Court Opinion

ID: 5169129
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:51:50.113404+00
Date Added: 2024-06-11T08:26:00.032374
License: Public Domain

AILSHIE, J.,
Dissenting. — The provisions of the lien law under consideration are, it seems to me, too plain and clear to require any construction, but the view taken of them by my associates is so diametrically opposed to what I conceive to be the plain and simple meaning of the English language in which these statutes are expressed that I find myself poring over them to find the meaning my brothers give them. The first territorial legislature, in 1864, enacted a lien law, and nearly every succeeding legislature from that time until the 1881 session either amended the law as it then existed or repealed the entire law and enacted a new and different one in its stead. At the 1881 session a new lien law was enacted, some of the sections of which were similar to provisions then found in the California lien laws, while other provisions were entirely different from the California law, and were evidently taken from the laws of other states. Taken, therefore, as a whole, it cannot be truly said that the lien law of 1881 was *332copied from the California statute. Section 819 of the Code of Civil Procedure of that session, however, was practically the same as section 3 of the lien law of California, as approved March 30, 1868 (Stats. 1867-68, p. 589, c. 448), and which was subsequently adopted as section 1186 of Deering’s Code of Civil Procedure. And, indeed, this same section was then, and is still, to be found in substance in the lien laws of many states of the Union. The Idaho legislature continued to amend the act of 1881 from time to time until 1893, when the entire lien law which was then embodied in title 4 of part 3 of the Code of Civil Procedure of 1887 was repealed, and the new law was enacted and approved February 27th of that year. (Sess. Laws 1893, p. 49.) By the act of 1893 the entire theory of our lien law was changed, and under it a subcontractor, laborer, or materialman might have.an absolute lien direct upon the property, irrespective of the status of the original contractor, or the amount which might be due him on the contract. On the other hand, the old lien law, as found in the 1887 statutes, made the lien of subcontractors, material-men, and laborers dependent entirely upon the original contractors’ status, and, if he had no lien, then the subcontractor, materialman or laborer had no lien, and, if he did, their lien only extended to “the amount then or thereafter due such contractor from such owner or person employing him under the contract. ’ ’ By the act of 1893 our legislature changed from what is sometimes called the “New York lien system” to that frequently designated as the “Pennsylvania system,” as discussed in Jones on Liens, section 1285, and Boisot on Mechanics’ Liens, section 225 et seq. It should therefore be borne in mind, when examining California eases, that those decisions were announced upon lien statutes following the New York system, and the discussions of the statutes therein contained rest upon that theory of the law. It is true that section 5 (page 51) of the act of 1893 is also found in the California statute, and has frequently been referred to by the courts of that state; but the views of the court upon that section have but little weight in construing our statute, when it is remembered that the general theory and trend of *333the other provisions of their statute have differed so widely from ours. My examination, however, of the California statutes convinces me that the court of thaj; state has never at any time gone to the extent of directly announcing the doctrine that is claimed in this case.
