Opinion ID: 2609009
Heading Depth: 1
Heading Rank: 3

Heading: The effect of recording plaintiff's lien in the wrong records.

Text: As previously stated, this lien, filed by plaintiff with the county clerk, was recorded in the Chattels Record, instead of in the Mechanic Liens Record as required by ORS 87.305 and 87.010. The courts are divided upon the question whether the failure to correctly record a lien after it has been properly filed will invalidate the lien. Many courts hold that when one who is otherwise entitled to the protection of a lien files it with the proper office he will be protected against the intervening rights of third persons even though the recording officer then fails to record it or records it improperly. See Annot. 70 A.L.R. 595 (1931). Many other courts hold that the consequences of the failure on the part of the recording officer to properly record a lien must be suffered by the person seeking to protect himself, under the recording acts, against the intervening rights of third persons. Annot., 70 A.L.R., supra at 602-604. We believe that the latter view is more consistent with the purpose of recording acts to give notice to persons who subsequently have occasion to deal with property subject to liens. This does not mean that a person who would otherwise be entitled to the protection of a lien is left without a remedy because the county and its officers who are responsible for the proper filing of liens, together with their bondsmen, may well be responsible for damages resulting from the failure to properly record a lien, assuming that the lien was otherwise valid and enforceable. Cf. Spaulding Log. Co. v. Ryckman, 139 Or. 230, 234, 236, 6 P.2d 25 (1932). We recognize that labor and mechanic's liens statutes are to be liberally construed for the protection of those who perform labor and provide materials. Drake Lumber Co. v. Lindquist, 179 Or. 402, 412, 170 P.2d 712 (1946). Nevertheless, it is equally well established that anyone claiming a lien by virtue of a statute must show substantial compliance with its provisions and bring himself within its terms. Drake Lumber Co. v. Lindquist, supra at 413, 170 P.2d 712. In Spaulding Log. Co. v. Ryckman, supra, 139 Or. at 236-237, 6 P.2d 25, we held that a delay in the recording of a lien which had been timely filed did not invalidate it under the facts of that case because otherwise a lien filed on the last hour of the last day for filing would be invalidated if not recorded until the next morning. In that case, however, the lien was recorded in the proper record and it does not appear that during the period of the delay any third parties intervened so as to be subject to possible prejudice as a result of that delay. In this case, however, the lien was never recorded in the proper record and defendant ARZ took possession of the land and incurred expenses in the planting of crops on the land before it was notified of the lien by copy of the letter dated March 2, 1972. Under these circumstances, and for these reasons, we hold that the lien was invalid as against defendant ARZ. Having held that plaintiff's lien is invalid against defendant ARZ, we need not consider whether or not it was also invalid for the additional reasons urged by defendants. [1] This case is therefore remanded for further proceedings not inconsistent with this opinion, including further proceedings against defendant Sunbest Corporation, in the event that plaintiff should so desire. Cf. Paulk v. Van Cleve et al., 210 Or. 218, 225, 309 P.2d 176 (1957). Reversed and remanded.