The title of the true owner of land can not be subjected to a lien for improvements, unless he expressly or impliedly assents to the contract under which the improvements are made. The grantee in a security deed is the true owner of the legal title; and where such deed is duly recorded before improvements are made, the purchaser at a foreclosure sale under the security deed holds title free from any lien for improvements placed upon the land subsequently to the execution and record of the security deed.
No. 14018. FEBRUARY 11, 1942.
The petition of Rutland Contracting Company against Sallie E. Gay Estate and Briarwood Inc. alleged, that Sallie E. Gay Estate sold a described tract of land to Briarwood Inc., and took from the purchaser a deed to secure the unpaid balance of the purchase-money, which deed was duly recorded; that Sallie E. Gay Estate knew at the time of the sale that the purchaser intended to subdivide the land, grade and level it, lay off streets, and sell it in small improved building lots, and knew that the purchaser did not have assets sufficient to pay for such improvement; that thereafter, on August 15, 1939, Briarwood Inc. employed petitioner to grade, level, and lay off streets in the land so purchased; that on September 1, 1939, the secured purchase-money became due, and foreclosure of the security deed by exercise of a power of sale contained therein was begun; that the foreclosure sale was duly advertised by publication on November 9, 16, 23, and 30, 1939, advertising the sale to be held on December 5, 1939; that the sale was held as advertised, and Sallie E. Gay Estate was the purchaser; that the petitioner was making the improvements contracted for during the advertisement of the sale, but neither of the defendants notified petitioner of the foreclosure; that petitioner, learning of the existence of the security deed, the default, and the foreclosure proceedings, filed a claim of lien against the land on November 20, 1939; that the petitioner completed its contract for improving the land according to the terms of the contract; and that the defendants have failed and refused to pay petitioner for its services in making the improvements. It is alleged that petitioner has no adequate remedy at law, but is entitled to relief in equity for the following reasons: (a) defendants encouraged petitioner to make the improvements; (b) defendants were unjustly enriched by the improvements made by petitioner; (c) defendant's property was thereby enhanced in value; and (d) defendants knew, during all the time the plaintiff was performing the work, that Briarwood Inc. had nothing with which to pay petitioner. The petitioner prayed for judgment against Briarwood Inc., in the sum of $8737.08, and that this judgment be made a special lien on the land. Sallie E. Gay Estate filed general and special demurrers to the petition. Upon hearing, no ruling was made on the special demurrers, but the general demurrer was sustained and the action dismissed as to this defendant. To this judgment the plaintiff excepted.
All mechanics of every sort, who have taken no personal security therefor, shall, for work done and materials furnished in improving real estate of their
employers, have a special lien on the real estate so improved. Code, § 67-2001. In subsection 2 of this section it is provided that when such work is done upon the employment of a contractor or some person other than the owner, the lien shall attach as against the owner, unless such owner shall show that the lien has been waived in writing, or produces a statement of the contractor, or other person at whose instance the work was done, that the agreed price or reasonable value thereof has been paid; provided that in no event shall the aggregate amount of lien exceed the contract price of the improvements made. Counsel for the plaintiff construe this subsection to give a lien to a person making such improvement under employment by persons other than the owner, when such persons are unauthorized by the owner to make such contract of employment. The entire statute is dependent upon consent of the true owner, and subsection 2 is predicated upon the existence of authority from the owner to the contractor or other person to have the improvement made. This is shown by the provision therein that in no event shall the aggregate of liens exceed the contract price. Where a stranger to title or other person contracts or employs a third person to make improvements, the owner of the land is not bound to disclose to such third person the fact of his ownership, and such third person has no lien on the land.
Callaway v.
Freeman,
29 Ga. 408;
Rice v.
Warren,
91 Ga. 759 (2) (
17 S.E. 1032);
Reppard v.
Morrison,
120 Ga. 28 (
45 S.E. 554);
Reaves v.
Meredeth,
123 Ga. 444 (3) (
51 S.E. 391);
Picklesimer v.Smith,
164 Ga. 600 (
139 S.E. 72);
Morris v.
West,
170 Ga. 550 (
153 S.E. 361);
Georgia State Savings Association v.
Wilson,
189 Ga. 21 (5) (
5 S.E.2d 14). The petition in the present case showing that Sallie E. Gay Estate was the holder of the legal title under a deed to secure debt, before any improvements were made, that the grantor in the security deed had no authority from the Sallie E. Gay Estate to contract with the petitioner for the improvements, and that by foreclosure of the security deed the
Sallie E. Gay Estate had acquired unconditional title, under the above authorities the petitioner has no lien on the land, and the petition was subject to the general demurrer. The facts pleaded do not bring the present case within the rulings in the following cases upon which petitioner relies:
Warner v.
Hill,
153 Ga. 510
(
112 S.E. 478);
Raines v.
Clay,
161 Ga. 574
(
131 S.E. 499);
Williams v.
Brewton,
170 Ga. 164 (
152 S.E. 441). The knowledge of the owner that the improvements were being made, and failure to object to the same, affords no ground for giving a lien upon the land. The solvency of Briarwood Inc. was a matter for petitioner to determine before extending credit, and it was petitioner's right, if it so desired, to take the risk of collecting from Briarwood Inc., according to their contract; and the inability of Briarwood Inc. to pay constitutes no ground for placing a lien on the land, when the owner had no connection with the contract between those parties.
Judgment affirmed. All the Justices concur.