Fuquay v. Stickney

By the Court, Crockett, J.: This is an action to enforce the liens of mechanics and material men, under the Act of March 30th, 1868 (Stats. 1867-8, p. 589), for labor performed and materials furnished in the construction of a building by the defendant Stickney. Whilst the building was in the process of construction, Stickney borrowed from the Fireman’s Fund Insurance Company the sum of three thousand five hundred dollars, and, to secure the repayment thereof, executed a deed of [586] trust upon the lot of land on which the building was then being erected, and which deed, of course, included the unfinished building. At the time when the deed was made and recorded there was nothing due to the mechanics and material men,'and the labor and materials for which this action is brought was all performed and furnished after that time. It is not pretended that the, insurance company, when it loaned the money to Stickney, was ignorant of the fact that the building was then in the progress of erection. On the contrary, the proof tends strongly to show that the loan was made for the purpose of enabling him to complete the building. On these facts the only question raised on the appeal is, whether the mechanics and material men have a lien either upon the land and building, or upon the building alone; and if so, whether such lien is superior to that of the insurance company. In construing this statute, we held, in Preston v. Sonora Lodge, 39 Cal. 117, that “ it contains 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 material man 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.” But the fourth section of the statute provides, that if the building be erected with -the knowledge of the owner of the lands or of any person having or claiming an interest therein, it shall be held to have been erected at the instance of such owner or person claiming an interest, and such interest so held or claimed shall be subject to the lien of the material man or laborer, unless the owner or claimant, within three days after he shall have obtained knowledge of the construction, alteration, or repair, or the intended alteration or repair of the building or superstructure, give notice that he [587] will not be responsible for the same; and the statute prescribes the method in which the notice shall be given. In this case the proof shows that the insurance company had knowledge of the intention of Stickney to complete the building after the execution of the deed of trust, and permitted the work to proceed without giving the notice préseribed by the statute. The case is fully within the class of cases provided for in the fourth section; and I think the power of the Legislature to enact this provision is not only free from doubt but the justice and wisdom of the measure are obvious. If the owner of land, or any one claiming an interest in it, knowingly permits buildings and improvements to be erected on it without giving notice that it is done without his consent, it is eminently just that he shall be held to have acquiesced in it. It is unnecessary in this case to decide whether a mortgagee or judgment creditor having a lien has such an interest in the land as to bring him within the rule here laid down; but my impressions are strongly to the contrary, and the question was practically decided in Preston v. Sonora Lodge. The instrument, however, taken by the insurance company from Stickney is not a mortgage, but a deed conveying the fee, defeasible on the payment of the debt. It conveys the legal title, which is to be reconveyed if the debt is paid at maturity. It is something more than a mortgage lien, and clearly conveys an interest in the land; and such being its character, it brings the case fully within the letter and spirit of the fourth section of the statute. Judgment affirmed. Mr. Justice Temple did not participate in the foregoing decision.