97 Tenn. 334 | Tenn. | 1896
These several bills, consolidated and heard together, were filed to have declared and enforced mechanics’ and furnishers’ liens on a block of buildings erected by defendant, Howard. The Chancellor held that the complainants were entitled to liens as against Howard and the Cincinnati Investment Co., and fixed the priorities of the several bills upon a lot of eighty-seven feet sold by the investment company to Howard, but not upon the remainder of the lot, which was sold to Howard by Dickey. He decreed that all of the complainants had liens prior to that of the investment company, under a deed of trust executed to it, except that as to Ragon, receiver, there was an admission that the investment company had a prior lien for $8,500 of purchase money. He .declined to give any personal judgment against the investment company. There was a reference to report the amounts of the debts and priorities, and a report thereon, and numerous exceptions to the report, which were all overruled except one as to the number of brick furnished
The investment company and Montague alone appealed and assigned errors. The cause has been heard by the Court of Chancery Appeals, and they have affirmed the decree of the Chancellor, and from their decree the investment company prayed a broad appeal, and Montague appealed from so much of the decree as refused him a lien upon the entire Howard block and a personal judgment against the investment company, and taxed him with half the costs, and both parties have assigned errors.
The errors assigned by the investment company are, in substance, that the Court erred in holding that it was not necessary for the lien claimants to give the thirty days notice required by the Act of 1889 to be given the owner of the property. This error is based upon the theory that Howard had no title to the lot, and that it remained the property of the investment company until thirty days after the building was finished, and hence the lien claimants could fasten no liens on the lot by virtue of any
‘ ‘ Dear SiR — Referring to the several conversations we have had concerning the sale to you of the property on Whiteside Street adjoining your building, 1 beg leave to say we will sell all the frontage we have on Whiteside Street, which is eighty-seven feet more or less, same depth as your lot, to you for $8,500, payable in five years, interest at 6 per cent, per annum, payable semiannually, and, should you purchase the property, we will, agree to loan you $5,500 on a building to be erected on the same property, the value of which shall not be less than $10,000, the money to be paid you when the building is completed and its value is certified by a competent person whom we may name, you to pay the expense of such examination and report. This $5,500 is not to be paid, however, until thirty days after the building is completed, and satisfactory proof is given that there are no mechanics’ liens or prior mortgages to that which will be given to us to secure the payment of the loan. Please advise us of your final acceptance of this proposition.
1‘Adolph S. Ochs, Sec’y.”
It is insisted that there was no fraud in the contract, and the mechanics and furnishers were bound to take notice that Howard, though in possession, was not owner, and it was their duty to inquire into and ascertain his interest, and they have no claim or lien against the investment company, and could get none on the lot except by giving the notice provided by the Act of 1889 to be given to the owner of the property, and, having failed to give such notice, the investment company was at liberty to secure itself, according to its contract with Howard, for its purchase money and money advanced,
In this case it is evident that the legal title to the property in controversy was not in Howard, but in the investment company, and an examination in the proper office would have disclosed this fact. At the same ° time, it is plain that the investment company allowed Howard to take possession of the lot and treat it as his own, and that its contract clearly contemplated that Howard should erect the buildings with the expectation and intention of putting the
When a vendor holding the legal title consents for and directs a vendee to have improvements placed upon the property, with the expectation and intention of putting the legal title in him when the buildings are completed, if the legal title is thus placed, the lien of the mechanic attaches as against both parties. Rollins v. Cross, 45 N. Y., 766. In Warville on Vendors, Vol. I., Sec. 23, p. 209, it is said, in substance, that where a vendor, by his contract of sale, expressly authorizes the vendee to make erections and improvements on the premises, and particularly if he agrees to advance money to aid in such improvements, and before the termination of the contract and notice thereof a mechanic performs labor or furnishes material for the erection of buildings on the land, the latter will not be required to look alone to the title held by the vendee, but may enforce his lien against the legal as well as the equitable title.
To the same effect is Phillips on Mechanics’ Liens (3d Ed.), Sec. 69, citing and commenting on many cases which proceed upon the idea that under such ciraimstances the party purchasing and in possession is the “owner,” in the sense of the statute, and unless he shall be so considered mechanics and material men will be defrauded of their liens.
In Lyon v. McGuffey, supra, it is held that the mechanics’ lien on an equitable estate attaches to an after acquired legal title the moment it vests in the same person. Coleman v. Goodnow, 36 Minn., 9; Am. & Eng. Enc. L. (Vol. XV.), pp. 11, 12, and notes.
