Court Opinion

ID: 7967907
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:21.097526+00
Date Added: 2024-06-11T16:34:41.802567
License: Public Domain

Mitchell, J.
This action, which was to foreclose a mechanic’s lien, is brought here on the findings of the court, without any case or bill of exceptions, and hence the only question is whether the conclusions of law are justified by the findings of fact. Tubbs is the owner of the premises, who contracted for the construction of the building. Topliff is a mortgagee of the premises, and the other defendants and the plaintiff claim liens for labor and material performed or furnished for the construction of the building. As Sedgwick is the only' appellant, and as his assignments of error relate only to the decision of the court in favor of Topl'iff, we have only to consider the relative rights of these two parties.
Sedgwick claims a lien for labor and skill performed and furnished, at the request of Tubbs, in preparing plans for the building, and in superintending its construction. The court finds “that he commenced to draw the plans on the 1st of February, 1890, but that this work was then commenced in his office, and not upon the ground; that there was nothing upon the premises up to May 26, 1890, to indicate that any architect had been employed for any purpose in connection with the premises, or for the purpose of erecting any building or structure thereon; and that up to sa'id time said architect performed no labor, services, or skill upon said premises.” The court also finds that “after said 26th of May, 1890, said Tubbs commenced the erection of a building on said lot.” We construe this as meaning that no work had been commenced and no labor performed or materials furnished on the premises by any one until after May 26th.
There is a finding that Tubbs caused an excavation to be made on the lot about March 1, 1890, but there is none as to its extent and character, or that it had any relation to the erection of this building; hence we deem the finding wholly immaterial.
Topliff’s claim is based on two mortgages on the premises, executed by Tubbs, — one for $13,000, executed March 13, 1890, and recorded on the 26th of the same month; and the other for $10,-000, executed August 5, 1890, while the building was in process of erection, and recorded the 11th of the same month.
*3941. Appellant’s first assignment of error is that the court erred in holding that his lien was inferior and subordinate to the lien of this first mortgage. This presents the question when appellant’s lien attached,, his contention being that it was acquired February 1, 1890, when he commenced drawing the plans for the building in his office. This involves the construction of the statute. The mechanic’s lien law nowhere in express terms declares when a lien attaches. Laws 1889, ch. 200, § 8, requires that the statement filed shall contain the time when the first and last items of labor or material were furnished, and provides that the statement, when filed, “shall operate to continue such lien during all the period of time from the time of the furnishing of the first item of such labor, etc., until the expiration of one year after the time of furnishing the last item of the same.”
It is on this provision that appellant relies for support for his contention. The tenth section of the act, in effect, provides that all liens for labor, material, etc., furnished for the construction of a building, without regard to the relative dates at which it was furnished, shall be co-ordinate, and without priority one over the other.
The time when a lien is to be considered as acquired depends upon the statute authorizing the remedy. The statutes are not uniform on the subject.
The larger number fix the commencement of the work on the premises — the first labor done or materials furnished on the ground' —as the date when the mechanic’s or material man’s lien attaches,
This is exceedingly fair and liberal to the mechanic, especially under our statute making all liens co-ordinate; so that all who furnish material or labor at any time during the process of construction of the building get a preference over all other liens of a date posterior to “the commencement of improvement on the land” by the one who performs the first labor or furnishes the first material on the ground. Gardner v. Leck, 52 Minn. 522, (54 N. W. Rep. 746.) This works no injustice to any one dealing-with the property, as the work itself is notice to all of the mechanics’ claims. It enables them by ocular examination to ascertain whether they can do so safely.
*395But, on the other hand, it would he very unjust if the land could be afterwards swallowed up by mechanics’ liens for work which had not been commenced on the ground, and of which consequently one who might buy the property or take a mortgage upon it had no notice or means of knowledge when he took bis deed or his mortgage.
The injustice of this would be forcibly illustrated by the facts of this case, where appellant claims a lien as of the date of February 1st, when he perhaps began the mental labor or skill of designing the plans of the proposed building, which furnished ho visible trace of work or labor on the ground itself. If the date of the lien could thus antedate the actual commencement of operations on the premises three months, there is no reason why it might not antedate it three years.
The injustice of this would be intensified under our statute, in view of the fact that the date of the lien of the person who furnished the first material or labor would fix the date of all other mechanics’ liens, regardless of the dates at which such material or labor was in fact furnished. Hence we ought not to give to the statute the construction contended for by appellant, unless it will not reasonably admit of any other; and in determining the meaning of the phrase “time of furnishing,” as used in the eighth section, reference should be had to all the other provisions of the act, as well as its general scope and plan. Of course, as against the owner who contracts for the erection of the building, the question when a mechanic’s lien attaches is of no practical importance. It only becomes material with reference to subsequent purchasers and mortgagees. Taking into consideration all the different provisions of the statute, as well as oúr previous decisions construing it, we are of the opinion that, as regards the date of acquiring a lien, the word “furnished” or “furnishing,” as used in the law, means furnished on the premises, and that the liens of mechanics or material men all attach as of the date of the performance of the first work or the delivery of the first material on the ground.
