Jean v. Wilson

Guason, J., delivered the opinion of the Court. The main question presented by the record in this case is, whether the mortgages or the lien claims are entitled to priority. The proof shows that the appellant Jean, William F. Burns and Samuel Meakin were the owners of certain lots in Baltimore city, fronting on the south side of Boundary Avenue, and that these lots were of such grade with regard to the adjoining streets and avenues, [294] and so covered by water as to render them unavailable in their then condition for either building or leasing. In the fall of 1869 the owners determined to make.such improvements upon them as would make- them available for either leasing or building, and accordingly, without any intention of erecting buildings thereon at that time, began the improvements in the month of October, and completed them early in December, 1869, when the workmen employed were paid off and discharged. The improvements thus made consisted in removing earth from some parts of the lots and with it filling in other parts which required filling ; .but where the houses now stand, instead of filling in with earth, foundations were made and walls, built so as to avoid the trouble and expense of again removing the earth for cellars, whenever thereafter the owners might think proper to build. A tank was also put in, and there is proof to show that it was necessary to put in the foundation walls and tank in order to remove the water which lay upon the lots some four feet deep. Some time after the completion of these improvements, oif the 23rd February, 1870, the owners leased the above-mentioned lots to one Benson M. Greene, and on the same day took from him mortgages to secure the rent reserved, as well the repayment of certain loans and advances to be made to the lessee to be used in the erection of buildings on the said lots, the mortgages reciting that their execution, delivery and recording were conditions agreed upon prior to the making of the leases, and prior to the agreement for the loans and advances, and also prior to the entry of the lessee or the doing of any manner of work by him upon the premises or any part thereof. These mortgages were recorded on the second day of March, 1870. It is shown by the evidence that Benson M. Greene in reality took only the legal title to the property thus leased to him, having consented to take the lease and hold the property for his brother-in295 law, J. Thomas Lester, who was the party really entitled to the property under the leases. In the spring of 1870-the improvements were commenced on these lots by J. Thomas Lester, and the liens set out in the record were filed by the mechanics and material men who had done work upon, and furnished materials for the construction of the houses. It further appears that, on the 12th day of June, 1871, four of the above mentioned lots were assigned by Grreene to Amelia Berry, oneofthe appellants. Some of the parties filed the hill in this case in the Circuit Court of Baltimore City, to enforce payment of their liens, in which all other lien claimants, the mortgagees, and all other persons having any interest in the property were made defendants, and, upon final hearing, the Circuit Court passed a decree for the sale of the property, sustaining as valid the liens of the appellees, rejecting the liens of Hirshberg & Co. and Shorey & Eigelberner, and giving priority to the liens thus declared to be valid, over the mortgages. From this decree Jean, who it seems is now the only party interested in the mortgages, Amelia Berry and her husband, and Hirshberg & Co. and McShane & Co., who are the assignees of the lien of Shorey & Eigelberner, have all appealed. The 15th section of Article 61 of the Code, provides that, “The lieu hereby given shall be preferred to all mortgages, judgments, liens and incumbrances which attach upon the said building or the grounds covered thereby, subsequently to the commencement thereof, and all the mortgages and liens other than liens which have attached thereto prior .to the commencement of the said building, and which by the laws of this State are required to he recorded, shall he postponed to said liens, unless recorded prior to the commencement of said building.” It was contended by the counsel of the lien claimants that the foundations put in by the lessors of J. Thomas Lester, in the ['all of 1869, constituted the commencement [296] of the buildings erected by him, and that, as they were put in before the execution and recording of the mortgages of the lessors, the former are entitled to priority in the payment of these claims. In the case of Brooks vs. Lester, 36 Md., 69, 70, this Court has said, quoting from Pennock vs. Hoover, 5 Rawle, 308, “that the first labor done on the ground, which is made the foundation of the building, and is to form part of the work suitable and necessary for its construction, constitutes the commencement of the building.” The cases of American Fire Ins. Co. vs. Pringle, 2 Seargt. & Rawle, 138 ; Pennock vs. Hoover, 5 Rawle, 308 ; Horn vs. Hopkins, 13 Seargt. & Rawle, 269, and Seargt. Mechanics Lien Law, 167, 168, are to the same effect, and they are relied upon by the counsel of the lien claimants as conclusive of this question in their favor. While this Court, in the case of Brooks vs. Lester, declared what work should be regarded as the commencement of the building, as above recited, it decided that the building had not been commenced at the time the mortgage was recorded, nothing having been then done except to drive some pegs in the earth to mark where the foundations were to be dug. In ■ the Pennsylvania cases, above cited, it appears that the work, which was held to be the commencement of the buildings, had been done with the intention and purpose, then formed, to continue the work to the completion of the buildings. Where work is done with the design to go on and construct a building, there can be no question that it must, be regarded as the commencement of the building; and in such case all liens attaching subsequent thereto would, under the provision of the lien law, be postponed to the liens of mechanics and material men who might bestow labor or furnish -materials for the construction of the building. The work done before the recording of the mortgage, so as to give mechanics liens priority, must, however, be the com [297] mencemeut of the building, and such is the very language of the lien law. In the case before us the proof shows that the work done was not done with any design or purpose of constructing a building at that time, but was done solely with the intention and for the purpose of grading the lot and removing the water therefrom, so that it might be in a condition to lease or to build upon at some future time. That this was the intention and purpose of the owners is conclusively shown by the fact, that .when this object was accomplished, work was immediately stopped and the workmen paid off and discharged. How can it be held, with either reason or justice, that a building has been commenced in the face of the uncontradicted proof in the case, that the owners had no intention to erect any building, but merely to grade and remove the water from the lot, and when it is apparent that, when these objects were attained, nothing more was ever done upon the premises until the spring of 1870, and then, not by the parties who had made the improvements referred to, but by their lessee. Although, after the building has been once commenced, a change of ownership during its progress to completion cannot change or affect the rights of the parties ; yet in view of the facts of this case, the first work done by J. Thomas Lester must be regarded as the commencement of the buildings, and, as the mortgages were executed and recorded before that time, they are entitled to be first paid out of the proceeds of the sales of the property. We have carefully examined the liens of the appellees and the evidence relating to them, and concur in the views of Judge Pinkney as to their validity as expressed in his opinion. Upon the appeal of Hirshberg & Co., and McShane & Co., assignee of Shorey & Eigelberner, the decree of the Circuit Court will be affirmed. In the case of the former it 'appears that they furnished the articles charged in [298] their account to Wood, who did the painting under a contract with J. Thomas Lester, and no notice whatever appears to have been given by them df their intention to file a lien. We think the proof of the delivery of the articles is also deficient. The lien of Shorey & Eigelberner was clearly not filed within the time required by tbe statute. (Decided 2nd July, 1873.) The decree appealed from will be reversed in part and affirmed in part, and the cause remanded for further proceedings in conformity with the views expressed in this opinion. Decree affirmed, in part, and reversed in part, and cause remanded.