Parker v. Tout

LANGDON, J.

This is an appeal from a judgment declaring a mechanic’s lien in favor of plaintiffs to be prior in right to the mortgage lien of the defendant bank upon real property situated in Glenn County, California, and owned by the defendants Tout.

The facts in the case are not disputed. The defendant bank was the owner and holder of a note for $25,000, secured by a deed of trust upon this real property, which deed of trust was recorded June 17, 1922, and was a valid and subsisting first lien of record at the time the plaintiffs commenced the working of digging a well upon the property, which work is the basis of the mechanic’s lien asserted in this action.

Shortly before May 14, 1924, Tout went to the bank and arranged to borrow some money to dig a well, intimating at the time that the well need be only about 100 feet deep. On May 14, 1924, Tout entered into a contract with plaintiffs to dig this well at an agreed price per foot. The well actually cost over $1,700, as it became necessary to drill much. deeper than was originally planned. The work of drilling the well commenced on May 25, 1924, and was completed July 7, 1924, and the notice of lien was not filed until September 18, 1924. While the well was being drilled, on June 28, 1924, Tout and his wife gave the defendant bank a new note secured by a new deed of trust as a renewal of.

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the old note and interest and some additional advances for taxes, pump, well, etc., the aggregate of which amounted to $27,500. No payments had been made on the original note of $25,000 and the additional $2,500 represented the items above enumerated. This second deed of trust was recorded on July 2, 1924, before the recordation of the mechanic’s lien, but after the work of drilling the well had been started. After the recordation of the second trust deed, on July 2, 1924, defendants W. W. Garthwaite and J. Y. Eceleston, as trustees under the first trust deed, executed and recorded a satisfaction thereof and the same was recorded in the office of the county recorder of Glenn County.

The evidence shows without conflict that before the acceptance of the renewal trust deed of June 28, 1924, and before satisfying the first trust deed of record, the bank had the records of Glenn County searched to ascertain if between the time of the execution of the first trust deed and the renewal thereof any encumbrances or liens had been placed thereon and after a report on the title, the bank accepted the renewal of the first trust deed and had the same recorded and then executed and recorded the satisfaction thereof. It was stipulated that the bank did not know of plaintiffs’ and-respondents’ lien claim until the suit was filed and had no constructive notice thereof until September 18, 1924, when-it was filed for record.