Bastien v. Barras

Young, J. Plaintiff prosecutes this action to foreclose a real estate mortgage executed by Michael Barras, one of the defendants herein, and, as an incident thereto, to have the lien of such mortgage declared paramount to the interests of the other defendants in the mortgaged premises. Barras does not answer. The remaining defendants answered separately, setting forth their respective interests, and ask that the same be adjudged superior to the lien of plaintiff’s mortgage. It is admitted that the mortgage was executed as alleged, and that the notes secured thereby are unpaid. The sole controversy in the case is whether the mortgage constitutes a prior lien. The trial court found with" plaintiff, and directed the entry of judgment in .accordance with the prayer of his complaint. Defendants appeal from the judgment. For the purpose of this appeal, appellants caused a statement of case to be settled, which embraced all of the evidence offered at the trial, and also a specification that they desired a retrial of the entire case in this court under the provisions of section 5630, Rev. Codes. So far, however, as their appeal relates to a retrial in this court under said section, it has been entirely abandoned. The evidence offered in the trial court has been wholly omitted from,the record presented here, and appellants do not now ask a trial de novo. They are satisfied with the findings of fact made by the trial court, but-insist that such findings do not warrant the conclusions of law and the judgment of the District Court, wherein it was determined that plaintiff’s mortgage was paramount. On the contrary, they contend that the findings of fact, as they stand, entitle them to a judgment declaring plaintiff’s mortgage subject and subordinate to their respective interests in the premises. This presents the sole question in the case, and it arises fairly upon the statutory judgment roll. Do the findings of fact warrant the conclusion and judgment of the trial court? We are agreed that they do, and that the judgment'of the trial court must accordingly be affirmed. The facts upon which the trial court based its conclusions, so far as pertinent on the question of priority, are these: Plaintiff’s mortgage was executed and recorded on February 24, 1897. A building known as the “French College” was then in process of construction on the premises covered by such mortgage,. The building wás commenced on December 9, 1896, and was not completed until March 24, 1898. Three mechanics’ liens were filed against the premises. They were filed approximately a year after plaintiff’s mortgage was recorded — the exact date not being material, — and were 'for labor and material furnished long subsequent to the recording of the mortgage. These [32] several liens were foreclosed in actions wherein Michael Barras, the owner of the premises, was sole defendant; and judgments were obtained therein establishing such liens, and directing a sale of the premises to satisfy the same. Appellants are the purchasers at the sheriff’s sale made pursuant to said judgments, and their interests in the mortgaged premises are represented by the sheriff’s certificates issued on said sales. Neither in the foreclosure proceedings nor in the liens filed did the lien claimants claim liens on the premises anterior in time to the furnishing of the labor and material, which, as we have seen, was subsequent to the recording of plaintiff’s mortgage; and the judgments entered, directing the sale of the premises, established the liens only as present liens as of date the judgment, and, in express language, barred only those who should thereafter acquire an interest in said premises from Barras. The most liberal construction of the foreclosure proceedings will not extend the lien established by the judgment prior to the furnishing of the labor and material. In these several .foreclosures the lien claimants entirely ignored the fact that the building for which they had furnished labor and material had been in process of construction from December 9, 1896, and were content to claim and establish a lien merely from the date such labor and material were furnished. Under these facts, we think it is entirely clear that the interests of defendants in the premises are subordinate to the lien of the mortgage. They have just what they purchased at the sale, and no more, and that interest was what the lien claimants had to sell. To ascertain the extent of that interest, we must look to the judgments which determined it. They disclose that the liens, at most, did not antedate the furnishing of the labor and material, and were subsequent in time to the execution and recording of plaintiff’s mortgage. Appellants’ contention seems to be that, inasmuch as the building was under construction when plaintiff’s mortgage was executed, it is • postponed to mechanics’ liens for labor and material thereafter furnished for the purpose of completing it. As a general statement of law, the proposition is correct. See Rev. Codes, § 4793; Heater Co. v. Gordon, 2 N. D. 246, 50 N. W. Rep. 708; Turner v. St. John, 8 N. D. 245, 78 N. W. Rep. 340. But it does not apply to the facts of this case as they exist. If