California Supreme Court Jul 1, 1872 No. No. 2,290Published
Before: Wallace
Synopsis
Parties Plaintiff in Suits to Enforce Liens.—The several parties who furnish materials for or perform labor on a building constructed without any contract in writing for building the same, may unite in an action to enforce their several liens under the Act of April 20th, 1862, in relation to mechanics’ liens.
Liens where there is no Contract in Writing.—When a person proceeds to construct a building by purchasing material and employing labor without making any contract in writing for the construction of the same, the parties thus furnishing material and performing labor are entitled to liens under the seventeenth section of the Act of 1862 concerning mechanics’ liens, even though the amount of a claim exceeds two hundred dollars; and the second section of said Act, requiring contracts to he in writing, has no application to such claims.
Lien of Mechanics and Judgments—Priority.—The lien of a judgment rendered after labor is commenced or material is first delivered, is postponed to the lien of the material man, or laborer, although the labor is completed and the last of the material delivered after the judgment is docketed.
Lien Filed for too Much.—A lien for labor or material under the lien Act of 1862, will not be rejected because it was filed in the Recorder’s office for too much, unless it appears that it was a willfully false claim.
Day when Mechanics’ Lien Takes Effect.—Under the lien Act of 1862, where there is no written contract for the construction of the building, the several liens of the material men and laborers do not relate back to the day of the commencement of the building, hut each lien relates hack to and takes effect on the day the particular labor was commenced, or the material began to he furnished for which the lien is sought to he enforced.
Satisfaction of Judgment by Levy.—Although it is a general proposition that a levy under an execution upon sufficient personal property to satisfy it amounts to a satisfaction of the judgment, yet such is not the case as to the debtor if he consents to an application of the proceeds of sale to junior executions.
Satisfaction of Judgment by Waiving its Right to Proceeds of Sale.—If a judgment has the first lien on real estate and mechanics’ liens have the second lien and other judgments the third lien in point of time, and an execution issued on the first judgment is levied on sufficient personal property to satisfy it, and executions on the other judgments are then levied on the same, and the attorney for the plaintiff in the first judgment consents that the proceeds of sale he applied to the other judgments, the first judgment will be deemed satisfied as against the mechanics’ liens.
Notice of Matters Affecting Validity of Judgment.—If the plaintiff in a judgment bids in real estate sold on execution issued under it in the name of another person, hut applies the amount due on the judgment in payment of the bid, and is himself the real purchaser, such other person will be deemed to have notice of all matters affecting the validity of the judgment and sale under it, which were within the knowledge of the plaintiff in the judgment.
By the Court, Wallace, C. J.: This action was brought to enforce certain liens claimed under the provisions of the Act of April 26th, 1862, in relation to liens of mechanics and others. The plaintiffs, each claiming a distinct and separate lien upon a leasehold interest in a lot on Howard street, in San Francisco, and upon a building partially erected thereon, unite in the complaint and pray a decree enforcing their liens. Pending the action [530]Buckman intervened and set up a lien in favor of himself as having furnished labor and materials in the construction of the building between August 16th and September 13th, 1866, and prayed relief as though he had been a party plaintiff.
The history of the case is briefly as follows: On the 30th of July, 1866, the defendants, Reynolds and Washburn, being copartners in business and the joint lessees of the Howard street lot, commenced on that day to erect a building thereon, without making any contract in writing for its construction. The plaintiffs, Barber, Broekaw, and Rockwell & Coye, severally furnished materials and performed labor about the erection of the building, and commenced to do so anterior to August 7th, 1866, on which day a judgment in favor of one Fabius Stanly, and against the defendants, Reynolds & Washburn, for five thousand dollars and costs, became a lien on the unfinished house and the leasehold premises, and these last named plaintiffs continued to furnish materials and labor in the erection of the building after the lien of the Stanly judgment had so attached. The other plaintiffs, Wilson & Brother, Daniel, Wheaton, Davis, Stanyan & Co., Cathcart, Rosekranz & Co., and the intervenor Buckman, also furnished materials and performed labor in the erection of the building—all of these latter, however, commencing to do so only after the 7th day of August, 1866, when the Stanly judgment became a lien upon the premises. The farther prosecution of work upon the building was arrested on the 18th of September, 1866, by the business failure of the defendants, Reynolds & Washburn; on that day an execution theretofore issued upon the Stanly judgment was levied upon the building and premises—having on the day before been levied upon a large amount of personal property, more than sufficient to have satisfied it in full. On the 17th day of September, 1866, Bosque, Boothby, Mattoon, and several other persons, who were creditors at large [531]
Personal Judgment in Lien Suits.—In a judgment enforcing a mechanics’ lien a personal judgment cannot be rendered against those defendants against whom no personal claim is established.
