Shryock v. Hensel

Pearce, J., delivered the opinion of the Court. This is a creditor’s bill filed by Thomas J. Shryock & Company, The German Bank of Baltimore City, N. W. James & Company, Edward L. Kaufman & Company and the *620 National Mantel and Tile Company of Baltimore City, against Henry C. Hensel and J. Edmund Eckstine. The prayer of the bill, is for a decree setting aside as fraudulent and void, certain conveyances of real estate from Charles G. Hill and wife and J. Edmund Eckstine to Henry C. Hensel, declaring the property described in said deeds to be the property of J. Edmund Eckstine, and directing the sale of said property, and the distribution of the proceeds of such sale among the plaintiffs and the other creditors of J. Edmund Eckstine. To this bill the defendants filed a plea of res adjudicates, and an answer supporting said plea. This plea set out with much fulness the mode in which Hensel acquired title to the land described in said deeds, and the substance of a contract between Hensel and Eckstine for the erection by Eckstine of a number of houses on said ground, and the creation of indebtedness from Eckstine to sundry persons for materials furnished and work done upon said houses. It also set out the filing of lien claims by the parties last mentioned, and the filing of a bill in equity to enforce these liens, resulting in a decree out of which grew the alleged adjudication. The case before us was set' down for argument upon bill, plea and answer, and upon hearing, the plea was allowed by the Circuit Court for Baltimore County in equity, and the plaintiffs refusing to join issue upon the averments of the plea, or to take testimony in reference thereto, the bill of complaint was dismissed, and from these orders this appeal is taken. : A brief outline of the proceedings in the former cause will be necessary to the proper understanding of the plea in this case. In November, 1899, Edward L. Kaufman & Company together with several other parties filed a bill against Hensel and Eckstine to enforce certain mechanics’ liens claimed by them against the land now in question and certain houses erected thereon by Eckstine, for work done and materials furnished Eckstine, in the erection of these houses. This bill alleged that Hensel was, at the time of the doing of the work and the furnishing of the materials, the owner of said ground *621 and the houses thereon, and that Eckstine was the builder and contractor, for whom the work was done, and to whom the materials were furnished. It also alleged that John Eckstine, Charles G. Hill, William C. Robinson, Alice A. Harden, trustee, and the Baltimore Mutual Aid Society, claimed to be owners or reputed owners of said land and houses, orto have some interest therein, and they were therefore made parties defendants : Also, that the firm of F. O. Singer & Company, and the firm of Myohl & Luken claimed to have mechanics’ liens against the same property, and they also were made parties defendants. Hensel answered, alleging that he was the owner of the ground and houses, and denying that any of the parties to the cause had any mechanics’ lien claims against the property. ■ J. Edmund Eckstine answered that he was the contractor and builder of the houses, but that all mechanics’ lien claims against them had been paid. He did not state who was the owner or reputed owner. John Eckstine and Charles G. Hill answered, each disavowing any interest in the property. Wm. C. Robinson, Alice A. Harden, trustee, and the Baltimore Mutual Aid Society, answered, each claiming to hold ground rents or mortgages against part of the property in question, but claiming no other interest therein. Myohl & Luken answered, alleging that they held a mechanics’ lien claim for #2,713.77 against said houses, and that J. Edmund Eckstine was the contractor and builder of said houses, and “that the defendant, Henry C. Hensel, was the ostensible owner of the said dwelling houses and the ground on which they were built, but that both the said Eckstine and Hensel were, and are now, interested in said houses and ground.” F. O. Singer & Company answered in the same exact terms as to Eckstine and Hensel, and set up a mechanics’ lien claim of #1,272.50. A great mass of testimony was taken relating to the several mechanics’ lien claims, ánd after argument, an opinion and *622 decree was filed, sustaining all the lien claims of the parties to the bill, except that of the National Building and Supply Company, and decreeing a sale of the land and houses for the payment of the claims allowed. The opinion was filed January 22nd, 1901, and on the 16th of January, 1901, a petition was filed by Thomas J. Shryock & Company, The German Bank of Baltimore City, and N. W. James & Company, setting forth the assignment to them in certain proportions by Myohl & Luken, of their lien claims, and the decree passed February 2nd, 1901, recognized this assignment and directed payment to the assignees accordingly. Hensel filed as an exhibit with his answer to a petition for a receiver, which was filed in that cause, an agreement between himself and J. Edmund Eckstine, made April 10th, 1899, for the erection of the five houses in question, in which agreement Hensel is “designated as owner” and Eckstine as contractor, but neither Hensel nor