Montandon & Co. v. Deas

CHILTON, J. The bill in this case is filed by James S. Deas, to enforce a lien as a builder, under the statute of 1834, (Digest, 375,) which provides “that master builders and mechanics, of every denomination, contracting in writing to put up and erect buildings, of every description, shall have a lien in the nature of a mortgage upon the tract, parcel or lot of land, upon which such building or buildings shall be put up and erected, as well as upon such building or buildings, until the price or compensation for services and for materials found, shall be fully paid and satisfied, unless a contrary stipulation be made and agreed upon at the time it is entered into: Provided always, that such lien shall not have a priority over bona Jide or legal incumbrances, existing anterior to the time of the contract being made, if said mortgages and incumbrances shall be duly recorded according to law. By the second section, the contract is required to be recorded in the clerk’s office of the county court óf the county where the building is to be erected, within thirty days after the building is erected, or the lien is declared to be inoperative.” By the third section it is provided that “ when any judgment or decree shall be rendered in favor of any master builder or mechanic upon such contract, execution may be levied upon such tract, parcel or lot of land on which the building has been put up, as well as upon the buildings and improvements thereon erected and made, and all the right, title and interest the defendant had in and to the said lot, — 42 — tract or parcel of ground, at the time the said contract was entered into, as well as the buildings and improvements erected and made thereon, may be sold to satisfy such judgment or decree, provided such builder or mechanic may levy also on other property,” &c. 1. On the part of the appellants, it is insisted that chancery has no jurisdiction to enforce the lien given by the statute, but that the mode prescribed by the statute must be puiv sued, which is to enforce the lien by the levy of an execution. The statute says the mechanic “ shall have a lien in the nature of a mortgage,” and speaks of suits upon such contracts resulting in judgments or decrees. Now as executions may issue upon decrees in chancery as well as judgments at law, (Digest, 348, § 29,) it seems to me there is nothing in the wording of the act which confines the remedy to a court of law, but rather the reverse, as being in the nature of a mortgage, which courts of chancery foreclose, it w'ould seem wanting in this nature, if the appropriate remedy should be denied. It is not necessary that such jurisdiction should be specifically conferred by the statute, as the argument supposes, but it is sufficient if the statute create the equitable right, and that it comes within the ordinary and appropriate jurisdiction of the equity court, and that the exercise of such jurisdiction is not prohibited by the act. Cases are numerous where similar jurisdiction has been exercised. See Gillespie v. Bradford, 7 Yerg. Rep. 168. In Black v. Breenan, 5 Dana’s Rep. 311, it is held that chancery has jurisdiction to enforce liens and pledges of personal property generally, and may order the sale of a horse belonging to an innkeeper’s guest to pay charges. So, in Gambling v. Read, 1 Meigs’s Rep. 281, it was held that one who had sbld a slave at a fixed price, to be paid on a certain day, but who retained the title as security for the payment, could go into equity to enforce his lien, against one to whom such slave had been assigned in trust by the vendee. 2 Story’s Eq. 461-2. 2, We do not think the design of the legislature was to restrict the lien to cases where the party for whom the building was erected owned the legal title to the land, but the — 43 — proper construction of the act would embrace any interest which the party could pass by mortgage. The cases referred to, do not sustain the view taken by the, counsel for appellants. The case of Thaxter v. Williams, 14 Pick. Rep. 49, was an adjudication upon a statute very different from ours. In Massachusetts, the act provides for a lien in cases where the person contracting for the erection of buildings is the (owner) propriefor of the land, and the court in the case last referred to, say very properly, that the lien cannot be extended to cases where the party is “ a mere tenant or intruder.” The statute of this State provides for a sale in satisfaction of the lien of “ all the right, title and interest,” which the contracting party had at the time of the contract, and in our opinion clearly embraces leasehold as well as greater estates. 3. It is further insisted, that the recorded contract in this case cannot give a lien, because the land is not specified in it. It is true, the land is not specified in the contract, but it does provide that the lease from M. D. Eslava to Chantron is pledged for the payment for the work, so that the contract by reference to the lease, may be rendered sufficiently certain. But without thisj does it follow that the land must be described in the building contract in order to create a lien? This act should receive a liberal construction, as it is but an extension of the doctrine of lien, so much favored by the courts, as consonant with every principle of equity and justice as applied to personal property. Cross on Law of Lien, 24. The intention of the act was, to give to the mechanic who had expended his labor and furnished materials in improving the ground of another, a prior right of satisfaction by a lien upon the building, and the interest