Court Opinion

ID: 3475424
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:47:14.471716+00
Date Added: 2024-06-11T13:33:56.269594
License: Public Domain

In the original opinion rendered in this case it was conceded that, *Page 378 
under the doctrine announced in Capital Building  Loan Ass'n v. Carter, 164 La. 388, 113 So. 886, and Central Lumber Co. v. Schroeder, 164 La. 759, 114 So. 644, the furnishers of materials would have liens superior in rank to the mortgage and lien of the homestead association if Mrs. Montegut had been the owner of the three lots when she entered into the contract with E.J. Stewart Co. to construct the buildings, and when they were being constructed. The doctrine of the decisions cited is that, if a materialman's claim is recorded within the time prescribed by the Act 139 of 1922 to affect third parties, the recording has a retroactive effect against mortgages previously recorded. The time within which materialmen's claims should be recorded, to affect third parties, is, according to section 2 of the statute, within 30 days after the recording of a notice of acceptance of the work. As no such notice was ever recorded in these cases, the claims of the materialmen were recorded in time to preserve their liens.
The only reason why it was decided on the first hearing of these cases that the materialmen did not have liens was that Mrs. Montegut did not own the lots at the time when she entered into the contract with E.J. Stewart  Co. for the construction of the buildings. She had, at that time, a recorded contract to buy the lots from the Picheloup Realty Company for $4,000, and it was stipulated in the contract that she should have "immediate possession for building purposes." Therefore, when the homestead association examined the title, with the view of making a loan upon the property, for the purpose of paying for the construction of the buildings on these lots, the association was informed that, at the time when the buildings were constructed, Mrs. Montegut was in possession of the lots for the purpose of constructing the buildings, and under a contract to buy the *Page 379 
lots, and, as a matter of fact, the lots were transferred by the Picheloup Realty Company to Mrs. Montegut — in a roundabout way — before the buildings were completed, and pursuant to the recorded contract on the part of the Picheloup Realty Company to transfer the lots to Mrs. Montegut. The Picheloup Realty Company transferred the lots to Maurice Lecompte, who was the attorney for E.J. Stewart  Co., and, on the same day, Lecompte transferred them to Joseph J. Fineran, who was the secretary of E.J. Stewart  Co. Fineran transferred the three lots to the homestead association, and on the same day the homestead association transferred two of the lots, 39 and 40, with the buildings thereon, to Mrs. Montegut, and transferred the other lot, 38, with the building on it, to Henry B. Foster, who was an employee of E.J. Stewart  Co., and who gave Mrs. Montegut a counter letter to the effect that the title was taken in his name for her account. E.J. Stewart testified that Lecompte and Fineran were parties interposed "for the purpose of financing the work," and that the reason why the title to one of the lots, with the building on it, was placed in the name of Foster, instead of Mrs. Montegut, was to avoid making too large a loan to Mrs. Montegut. Inasmuch as the homestead association was one of the parties interposed in these transactions, by which the title was conveyed from the Picheloup Realty Company to Mrs. Montegut, in fulfillment of the contract between them, which was on record when the homestead association entered into the transactions, the latter is not in a position to plead successfully that Mrs. Montegut did not own the lots when she entered into the contract with E.J. Stewart  Co. The third section of the statute makes provision for a case like this, viz.:
"Where any work as hereinabove set forth is done on buildings or other improvements *Page 380 
made, where the person for whom the work is done or with whom the contract is made, or by whom the work is done is not the owner of the land upon which the work is located, then the liens and privileges created and established by this Act shall operate upon whatever right said person having the work done, or doing the work, may have to the use of the land as lessee, usufructuary or otherwise; and said lien and privilege shall operate against the lease such person holds if there is one," etc.
Accordingly, the liens of the materialmen in this case affected the right which Mrs. Montegut had to possess the lots for the purpose of building on them, and to become the owner of them, at the price stipulated; and when that right developed into ownership of the lots, the materialmen's liens affected the lots themselves. And the important fact, as far as the homestead association is concerned, is that Mrs. Montegut's right of possession, and the extent of her right, was a matter of record.
According to the fifth section of the statute, Mrs. Montegut's failure to record the building contract, and failure to obtain and record a bond, made her liable to those who sold materials to the contractor; and their liens, being recorded within the time stipulated in the second section of the statute, had effect against third parties.
The eighth section of the statute declares that the liens or privileges thereby created are superior to all other claims against the building and the land on which it is situated, except taxes, local assessments for public improvements, and claims secured by a vendor's lien on the land recorded previous to the building contract; and that the holder of a vendor's lien shall be entitled to a separate appraisement of the ground and of the building or other work thereon, in the event of a *Page 381 
sale of the property, so that the holder of the vendor's lien shall be paid in proportion to the appraisement of the land, and the holders of the other liens in proportion to the appraisement of the building. That is the situation here. The liens of the materialmen are superior to the ordinary mortgage held by the homestead association, even though the mortgage was recorded ahead of the materialmen's claims; but the materialmen's liens are superior to the vendor's lien held by the homestead association, only on the building, and are inferior to the vendor's lien on the land. The consequence is that there should have been a separate appraisement made of the land and of the improvements, in each case, before the sale; and the proceeds of the sale, which were not sufficient to pay all of the liens, should have been apportioned between the homestead association on the one hand, and the materialmen on the other, in the ratio which the appraisement of the lot or lots, and the appraisement of the improvements, respectively bore to the proceeds of the sale, in each case. The materialmen contend, according to the language of the eighth section of the statute, that the burden was upon the homestead association, as holder of the vendor's lien, to ask for a separate appraisement. The homestead association contends that, as its lien affected the whole property, and as it had the right to seize and sell the property as a whole, the burden was upon the materialmen to demand a separate appraisement. As the proceeds of the sale are yet in the hands of the sheriff, it is not too late, or impracticable, to have a separate appraisement made, as of the date of the sale. New Orleans Land Co. v. Southern States Fair-Pan-American Exposition Co., 143 La. 884, 79 So. 525. It is not necessary to decide whose duty it was to demand a separate appraisement. Our conclusion is that the two cases should be remanded *Page 382 
for the purpose of having the separate appraisements made, and the proceeds of the sales apportioned accordingly.
Unfortunately, for them, two of the materialmen who obtained judgments in their favor in the court below, and whose judgments were annulled by the decree of this court did not apply for a rehearing. We refer to the National Sash  Door Company and the United Hardware Company, who were appellees in the case of Union Homestead Association v. Henry B. Foster, No. 28923. As their interest in the matter was entirely separate and distinct, the judgment which was rendered against them is final. Succession of Morere, 117 La. 543, 42 So. 132; Lahn  Co. v. Carr, 120 La. 797, 45 So. 707.
These cases are ordered remanded to the civil district court for the purpose of having a separate appraisement made of the land and of the improvements, in each case, as of the date of the sheriff's sale, in order to distribute the proceeds in the proportions stated in section 8 of Act 139 of 1922, p. 293. The costs of this appeal are to be paid by the appellees, the liability for other costs being dependent upon the final judgment. The right is reserved to the Union Homestead Association to apply for a rehearing.
OVERTON, J., concurs in decree and assigns reasons.
ROGERS, J., takes no part.