Eckstine, when sworn as witnesses, testified, nor were interrogated, as to the ownership of the land and houses. The opinion states: “It is shown by the evidence in this case that on April 10th, 1899, Henry C. Hensel, the owner of certain lots of ground in Baltimore County, entered into a contract with J. Edmund Eckstine, a contractor, by which Eckstine obligated himself to erect within the time limited therein, five houses as specified in the agreement.” The opinion also states later, “The claim of the National Building and Supply Company will be disallowed as no notice was given, it appearing that at the time the goods were furnished and the work done, Eckstine was not the owner of the property.” These are the only references in the opinion to the ownership of the property. The decree does not refer to the ownership at all, but merely provides for a sale of the property “unless the defendants, Henry C. Hensel and J. Edmund Eckstine, pay to the plaintiffs,” naming them, the respective sums found due them within thirty days from the date of the decree. On appeal to this Court, that decree was on March 6th, 1902, reversed, the lien claims of the National Mantel and Tile Company, of Edward L. Kaufman & Com *623 pany, and of Myohl & Luken being disallowed for reasons not material to this case. Thereupon, on March 21st, 1902, the present bill was filed by the assignees of Myohl & Luken, and by the other rejected lien claimants, for the purpose already stated. It does not appear whether a sale of this property has been made under the former decree, but the only effect of such sale would be to transfer the present controversy to such surplus proceeds of sale as should remain, after payment of the lien claims provided for by the former decree. It is contended by the appellees that the precise point raised in this case as to the ownership of the property, was decided in the former case, and against the contention of the plaintiffs in this case; that all the parties in this case were parties to the former case, and that the question of ownership is therefore res adjudicata. The appellants, on the other hand, contend that the parties in this case are not the same as in the former case, because there, Shryock & Company, The German Bank of Baltimore, and N. W. James & Company were mere assignees of Myohl & Luken, who were themselves parties to the former suit, while here their assignees sue in their own name and right; that the question of ownership was not in issue in the former case, and that the only issue was lien vel non. As to the identity of the parties to these suits, it would seem to be sufficient to say, that so far as a decree operates as a finality, upon any point involved, it concludes not only the parties, but all those in privity with them, and the evidence shows not only that the claim of Myohl & Luken was assigned to Shryock & Company and the other parties named, before decree passed, but that it was entered to their use on December 27th, 1899, one month after the bill in that case was filed. Therefore if Myohl & Luken would be concluded by the decree in that case, their assignees must be equally concluded, and Kaufman & Company, and the Mantel and Tile Company were themselves parties to the former suit. Whether the precise question of ownership presented in *624 this case was expressly decided in the former case, or whether it must be held to have been decided by necessary implication, as essential to the rendition of the decree, must be determined from the requirements in this respect of the statute' relating to mechanics’ liens, and from the proceedings thereunder in the former case. Sec. 19 of Art. 63 of the Code, prescribing what shall be set forth in the claim which must be recorded in the Mechanics’ Lien Docket, requires the name of “the owner or the reputed owner of the building,” to be stated, the requirement being in the alternative, and the right, consequently, being the right to use either or both designations, as prudence may suggest. In Real Estate Co. v. Phillips, 90 Md. 515, the lien claim recorded described the B. & O. R. R. Co. as owner, and one Johns as contractor or builder, and it was sought to amend by charging that Johns and one Lechler were equitable owners. This amendment was allowed, the Court saying: “Can it be possible, the statute itself having given the lienor the right to use, either the name of the owner or the name of the reputed owner, that he should, especially in a Court of equity, and under the provisions of a statute remedial in its nature, be punished by a forfeiture of his claim, because, and only because, he has used the latter instead of the former ?” It is true that sec. 11 of Art. 63, which provides for notice to the owner or his agent of the intention to claim a lien, where the contract for work or materials shall have been made with any person except the owner of the lot or his agent, mentions only the owner or his agent, and does not in terms mention the reputed owner, but that section must be construed in connection with sec. 19, and so construing them, it cannot be that a recorded lien claim which used one of these terms could .be defeated, because in the notice to the owner, the other alternative term was used. The broad alternative right given by section 19 cannot be so limited, qualified