of the defendants, Reynolds & Washburn, sued out their several writs of attachment in actions brought to recover divers sums of money owing and due to them by the latter,, they all appearing by the same attorney, who was also the attorney for Stanly, the judgment creditor. The writs of attachment were on the same day, the 17th of September, successively levied upon the personal property and also upon the real estate, upon both which the Stanly execution had already been levied, and out of the proceeds of which it was of course entitled to be first satisfied. On the 9th day of October, 1866, judgments having in the meantime been rendered in the several attachment suits, and executions thereon having been placed in the hands of the Sheriff, that officer made a sale of the personal property first levied upon under the Stanly execution and which had ever since the seventeenth of September been held under that levy, and the proceeds of the sale amounted to upwards of twelve thousand dollars. The Sheriff, however, under the direction of the attorney who represented all the execution creditors referred to, made such an application of the proceeds of the sale upon the several executions as that a balance of some sixteen hundred dollars of the Stanly judgment was left unsatisfied. Subsequently, and on the 26th day of October, 1866, the building and premises referred to were sold under the Stanly judgment and were bid off in the name of the defendant Mars-den; the bid seems to have been exactly the balance then appearing to be due upon that judgment, including interest and costs accrued thereon to that day. The bid and purchase in the name of Marsden appear to have been made in his absence and without any authority from him. This bid was made by the defendant Green, who was present at the sale and made the bid, as he says, by direction of one Searle, who was the partner of Green. The Court below found as a fact that Searle and the defendant Green really made the purchase, and that the funds therefor were supplied from the
[532]
partnership funds of Green & Searle, and upon looking into the evidence as to that matter we are satisfied with the finding.
On the 5th day of October, 1866, the defendant, Green, represented by the same attorney, recovered a judgment against the defendants, Reynolds and Washburn, for upwards of three thousand dollars, which was an indebtedness nominally to Green, but really to the firm of Green & Searles, which judgment then became a lien upon the building and premises; and on the 11th day of March, 1867, Green, as the nominal holder of this lien by judgment, subsequent in point of time to lien of the Stanly judgment, under which he had purchased the property in the name of Marsden, effected a statutory redemption from the sale nominally made to the latter, and ultimately received a Sheriff’s deed; and thereupon went into the possession of the building and .premises. On the 17th of October, 1866, within thirty days after the work on the building had been discontinued, the plaintiffs and the intervenor, Buckman, filed in the Recorder’s office their respective accounts and claims, under the provisions of section twenty-five of the statute already referred to, and subsequently, and in due time thereafter, commenced this action, and at the trial a decree was rendered in their favor.
1. There was no misjoinder of plaintiffs. It was so held when the case was here upon a former occasion. (Barber v. Reynolds, 33 Cal. 497.) Though the point as to the alleged misjoinder may not have been necessarily involved upon that appeal—as we think it was not—we are entirely satisfied with the reasoning of the Court in that case, and now that the point is involved we adopt it.
2. But in Barber v. Reynolds, supra, which was an appeal brought by the defendants from an order refusing to dissolve an injunction which the plaintiffs had obtained in aid of their asserted liens, the validity of each of their claims, in [533]the instances in which such claim exceeded two hundred dollars in amount, was directly involved, and it was then determined, and we think correctly so—and even if we thought otherwise, it thereby became the law of this case— that the liens of the plaintiffs arose under the seventeenth section of the Act, and so were unaffected by the provisions of the second section, requiring contracts involving more than two hundred dollars to be in writing, and that point, now renewed upon this appeal, must, therefore, be determined against the defendant.
