Denmead v. Bank of Baltimore

Le Grand, C. J., delivered the opinion of this court. This appeal is from an order of the chancellor overruling exceptions to the report, and accompanying accounts distributing a fund which had been created by a sale of property on which there were various liens. It is only necessary to notice two of them, as they are all that are involved in the present inquiry. It appears from the record, that, on the 4th of March 1841, the Powhattan Manufacturing Company being indebted to the Bank of Baltimore in a large sum of money, executed a mortgage of certain lands in Baltimore county, “together with all the buildings and improvements thereon,” including “the mill, factoiy, dwelling and other houses; and all the machinery and fixtures, in said mill or factory,” <fcc., as a security for said indebtedness. On the 15th November 1845, the mortgage debt being unpaid, the company conveyed the premises to William Mason, who, in the year 1847, commenced the erection of a large mill on the property called the Pocahontas mill. In the year 1848, he caused suitable machinery to be constructed by different mechanics to be placed therein; and among others, by the appellants, who manufactured and furnished the mill with a steam engine, with boilers, tanks, and other usual appurtenances. About this túne, Mason formed a co-partnership with William Mason, Jr., and H. A. Barling, who with him carried on the manufactory until 1849, when they were compelled to suspend their business. On the 8th of September of that year, they conveyed to Messrs. McKim and Kennedy, on certain trusts, the lands, the two factories, and all the machinery, fixtures, &c., belonging to them. On the application, by bill of complaint of these trustees, the property was sold, reserving for future adjudication all questions of priority. [183] It appears, from the testimony, that some time in 1848, the appellants sent the machinery, which they had made in the city of Baltimore, to the country to be put up in the factory; that they filed their lien on the 18th of March 1848, on which scire facias issued in July 1849, and obtained judgment in September of the same year. The question which we have now to determine is, winch of these claimants is entitled to priority? A great number of important question were suggested when the argument commenced, but all, save one, abandoned before it was concluded. It was conceded by the appellants. 1. That the machinery put up by them, so soon as it was attached to the building, became fixtures. 2. That it might be conceded that the judgment obtained by them was not in strict conformity with the acts of Assembly giving liens to mechanics and others, and therefore, that the judgment did not, of its own force, give a prior lien to the appellants. The counsel for the appellants desiring the case to be decided in view of these concessions, in regard to the propriety of which we wish to be understood as pronouncing no opinion, the case was submitted on the ground that, “even if the judgment is not held conclusive, the original hen itself is of sufficient force to bind the proceeds of the steam engine, &c., in favor of the appellants.” This being so, the whole case is narrowed down to this: does the claim of the appellants, filed in March 1848, so far as the machine is concerned, give to the appellants a priority over the appellees who claim under a mortgage executed in 1841? This is a question which must be determined by our acts of Assembly. It is not only not denied, but, it is conceded, that, independently of our legislation, the mortgage held by the appellees would attach from its date to any fixtures which might be affixed to the premises covered by it. But, it is insisted, the common law principle is modified by our acts of Assembly. The first act relating to liens, that of 1838, chapter 205, does not embrace machines; but that of 1845, chapter 176, does. Its 4th section is in these words: “That every machine hereafter to be erected, constructed or repaired, within the [184] city of Baltimore, shall be subject to a lien, in like manner as buildings are made subject under the provisions of this, and the original act to which this a supplement.” This section contemplates a lien on machinery arising in three different modes: 1st, where the machine is erected in a house or affixed to it or the soil; 2nd, where it is constructed and is movable in its operations, such as a locomotive, a threshing machine, and the like; and 3rd, where the machine is repaired, whether it be attached to the freehold, or movable in its operation and use. In the case now before us the lien arises under that part of the act which refers to the erection of the machine. In the case of Wells and Miller vs. The Canton Co., et. al., 3 Md. Rep., 241, this court said, in construing the 4th section of the act of 1845, chapter 176, that “the claim of the mechanic upon a machine must commence as soon as he begins to put up the machine. ’ ’ The evidence in this case shows, that the machine erected by the appellants was not begun to be put up until the year 1848, and under the decision to which we have adverted, the lien of the appellants did not commence until that time. The section under which a lien on a machine is given, provides, such machines “shall be subject to a lien in like manner as buildings are made subject under the provisions of this and the original act to which this is a supplement.” Now it is provided, that the lien acquired on a building for work done or materials furnished “shall only be preferred to every other lien or incumbrance which attached upon such building, subsequent to the commencement of the same.” Now were it even admitted that the common law principle, which would make the mortgage take effect from its date on all fixtures subsequently attached to the freehold, did not operate, it cannot, in our opinion, reasonably be denied, that it will operate from the very moment when anything is affixed to the land, and this being so, the machinist’s claim cannot have a priority over the mortgage of an older date, because that priorityis only over liens “subsequent,” and not to those coeval or simultaneous. The lien of the mechanic is dependent wholly on the statute, and it defines the priority of such lien to be [185] only over “subsequent” liens or incumbrances. Here the lien of the appellee is, in our judgment, clearly not subsequent to that of the appellants, and as a consequence must have a preference over the latter. Order affirmed with costs.