or restricted by the language of sec. 11. In pursuance of this alternative right Kaufman & Company in their notice, and also in their recorded lien claim, desig *625 nated Hensel as owner or reputed owner. The notice of the National Mantel and Tile Company was filed with the examiner, but was lost or mislaid. The lien claim recorded however, designated Chas. G. Hill, J. Edmund Eckstine and Hensel, as owners or reputed owners. Both the notice and the recorded lien claim of Myohl & Luken designated Chas. G. Hill, John Eckstine, Henry C. Hensel, Wm. C. Robinson, Alice A. Harden, trustee, and the Balt. Mutual Aid Society, as owners or reputed owners. Both the notice and the recorded lien claim of the Walbrook Coal and Supply Company designated Hensel, John Eckstine, Hill, Robinson and the- Mutual Aid Society, as owners or reputed owners. So also in the notices and recorded lien claims of John J. Duffy, James H, Warthen, J. Frank Pearson & Co., and the Balt. Cooperage' Co., these being all the remaining lienors in the former case, whether plaintiffs or defendants. We have referred thus carefully to all these lienors, because it is thus shown that not one of them, either in their notice or in their recorded lien claim, named Hensel as absolute owner, and only Kaufman & Co. named him as sole reputed owner. All named either Hensel alone as owner or reputed owner, or Hensel and others as-owners or reputed owners. Hensel was the ostensible owner in virtue of his deed from Hill and Eckstine, as aptly expressed by Myohl & Luken in their answer to the bill in the former case, and it is said in 20 Amer. & Eng. Ency. of Law,. 2nd ed., p. 424, that a lien claimant is justified in naming as-owner, the person appearing from the public records to be such, and that if a statement in a lien claim, that one is owner, or reputed owner, is made in good faith, the lien will not be lost because it is subsequently ascertained that some other person is the owner. This is obviously just and proper. The lien is the creature of the statute, and creates no personal liability against anyone, but it cannot be obtained without recording a lien claim in which the name of the owner or i-eputed owner must be set forth, together with the location of the building, the number and size of the stories of the same, or such other matters of description as may be necessary to *626 identify.the same, the object being, as stated in Gault v. Wittman, 34 Md. 37, “to describe the property charged with the lien with sufficient certainty to enable parties by searching the public records to ascertain the existence of the lien.” But where one has done all in good faith required to advise the public of the existence of a lien against the physical property described, the lien will not be defeated because another than the person whom he had cause to believe was the owner, and whom he. named as owner or reputed owner, is subsequently determined to be the true owner. The only object of the notice to the owner where the contract for work or material is made with anyone except the owner or his agent, is to enable the owner to protect himself from loss in settlement with the builder .or.contractor. The policy and purpose of the law is to create a lien against the property without the consent of the owner-, but with notice either to the owner or reputed owner, and all proceedings for the enforcement of such liens are exclusively in rem. The subject-matter adjudicated is the lien upon- the- rein; -its status-is fixed as respects the existence of a definite lien upon a specific piece of property, in favor of a designated claimant, but the status of the res as to its ownership is-not always necessarily fixed. The lien, once finally adjudicated, will be valid against the world, although when decree or judgment is executed, it be found that another than the reputed or ostensible owner is the true owner, unless it could be shown in appropriate proceedings to restrain the execution of -the decree or judgment, that it was obtained through fraud of the lienor' practiced against the true owner. We are not dealing here with a case where all the-proceedings, from first to last, concur in naming one person as absolute and unqualified owner, and we are not required to determine whether in such a case, a defeated lienor could maintain a new bill to set aside a conveyance to such alleged owner, and to have the property declared to be the property of another, in order by that means to realize his claim from any surplus after payment of other liens established by the former decree. Here none of the lienors committed them *627 selves to any such absolute position, and cannot properly be regarded as occupying inconsistent positions in the two proceedings. They availed themselves of the permission given by the statute to allege either that Hensel was owner or reputed owner, or that he with others named, were owners or reputed owners. It was not necessary therefore for the Court to determine in the former case whether Hensel alone was the true, or the reputed owner, or whether he, in conjunction with others named, were the true, or the reputed owners, since in any event the claimants were entitled to liens on the property upon showing compliance with all the other requisites of the statute. The precise