I shall briefly review the authorities cited in the majority opinion, since to my mind they all fall so far short cf holding what is claimed for them. (Preston v. Sonora Lodge, 39 Cal. 116, and Crowell v. Gilmore, 18 Cal. 370, are two eases more frequently miscited and misquoted on the various phases of mechanics’ liens, and perhaps decide less, than any other cases I have examined on this subject. In the former ease the only question before the court was as to whether or not certain persons who had furnished material and performed labor in a "quartz mine were entitled to have their liens preferred to that of a mortgage which was executed and recorded prior to the commencement of work by numerous lien claimants. That was the sole and entire question before the court and it was not contended that work in extracting ore from a quartz mine, or running tunnels or opening up or developing the same, should be held or construed as work done or material furnished upon any “building, improvement or structure,” so as to allow the lien to attach as of the date of the commencement of such “building, improvement or structure. ’ ’ Indeed, the court said in the course of that opinion: “In the record before us there is nothing indicating, nor do we understand the respondents as claiming in argument here, that the work or repair upon this mine resulted in placing thereon any improvement of the distinctive and exceptional character just mentioned, but the respective claims of all the parties to this controversy are conceded to extend to the entire mining premises, including, of course, all the improvements thereon.” In a case like the Preston-Sonora Lodge case, involving work done in a mining claim, as disclosed by the facts of that case, the question here presented could not well arise, because under those facts there is no such thing as the commencement of a “building, improvement or structure” to which such liens could refer for their incep*334tion. It was purely a question of commencement of “work.” In the Crowell-Gilmore case the only question before the court was as to whether or not the mechanic who made the first contract or first commenced work had a prior lien over one who commenced work subsequently on the same building or structure, and the court applied the principles of equity, and held that they were all on the same footing. After deciding the point before it the court indulged in some speculations which decided no question in the ease, and which apparently had reference to no statute found upon the books. In Boot v. Bryant, 57 Cal. 48, the mortgage was executed in May, 1877, and, while it was not recorded until November, 1878, the court held that the lien claimant who performed the laboi. between March and July, 1878, was presumed to have had notice of such mortgage, and that his lien was therefore subordinate to such mortgage. Pacific Mutual L. Ins. Co. v. Fisher, 106 Cal. 224, 39 Pac. 758, does not pretend to decide any such question as is before the court in this case. The point the court was passing upon when it used the language quoted in the majority opinion in this case was as to whether or not a person who furnished materials for building under a direct contract with the owner might file his lien within the statutory time after he completed his contract, or whether he should wait until the building was completed before filing his claim. In a discussion of that question the court used the language cited, and held that each laborer or materialman who contracted directly with the owner should be held to be an “original contractor, ’ ’ and to that extent departed from its former holding, which this court had refused to follow in Colorado Iron Works v. Rickenberg, 4 Idaho, 262, 38 Pac. 651. It is true that some things are said in the syllabus' to this case (which was not written by the court) that are in no way passed upon or decided in the opinion.
It is claimed, however, that our statute is very similar to that of the state of Washington, and .that the Washington court has construed the section here involved in Mechanics’ Mill etc. Co. v. Denny Hotel Co., 6 Wash. 122, 32 Pac. 1073, and Home Savings etc. Assn. v. Burton, 20 Wash. 688, 56 *335Pac. 940. In each, of these cases the Washington court has held that the lien must date from the time the work was commenced or the material was commenced to be furnished, and not from the commencement of the building. Each of those cases was decided by merely a majority of the court; the minority apparently having expressed no opinion in the cases. An examination of those cases discloses, also, that they were decided upon the provisions of section 1666, volume 1 of the Code of that state, which is the same as section 5 of our lien law (Laws 1899, p. 148), and that no consideration was given to the other significant provisions of the same act. The most casual reading of the Home Sav. etc. Assn, case will disclose the fact that the learned judge who wrote that opinion overlooked the vital portion of the section when he said: “When the legislature said that the liens for which pr vision was made are preferred to any lien, mortgage or other encumbrance of which the lienholder had no notice, and was unrecorded, they also in effect said that such liens are not preferred to mortgages of which the lienholder had notice, or were recorded at the time the lien arose.” Now, it is generally recognized, where recording laws prevail, that a person dealing with real property is not-hound by any unrecorded mortgages unless it be shown that he has actual notice of them; and that statement of the learned judge does not in any respect answer the portion of the section which says: “The liens provided for in this chapter are preferred to any lien, mortgage or other encumbrance which may have attached subsequent to the time when the building, improvement or structure was commenced.” The vital question there was as to when the lien “arose” under the Washington statute.