this were an action between the mortgagee and the lien chaimants, in which the latter were seeking to make their lien relate back, the principle would be applicable; and undoubtedly such lien claimants could by appropriate proceedings have claimed and established their liens as prior to the mortgage, upon the strength of the fact that the building was being erected when the mortgage was given. But they did not see fit to do so. They were satisfied with subordinate liens, and appellants are merely the purchasers at sheriff’s sale of such subordinate interests. Furthmore, these appellants are not lien claimants. They are purchasers, and hold under independent rights, to which the liens filed and foreclosure proceedings are important only for the [33] purpose of measuring the extent of their purchase. As we have seen, the liens established were subordinate to the mortgage, and appellants acquired no other or greater interest by the purchase at the sheriff’s sale. In other words, they acquired the interests which the lien claimants had as fixed by the judgment, and not to what they might have claimed. There is no principle of law or equity which will permit appellants to expand their purchase by parol evidence, and thus make it relate back to a time long anterior to the time when the lien attached as shown by the judgment, and thus secure in this litigation an estate and interest entirely different and of greater value than that actually purchased. If it could be done in the case at bar, it could in similar cases. For instance, on ■ the theory that a purchaser at a foreclosure sale acquires such rights as the lien claimant had before foreclosure proceedings were begun, a purchaser of an 8o-acre tract of land at a mortgage foreclosure sale might thereafter insist that in reality he was entitled to 160 acres, because the mortgage which had been foreclosed originally covered 160 acres, and a judgment and decree might have been obtained directing the sale of the entire tract. ■ A sufficient answer would be that no such judgment was in fact rendered, and in the case at bar that the judgments establishing the mechanics’ liens established them as subordinate liens in fact, and that the extent of the estate or interest of the purchasers is that actually determined by the judicial proceedings, and not by what might have been determined therein. The particular question involved on this appeal has seldom reached courts of last resort. The few reported cases, however, where it has been presented, hold views entirely in harmony with those we have expressed. Kendall v. McFarland, 4 Ore. 292; Reading v. Hopson, 90 Pa. St. 494; Meigs v. Bunting (Pa. Sup.) 21 Atl. Rep. 588. In Kendall v. McFarland, supra, the court said: “No time having been specified in any of these judgments when the building was commenced upon which the liens were claimed, the judgments could only operate as liens upon such property, the same as any ordinary judgment, from the time when they were placed upon the judgment-lien docket; and, in consequence of these judgments failing to show when the mechanics’ liens attached to the building, we are.unable to see how any other or greater interest could have been sold under special execution than was owned by Hunt in the property on the day when the judgments were docketed. In an action to enforce a mechanic’s lien, if the party desires the lien to be enforced from the commencement of the building upon which the lien is claimed, the time when the building was commenced should Jje averred in the complaint, so that it may be determined and adjudged by the court at what time said lien attached to the building. To enable the appellant to hold the premises against the mortgage of respondent, it should have appeared in the judgments and proceedings under which he claims title that these mechanics’ liens [34] attached to the building in question prior to the time when respondent’s mortgage was executed and recorded. The time when these liens commenced to have an existence was one of the main questions to be ascertained and judicially determined in said action. If no time was mentioned in said proceedings when said liens attached, we are unable to see how it can be done here, and after said judgments have been executed.” In Reading v. Hopson, supra, it was held that parol evidence might be offered, in -a contest between the mortgagee and the lien claimant, to show that a building upon which a mechanic’s lien is claimed was commenced prior to the execution of the mortgage. The court said: “But an entirely different case is presented when the question arises between the mortgagee and the purchaser at sheriff’s sale, as the bidder at sheriff’s sale is not bound to look beyond the record in determining what he shall bid; and it cannot be shown, as against him, that a prior lien has been paid, or is not subsisting; so neither can he take advantage of any fact dehors the record to discharge the land from the lien of the mortgage.” (84 N. W. Rep. 559.) The conclusions of law reached by the trial court-upon the facts as found in this case were entirely sound, both in principle and under the authorities, and the judgment is accordingly affirmed. All concur.