We are aware that there are many cases in real or apparent conflict with the holding in these cases (Phillips on Mechanics’ Liens, Sec. 70), but we consider the cases above cited as most in accord with the provisions and spirit of our own statute and decisions. We think it evident that the Act of 1889, Ch. 103, was not intended to apply to this class of cases, but was intended to apply to cases where the owner of the property has employed a mechanic to construct a home upon his land- for himself, and such mechanic has employed a subcontractor or bought materials. If the subcontractor or material man desire to hold the owner therefor, as well as
We "are of opinion, therefore, that complainants were not, under the facts of this case, required to give the notice prescribed by the Act of 1889, but they had a right to have their liens upon the property without such notice if there were nothing else in the case.
Complainant Montague assigns as error that he was not allowed personal judgment against the investment company, and that his lien was limited to the quantity of brick which went upon the lot bought from the investment company, and did not extend to all the- brick furnished for the entire block. If this latter contest were alone between Montague and Howard, this contention would probably be correct, but in view of the equities and claims of the dif
It is next assigned as error by the investment company that the Court of Chancery Appeals did not hold that the failure of the lien claimants to issue and levy attachments within a year from the accrual of their rights to a lien was an abandonment of the lien. That Court held “that if the suit was brought in time, attachments might be issued and levied at any time during the pendency of the suit; and while it would be fatal to the lien not to take out attachment at any time, still it was not necessary that it be sued out and heard within the year, the attach
We think in this the Court of Chancery Appeals is in error, and that the attachment must be issued and levied within the year in order to preserve the lien. In Barnes v. Thompson, 2 Swan, 316, the Court uses this language: ‘£To secure the benefit of his advantage over all others who might have claims equally just against the same debtor, this particular creditor is required, at the commencement of his action, to show that he holds the property on which he has done the work liable for his debt by attaching it.” And again: “It is reasonable to conclude that it was the intention of the Legislature to avoid these and other difficulties by requiring the favored creditor to commence his suit either in law or equity, by attachment, if he desire to rely upon his lien.” And again: “We do not say that the mechanic creditor may not proceed by summons, but what we decide is that the benefit of his lien can only be preserved by attachment.”
Even though Howard, by not appealing, may have waived any right to complain, so far as he is concerned, the investment company, as a holder of the mortgage on the property,' has a right to contest the existence and regularity of the liens.
The Court of Chancery Appeals held that this
We are unable to see any tenable ground upon which they can be held to have acquired or preserved any lien. The mere filing of the petition, without making anyone a party-, cannot give the petitioner a right to any lien. Nor can the fact that it -was agreed that the papers which had been lost might be supplied, have that effect, and the giving of the bond nunc pro tunc, without more, could have no such effect. We are of opinion, therefore, that the Court of Chancery Appeals was in error in giving to Strong Bros, any lien, and the decision of that Court as to these claimants is reversed. As to Kagon, there was no attachment within the year, and he acquired no lien.
As to the status of Montague, it appears that
More than twelve months after his lien had accrued, Ochs, trustee, and ' the investment company were made parties by amended and supplemental bill. Under this latter bill no attachment was issued or asked for. Howard, as heretofore stated, is now making no defense and has not appealed. As to him the attachment was in time, and the question is, Was it necessary that the investment company should have been proceeded against at the same time with Howard in order to preserve the lien ? Under the facts of the case we think it was not. The legal title to the property was put in Howard by the investment company. It is immaterial how long it remained, whether six days, as the record shows, or only for the moment.
The lien of' the mechanic being in existence, fastened upon it and became operative, and especially would this be so as against the investment company and the mortgage made for its benefit. It is not the case of a disinterested third person acquiring title and contending for priority, but the mortgage is for the benefit of the investment company, which had authorized Howard to act as owner, to erect the buildings and purchase the material under an agreement to convey to him when the buildings were completed. We are of opinion, therefore, that Montague preserved his lien- by attaching the property in the
The last error assigned is that the claims were not properly proven on reference to the Master. It is sufficient to say there is some proof to sustain them, and the Clerk and Master, Chancellor, and Court of Chancery Appeals have concurred in their finding, and this assignment must be held insufficient.
The decision of the Court of Chancery Appeals is modified as herein indicated. The costs of the Court below will be paid as adjudged by the Chancellor and in the Court of Appeals, and this Court will be paid one-half by the investment company and the other half equally by Strong Bros., Montague, and Ragon.