by appellant.
[5] Appellant further asserts that the findings relating to transfers of the note and trust deed are unsupported by evidence. There is a considerable amount of evidence in the record with respect to these transfers. We deem it unnecessary to discuss it, except to say that the apparent contradictions must be resolved in favor of the judgment, and that there is ample evidence to support the findings criticised by appellant. A reviewing court is not justified in disturbing a judgment unless it appears that upon no hypothesis is there sufficient substantial evidence to support it. (Packer v. Wagner,
The judgment is affirmed.
Barnard, P.J., and Marks, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on August 11, 1932, and an application by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on September 19, 1932.