Pacific States Savings, Loan & Building Co. v. Dubois

SULLIYAN, J. — This action was commenced by A. J. Turley and others to foreclose certain mechanics’ and laborers’ liens against the property of the respondent Dubois. The appellant corporation, among a number of others, was made a party defendant. During the progress of the case the court made an order changing the parties in said action, — 323 — so that thereafter all further proceedings in said action were entitled “Pacific States Savings, Loan & Building Company, Appellant, v. Jesse K. Dubois,” and certain other parties, as defendants. The appellant company was the owner and holder of two mortgages upon the property involved in this ease — one for the sum of $20,000, which was filed for record in the proper recorder’s office on the twenty-third day of January, 1904; and the other for $10,000, which was filed for record in the proper recorder’s office on the eighteenth day of June, 1904, which mortgages were executed by said Dubois and his wife to the said appellant corporation to secure the payment of said sums. The court, after hearing the evidence, held as a matter of law that the liens of all laborers, materialmen or contractors relate hack to the time of the commencement of the building, irrespective of the question as to whether the work was done, the material furnished, or the contract entered into prior or subsequent to the time that the mortgages of the appellant corporation were filed for record. From the judgment of the court declaring that said liens were prior to the mortgage liens of the appellant, this appeal was taken. In this ease the contract to erect said building was not let to anyone, but the owner employed men to furnish and do the rockwork, employed others to furnish the brick, others to furnish other material, others to furnish and do the plumbing, etc., and others to do the carpenter work, etc. Several errors are assigned, some of which go to the sufficiency of certain of the liens filed, but the main question is whether or not the claim of liens of persons performing labor upon or furnishing materials for the construction of the building on the premises referred to in the complaint relates in each ease back to the time of the commencement of said building, or whether the lien attaches in favor of such parties from the date on which the labor was commenced to be performed, or the material was commenced to be furnished. It is conceded that if all of said liens relate back to the time of the commencement of the building, irrespective of the time when the labor was commenced to be performed or the — 324 — material was commenced to be furnished, then the judgment should be affirmed as to that question, and if not, said judgment should be reversed. That question involves a construction of the statutes of this state relating to mechanics’ liens, and particularly involves the construction of section 5 of the mechanic’s lien law, found at page 148 of the Session Laws of 1899, which section is as follows: “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, work done, or materials were commenced to be furnished; also to any lien, mortgage or other encumbrance of which the lienholder had no notice, and was unrecorded at the time the building, improvement or structure was commenced, work done, or materials were commenced to be furnished.” Counsel for respondents contend that under the provisions of said act the lien of laborers and materialmen in all cases, regardless of when they performed the labor or furnished the material, attached from the time of the commencement of the erection of the building, regardless of whether the structure was erected under an original contractor or by the owner of the premises; and it is conceded by counsel for appellant that if all of said liens relate back to the time of the commencement of the building, irrespective of the time when the labor was commenced to be performed or the material began to be furnished, the judgment should be affirmed on that question. It is conceded that the work done by some of the lien claimants, and the material furnished by some of the materialmen, was commenced to be done and furnished subsequent to the recording of the mortgages above referred to; and it is contended by appellant that under the provisions of said section 5 above quoted all such liens are subsequent to the mortgages. We will proceed and analyze the first half of section 5, and divide it into sentences, which sentences we think will clearly show the intent of the legislature in enacting it: 1. “The liens provided for in this chapter are preferred to any liens, mortgages or other encum — 325 — brances which may have attached subsequent to the time when the building, improvement or structure was commenced.” This would include all liens that are entitled to date from the commencement of the construction of a building, improvement, or structure of any kind. All of said liens are referred to any mortgage given subsequent to the commencement of such building, etc. 2. “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 work was commenced to be done. ’ ’ That provision prefers all liens for work or labor, which work or labor was begun prior to the filing of a mortgage, but begun after the commencement of the erection of the building, etc., by a person or persons not theretofore connected with the construction of the building, and entitled to a separate and distinct lien from thoso who commenced the building. 