Martsolf v. Barnwell

The opinion of the court was delivered by Brewer, J.: The question in this case is as to the priority of certain liens. The matter’ was tried before a referee, who filed his report, with findings of fact and conclusions of law. He gave plaintiff in error priority over Barnwell, defendant in error. The district court, however, upon the facts as reported by the referee,'awarded priority to Barnwell. No objection’was made by plaintiff in error to the referee’s report, and no motion made by him to set it aside. The facts therefore as found by the referee, are beyond question, and the only matter for consideration is the judgment required upon such facts. The district court was not bound by the conclusions of law of the referee, any more than this court is bound by the conclusions of the district court. It was the duty of that court, upon examination of the facts found, to see that the proper judgment was entered upon them, whatever might have been the conclusions of the referee, as it is the duty of this court upon a reexamination to see if there has been any error in the conclusions and judgment of that court, and if so to direct the entry of the proper judgment. Which lien was prior? Barnwell claimed a mortgage; Martsolf a mechanic’s lien. Barnwell’s mortgage was executed and recorded August 21st, 1871. Martsolf’s 'contract for work was executed, and his work commenced, August 23d, 1871. Upon this alone, Barnwell would have unquestioned priority. As against this, it is claimed that, prior to the execution of the mortgage there was an understanding between the mortgagee, the lot-owner, and Martsolf, by which Martsolf [618] was to erect a building, and the mortgagee was to advance to the lot-owner the money needed to pay for the work as it progressed, and that the mortgagee had actually drawn up the contract for the work between the lot-owner and Martsolf; and that from that understanding Martsolf had a right to suppose, on the 23d, when he executed his contract and commenced work, that no money had actually been advanced,, or mortgage executed. We fail to appreciate the force of this argument. It does not seem reasonable that a lot-owner would sign a contract for the construction of a large building, (in this case a hotel,) before he either had the money to pay for it, or had perfected arrangements to obtain it. Martsolf then ought to have presumed, if he was acting upon presumptions, that if money was to be borrowed the security therefor would be perfected before the. building contract was signed. But the rights of these parties do not rest upon presumptions. The mortgage was on record, and Martsolf was chargeable with notice of its existence. He could acquire no rights against it, or in precedence' of it. If doubtful about payment, or unwilling to risk the security of a second lien, he could decline the proposed contract. Again: It is said that the money was to be advanced as the work progressed, and that in fact only a small portion was advanced prior to the commencement of the work, and that therefore to the extent of such prior advancement alone could Barnwell’s mortgage be preferred to the mechanic’s lien. In this we think counsel are mistaken. The mortgage was for a single, fixed amount, and contained no provision for future advances. Now, if it be true, that equity will look' behind the face of the mortgage, and date the liens from, the times of the several advances of money by the mortgagee, (and upon this question we express no opinion,) it will also upon the same principle date the mechanic’s liens from the times of furnishing material and doing work. If the one can claim a lien only from the time of paying over his money, surely the other can claim his only from the time of supplying material and doing work. At such times only [619] does either mortgagee or. mechanic part with, or mortgagor and lot-owner receive, value. And if this is the test of lien, it must be so for both alike. Now it does not appear that Martsolf supplied any material, or did any work for which he did not receive pay, or for which he claimed a lien, prior to the last advance of money by the mortgagee. Under those circumstances he is in no position to claim that his entire lien should be referred back to the date of the commencement of his work, and the mortgagee’s be distributed along the dates of the several advances of money. Whether therefore we regard the dates of the liens of the two parties from either a legal or an equitable standpoint, the mortgagee must be preferred to the mechanic. It seems to us therefore, that there was no error in the rulings of the district court, and the judgment must be affirmed. All the Justices concurring.