In the majority opinion, after some analysis of section 5, and the conclusion that each lien dates from the time the work was begun or the material furnished, the question is asked: “If that were not intended, why did not the legislature simply say that all liens for labor and material furnished in the erection or construction or repair or change of a building took effect from the commencement of the construction of such building, or of such repair or change?” The answer to the *336question is simple. - Section 5 provides the preference for all liens enumerated in that chapter, and the chapter contains numerous matters and things for which liens are provided, other than that for “labor and material furnished in the erection or construction or repair or change of a building. ’ ’ Section 5 consists of one sentence, and there is nothing complicated or difficult in the language used. The first part of the sentence, namely, “the liens provided for in this chapter are preferred to any lien, mortgage or other encumbrance which may have attached subsequent to the time when the building, improvement or structure was commenced,” is to be found in the lien statutes of several states, and the courts of those states have had no difficulty in holding that such a statute entitled all liens to relate back to the time of commencement of “the building, improvement or structure.” (Gardner v. Leck, 52 Minn. 522, 54 N. W. 748; Oriental Hotel Co. v. Griffiths, 88 Tex. 574, 53 Am. St. Rep. 790, 33 S. W. 652, 30 L. R. A. 765; Neüson v. Iowa Eastern Ry. Co., 44 Iowa, 71; Insurance Co. v. Slye, 45 Iowa, 615; Davis v. Bilsland, 18 Wall. 659, 21 L. ed. 969; Kansas Mtg. Co. v. Weyerhaeuser, 48 Kan. 335, 29 Pac. 153; Haxtun Steam Heater Co. v. Gordon, 2 N. Dak. 246, 33 Am. St. Rep. 776, 50 N. W. 708; Norris’ Appeal, 30 Pa. St. 122; Watts v. Sweeney, 127 Ind. 116, 22 Am. St. Rep. 615, 26 N. E. 680; Vilas v. McDonough Mfg. Co., 91 Wis. 607, 51 Am. St. Rep. 925, 65 N. W. 488, 30 L. R. A. 778; Dubois v. Wilson, 21 Mo. 213.) But the Idaho statute is a much more comprehensive and liberal statute in the allowance of l'iens than most states have, and allows a lien for labor done in the construction, alteration, or repair of any building, wharf, bridge, ditch, dike, flume, tunnel, fence, machinery, railroad, wagon road, aqueduct, or work in any mine, or for work done in grading any lot, or filling and grading any street in front of any lot, or for work done on any public improvement or structure for any city, town, county, or school district, and allows a lien for any material furnished in connection with any such work. Following upon the enumeration of the various work for which liens are allowed, section 5, in prescribing the preference for such liens, *337goes beyond the mere enumeration of “buildings, improvements or structures, ’ ’ and provides that in ease the lien should be one for 'which the work was not done, or the materials were not furnished, upon a “building, improvement or structure,” then the lien should date from the time the work was commenced or the materials were commenced to be furnished. For instance, if the work was done in a mine, then the only period of time from which the right of the lien to attach could date would be from the commencement of the work, and if he should furnish materials for a mine, tunnel, or in grading a lot or a street, then the only time from which the lien right could date would be from the commencement to furnish such materials, since they were not furnished in the erection or construction of a “building or structure.”
It seemr. to me that the legislature could not have written a statute plainer if they had tried, and that this is only capable of the one meaning. There is no such thing known to the statute as a lien for commencing a building or structure, or for anything other than labor in some form or materials furnished. It takes both labor and material for the construction of a building, and, when the legislature said that liens for constructing a “building, improvement or structure” should be preferred to any lien, mortgage or other encumbrance which might attach subsequent to the commencement of such building, improvement or structure, it certainly meant to allow liens for every kind of labor and every kind of material which go to the erection and completion of such building, improvement, or structure. Any other view that may be taken of it leaves this language absolutely meaningless and surplusage. By the construction placed upon this statute by the majority of the court a contractor who has done one day’s work toward the construction of the building for which he has contracted may have a lien for the labor and material necessary to the completion of the building, and yet the laborers who commenced work the next day, and the materialman who began furnishing the material on the following day, may all be deprived of their right of lien by reason of a mortgage which has been executed during the intervening night. This *338is neither reason, justice, nor, in my opinion, the purpose or intention of the law. Under the construction placed upon this statute, if one man should commence to labor on a building and another to furnish materials, and the next day a $50,000 mortgage should be placed upon the premises, these two men might continue — the one to labor and the other to furnish material — for ten years, and finish the building and be entitled to their lien, but if the owner or contractor should, or the following day after the execution of the mortgage, employ a large crew of men to labor, and a sufficient number of others to furnish materials, so that the building might be completed in a half a year, both the mortgagee and the owner of the building would have received the benefit of the improvement and the use of the building, and yet these additional laborers and materialmen would be entitled to no lien. Such a proposition, to my mind, discloses one of the innumerable absurdities into which such a conclusion must inevitably lead.
