Germania Building & Loan Ass'n v. Wagner

Morrison, C. J.: Plaintiff brought this suit to foreclose two mortgages on certain premises in the city of Sacramento, and made defendants parties, under'a general allegation in the complaint that they have or claim to have some interest in the property, as the holders of mechanics’ liens or otherwise, which interest or claim is subsequent and subordinate to the lien of the plaintiff. It appears from the bill of exceptions that the mortgage first described in the complaint was made on the first day of April, 1881, and the second mortgage was executed on the nineteenth day of May, 1881. The allegation in the answer and cross-complaint of the defendant, the Sacramento Lumber Company, is, that the Company commenced to furnish materials to be used, and which were used, in the erection of a building on the premises in question on the.eighteenth day of February, 1881, and continued to furnish such materials down to the twentieth day of June, 1881, and this allegation is found by the Court to be true. The allegation in the answer of the defendant Martin is, that he commenced to furnish materials for the building above referred to on the seventh day of March, 1881, and this allegation is found by the Court to be true. These two liens were held to be prior and paramount to the liens created by the mortgages to the plaintiff; and the correctness of the judgment of the Court below is attacked on this appeal. [353] When the defendant, the Sacramento Lumber Company, offered in evidence its notice of claim of lien, the following objections were made thereto: “ 1. Because there is no law in the State of California to provide for the enforcement of mechanics’ liens that have accrued since the adoption of the present Constitution of this State; and because it is irrelevant and immaterial. “2. Because it was not filed for record in the County Recorder’s office within thirty days after the completion of the contract between the said defendant, Sacramento Lumber Company, and the defendants, John and Helena Wagner; and that it does not set forth the contract between the Sacramento Lumber Company and defendants, John and Helena Wagner, as averred in the Sacramento Lumber Company’s cross-complaint. It does not state by whom the contract for the alleged indebtedness was made, and does not state the character of the materials, or the quantity furnished, or to whom furnished.” The Court overruled the objections, and the plaintiff then and there excepted; and the same objection was interposed to the introduction in evidence of the notice or claim of the lien of the defendant Martin. In answer to the first objection, it is sufficient for us to say that it was not the intention of the new Constitution to repeal or abrogate the then existing law, giving liens to mechanics and others upon real property, found in Sections 1183 to 1199 of the Code of Civil Procedure; and such law was preserved in full force and effect by Section 1, Article xxii. of the Constitution. It is true that Section 15, Article xx. of that instrument provides that “ mechanics, material-men, artisans, and laborers of every class shall have a lien upon the property upon which they have bestowed labor or furnished materials, for the value of such labor done and materials furnished; and the Legislature shall provide by law for the speedy and efficient enforcement of such liens. It is argued on behalf of appellant “ that since the adoption of the Constitution, the Legislature has made no provision for the enforcement of such liens, and that there is no law now in force for that purpose.” If the premises were true, the conclusion would by no [354] means follow, because it was clearly the intent of the Constitution that mechanics and material-men should be secured - by lien upon the property; and in the absence of any legislation under the new Constitution, the laws then in force were kept in force by virtue of Section 1, Article xxii., until altered by the Legislature; The then existing law on the subject was not only not inconsistent with anything contained in the Constitution, but was in full harmony with it. But the legislature in fact did, at the first session after the new Constitution went into effect, pass an Act amendatory of Section 1183 of the Code of Civil Procedure, which was intended to enlarge and extend the operation of the former Act. (Hit-tell’s Suppt. to Codes.) We think that this point is not well taken. The second objection to the liens is answered by an examination of the notices or claims of lien introduced in evidence. They were filed in time; they sufficiently set forth the contracts upon which they were founded and the parties between whom they were made, as well as the character and quantity of the materials furnished. The objections were therefore properly overruled by the Court below. The objection that the cross-complaints were not served on John Wagner and Helena Wagner, ahd that therefore the Court had no jurisdiction of their persons, is not well taken by the appellant. No appeal is taken by them or either of them, and we do not see how the appellant has been injured by the omission complained of, or what right he has to urge the objection on this appeal. Again, there was no necessity for a cross-complaint in the case. It was charged in the complaint that the defendants had, or claimed to have, some interest in the mortgaged property; and it was sufficient for the defendants to set up that interest by way of answer. From the findings and bill of exceptions it appears that the defendants whose liens were found to be prior and paramount to the liens created by the mortgages, commenced to furnish materials • for the erection of a building upon the mortgaged premises before either of the mortgages was executed; and it is provided by Section 1186, Code of Civil Procedure, that “ the liens provided for in this chapter are paramount to any lien, mortgage, or other incumbrance which [355] may have attached subsequent to the time when the building, improvement, or structure was commenced.” The defendants’ liens were properly preferred to, and given priority over, the plaintiff’s mortgages. There is one other point in the case which we will now proceed to consider. The point is thus stated in appellant’s brief: “ The defendant, Sacramento Lumber Company, on July 19, 1881, commenced its aótion in the Superior Court of Sacramento County against the defendants John and Helena Wagner, for the same cause of action and indebtedness set forth in the cross-complaint filed in this action, and on October 24,1881, recovered judgment in said Superior Court in its said action against the said defendants John and Helena Wagner, for the amount of said indebtedness set out in its said cross-complaint herein, on the merits.” Did the defendant, the Sacramento Lumber Company,waive or lose its lien by commencing and prosecuting to judgment an action against John and Helena Wagner for the indebtedness, to secure which the lien was filed ? We are of the opinion that the question should be answered in the negative. In the case of Crean v. McFee, 2 Miles (Pa.) 214, it was held that “ the taking of a bond with warrant of attorney to confess judgment, and judgment confessed therein, does not extinguish the lien of the mechanic or material-man under the Mechanics’ Lien Act. The lien under the Act is but a collateral security for the debt; the claimant has also a convenient remedy by personal action.” To the same effect in the Thompson Case, 2 Brown’s (Pa.) Rep. 297. We also find the same doctrine laid down in the very recent work of Knecland on Mechanics’ Liens, Section 151. The author says: “ There are two controlling reasons why a mechanic’s lien will not be destroyed by the entry of a judgment. First, because there is merger of the claim and not of the security. The first we have already considered; the second is fully set forth by the Supreme Court of Pennsylvania, in the .case of John Thompson, substantially as follows: Whenever the law works an extinguishment, the creditor has gained a higher security; the thing substituted is more beneficial to the creditor than the thing contracted for. How, the debts of the [356] mechanic or material-man were originally simple contract debts, but for their security the Act has created a lien on the building; so that the security which the creditors have in relation to the safety of the debts ranks with that of a judgment or mortgage. Therefore the acceptance of a bond and warrant of attorney, and the entering of a judgment on the bond, is not a waiver or extinguishment of a mechanic’s lien.” The rule seems to us not only reasonable and just, but in accordance with the analogies of the law in cases of mortgages, pledges, etc., and we have been referred to no authority to the contrary. Judgment and order affirmed. Sharpstein and Thornton, JJ., concurred.