3. Ror can it be maintained that a claim verified and filed under section twenty-five of the Act, is not to be supported merely because it turns out on the trial that the claim, as filed in the Recorder’s office, was for too much. It would still be valid, unless it should appear that it was a willfully false claim, within the meaning and intent of section eleven, which denounces a forfeiture of the liens on that ground. There is no such discrepancy appearing here between the amounts claimed and the amounts adjudged to have been really due, as would suggest a doubt as to the good faith of the parties filing their claims under the statute.
4. There being no written contract for the construction of the building, and the several liens of the plaintiffs arising under the seventeenth section of the Act, these liens did not relate back to the commencement of the work, July 30th, 1866; but each lien related to the commencement of the particular labor or the furnishing of the particular materials for which claim was made in the account filed in the Recorder’s office. ^
This is the rule of priority which we think the statute contemplated in reference to liens of the character of those with which we are now dealing. We think that the phrase, “ which lien shall relate to the time of the commencement of the work,” occurring in the seventeenth section, has referénce, not to the commencement of the general construe[534]tion of the building, but to the commencement of the particular work of furnishing materials in virtue of which a particular person claims a lien. Upon any other construction it must follow that a lien sufficient and affording ample security at the time a jsartieular piece of work was commenced or materials furnished might become practically lost or dissipated by the subsequent recklessness or extravagance of the proprietor of the building, involving, it might be, liens of such magnitude in aggregate amount as to leave comparatively nothing to satisfy the laborer or material man whose lien was perhaps the earliest in point of time;
5. Under' this view it results that the liens of the plaintiffs, Barber, Brokaw, and Rockwell & Coye, were subsisting liens anterior to the rendition of the Stanly judgment, and, therefore, entitled to satisfaction irrespective of the lien of the judgment and of the sale made thereunder.
6. The liens of the other plaintiffs, however, arising subsequently to the time when the lien of the judgment attached, must depend for their validity upon the question as to whether or not the Stanly judgment is to be treated as having been satisfied by its levy upon a sufficient amount of the personal property of the defendants, Reynolds & Wash-burn, and the subsequent sale of that property by the Sheriff. There can be no doubt that, as a general proposition, if an execution be levied upon a sufficient amount of personal property to satisfy it in full, such a levy amounts to satisfaction. Of course this would not be true as in favor of a judgment debtor in a case where he had subsequently withdrawn the property so levied upon, either with or without the consent of the plaintiff' in execution. Under such circumstances he would not be permitted to set up the original levy as amounting to a satisfaction; so, too, where the levy had been subsequently relinquished by his consent, so as to allow other and junior liens to be satisfied—for in such a case the property levied upon would, notwithstanding the [535]relinquishment, have been applied by his own consent to the satisfaction of his other debts; and it may be that the same rule would be applicable where the relinquishment for such a purpose occurred without his consent, for even in such a case he would have sustained no loss by the change. It does not follow, however, that because a judgment may be held to be still subsisting as against the judgment debtor, in the cases or under the circumstances supposed, it will therefore be kept on foot as against the rights of other persons who as subsequent lien holders, or as purchasers of property under liens subsequent to that under the particular judgment so dealt with, claim that it has been satisfied as to them. This principle, highly equitable in itself, is well illustrated in the case of Woods v. Toney, 6 Wend. 564. In that case the writ had been levied upon a sufficient amount of personal property to satisfy it. The assignee of the judgment subsequently, and probably by some arrangement with the defendant in execution, received from the hands of the Sheriff' the property levied upon, giving him a receipt therefor, and promising to redeliver it when he should desire it sold under the execution. Probably the property found its way back to the hands of the execution defendant—at all events, “ under the circumstances of the case ” the Court denied an application made by him to set aside the execution as having been satisfied by the levy. In the meantime certain lands of Toney, the defendant in execution, had been sold by him to a bona fide purchaser, and these lands having been afterwards levied upon under the judgment, it was held that as to him these facts amounted to a satisfaction of the judgment. °