The statute, however, furnishes still further potent reasons why the conclusion of the majority in this ease is contrary to every thought and intention of the lawmakers when writing and enacting the statute. Section 11 (page 149) of the act provides the rank and classification of the liens as follows : “In every case where different liens are asserted against any' property, the court in the judgment must declare the rank of each lien or class of liens which shall be in the following order: 1. All laborers, other than contractors; 2. All materialmen, other than contractors or subcontractors; 3.' Subcontractors; 4. The original contractor; and in case the proceeds of sale under this chapter shall be insufficient to pay all lienholders under it: 1. The lien of all laborers, other than the original contractor and subcontractor, shall first be paid in full, or pro rata, if the proceeds be insufficient to pay them in full; 2. The lien of materialmen, other than the original contractor or subcontractor, shall be paid in full, or pro rata, if the proceeds be insufficient to pay thorn in full; 3. And out of the remainder, if any, the subcontractors shall be paid in full, or pro rata, if the remainder be insufficient *339to pay them in full, and the remainder, if any, shall be paid to the original contractor; and each claimant shall be entitled to execution for any balance due him after such distribution; such execution to be issued by the clerk of the court upon demand, on the return of the sheriff or other officer making the same, showing such balance due.” Section 12 (page 150) provides that any number of persons making liens against the same property may join as plaintiffs in the action for the foreclosure of their liens, and that in case they commence separate actions the court, by its order, may consolidate them. Now, it' is obvious that the legi.lature would never have authorized lien claimants to join as plaintiffs whose interests were adverse to each other. But under the holding in this case there would in most cases be more rivalry and adverse interests displayed among the various lien claimants themselves in the effort of each to show that his lien is superior and preferred to that of his coplaintiff than would often be manifest or developed as against the real defendant and owner of the property. Whenever we say that each lien dates its inception and attaches from the date the claimant commenced work or furnishing material, we at once abrogate every provision of section 11, supra, and leave the entire section a dead letter on the statute books. By the terms of that section the original contractor is the fourth and last in the list of preferences and priorities as among the lien claimants, and, of course, he is always the first man who makes a contract with reference to a building, and the first one to do any work with reference thereto. Now, under the holding of my brothers, it is stated that such contractor might take a mortgage on the property for his claim, and that he would thereby have secured a lien prior to that of all laborers or materialmen who might commence work or the furnishing of material subsequent to the date on which the mortgage was executed. It is even said that it “would not be just to the mortgagee” to allow the lien claimants a preference over him under such a state of facts. I ask the question: Is it possible that we have a lien law which could be evaded in such a palpable manner, and its provisions, which were intended *340as a shield and protection to laboring men, turned into an instrument and means for cheating and defrauding them in such a manner? Is it possible that a lien created by law for the protection of laboring men is so much inferior to the devices and machinations of wily contractors and irresponsible property owners that they may create a lien by contract that will rise so superior to the statutory lien as to deprive the very persons for whom it was enacted of its protection? When the money-lender takes his mortgage on a property on which a building is being erected he can see with his own eyes what is being done — that a building is under course of construction, and that its completion will enhance the value of his security to the extent of the value of such structure. He also has notice that the men who performed the labor and furnished the material in the construction of such building must be paid, and that they are entitled to liens on the property, and that the statute says their liens are “preferred to any lien, mortgage or other encumbrance which may attach subsequent to the time when the building, improvement or structure was commenced. ’ ’ This is manifest justice, and any departure from it is a departure from the spirit and intent of the statute and the plainest dictates of equity. Is it possible that eveiy carpenter, mason, hod-carrier, painter, or plasterer employed to work on a $50,000 building, who knows neither the owner of the building nor the contractor, must, before doing a day’s work on the building for the sum of $3 or $4, spend two or three days in traveling, as it would be necessary in many counties in this state, a distance of one hundred miles or more to the county seat to examine the records and ascertain whether the owner has placed a mortgage of record upon the property? And, perhaps, if he found no mortgage of record, before his return and commencement of work the mortgage would be of record, and then the court tells him that the mortgage is ahead of his lien claim. It is a notorious fact that the laboring man is not the man who examines the records. He has other things to do, and this was undoubtedly one of the many considerations which led the legislature to provide that a lien for his labor might have its *341inception and date from the commencement of the building. The individual, corporation or trust company that loans money has time both for the examination of the records as well as the property on which they take their mortgage, and they always do so, and their means of ascertaining whether a building is under course of construction are ample and never overlooked by them.