issue sought to be raised in the present case is whether Hensel or Eckstine is the real owner of the property. The precise issue raised in the former case, was whether the lien claimants were entitled to liens on that property, and they were so entitled, if the proceedings were in all respects regular, and the proof adequate, whether the property belonged either to Hensel or Eckstine. It was not essential to the determination of the issue in the former case, to determine which one of these alternatives represented the real state of ownership. Unless issue was taken in the former case upon the precise point controverted in the second case, or, unless the decision of that point, though not formally put in issue, was essential to the finding of the former judgment, it cannot be regarded as conclusive in the second case. Trayhern v. Colburn, 66 Md. 277. We have already referred to the only expressions in the opinion of the lower Court in the former case relating to the question of ownership, and it will be seen that the decree in that Court determined nothing whatever as to the ownership, as it should properly have done if a finding upon that point was essential to the fixing of a valid lien upon the property. The appeal in the former case was not from the opinion, but from the decree, of the Court; Woods v. Fuller, 61 Md. 460; Martin v. Evans, 85 Md. 8; and while the opinion of this Court on that appeal states that it seemed to be conceded by all par *628 ties- that Hensel and Eckstine were respectively owner and builder, the decree of this Court is silent upon that question. But the appellees further relied upon the established doctrine that the principle of res judicata extends not only to the questions of fact and law which were actually decided in the former suit, but also to the grounds of recovery and defense which might have been, but were not presented, and contended that the question whether Eckstine was the real owner of the property, as the plaintiffs in this case now allege, might ■have been' brought into the former case by them and submitted to the determination of the Court, and in that connection they relied upon the recent case of Nat. Marine Bank v. Heller, Hirsh & Co., reported in 94 Md. 213, in which we quoted with approval the language of Justice Miller in Corcoran v. C. & O. Canal Co., 94 U. S. 741, holding that “in chancery suits, adverse rights as between co-defendants may be determined, and that if the parties have had a hearing, and an opportunity of asserting.their rights, they are concluded by the decree so far as it affects rights presented to the Court and passed upon by its decree. ” That citation was directly applicable to the case then before the Court, it being a controversy between creditors participating in the distribution of a certain fund derived from the sale of the real estate of an insolvent corporation. Under a previous audit in the same ■case, another fund derived from the sale of personal property and insurance upon buildings on said real estate, which had been destroyed by fire, had been distributed, and out of that fund had been allowed certain taxes upon the real estate and buildings of the corporation. Heller, Hirsh & Co., filed exceptions to this previous audit on the ground that certain claims were improperly allowed, but there was no exception to the allowance of the taxes mentioned. When the second audit came up for consideration, Heller, Hirsh & Co., excepted to its ratification on the ground that the sum allowed jn the previous audit for taxes upon the real estate should have been deducted from the proceeds of the real estate (all of which was distributed among the lien creditors of the company) *629 and should have been distributed to its general creditors pro rata, in order to do justice between the lien creditors and the general creditors. But this Court held, on appeal from an order sustaining this contention, that the ratification of the previous account, and the application of the fund accordingly, operated as an adjudication not only in respect to the allowance of the taxes, but also in respect to the fund upon whicli they should be charged. To that case, the language of the Supreme Court in 94 U. S. supra, was directly in point, but we do not think it applicable here. (Decided November 20th, 1902.) If in the former case to enforce these mechanics’ liens any of the plaintiffs had embraced in the bill an attempt to set aside the conveyances to Hensel as fraudulent, and to have the property therein described, declared to be the property of Eckstine, the bill would have been demurrable as multifarious, and if the plaintiffs could not have required the determination of that question, it can scarcely be contended that any of the defendants could have required its determination, and if they could not have done so, they cannot now be concluded by that decree upon the question raised in this case. If we should extend the doctrine of res judicata as asked by the appellees, we should be straining the principles upotl which it rests beyond their natural and proper tension, with the result of preventing an inquiry into alleged fraud, which was not, and could not have been inquired into, in the formet case. Decree reversed with costs to appellants above and below and cause re- ' manded.