3. “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 materials were commenced to be furnished.” That provision prefers all liens for material, which material was commenced to be furnished prior to the recording of a mortgage, and which was commenced to be furnished some time after the commencement of the building, etc. Separating said section into distinct sentences as above, it seems clear to me that, when mortgages and other liens are involved in the foreclosure of mechanics’ and materialmen’s liens, the time or date when the building was commenced, or the laborer begun to work, or the materialman commenced to furnish the material, must be taken into consideration in determining the priority of such liens over such mortgage lien. All liens for labor commenced and materials commenced to be furnished prior to recording said mortgages are prior and r.uperior liens to said mortgages, and the liens of all laborers for labor commenced, and materialmen for material commenced to be furnished, subsequent to the recording of said mortgages, are subordinate to said mortgages, when such work is done and material furnished by persons not theretofore’connected with the construction of the build — 326 — ing. If that were not intended, why did not the legislature simply say that all liens for labor and material furnished in the erection or construction or repair or change of a building took effect from the commencement of the construction of such building or of such repair or change?. It is clear to me that the legislature intended to make all liens for work commenced and material commenced to be furnished after the recording of a mortgage subsequent and inferior thereto, especially when such work is done and materials furnished by persons who had no connection with the erection of the building until after the recording of the mortgages. The mechanic’s and laborer’s lien law containing said section 5 was enacted in 1893, and approved February 27th of that year. (Laws 1893, p. 51.) We first find said section in the Session Laws of 1881 (Code Civ. Proc., sec. 819). That, section was evidently copied from the laws of the state of California, as section 1186 of the Code of Civil Procedure of that state is identically the same. We first find it in the laws of California in 1872. The state of Washington borrowed that section from California the same as Idaho. Each section has a caption or index preceding it as enacted in our law of 1893, and those are identically the same as we find in the lien laws of Washington. This would indicate that said captions and sections were taken, many of them, literally, from the Washington law. We find a few slight changes in some of the sections, and a new section or two added not contained in the Washington law. For the Washington mechanic’s lien law, see Hill’s Annotated Statutes and Codes of 1891, section 1663 et seq. Section 1194 of the California law provides that in every case where different liens are asserted against the same property the court, in its judgment, must declare the rank of each lien, which shall be in the followirg order: 1. A.11 persons performing manual labor in, on, or about the same; 2. Persons furnishing materials; 3. Subcontractors; 4. Original contractors. Section 11 (page 149) of the Idaho act provides substantially the same as section 1194 of the California law, and section 1673 of the Washington law is to the same effect, except that it places laborers and materialmen on — 327 — the same footing. The provisions of those sections apply when there are no mortgage liens intervening between the mechanics’ and laborers’ liens, and were not intended to interfere with mortgage liens that had attached prior to the lien claimant commencing to perform the labor or the materialmen commencing to furnish the material. We turn to California to ascertain if the supreme court of that state has construed the provisions of said section 1186 of the California statutes. In Preston v. Sonora Lodge, 39 Cal. 116, the court say: ‘ ‘ These provisions of the law having thus fixed the rights of the statutory lienholders inter sese, the act further provides in substance that such liens shall be preferred to that of any mortgage subsequently attaching upon the premises, or subsequently recorded. It contains, however, no provision authorizing, under any circumstances, the displacement or disturbance of a mortgage lien once attached, nor its postponement to any lien arising at a subsequent time; nor does it contemplate that the mortgagor and materialmen, or laborer, may, as the result of a contract made between themselves, without consulting the mortgagee, improve the latter out of such absolute prior lien upon the premises as he may have theretofore lawfully obtained.....As it is conceded that the respondents Scott, Zelian, Ford and Fitzgerald only commenced work on the premises long after (Scott, the earliest of them, fully one month after) the mortgage was recorded, the court below erred in preferring their liens to that of the mortgage.” This ¡decision was rendered in 1870, and said section 1186 was amended in phraseology in 1872; but its effect is the same on the point under consideration as the law of 1868, under which said decision was rendered. In Crowell v. Gilmore, 18 Cal. 370, it was held, under the mechanics’ lien law of 1856, that the mechanic making the first contract or first commencing work on a building had no priority over others commencing work subsequently, and that said law placed all lien claimants on an equality. In that case it was held that the rule of equity there stated would not apply, if some of the mechanics began work before a mortgage was executed by the owner of the property thereon, and — 328 — some afterward; that in. such ease the first lienholders would have priority over the mortgagee, while the latter would not. As touching upon the question under consideration, see Root v. Bryant, 57 Cal. 48. The court held in that case that the lien of the mortgagee was superior to the lien claimed by plaintiffs, unless the plaintiffs, at the time they performed the labor or commenced to furnish the materials, had no notice of the existence of the then unrecoMed mortgage, and cites said section 1186 of the Code ctf Civil Procedure. It is held by the California courts that liens for furnishing materials or work and labor relate to the time of beginning to furnish the material or commencing the work. In Pacific Mutual L. Ins. Co. v. Fisher, 106 Cal. 224, 39 Pac. 758, it is held that the lien for furnishing materials relates to the date of beginning to furnish them, and includes all the materials thereafter furnished for the building, and that such lien has priority over a mortgage after the date of the commencement to furnish the material, and it is there stated that “for the purpose of constructing the building the owner may enter into different original contracts for the different departments of work involved therein (as was done in the case at bar). If he should enter into a contract with one person for the construction of the building in all its parts, except the painting, and he afterward entered into a contract with another person to do the painting of the building, each of these individuals would be an original contractor, within