We are satisfied with the soundness of this principle, and applying it to the facts of this case, it is-clear that as to all the plaintiffs the Stanly judgment must be considered to have been satisfied as of 17th September, 1866, or at all events as of October ninth following, at which time a sale of the [536]personal property was actually made under the several executions—that issued upon this judgment being first in its levy, and entitled to the first satisfaction. If the parties to. these judgments had the right to rearrange, as between themselves, the order in which their respective judgments should be satisfied out of the fund produced by the sale, a question which we are not called upon to determine, they certainly could not be permitted to so rearrange them as to thereby work a damage or loss to the rights of others, who were not consenting thereto. Had the proceeds of the sale been first applied to the Stanly judgment, as the statute directed, that judgment would have been thereby satisfied in fact, and the liens of all the plaintiffs would, in that case, have been prior to all others upon the building and premises in question. But the attorney who represented the Stanly judgment directed that the fund be applied in part to satisfy other judgments junior to the liens of the plaintiffs. The effect of this, should it be permitted, would be to postpone the liens of the plaintiffs without their consent, and to confer upon other persons a priority to which they had in no other way become entitled. We are of opinion, therefore, that as against the claims of those of the plaintiffs whose liens attached subsequently to the 7th August, 1866, the judgment in favor of Stanly must be considered to have been satisfied by the levy and sale of the personal property.
It is apparent that the defendant Marsden was not really or in fact the purchaser at the sale of the premises under the Stanly judgment. The money paid upon that sale was of the assets of the copartnership of Searle and the defendant Green. Th# name of Marsden seems to have been used by the defendant Green with a view to embarrass the controversy by his introduction into the proceeding in the assumed character of a stranger, bidding and purchasing in good faith at a judicial sale, without notice of the circumstances touching the disposition of the moneys arising from [537]the sale of the personal property, and as to whom, had he really occupied that position, a question more or less serious might have arisen as to the extent to which he would be entitled to be protected. The sale made nominally to Marsden was really made to the defendant Green, whose subsequent redemption from that sale, as a holder of a subsequent lien, was really a redemption from his own purchase, his attorney, and, therefore, he himself, having notice of all the facts which had occurred in reference to the application of the moneys realized by the sale of the personal property. He subsequently entered into possession of the premises under the Sheriff’s deed, obtained upon that redemption.
The decree, in so far as it fixes the defendants with a personal liability, cannot be supported. The defendants Reynolds and Washburn had been discharged from their liabilities by the proceeding in insolvency, and there is no personal claim established against the other defendants by the facts appearing in the case.
The decree is, therefore, reversed, and the cause remanded, with directions to render a decree not inconsistent with this opinion; the defendant Green to pay the costs of this appeal, and all the other costs accrued in this suit up to the rendition of the final decree upon the return of the cause to the Court below.
Mr. Justice Rhodes did not express an opinion.
AI Brief
AI-generated · verify before citing
Holding. The court held that mechanics' liens under the Act of 1862 relate to the commencement of the specific work performed by the claimant rather than the general construction of the building, and that a prior judgment is deemed satisfied as to subsequent lienholders when sufficient personal property was levied upon and sold to satisfy it, regardless of how the proceeds were redirected by the parties.
Issues
Whether there was a misjoinder of plaintiffs in the action to enforce mechanics' liens.
Whether mechanics' liens are valid if the filed claim exceeds the amount ultimately proven due.
Whether a judgment creditor's redirection of sale proceeds to junior liens affects the priority of intervening mechanics' liens.
Whether the defendants are subject to personal liability despite insolvency proceedings.
Disposition. reversed and remanded
Quotations verified verbatim against the opinion
“each lien related to the commencement of the particular labor or the furnishing of the particular materials for which claim was made in the account filed in the Recorder’s office.”
“as against the claims of those of the plaintiffs whose liens attached subsequently to the 7th August, 1866, the judgment in favor of Stanly must be considered to have been satisfied by the levy and sale of the personal property.”
“The decree, in so far as it fixes the defendants with a personal liability, cannot be supported.”