St. Paul daily globe., 1893-08-29
MORTGAGE AND LIEN.
WHICH HAS THE PRIORITY AccGR DING
TO TIE STATUTEs
A SUPREME COURT DECISION

Rehearing of a Case Previously
Considered, and Additional
Points OF Law Ruled Upon
Intricate Question Involving
the Rights of Mechanics and
Builders.
4 brief statement of the case of Will
lam Miller anu David Allen, copartners
as Miller d Allen, appellants. against
James Stoddard and others, defendants,
Henry nj. Little and others, appellants,
is that there had been former appeal
in the case, and it was reported in 81 n.
w. r., S95, and from the judgment in
the second trial appeals were taken
over again TO the supreme court. Yes
terday Justice Dickinson gave a decision
in the appellare court, in which he mod
flied the Judgment of the court below.
1t is stated that Esther b. Little and
the North Side Building and Loan asso-
citation are mortgages Of the property
in controversy in the suit at law. and
this consists of sixty-five lots in the city
of Minneapolis. The other appellants
have acquired mechanics liens on the
property. as subcoutractors under Stod-
dard, who. under contract with the
owner, Henry NJ. Little, constructed a
house, and part of barn appurtenant,
on the same premises.
Then Mrs. Little conveyed the prem
ises to Henry Nj. Little and took mort
gage back Oh the same property to Sc
cure the payment of Sl,999, payable five
years thereafter This mortgage, Issued
and given in May, was not recorded
until november, and on May % Ii. NJ.
Little entered into tile contract with
Stoddard for the construction of house,
anu the latter completed the foundation
for the house by June 2. Prior to June
Little entered into another contract
with Stoddard, thereby cOmplicating
matters The latter was for the erec-
ton of barn. Half of the baln was
on other premises. Before giving the
mortgage to the North SIDE Building
and Loan association, and before
the recording of Mr.. Little's mort
gage, the parties claiming the
mechanics liens, other than Fraser Il
Shepard, had contributed material and
ldDOl OEl IIC SlOuius UUth iOA OiLO Noii-
Struction of the house and the barn.
Fraser & Shepard began delivering ma
terial on the 11th of June, and then the
cons tructionS were carried to compile
ton, and time statements were filed by
the claimants mentioned. June &, 1890
Little executed the mortgage to the
North Side Building and Loan aSSocia
ton for $500. This mortgage was
taken in good faith. There was no ap-
parent notice OF knowledge of pre-
vious mortgage. The judgment ap-
pealed from directed the sale of the
property and the distribution of the
proceeds. The supreme court holds
that as Mrs. Little neglected to record
her mortgage she is precluded from as
Serting the rights which one holding a
senior lien might have. The Judgment
OF the court below is so modified. and
the syllabus recltes:
Action to foreclose mechanics liens.
The several liens are represented as
follows:
1. A senior mortgage for $4,000 given
for the purchase price of the land in
May, but not recorded until November,
and not yet mature.
9. Various subcontractorS' mechan-
icS' liens for construction of house
and barn appurtenant thereto, under
two separate contracts with the owner,
one for the construction Of the house
and the other for the construction of
the barn. Such contracts, and all that
was done thereunder, were subsequent
TO the giving of the senior mortgage.
l. 3. A second mortgage for $1,000,
given after the visible commencement
OF the house. and after the delivery Of
some of the materials for the cOnStruc-
ton of the barn. This mortgage was
recorded before the recording of the
senior mortgage.
l. The senior mortgage is the su-
perior lien except in so far as it has
lost its priority by neglect to record the
| same.
2. By force of the registry law the
| Junior mortgage acquired prece-
dence over the senior.
8. The registry law is inapplica5le
| to affect the priority of mechanics
liens. Hence as between the senior
mortgage, although unrecorded, and
The mechanics liens. the former is the
| prior and superior lien.
| 4. But as between the mechanics
liens and the second mortgage, the for
mer constitute the superior liens.
| Gardner VS.. Leck, 81 n. w. R., 746, and
Glass VS.. Freeberg, SO n. w. r., 900,
followed.
5. All the mechanics liens are CO.
ordinate and without priority among
themselves, although they accrued in
! the performance of separate contracts,
| the whole improvement being in the
nature of all entirety.
6. Following Malmgrem vs.. Phinney,
SO n. w. r., 9l5, the rule of distribution
| of the proceeds OH sale of the property
is as follows:
First-rake out the amount of the
| senior mortgage and from that amount
| pay the junior mortgage. and then
| apply the remainder of that amount to
| satisfy pro tanto the senior mortgage.
Second,-The remainder of the pro-
| ceeds are to be applied as far as they
! will go to satisfy the several classes OF
liens in the following order: First, the
several mechanics liens, pro rata: and,
second, the remainder of the Junior
| mortgage. whatever may remain, will be
paid to the owner.
Z. The senior mortgagee having
| neglected to record her mortgage, and
the complication of rights above stated
| having resulted, SO that the property
cannot be sold subject to the senior
mortgage without interfering with the
rights of others, the holder of the senior
mortgage is precluded from resisting 6
foreclosure sale of the entire property
to satisfy all the liens in their proper
order, although her mortgage is not We
mature.
,T4TI, NfATRONS