This was the view taken in Glass v. Freeburg, 50 Minn. 386, (52 N. W. Rep. 900,) and Gardner v. Leck, supra, and it was upon this theory of the law that in the latter case it was held that all liens for labor or material furnished by any one, at any time during the *396progress of the work, attach as of the date of the commencement of improvement on the land.
Our decisions to the effect that a party might, under certain circumstances, have a lien for material which was never actually delivered on the premises, or not actually used in the building, are not inconsistent with this view. In all these cases it will be found that not only was no question of bona fide purchaser or mortgagee involved, but in every instance there was in fact a building in process of construction, and the material was either in fact delivered on the premises, but subsequently diverted by the contractor, or its delivery was prevented by the fault of the owner. See Howes v. Reliance Wire-Works Co., 46 Minn. 44-48, (48 N. W. Rep. 448;) Hickey v. Collom, 47 Minn. 565, (50 N. W. Rep. 918;) Burns v. Sewell, 48 Minn. 425, (51 N W. Rep. 224.)
2. Topliff’s second mortgage was given to secure a loan of $10,000. The court finds that, at the time this mortgage was made, it was agreed between the parties thereto that the money thus borrowed should be paid by the mortgagee to persons holding liens on the premises for labor and material furnished in the erection of this building, and releases of such claims procured from the holders; that, pursuant to this arrangement, the mortgagee paid over the proceeds of the mortgage on claims due for labor and material so furnished by persons holding liens therefor; that the amount so paid operated to extinguish liens on the premises to that amount, which were co-ordinate and of equal priority with the other liens for labor and material, including that of appellant, enumerated in what, in the findings, is called the “Second Division.” When the court speaks of these claims, to the payment of which the proceeds of this mortgage was applied, as being liens on the premises, we understand that he means what, for want of a better term, we may call “inchoate liens;” for it is not found that either the holders or any one else had ever filed statements of liens as required by the statutes.
Inasmuch as the proceeds of this second Topliff mortgage were thus used to pay off claims which were lienable against the property, and thereby reduced by that amount the liens which would have been co-ordinate with the lien of appellant and the other liens *397of the “second division,” the court held, on what he considered the doctrine of equitable subrogation, that the lien of the mortgage was co-ordinate with the liens of the “second division,” and directed the distribution of the proceeds of the sale of the premises on that basis.
This is the subject of appellant’s second and third assignment of error.
As this goes only to the distribution of the proceeds of the sale, and will not affect the sale itself, and inasmuch as it was admitted on the argument that the sale had already taken place at which the premises (which were sold subject to Topliff’s first mortgage) only brought the gross sum of $150, this question is of no real practical importance, as appellant’s share would only be a very few dollars. But we are unable to see how, upon the facts, the doctrine of subrogation can apply. This doctrine, we are aware, is a favorite one with the courts, but its application is regulated by certain well-defined rules.
It can only apply where the payment operates as a purchase or equitable assignment, and not an extinguishment of a claim. It only applies in favor of one who has- bought the debt either expressly or by paying it under circumstances which render the payment equivalent to a purchase. Whether the payment amounts to a purchase or an ex-tinguishment is really a question of intention, either express or presumed from the relation of the party to the debt or other circumstances under which the payment was made. There is no finding that the parties intended the payment of these claims as a purchase, or intended that they should be kept alive for the benefit of Topliff. On the contrary, the court finds that the agreement was that she should pay the claims, and obtain releases therefor, and that the payment operated to extinguish them.
Nor are any facts found from which an intention to keep the claims alive can be presumed. The payment was not made by one collaterally liable for the debts, when the law, by reason of the right of the party, would presume that the payment was intended as a purchase, and not as an extinguishment. Neither is it found that, as in Emmert v. Thompson, 49 Minn. 386, (52 N. W. Rep. 31,) the payment was made under any mistake of fact as to the state of the title of the premises. So far as appears, Topliff obtained just *398the security under her mortgage which she expected to get, with these claims extinguished. In short, the facts found do not’ bring the case within any recognized ground for equitable subrogation. The mere fact that, if subrogation is not allowed, the other lienors may be in better position, or, if allowed, may be in no worse position than if these claims had not been paid, is not, of itself, ground for subrogation. Judgment modified in so-far as it makes the second Topliff mortgage co-ordinate with plaintiff’s lien; but the amount is so trifling that appellant is not entitled to statutory costs.
Vanderburgh, J., absent, took no part.
(Opinion published 55 N. W. Rep. 543.)