Court Opinion

ID: 3571421
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:24:23.268167+00
Date Added: 2024-06-11T13:48:54.539037
License: Public Domain

I am in agreement with much that has been said in the prevailing opinion, yet I think the conclusion reached is wrong because of faulty reasoning at the last.
To aid an understanding of this difference of opinion, we should be particularly careful in giving the word "owner" employed in our statute its proper signification when applying principles declared in the statute and as used in the decisions of equity courts in moulding the remedy.
The prevailing opinion asserts that, if the vendor fails to post the notice of nonresponsibility, the divided interests contemplated by sections 82-204 and 82-210, Comp. St. 1929, are deemed united for the purpose of satisfying *Page 16 
any valid lien filed consequent on improvements undertaken by vendee.
When a person performs labor upon, or furnishes materials to be used in the construction of, a building, he has a lien upon the same (building) for the work done or materials furnished. Section 82-202.
A building is a fabric, structure, or edifice built or constructed of component parts as of wood, brick, stone, etc., designed for use or convenience as a house, a church, a shop, and so forth. The person who labors upon or furnishes materials to be used in such construction, in so far as he may rely upon a mechanic's lien, relies upon a lien upon a completed building, and perhaps also upon an incidental lien upon the land upon which it is constructed. If he files a claim of lien, it is upon the building and/or the land. He does not file a lien upon a component part of the building, except under circumstances hereinafter noted, where the owner of the building abandons the construction when only a component part of the building has been erected. He would not indulge the futility of claiming a lien merely upon the stone or brick that have been placed in the walls or upon the nails which have been used to hold together the wooden portions of the building. It would be impractical to permit him to take out of the wall the stone or brick or nails that he had furnished and sell them. The lien on the whole building or structure is foreclosed, and the claimant is paid out of the proceeds of the sale. In so far as the primary lien is concerned, there is no difficulty — the lien is upon the building and upon foreclosure a court of equity would have power to order a sale and removal of the building from the land.
But the person having a lien upon the building has "also" a lien upon the land upon which the building is constructed, "if at the commencement of the work, or of the furnishing of the materials for the same the land belonged to the person who caused said building * * * to be constructed."
We have not so far come upon a division of estates. The land and the building "commenced" belong to the same person.
So we said in Albuquerque Lumber Co. v. Tomei, supra. We there held that, under section 82-202, the word "owner" has reference to the person causing the building to be constructed. This is true also under section 82-204, if, as a matter of fact, there is no division of estates. If, however, there is a division of estates, as for example between lessor and lessee or vendor and vendee, then a conditional vendee in possession, who causes the construction of the building to be commenced, is the "owner." Frieidenbloom v. Pecos Valley Lumber Co., 35 N.M. 154,290 P. 797.
If the vendor, the holder of the legal title, knows that the work is being done and/or the materials are being furnished, for the construction of a building upon the land of which he holds the legal title, and fails to post the nonresponsibility notice referred to in section 82-210, he is also constructively the "owner" of a "building * * * constructed."
This is so, not because of any contractual relations between the vendor and the materialman or laborer, but by construction the statute has furnished a rule of evidence *Page 17 
whereby the vendor who in fact did not cause the construction of the building to be commenced is nevertheless to be held to have done so.
If the proof should show that the vendee is an actual agent of the vendor for the purpose of the construction of the building, it would perhaps be held that the vendor was in actual contractual relation with the laborers and materialmen and so has in fact caused the construction of the building to be commenced. No such situation is presented here, and in Albuquerque Lumber Co. v. Tomei, supra, we held that, where the vendee, in an executory land contract, is the builder merely in the sense that he is the person who causes the improvement to be made, he is not the vendor's agent so as to bind the vendor or his property.