The principle involved in this statute is clearly this: That the commencement of a building on the premises constitutes actual notice to all the world that a building is to be constructed, and that such notice rises superior to all subsequent constructive notices that can be given under the recording laws. The statute of Texas, so far as it goes, is very similar to our section 5, and the supreme court of that state, in Oriental Hotel Co. v. Griffiths, 88 Tex. 574, 53 Am. St. Rep. 790, 33 S. W. 652, 30 L. R. A. 765, held that the statute intended to place all liens upon an equal footing, and that, when claimed upon a building, all dated from the commencement of the building. In discussing this question the court said: “When a building or other improvement is in course of construction, end any person takes a mortgage on the land upon which such building or improvement is situated, or on the improvement itself, he does so with the knowledge that it may be necessary, for the completion of the building, that other contracts should be made for labor and material; and it is clearly the policy of this state, ?s shown by its statute law, that an intervening mortgagee shall not destroy the statutory rights of persons that may be acquired thereafter in the course of constructing such building. The deed of trust in this case expressly reserves a lien upon the building thereafter to be constructed, and it is evident from the facts that the principal security for the bonds which were being sold was to be created by the completion of the contemplated hotel building. If the position taken by the counsel for the Oriental Investment Company be correct, then an intervening mortgagee could arrest the progress of such work, destroy the statutory rights and liens of all persons who might be engaged in the work, and assert a lien by contract which would be superior to that given by the law un*342der which the contract was made. This, we believe, cannot be maintained.....The man who lays the foundation has an equal claim upon the whole structure with all others, and the man who completes the work has an equal claim upon the foundation with him who does the work thereon or furnishej the material therefor. The lien, then, which is secured by statute, extends in favor of each, from the beginning to the completion of the work, and, if it so extends and embraces all that has been done from the beginning to the completion, its ‘inception’ must be the time to which it is made to relate in giving effect.” This case contains a very able and lucid discussion of the question, and of the purpose and intention of the lien statutes, and is worthy of much consideration. In Davis v. Bilsland, 18 Wall. 659, 21 L. ed. 969, this question arose over a Montana statute very similar to ours, so far as it went, though less comprehensive, and in the course of its consideration Mr.'Justice Bradley said: “The liens secured to mechanics and materialmen have precedence over all other encumbrances put upon the property after the commencement of the building; and this is right. Why should a purchaser or lender have the benefit of the labor or materials which go into the property and give it its existence ? At all events the law is clear.” In Neilson v. Iowa Eastern Ry. Co., 44 Iowa, 71, the supreme court, in considering a statute of Iowa substantially the same as section 5 of our statute, with the exception that it did not contain the words “work done or materials were commenced to be furnished,” held that all liens attached from the commencement of the building. The first paragraph of the syllabus to that ease is as follows: “A mechanic’s lien attaches from the commencement of the building, and takes precedence over a mortgage executed after that time, although the particular work for which the lien is claimed was not commenced until after the execution of the mortgage.” (See, also, Insurance Co. v. Slye, 45 Iowa, 615.) The same conclusion has been reached under the statute of Kansas, substantially the same, as the Iowa statute. (See Kansas Mtg. Co. v. Weyerhaeuser, 48 Kan. 335, 29 Pac. 153; Warden v. Sabins, 36 Kan. 165, 12 *343Pac. 520.) The supreme court of Missouri held to the same effect as early as 1855. (See Dubois’ Admr. v. Wilson’s Trustee, 21 Mo. 213.) In Gardner v. Leck, 52 Minn. 522, 54 N. W. 746, the supreme court of Minnesota overruled its former decisions on this question, and held that all liens for work done and materials furnished in the construction of a building should date from the commencement of such building. This decision was by a divided court, but the reasoning found in the opinion of Justice Collins appeals to me as sound, and founded upon the