Crowell v. Gilmore

California Supreme Court Jul 1, 1861Published

Before: Baldwin

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Holding. The court held that mechanic's lien claimants under the statute are entitled to equal priority among themselves, regardless of when they commenced work, but their priority relative to a mortgage depends on whether their work began before or after the mortgage was executed.

Issues

Whether the mechanic's lien statute grants priority to mechanics based on the date they commenced work.
How proceeds from a foreclosure sale should be distributed among mechanics and mortgagees when work was performed both before and after the mortgage was recorded.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“there is nothing in the statute which gives priority to the mechanic who makes the first contract or first commences work. On the contrary, the general scope of the act would seem to exclude this idea, and to place all such claims on a footing of equality.”

“As the statute makes no discrimination among these lien holders, and as there seems to be no reason founded in justice for making it, we have no authority for discriminating.”

Synopsis

Undue the Mechanics’ Lien Act of 1856, the mechanic making the first contract, or first commencing work on a building, has no priority over others commencing work subsequently. The statute places all claimants on an equality, and directs the property to be sold and the proceeds applied to all without preference.

This rule of equity would not apply if some mechanics began work before a mortgage was executed by the owner of the property, and some afterwards. In such case, the first lien holders would have priority over the mortgagee, while the latter would not. The first class would be paid in full before the mortgage ; then the mortgage, then the last class—each lien holder having equal claims with the others of his class.

Baldwin, J. delivered the opinion of the Court Field, C. J. and Cope, J. concurring.

Bill filed to enforce a mechanic’s lien.

Crowell, the plaintiff, and Scranton, Drummond and Demarest, interveners, were employed by defendants, Bull & Spencer, to work on a building in Shasta, in October, 1856, and they continued to [371]work until April, 1857. On the fifteenth of ¡November, 1856, Bull & Spencer, the owners, mortgaged the building to defendant Shea. After this date, the appellants, Yan Schank, Beckhard, Iieely and Hughson, were employed as mechanics on the building, and continued to work until the first of April, 1857. In April, 1857, Bull failed in business, and surrendered his property under the Insolvent Act, and the plaintiff and other mechanics, to whom considerable sums were due, filed their lien upon the building, and this action was brought by the plaintiff to foreclose his lien on the premises. The other mechanics under the statute intervened, and asked that their claims be also allowed. Shea and others, holding mortgages, intervened, and opposed the lien of the mechanics. The District Court rejected the liens in favor of the mortgages, on the first trial; but this Court (13 Cal. 54) reversed the judgment, holding that by statute “ the lien of the mechanics may be recorded within sixty days after the completion of the building, and by relation the lien attaches from the commencement of the work. All persons who deal with the property during the progress of the work are charged with notice of the claim of the contractors.” After the return of the case, the District Court made a decree by which it directed a sale of the premises, and a distribution of the proceeds of sale: first, to pay the costs; second, the claim of Crowell, who was employed in September, 1856 ; third, the claim of Demarest, who was employed in October,. 1856; fourth, the claim of Drummond, employed in October, 1856; fifth, the claim of Shea, who held a mortgage executed and recorded ¡November 13th, 1856 ; and after this, the several appellants in the order of time in which they commenced to work upon the building.

From this decree the appellants, the workmen who are postponed, appeal.

The statute under which this suit is brought (April 17th, 1856, Wood’s Dig. 537) provides for this lien, as here asserted, for work and materials. But there is nothing in the statute which gives priority to the mechanic who makes the first contract or first commences work. On the contrary, the general scope of the act would seem to exclude this idea, and to place all such claims on a footing of equality. It gives the lien to all, and directs that all claimants

Crowell v. Gilmore

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