212 N.W. 876 | S.D. | 1927
Plaintiff brings this action to foreclose a mortgage on a half section of land in Brown county. The land belonged) to defendant Treeby. During the summer of 1921, Treeby contracted with defendant lumber company for material with which to build a bam on the said land. The cost of this material was $1,656.65. The material was delivered and actual visible construction of the barn was commenced on or before the 14th day of August, 1921. When the contract for this material was made, it was understood between defendant and Treeby that a part at least of the bill for this material was to be paid in cash, but for some reason this was not done.
■Ait the time Treeby purchased the above material, he was negotiating with plaintiff for a loan to be secured by a mortgage on the said half section of land. These negotiations resulted in a loan of some $20,000. The mortgage was dated August 24, acknowledged August 29, filed for record October 14, but the money was not paid until November 9, 1921. At the time Treeby purchased the above building material, he was already owing defendant a bill of something over $800 for which defendant appears to have had no lien or other security. After Treeby received the
Two questions are submitted for the determination of the court: First, did the lumber company acquire a mechanic’s lien on the Treeby homestead; and, second, if such lien was acquired, was it superior in right to plaintiff’s mortgage?
Under the provisions of section 1644, R. C., as amended by chapter 280, Laws 1921, a mechanic’s lien may attach to a homestead to the extent that the value of the homestead exceeds $5,000.' In this case the uncontradictedi evidence shows that the value of the homestead did exceed $5,000. Whatever it may have been, it was sufficient to' support the lien and gave the lienor the right to pay the owner of the homestead $5,000, to pay off prior incumbrances, if any — in this the two mortgages amounting to $9,500 — and to' apply the balance of the excess, if any, to' its lien. The fact that the value of the property in this case may not have been sufficient to pay the incumbrances after deducting the value of the homestead is not material. The right to the lien existed, and it is optional with the lienor whether he will pay off the prior incumbrances and avail himself of his lien.
The next question to be determined is the extent of defendant’s lien. It is conceded! that the $1,000 that was paid to defendant on the 14th of November was a part of the money furnished by plaintiff on the loan, and it is contended: First, that defendant knew that it was the intention and desire of Treeby that
Lastly, the plaintiff invokes the doctrine of subrogation. In support of this contention plaintiff quotes the law from 37 Cyc. 443, as follows:
“A person who, in order to protect his own interest or rights in property, is compelled to pay an existing obligation against the same, such as a mortgage or other lien, is entitled to be subrogated to the rights of the creditor whose debt he paid, and to the lien of the incumbrance discharged; and he thereby becomes an equitable assignee and may keep the mortgage alive and enforce the lien for his own' benefit.”
This case will be remanded to the circuit court, with directions to so. modify the judgment appealed from as to establish the amount of defendant’s mechanic’s lien in harmony with this opinion, and declare the same superior to the mortgage lien of plaintiff. Costs on this appeal to be taxed- by appellant.