of the party contracting for its erection, in the land so improved. This right is not dependent upon any peculiar provision in the contract for its existence, but is created and attaches by virtue of the statute, when the contract for building has been duly recorded. If the contract must provide for the lien, the statute would be nugatory, as this could have been done without such law — “ conventio vine,it legem.” But under the statute, — 44 — an express stipulation is required in order to prevent the lien from attaching. The act of 1821, which this act repeals, limited the lien to the building which was erected, or worked upon, for the services of the workmen. This act, passed in 1834, extended the lien to the lot or tract upon which the building was erected, thus remedying the defect in the former law. Aik. Dig. 308. The terms of the contract for the erection of the building must be reduced to writing and recorded. The building of the house is an act open and notorious,y and the lien is perfected upon the completion of the work, and recording of the contract. These, in the absence of a particular description of the land in the contract, are sufficient to put a prudent man upon inquiry into the existence of the lien, and to charge him without notice, more especially if, subsequent to the registration of the contract and the completion of the building, he take an assignment. It is obvious that the statute designed the erection of the building to operate as notice, from the fact that the contract is not required to be recorded until within thirty days after the erection of the same. So that the argument deduced from inconvenience of want of notice, and surprise, is not well founded. But it is asked, if a party owns a section of land, and contracts for a building on one corner of it, or fails to specify where the building shall be placed, and it is erected on one corner of the section, will the lien cover the whole, or how much of it ? I answer the whole tract, if necessary to pay the debt, and that such is the just construction of the act. If the laborer is worthy of his hire, there is certainly nothing inequitable in saying the owner shall not avail himself of the value of the fixtures without compensation to the party who erected them, and this only, such lien secures. Besides, the lien can be discharged by giving good security to the builder for .the price. Dig. 376, <§> 4. 4. We do not consider the objection available to the appellants, that no lien could be created by the contract between the defendant in error and Chantron, because the latter had no written evidence of a lease from Eslava at the date of said contract. The record shows there was an agreement to lease, and which agreement was partly executed by — 45 — Chautron in taking possession of the lot, and in making the quarter part of the improvements for which compensation is sought by the bill, before its terms were reduced to writing. If it had never been reduced to writing, it is obvious a court of chancery would have decreed a specific performance, in virtue of the part performance which relieved the contract from the operation of the statute of frauds. In that event, the lien would attach because the contract would be regarded as obligatory from its date. That it was subsequently reduced to writing, cannot place the party in a worse condition. So far as respects the lien of Deas, it relates back, and takes effect from the time the parol agreement was made. The writing but furnishes evidence of a contract previously made and partly executed, but definitively settled by its terms, and notwithstanding the parties to the lease date its commencement from the first of November, 1844, after^the contract for building was made, still, the court considering that as done which ought to have been done, will give effect to it co-eval with the parol agreement, and consider Chan-tron as haviug a leasehold estate at the time he contracted for the building. 5. It was entirely competent for Cbantron to waive a strict compliance with the terms of the contract on the part of Deas, as to the time when the building should be completed. This delay however resulted from a change in some part of the building from the original plan, at the instance of Chantron, and could not work a forfeiture of the lien. The settlement made between the parties clearly shows, they regarded the original contract, which was the basis of that settlement, as binding. The amount is charged by Deas for the building, as provided for by the terms of that agreement, and the appropriate credits are allowed. It appears that the difference between the work as originally contracted to be performed, and as it was completed, amounted to j$72; which sum, in the settlement was placed to the credit of Chantron. That Deas was allowed the whole of the month of January, 1845, within which to complete the building, and that slight alterations were made in the manner of its erection, by consent of the parties, do not show an abrogation of the contract, nor in our opinion affect the lien. — 46 — 6. Neither will the renewal of the notes, or the extension of the time of payment have the effect to avoid the lien, unless such was the intention of the parties. True it is laid down generally, “ that a special contract for a particular mode of payment operates as a waiver and abandonment of the right of lien ; and though work be commenced under an implied contract, and afterwards a special contract be made, for payment, the one contract destroys the other.” Cross on Lien, 260. But this must be understood as applicable to those particular