84 P. 58 | Cal. Ct. App. | 1905
Mechanics' and materialmen's liens. The only question involved in this appeal is whether plaintiffs' liens are superior to the lien of the trust company, defendant, as trustee, to secure certain moneys borrowed from the loan association, defendant, by defendant Wright. The trial court held the lien of the deed of trust to be superior to the mechanic's lien and gave judgment accordingly. No question arises upon the validity of plaintiffs' liens, and the appeal is from that part of the judgment only which adjudges their lien to be subordinate to the claim of the loan association. Defendant Wright was the owner of the real estate involved in the action, and had agreed with the loan association for a loan of $1,000, with the understanding that *289 it was to be used in the erection of a building and to be paid as the work progressed, and the building to be part of the security. On April 1, 1902, Wright and wife executed the note and deed of trust on the property to secure payment of the same to the trust company, as trustee for the loan association. The trust deed was duly acknowledged and recorded on April 3, 1902, before any labor was performed on the building and before any material was commenced to be furnished. The loan association, through its agent, Wagoner, had notice that plaintiffs had commenced to furnish material prior to the actual payment of any of the borrowed money by the loan association. The first payment of $500 was made April 12, 1902, and the balance, according to the agreement was paid May 7, 1902, and both sums were disbursed, shortly after the payment, among various persons, including plaintiffs, for labor and material.
Both parties rely upon section 1186 of the Code of Civil Procedure. "The liens provided for in this chapter are preferred to any lien, mortgage or other encumbrance which may have attached subsequent to the time when the building, improvement or structure was commenced or materials were commenced to be furnished." Respondents contend that they have brought themselves strictly within this section, while appellant's contention is "that the deed of trust had no life or validity until such time as some of the money for which the security was given was actually advanced or paid." Appellants call attention to Avery v. Clark,
The real question is whether there was only a deed of trust in form, without force or effect as to plaintiffs (which is their contention), when they began to furnish materials, as claimed by plaintiffs. Plaintiffs rely upon Tapia v. Demartini,
At the oral argument Mr. Cory, speaking for appellants, said: "I will admit that if it appeared here that at the time this deed of trust was made and put of record that the building and loan association was under a legal obligation to loan that thousand dollars, and in advancing the money afterward *292 was simply complying with that legal obligation, which Mr. Wright could enforce, why that would raise a different question." But he denied that there was anything in the record supporting that theory. The answer of the trust company alleges that before any labor was done on the building, or materials were commenced to be furnished, the loan association "loaned to said George A. Wright and Linnie Wright, his wife, the sum of $1,000, which they agreed to pay," and which was evidenced by their promissory note, and to secure its payment they executed and delivered to the trust company a deed of trust conveying the title to the real property in question. The court found the facts substantially as alleged. This deed of trust is made part of the complaint. The deed of trust recites that "whereas the said parties of the first part have borrowed of the party of the third part the sum of $1,000 and agreed to pay the same with interest and premium according to its terms," etc. (setting forth the note), and "whereas said G. A. Wright has subscribed fifteen shares of the capital stock of said building and loan association, of the par value of one hundred dollars, and has agreed to pay for said stock in monthly installments of six dollars, payable in advance until said shares are fully paid and matured, as provided in the by-laws, and has pledged said stock to said third party [the trust company] as security for the payment of said loan. . . . Now therefore in consideration of the aforesaid indebtedness," etc., reciting the making of the note, etc., the first parties convey the property, following which are numerous conditions with which the first parties agree to comply, "and these trusts shall be and continue as security to the parties of the second and third part for the repayment of the money so borrowed by the parties of the first part," etc. We entertain no doubt but that the correlative obligation to pay this money to Wright arose when he executed and delivered his note and agreed to pay it, and secured payment by conveying the legal title to his land to the trust company. He had performed every condition of the agreement for the loan on his part to be performed, and there was, to our view of the matter, a clear legal obligation on the part of the loan association to perform its part by furnishing the money, which it did soon thereafter. This obligation was not *293 optional with the association, but was obligatory, and we have so regarded it in this opinion.
Respondent cites the case of Home Savings etc. Assn. v.Burton,
In the present case, however, we feel constrained, by the state of the law and decisions, to affirm the judgment of the trial court, and it is so ordered.
Buckles, J., and McLaughlin, J., concurred. *294