We will be aided in understanding our problem if we keep in mind the basis of our lien law in so far as the lien upon the building attaches "also" to the land or an interest therein. In Howes v. Reliance Wire-Works Co., 46 Minn. 44, 48 N.W. 448, 449, the court said: "It is true that the lien law is based on the theory of the increased value of premises, caused by the work or materials furnished, but, where the work is interrupted or materials diverted through the fault or act of the owner, obviously the rule cannot be applied technically to defeat the lien. Esslinger v. Huebner, 22 Wis. 632. And it is now well settled that no loss of lien, for the work actually performed in accordance with the contract, is occasioned, where the work has been stopped or abandoned in consequence of the default of the owner. Phil. Mech. Liens, § 138; Charnley v. Honig, 74 Wis. 165,42 N.W. 220; Kelly v. Rowane, 33 Mo. App. 444, 445. As is well stated in the Wisconsin case: `If the contractor had completed the building according to the contract, no one would contend that he was not entitled to a lien if he had not been paid. How can he stand in a worse position when he has completed it as far as the defendant would allow him, and he asks for the contract price, less the cost of finishing it. It would allow the defendant to take away from the plaintiff one of his statutory rights by a violation of the contract.'"
So, in Chenoweth v. Spencer, 64 Or. 540, 131 P. 302, Ann. Cas. 1914D, 678, it was held that: "Under the Oregon Mechanic's Lien Law the lien of mechanics and materialmen for material and labor furnished in the construction of a building on land held under contract of purchase, the title remaining in the vendor, does not extend to the land where the improvement giving rise to the lien has been destroyed by fire."
The statutes involved were substantially the same as our own. The court says: "The plain purpose of this section [corresponding to our section 82-210] is to make the interest of the owner of the land subject to the lien, as provided in section 7417, L.O.L. [corresponding to our section 82-204], unless the notice provided for is given, but not to impose upon him all the liabilities of the person who caused the building to be constructed. It does not modify nor in any manner affect the extent or character of the lien upon the land as provided by section 7417, L.O.L. [corresponding to our section 82-204]. That is an *Page 18 
incident to the lien on the building for the convenient use and occupation thereof."
The court went on to say: "It appears in most of those statutes that the lien is on the building and ground only to the extent of the interest of the person constructing the building, while in a case such as the one involved here the theory of the lien against the lot is that the lot gets the benefit of the expenditure. If, however, the lien attaches to the lot of a stranger to the contract for the building, and the building is destroyed, the lot owner would get nothing. He was not a party to nor a beneficiary of the improvement, yet his lot would be sold to pay a large debt not incurred for anything that was ever to come to him or by which he was to benefit, which would be very inequitable, a result not contemplated by our lien law, and a condition not coming within its terms."
So far, then, in the case at bar, we find the lien of appellee upon the contemplated building left in such a state of incompleteness that the court found "that the work which Townsend did in putting in the foundation and starting on the walls of the dwelling house, in which work the plaintiff's materials were used, is of no value to Monte Vista Company's land, and did not contribute anything of value thereto in the way of betterments or otherwise," does not extend to the land belonging to vendor by reason of any contractual relations between vendor and the appellee. Such lien as there may be upon the incomplete structure does not attach to vendor's legal estate, because no building has been constructed.
But a mere foundation which was intended to be a part of a building contemplated may be held to be a building when the "owner" has abandoned construction, through no fault of the person furnishing labor or materials.
This rule, developed in the process of administering the remedy under statutes similar to ours, arises out of equitable considerations.
Where prematurity of filing the claim of lien is an issue, it is said the lien claimant ought not to be postponed in the assertion of his lien until the building is completed when the "owner" has stopped the work permanently or indefinitely. On the other hand, when the "owner" has permanently or indefinitely abandoned the work and this fact is brought to the knowledge of the lien claimant, the period of limitations within which a claim of lien may be filed ought to and does commence.
The word "owner," as used in the pronouncements of the rule, means the owner of the building.
The vendor who has put the vendee in possession, even though with implied permission to the vendee to improve the land by construction of a building (nothing more appearing), is out of the picture in so far as this rule is concerned.
