Everest v. Gault Lumber Co.

Opinion by RUMMONS, C. (after stating the facts as above). Counsel for defendant Everest makes several assignments of error in his brief, but they all seem to be embraced in his contention that the court erred in decreeing priority to the mechanics’ lien claimants over the mortgages of the defendant Everest. It is contended by the defendant Everest that at the time of the commencement of the work, out of which the mechanics’ lien claims arose, he held a vendor’s lien upon the real estate in controversy to the amount of $2,000, the unpaid purchase price thereof, and the amount of money advanced by him under his contract with Mr. Pettit, and that, the mechanics’ lien claimants being charged with notice of the fact that the legal title to this land was in the Limvood Place Development Company, and not in Mr. Pettit with whom they contracted, they were also chargeable with constructive notice of his rights and interests in the premises, which they could have ascertained by inquiry. He therefore contends that the mechanics’ lien claimants furnished the material and performed the labor in the erection of said building with imputed notice of his prior claims thereon. He further contends that, as Mr. Pettit had, at best, only an equitable estate in the land, the mechanics’ liens could only attach to such interest as he had therein, and would therefore be inferior and subsequent to the lien of his mortgagees. On the other hand, it is contended by counsel for mechanics’ lien claimants that they can only be charged with constructive notice of the rights of the Linwood Place Development Company, and that they had no actual notice of any facts which would put them on inquiry as to the rights of the defendant Everest. They further contend that, because the contract between Mr. Everest and Mr. Pettit obligated Mr. Pettit to construct a dwelling house as therein specified as a part of the consideration for the conveyance to him of the land in controversy, any claim of Mr. Everest for unpaid purchase money and advances is thereby postponed until the mechanics’ lien claims are satisfied. Both sides of this controversy have assisted the court with very able briefs, bristling with authorities, in- support of their respective contentions. No case, however, has been cited by counsel for the respective parties in which the same state of facts existed as exists in the instant case. In this case, at the time the written contract between Mr. Everest and Mr. Pettit was entered into, Mr. Everest had no estate whatever in the real estate in controversy. The parol agreement among the stockholders gave him no legal or equitable interest in the lot to be selected by him; so that at the time the contract between him and Mr. Pettit was made he had no estate to transfer to Mr. Pettit, and Mr. Pettit received no estate by such contract to which a vendor’s lien could attach. It is true that, if Mr. Everest had taken possession of this lot and erected thereon a building in accordance with his parol agreement with the directors of the Development Company, he would have acquired an equitable estate in said lot, and would have been entitled to demand the conveyance of the legal title by the Development Company. In our view of the case the contract between Mr. Pettit and Mr. Everest simply in effect delegated to Mr. Pettit the obligation, which Mr. Everest had orally undertaken, to erect a dwelling house upon said lot, and in order for either Mr. Everest*or Mr. Pettit to acquire an equitable estate in said lot' it was necessary that the building be erected. So that it is apparent that neither Mr. Pet-tit nor Mr. Everest had any enforceable interest in said real estate prior to the delivery of the deed thereto on March 6, 1911. At that time the work upon the building had been in progress nearly two months, and most, if not all. of the mechanics’ liens claimed herein had attached. So that when Everest, on the date of the execution of the mortgages to him, acquired an interest in said real estate, he took it subject to the *174 liens then attached; for Mr. Pettit being in possession, without objection on the part of the holder of legal title, and afterwards receiving conveyance of the legal title, the rights of the lien claimants became vested as soon as his possession was merged into the legal title. The conveyance was a recognition that Mr. Pettit had an equitable title under which the improvements were being made, and related back to the commencement of the work, so as to give Mr. Pettit an interest and estate in the land to which the mechanics’ liens attached from the time of the commencement of the work. Chicago Lumber Co. v. Fretz, 51 Kan. 134, 32 Pac. 908. In the view we take of the peculiar facts of this case, we do not deem it necessary to consider the question, ably argued in the briefs of the parties to this controversy, whether or not the contract which obligated Mr.- Pettit as a part of the consideration of the conveyance of the lot to him to erect a dwelling house thereon postponed the lien of the vendor to the mechanics’ liens for labor and material used in the erection of such dwelling. As we have said above, we do not consider that Mr. Everest ever had a vendor’s lien upon this real estate; so that the cases cited involving that question are not pertinent to the issue here. In the case of Botsford v. New Haven. Middletown & 'Willimantie I-t. Co., 41 Conn. 454, the Supreme Court of Connecticut had under consideration a case very similar to the one at bar. There one Blakeslee had agreed with the Railroad Company to give a tract of land to the company if they would locate a depot upon it. The company agreed to the terms, erected the depot, and employed Botsford to build the chimneys and plaster the building. He did the work, and filed his lien. The lien was given priority over prior mortgages executed by the Railroad Company, upon the theory that the work thus done was necessary to perfect the equitable title of the company to the land, being in fact a part „of the purchase price. Until it was done the company had no claim to have the legal title conveyed to them, and so, when it came, that title could only come charged with the lien. The legal title, at the time the lien was sought to be foreclosed, still remained in Blakeslee; but he made no resistance to the foreclosure of the lien. In the instant ease the Development Company has no interest in the controversy. They gave the lot free of charge for the purpose of having a building erected thereon. Mr. Everest could only put himself in a position to be able to carry out his contract with Mr. Pettit by having the building erected on said lot. Until this was done he had no shadow of a claim to demand a conveyance from the Development Company. We therefore conclude that he authorized Mr. Pettit to act for him in erecting this building and thus constituted Mr.. Pettit his agent. Kberle v. Drennan, 40 Okla. 59, 186 Pac. 162, 51 L. R. A. (N. S.) 68. Having reached this conclusion, it makes no difference whether or not the various lien claims attached before or after the execution of the mortgages 'under which Mr. Everest claims. It was necessary, in order that he might reap the benefit of his arrangement with the Development Company, secure a conveyance, and collect the purchase price of the lot, that a building be not only commenced, but that it be completed; and having contracted to transfer his obligation to build to the shoulders of Mr. Pettit, he took his mortgages for the price of the lot and the money lent subject to the liens which might attach to the building in the course of construction. The judgment of the trial court should therefore be affirmed. By the Court: It is so ordered.