the meaning of the statute; and it would be immaterial whether the latter contract was entered into prior to the completion of the former one. If the owner did not enter into the latter contract until after the completion of the former contract, it could not be claimed that a lien to be filed therefor would in any respect depend upon the completion of the building. ’ ’ When a building is constructed by several persons under different contracts, as when A digs the cellar and does the stonework thereof, and puts in the foundation, and B then does the carpenter work and furnishes the wood material, and C furnishes and does the plumbing, and D furnishes the paint and does the painting, all of which work is done under the supervision of the owner, — 329 — and under distinct and separate contracts, D’s lien would not relate back to tbe commencement of the cellar and stonework by A, provided that prior to D commencing the work done by him th owner had placed a mortgage on such premises, and D had notice thereof. Now, if A had the contract to complete said building, and employed men to do so, his lien therefor would date from the commencement of the building, and would have been prior to any mortgage executed subsequent to the commencement of the building. In a case like the one at bar it is apparent that the lien is not prior to those mortgages which were recorded prior to the commencement of the work for which the lien is filed. If the contention of counsel for respondent was sustained, we would have this condition of things. Supposing Dubois had let the contract for digging and walling the cellar and completing the foundation for the building, and, when that was done, he was not able to pay the contractor for doing that part of the work, and the contractor thereupon proposed to the owner that he give him a mortgage on the premises for the contract price of the work done, as he would prefer that to a mechanic’s lien, and Dubois thereupon executed a mortgage to the contractor for the amount due him, and we will say that on the next day after the execution and recording of such mortgage the owner purchased material and employed workmen to complete the building, and they proceed immediately to do so, and thereafter said lien elaiman'. i file their liens for labor and material; under that state of facts, to hold that such liens would be prior to the mortgage of the contractor who commenced the building and took a mortgage thereon for the amount due him for the materials furnished and the labor done thereon would not be just to the mortgagee. In the case before us it is more than probable that the greater portion of the money realized on said two mortgages was paid for labor and material done and used in the construction of said building, and, if that be true, the mortgagees ought certainly to stand in the shoes of those who did such work and furnished such material, as all subsequent lien claimants had notice of the mortgages before they commenced — 330 — work or commenced to furnish materials. In the case at bar the owner let various contracts for the construction of the building under consideration, but the greater portion of the building, so far as constructed, was done by days’ works, except the plumbing, and perhaps a few other parts of the work. Each of the parties, except those who were paid, who furnished materials or performed work, filed a claim of lien on his own behalf, and we think it clear that, if no mortgage had intervened, each of said parties, under the law, are placed on an equal footing. But, as two mortgages intervened, they must be considered as prior liens to such subsequent laborers’ and materialmen’s liens. In the case of Home Saving etc. Assn. v. Burton, 20 Wash. 688, 56 Pac. 940, the supreme court of the state of Washington, in a case very much like the one at bar, construed the provisions of section 1666 of Hill’s Annotated Statutes and Codes of Washington, 1891, which section is the same as section 5 of the act under consideration, and said: ‘ ‘ The language of this section is so clear and unequivocal that there is no necessity of resorting to any rule of construction to determine its meaning. When the legislature said that the liens for which provision is made were preferred to any lien, mortgage, or other encumbrance of which the lienholder had no notice, and was unrecorded, they also, in effect, said that such liens are not preferred to mortgages of which the lienholder had notice, or were recorded at the time the lien arose. ’ ’ It will be thus seen that the two states that have statutes identical with our section 5 have construed said section, and we are inclined to follow the construction placed upon it by the courts of those states.. But it is suggested that, in ease of a mortgage lien intervening between prior and subsequent mechanics’ liens; injustice will in some way be done to the holder of the subsequent liens. It is sufficient to say that such lienholders have no rights other than such as the statute gives, and, if the liens as given are rendered less valuable because if the mortgage intervening, they cannot complain because they took their liens subject to such contingencies, and subject to those provisions of said law. As to the time when materialmen’s liens attach, see Mechanics’ — 331 — Mill Lumber Co. v. Denny Hotel Co., 6 Wash. 122, 32 Pac. 1073. Counsel xor respondents have cited eases from Montana, Minnesota, Texas and Iowa in support of their contention. Those decisions are not in point, for the reason that the lien laws of those states are not the same as our own. It is contended by counsel for appellant that the court erred in finding that the defendants Kromer and Ferguson, or the Boise Light Company, are entitled to a lien against the premises in controversy, for the reason that their claims of lien fail to show by direct and unequivocal averment any name of the person by whom each of said claimants was employed, or to whom they each furnished materials. We have examined said claims of lien, and find that they each substantially comply with the requirements of the law and are sufficient. We therefore conclude that the judgment of the court below must be reversed, and tne cause remanded, with instructions to ■ enter judgment in accordance with the views expressed herein. Costs of this appeal are awarded to the appellant. Stockslager, C. J"., concurs.