The vendor, in the absence of contract to the contrary, has no control of the vendee or his property. He cannot require the vendee to commence or stop. He has nothing to say as to how the vendee shall finance the project so that he will not commence unless he can *Page 19 
finish. He has no control over the vendee's caprices or judgment. If the vendee commences work on a building and then stops the work short of completion, the vendor is powerless; he cannot, on this account merely, re-enter into possession and complete the work. The vendor has nothing to say as to the size and the architecture of the building commenced by the vendee, nor as to the materials to be used or the prices to be paid therefor. If the improvements increase the value of vendor's fee-simple estate, it would not be primarily so, but only as a future incident thereto; so long as the relation of the vendor and vendee exists, the vendor will not become the "owner" of the building, the construction of which is caused to be commenced or completed by the vendee.
Where a building is commenced by a vendee in possession under an executory contract and then abandoned through fault of the "owner" of the building, the lien which has attached to the building in fact incomplete, but constructively complete because of the wrong or fault of the vendee (owner of building), "then only his (vendee's) interest therein is subject to such lien."
Under such a situation, the operation of the provisions of section 82-204 has been restored.
The failure to post the notice of nonresponsibility under conditions requiring it, under section 82-210, shows that, if abuilding is constructed on the land of which the vendor owns the fee simple estate, such vendor may not prevent such estate from being "also subject to the lien" (upon the building) by asserting that the building has not been constructed at his request.
The vendor who has not in fact entered into any contract for the construction of a building is in the same situation of reliance upon a completed building as is the person performing labor on or furnishing materials for a building commenced. If the building is completed, it will presumably be of utility and value. At a lien foreclosure sale, the liens will likely be discharged and the incidental lien upon the vendor's estate will be discharged. He may with reasonable safety so rely and refrain from posting. If the building is constructed, he is protected by the enhanced value of his land interest. If liens are filed, the proceeds of a sale will probably discharge them. They might not, but that is the only chance which the vendor is required to take. The rule of evidence which submits his interest in the land to this hazard does not subject him and his interest in the land to the further hazard of the will of the owner of the building (vendee) to prevent an enhancement of value by stopping the work before anything of value has been put on the land. A foundation for a building commenced and which is abandoned when it has reached the foundation stage may be of as little value to the vendee as to the vendor, if no superstructure is ever erected upon it. But if statutory construction is to be indulged and requires that in justice a person who has performed labor upon such foundation, upon the faith of a continuation of the construction of a building to completion, shall not lose a lien when he is not at fault and the owner of the building commenced is *Page 20 
at fault, and such foundation shall be considered a building completed, then, so far as the incidental lien upon an interest in the land is concerned, only the interest of the vendee who was the owner of the building commenced, but not completed, can be subjected to the lien. It would be inequitable to permit the vendee, owner of the building, to take advantage of his own wrong to defeat the lien as against his interest in the land.
Failure to post the nonresponsibility notice under section 82-210 does not purport by such failure to make the vendor responsible for the vendee's wrongs and faults. It seems to me an unsound doctrine that a consequence visited upon the vendee owner and his property because of the vendee's wrongs shall be also visited upon the vendor and his property when the vendor has done no wrong and has been powerless to prevent the wrongs of the vendee.
The failure of the vendor to post the notice invites continuation of construction to the end of completion. It does not invite cessation of the work.
The majority rely upon the language of the statute that the "building * * * constructed * * * shall be held to have been constructed at the instance of such owner or person having or claiming any interest therein, and the interest owned or claimed shall be subject to any lien filed in accordance with the provisions of this article," and they read into the statute, it seems to me: "If at the commencement of the construction of the building the person who caused it to be commenced owns less than the fee simple estate in the land and he abandons the work before a `building * * * is constructed' such abandonment `shall be held to have been * * * at the instance and request' of the person who owns the fee simple estate and such estate shall be subject to the lien filed."
This is not in the statute and likewise no where does the statute in referring to "building" in terms allude to anything less than a completed building. The lien does not attach to less than a completed building because of the terms of the statute, but notwithstanding such terms.
Now, when a lien claimant comes into a court of equity requesting the chancellor to declare a lien upon land upon which no building has been constructed, he does not rely upon the statute, but upon the principle of estoppel that the person who authorized the improvement and abandoned it shall not be heard to invoke the terms of the statute requiring completion because his wrongdoing prevented completion. The lienor so far succeeds as to subject to the lien the interest of the wrongdoer in the land, not because of the statute but in spite of it. Equity having thus done justice does not require the chancellor to do an injustice by visiting the sins of the wrongdoer upon the innocent owner of the fee-simple estate.