liens which the law gives in certain cases to brokers, factors, and the like, for charges, expenses, &c., in respect of personal goods, and does not extend to cases like the present, which are expressly declared by the statute to be liens in the nature of mortgages. The giving of the notes •jn this case, extinguishes aright of action upon the account, •which is receipted in the usual form, but certainly they do not amount to a satisfaction of the demand, of which they .are merely the evidence. And as the renewal of a note secured by mortgage, is no discharge of the mortgage, which •nothing but the payment of the debt discharges, so we think in this case, the renewal of the notes, and the receipt of the account by notes, as well as the receipt by Deas, as collateral security, in accordance with the original contract, of the notes on Hutchings, do not discharge the security which the law has afforded the defendant in error for the payment of the sum due for building. See Pomroy v. Rice, 16 Pick. R. 22; Davis v. Maynard, 9 Mass. R. 242; Dunham v. Dey, 15 John. R. 555. This view does not conflict with the principle decided in Bailey v. Adams, 14 Wend. Rep. 201, that the lieu of a mechanic is discharged by an agreement to look to the personal credit of his debtor, or another, for the satisfaction of his demand. There is no evidence in this case, that Deas ever intended to abandon his lien, and look alone to the personal credit of Chantron. 7. It results from what we have said, that the lien of the defendant in error is paramount to that of Montandon & Co., who took an assignment of the lease to their use, on the 15th. February, 1845, subsequently to the completion of the building, and the recording of the contract between Deas and Chantron, They-must, as we have seen, be chargeable with — 47 — notice of the prior lien, and the trustee in their behalf, to whom Chantrou assigned, takes the lease cum onere. 8. There is no evidence that the notes on Hutchings were ever realized, or that any portion of them ever was, or ever can be collected. But on the other hand the proof shows the notes not collectable. There is no negligence on the part of Deas, such as appeared in the case cited by appellant’s counsel, (10 Ala. Rep. 535,) which could charge him on account of them, and if any sum has been realized upon them, the same, upon accounting before the master, will be regarded in ascertaining the amount due, so that in our opinion, the demand against Hutchings, transferred as collateral, can furnish no objection to ,the remedy sought by complainant below. 9. It is insisted, that as Chantrou is an indispensable par-. ty, and was examined as a witness by the complainant, no decree should have been rendered without excluding his testimony, and if that be excluded, the proof does not warrant a decree. True, the rule is stated to be, that a complainant cannot have an adverse decree against a defendant whom he examines as a witness, but must rely upon the evidence furnished in the usual way by his answer. Walker et al. v. Gibbs and Labuzan, 10 Ala. R. 136; Palmer v. Van Doren, 2 Edw. Rep. 192. But the rule does not extend to defendants who stand indifferently liable to both parties 10. Ala. 136. In Carter v. Hawley, Blunt’s Ambler, 583, n. 3, Lord Hardwicke says, “ The rule of this court differs from that of law, because there are several cases where the complainant must make parties of those defendants whom he must necessarily examine as witnesses, as in the case of trustees, &c., for though the legal estate is vested in them, they are not materially interested.” Nor does the principle of the rule extend to cases where the defendant has admitted in his answer the facts charged in the bill, or where they have been taken for confessed against him. Bradley v. Root 5 Paige, 636. The same doctrine is held in Lupton & Pearsoll v. Lupton et al. 2 John. C. 614, by Kent, Chancellor, and it is consonant with the practice of the chancery courts, which dis — 48 — countenance technical objections to depositions, on the ground that the witnesses were parties to the suit. 5 Paige, 638. In the present case Chantron confessedly owes a just debt, both to complainant below and Montadon & Co., and the question is, which debt shall have the prior lien upon his leasehold interest. He is indifferent then between the parties, as in the event of the success of either, the property goes to pay his debts. His interest is balanced. See Wright v. Wright, 2 McCord’s Ch. Rep. 205; Alston’s Ex’rs v. Jones, 1 Murphy, 45; Sharp v. Morrow, 6 Monroe, 305. But so far as we are advised, no objection was made in the court below to his competency as a witness, and is raised for the first time in this court. It may well be questioned whether the objection is well taken. * 10. Once more — It is contended further by the appellants, that the decree is erroneous, as nq refunding bond was required to be given for the benefit of Bassford, one of the parties secured in the trust deed to Dumee for the benefit of Montandon & Co., and others. The answer to the objection is, that Bassford is not an indispensable party, being represented by Dumee, the trustee, who is a resident citizen. Walker et al. v. Miller & Co. 11 Ala. Rep. 1067. Besides it is shown that Montandon &- Co, own the demand formerly owned by Bassford, and that the decree is really not against Bassford. In such case, we think the statutary refunding bond may be dispensed with, as the decree would stand had the suit been dismissed as to Bassford. We are unable to see any error in the record, and the decree of the chancellor is affirmed.