true intent and spirit of the statute. In course of the opinion it is said: “A majority of this court are clearly of the opinion that the views expressed in the Finlayson case (47 Minn. 74, 49 N. W. 398, 645) are unsound. If such a method of distribution were adopted, it would result in deferring to some extent the lien claims of those who had performed work or furnished material before the execution of the mortgage to its lien in every case where the premises sold for more than sufficient to pay prior, in point of time, claimants, because those ahead would have to share with those behind the mortgage. It would compel those who had performed their labor or furnished material.; upon the strength of an unencumbered title to submit to a possible postponement of their claims to an encumbrance in no manner connected with the improvements, and brought into existence during or perhaps subsequent to, the fulfillment of their contracts. It would : lace it in the power of the owner of the real estate to mortgage it so as to substantially affect rights already assured and relied on, and virtually to destroy the statutory security. Significant illustrations of this kind might be multiplied, but are unnecessary. To permit assured rights to be thus displaced, really at the option of the owner, is opposed to the spirit and intent of the law.....There is nothing novel or unjust in a law which gives priority to the liens of mechanics and materialmen over those of other parties, originating subsequent to the commencement of the improvements on the land. In at least twenty states such laws have been enacted, and again and again have they been sustained by the courts. *344These states are named, and a synopsis of their lien statutes given, in Jones on Liens, sections 1187, 1469.” After proceeding to announce the two theories presented to the court it is again said: “The inevitable logic of what we have said is that, whenever a mortgage or other encumbrance or distinct lien originates subsequently to the commencement of the work on the ground, or the furnishing of materials at the same place, so that the world may have notice of the proposed improvement, it must yield to the claims of all who have contributed to the completion of the structure with their work or materials. A mortgage placed upon real property subsequent to the commencement of a building, after lien rights have attached, must be subordinated to the liens provided for in chapter 200, page 313 of the General Laws of 1889. The rights of the person who first labors, or those of the materialman who first furnishes material, in respect to the time they attach, are fixed by statute; and it was the plain and unmistakable intention of the legislature to date all lien rights from this time, and to place all who may be engaged in a common enterprise — the erection and construction of a building — upon the same footing.”
Again reverting to our statute, we find that the legislature was careful in every section to provide the manner and method of securing a lien to every person entitled thereto under chapter 1 of the act. Section 6 (page 148) prescribes that every original contractor must file his claim within sixty days, and every other person within thirty days, “after the completion of any building, improvement or structure, or after the completion of the alteration or repair thereof or after he has ceased to labor thereon from any cause, or after he has ceased to furnish materials therefor, or after the performance of any labor in a mine or mining claim.” This is a further illustration of the fact that the legislature meant all liens for labor or material used in the construction of a building to date from the commencement of the building, and if for labor on something other than a building, as in a mine or on mining claim, then from the commencement of the labor, etc. Another significant fact dis*345closed by this section is that wherein it provides the kind and character of lien to be filed. It nowhere requires the claimant to state when he commenced work or furnishing materials. After prescribing thesi numerous provisions in detail the entire act closes by admonishing the courts that “its provisions and all proceedings under it are to be liberally construed with a view to effect its object”; and there can be no question as to what its object is. That object is to secure liens to the laborers and materialmen enumerated in the act. I am thoroughly satisfied that the trial court arrived at the correct conclusion as to the intent and purpose of this statute, and, indeed, the clear and unequivocal expression of the statute itself, and his judgment should be affirmed.
(December 23, 1905.)