Having invoked a rule based upon equitable considerations to do justice to the laborer and materialman, the application of which rule will do no injustice to the vendee by attaching the lien of the constructively completed building to the vendee's interest in the land, there seems to be no occasion to extend *Page 21 
the application of the rule so as to do an injustice to the vendor. In Jones on Liens, § 1438, it is said: "It would be inequitable and unreasonable, and contrary to the spirit of the law, to hold that parties are absolutely barred of all rights to the lien law, where the work is prematurely stopped or abandoned without fault of such parties. Such a construction would place materialmen and laborers at the mercy of the dishonesty, fickleness, or misfortunes of the owner or contractor." It is apparent that this rule arising out of equity would not have any application in the case at bar so as to attach the lien to the vendor's interest, because the vendor has no opportunity of affecting the situation by dishonesty, or fickleness, and is in no wise responsible for the situation which makes an incomplete building constructively complete.
The Michigan Supreme Court in Scales v. Griffin, 2 Doug. 54, thought it would be a monstrous doctrine "that the owner [of the fee simple estate], who has contracted to convey a lot upon certain terms, and given the possession until these terms be fulfilled, without parting with his title, but who, on account of a breach of the contract, was obliged to take possession of his land again, should be subject to be deprived of his title by virtue of such a lien for buildings erected for the contractor, and without the privity or consent of the owner."
That the failure of the vendor to post the statutory notice of nonresponsibility accomplishes this seeming injustice finds its justification in the consideration that the vendor's interest is to be enhanced in value by the construction on the land of abuilding, and we see the purpose of the rule of evidence. From application of further equitable principles, we find that what is not a building, but a mere hole in the ground, excavated preparatory to laying a foundation or the foundation itself, even though a detriment to the lot, will support an incidental lien on the land or an interest therein. Here the courts of equity, eager to do justice, say the lien claimant shall not be defeated of his incidental lien through the fault of the owner of the building. In other words, the owner of the building will not be permitted to say to the materialman: "You have no lien except upon a building completely constructed notwithstanding that it is my fault that it is not completed."
Equity, thus preventing injustice to the laborer and materialman, does no injustice to the vendee who created the situation requiring the application of the equitable rule so as to attach the lien to the interest in the land of him who has committed the wrong, but it does not go further and do an injustice to the vendor who was not at fault.
When we start in to give life and meaning to the statute by application of equitable doctrines, we should preserve rights without doing injustice. The distinction and division of estates sought to be preserved in section 82-204 will be preserved by extending the equitable rule that the owner's (owner of building) abandonment of the work upon a building is to be deemed a completion of it for the purpose of filing of mechanic's lien, and shall operate no further than to subject *Page 22 
the interest of the owner of the building in the land to the incidental lien.
In Shaw v. Stewart, 43 Kan. 572, 23 P. 616, 618, is an interesting suggestion to the effect that, when the courts have talked of construction of mechanics' lien statutes, they have not exactly meant construing the meaning of words in a statute from a lexicographer's viewpoint, but that, in a case of foreclosure of a mechanic's lien the court will consider the equities unless the spirit of the statute forbids. The court discussing the letter and the spirit of the statute said: "The foreclosure of a mechanic's lien under the statute is an equitable proceeding, in which the powers of the court are invoked to mould the remedy, within the provisions of the statute, to suit the circumstances of the case. In this action the equities are with the plaintiffs. They furnished all the lumber and hardware used in the building, and ought not in justice to be prevented from acquiring and enforcing their liens, because the contractor abandoned his work."
So I say we know that an excavation for a foundation or a foundation without a superstructure is not a building. The courts do not say it is a building, but that equitable principles will permit the materialmen and laborers to acquire and enforce their liens under certain circumstances, notwithstanding the letter of the statute. A court that can do this upon considerations of wrongs by the owner of the building ought to be able to shield those who are innocent of wrongdoing and powerless to prevent the wrongs alluded to.