St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-08-01
Thoughts Of a Prominent At
torney on a Mechanics
Lien Decision.
Advantage Taken Of It by
INSCRIPTIONS Contract
ors and Agents.
h. o. Peterson Energies From
the Clouds and Talks
to Critics.
More Figures on the Appor-
tionment of Funds--The
Lowry Banquet.

~ 0N7NS aAAN -NH
what few of them there were around
the district court-were ~interestedly
discussing the recent decision of the
supreme court on mechanics liens.
The decision defines the priority of
mortgages and liens-defines how they
shall be handled when a piece of prop
erty is encountered by both liens and a
mortgage. On this point the decision,
which was filed Thursday, says:
when a mortgage lien intervenes
which is subsequent TO some or the liens
under the statute, but prior TO others.
the proper method of distributing the
proceeds of the sale of the premises is
to first set aside as applicable to the
payment OF statutory liens a sum equal
to the amount OF the liens prior to the
mortgage; next. out of the remainder
pay the mortgage and then apply what
is left. if anything. together with what
was first set aside for that purpose, rat
ably among all the lien claimants with
out any priority among themselves"
1t was the general opinion among the
gentlemen who discussed this matter
that. under this ruling. the labOrer and
the small material furniSher can be
frozen out. If they get anything their
portion will be small. One gentleman
was particularly emphatic in his denun-
citation of a law susceptible to such con-
struction. This gentleman. who is one
of the most prominent members of the
Hennepin county bar, refused to let his
name be used. He occupies a position
in Republican politics and feared that
his words might cause some one to be-
lieve that he was aiming his shafts at
Gov. Merriam and what he said was
this:
Il have had occasion to say before
that the mechanics lien law of this state
is rOtten-rotten to the core. Under it
the laborer who has a lien on a build
ing as security for his wages. the small
contractor who has furnished a little of
the material. have no earthly chance to
get his just dues. The judges of the
supreme court are not to blame. They
interpret the law as they ind it.
The responsibility for this legaliZed
robbery-it is nothing less-lies with
the law itself, the trainers of the law
and the persons who have refused to al
low an amended law to 60 upon the
statute books of the state. This de-
cisiOn (the one quoted near the begin
ming of This articleG depriYes the small
lien holder Of his dues. I'll tell you
how.
Take a suppOsitItious case. Jones
begins the erection of a building. He
has 5000 worth of work done on it.
Liens a~ggregating s., 000 are filed against
it. But the building isn't finished yet.
Jones then secures a loan of $4,000, Sc
cured by a mortgage on the property.
On the strength of that $4,000
loan, the money being in sight, Jones
has $4,000 worth OF additional work
put upon the building. completing it.
Liens to the amOun of SO, 900, to secur
this work done last. are now filed
against the property. The membranes
or this building, now. completed and
ready for occupancy, stand thus: Liens
to the amount Of $1,000 for work first
done; mortgage for $4,000; additional
liens to the amount of $4,000.
Now let's see how these incum-
ORANGES must be disposed of under this
mechanics lien law of ours as inter-
preted and correctly SO-by u Su-
preme court.
None of these liens have been salts
fed. The property is ordered sold.
Say that, at forced sale, il fetcleS S15,-
600. We said that the liens prior to the
mortgage amounted to $1,000. Then
out OF this S15, 200. the proceeds of the
sale. we set aside $1,000, a sum equal to
the prior liens. Out of the remainder
Of the proceeds, $4,000, the mortgage
must be SatIfed. The mortgage is for
$4,000. Its satisfaction eats up all of
the proceeds of the sale. save the 5000
previously set aside.
But liens amounting to $4,000 re-
main TO be satisfied. You notice that
the decision says'a sum equal to the liens
prior 10 the mortgage shall be set aside,
not used to satisfy those liens. After
tue mortgage has been cleared away,
all that remains from the proceeds of
the sale must be applied ratably to the
settlement of all the liens. In this
case nothing remains but the $1,000
originally set aside. Then we have
5000 with which te pay off $4,000 of
liens. The labOrer and the material
furnisher, instead Of 100 cents on the
dollar, receives only 81 cents on the dol
lar.
Now, l wish some m would tell me
what guaranty a lien holder has that he
will get anything out OF the building to
paw him for his labor. Under this law
the labOrer can be robbed of every cent
robbed is the word.
There Is still another point on which
l want to free my mind While I'm fired
up and growing hotter.
such a loan as l have mentioned is
never a legitimate loan. A straight,
honorable money loaner, who loans
money on Just business principles,
/ never makes a loan of that charac ter.
1t is done in this II
"a building is to be erected. The
contractor cOnfers with the big material
man-the man who Will supply most of
the building material. The material
man tells the contractor that the IN
tract for material can be made
| 49,, p,o-a 1dv1n+annnnc tnvmc If thorn ic
money in sight to pay for the material.
tIIl fix that says the contractor. He
goes to the builder. explains the sItua-
ton to him, and together they visit a
loan agent. They negotiate a loan. Civ
ing a mortgage as security. That loan
is deposited in bank and assigned over
to this material man. All this is done
secretly. The builder. the contractor,
the big material man and the loan agent
are the only men who are I'M on this
deal.
"Finally the building is completed.
A whole lot of liens are fled against it
by the IabOrer, the big material man,
the small material man, etc. The
money Ioaner has a mortgage on the
building. When his mortgage is salts
fed the little fellows can fight over
what's left. The big material man is
safe because his money is safely in the
bank and assigned TO him.
Should some lienhOlder find out that
this loan has been made, and drag the
matter into court, what relief does he
get? 1t can be shown that the loan was
assigned to the big material man. The
little fellows take what they can get.
That's the way they work it. The
laborer and the little material man get
the worst of it always. If the big ma
terial man doesn't happen to be in on
the deal l have mentioned he fights the
matter in the courts. He can afford to.
The builder and contractor compromise.
The biz material man gets 20 or so per
cent of his claim. The little fellows
must be content with 20 or 80. They
can't afford TO conduct an expensive
litigation.
us the law rotten2 Well. 1 should
say it is
In connection with his dissertation on
this lien law, he pointed out how the
bill passed unanimously by both houses
of the legislature last winter and vetoed
by the governor would have prevented
n,oh fni,cfTaa &c chic In coofi0n a