Blose v. Havre Oil Gas Co.

Full title: BLOSE, RESPONDENT, v. HAVRE OIL GAS CO., APPELLANT

Court: Supreme Court of Montana

Date published: Apr 2, 1934

31 P.2d 738 (Mont. 1934)

31 P.2d 738

Opinion

No. 7,234.

Submitted March 8, 1934.

Decided April 2, 1934.

Oil and Gas Leaseholds — Mechanics' and Materialmen's Liens — Purpose and Construction of Act — Foreclosure Suit — Nature of Proceeding — Date Lien Takes Effect — Transfer of Leasehold Interest — Effect on Rights of Lienor — Parties — Equity — Jurisdiction — Appeal and Error. Oil and Gas Leaseholds — Mechanics' Lien Statutes — How to be Construed. 1. Mechanics' and materialmen's lien laws (such as Chapter 152, Laws of 1923, granting liens for labor and materials furnished to oil and gas leasehold owners), considering their purpose, which is to make secure payment of those who by their labor or materials enhance the value of the lienee's property, should be so construed, without violating the true signification of the language used, as to best promote their object and efficiency in all their parts. Same — Contract on Which Mechanic's Lien Based may be With Owner of Leasehold or Agent or Trustee. 2. The contract for work or materials, express or implied, which under Chapter 152, Laws of 1923, forms the basis for the lien thereby created, may be with the owner of an oil and gas leasehold, or with his agent or trustee. Same — Foreclosure of Mechanic's Lien — Proceedings Equitable in Nature. 3. A proceeding to foreclose a mechanic's lien is in the nature of an action in rem: a suit against the property upon which the lien is placed, rather than against the defendant personally, and is controlled by the general spirit of equity; the plaintiff must prove the existence of a debt against the party with whom he contracted. Same — Mechanic's Lien Takes Effect as of Date of Commencement of Work. 4. Where a mechanic for work performed on an oil and gas leasehold perfects his lien by compliance with the provisions of Chapter 152, Laws of 1923, it takes effect as of the date of the commencement of his work on the property charged. Same — Mechanic's Lien — Transfer of Leasehold Interest After Commencement of Work by Mechanic — Single Lien Sufficient. 5. Where an oil-well driller entered into a contract with the owners of a leasehold which in contemplation of the parties was to be continuous until completion of the work, and commenced work, a lien for his services immediately attached to the leasehold which could not be defeated by the then owners transferring their interest to a corporation; and where the purchaser requested the driller to continue work under the contract, the contract must be deemed an entirety, and a single lien could properly be perfected for the amount due the lienor both before and after the transfer of the property. Equity — After Taking Jurisdiction Court will Retain It for All Purposes of Case. 6. Where a court of equity takes jurisdiction of a cause and grants the equitable relief sought, it will retain such jurisdiction to render judgment in relation to all matters involved and growing out of the controversy. Oil and Gas Leaseholds — Mechanic's Lien — Transfer of Leasehold Interest — Suit Against Original Owner and Purchaser Held Proper. 7. Under the circumstances set forth in paragraph 5 above, there was neither a misjoinder of causes of action nor misjoinder of parties defendant when the lienor brought his foreclosure suit against both the original owners of the leasehold and the subsequent purchaser thereof, to recover from each that portion of the debt due him from each, and the court was justified in rendering judgment against each debtor for the amount of his portion of the entire debt. Same — Mechanic's Lien — Name of Owner of Leasehold, not Owner of Land, must Appear in Lien. 8. Under the oil and gas well lien statute (Chap. 152, Laws of 1923) relating to liens for labor and materials furnished to owners of leaseholds, the name of the owner of the leasehold, rather than the owner of the land, must appear in the lien claim. Appeal and Error — Opinions of Supreme Court to be Read in Connection With Facts in Particular Case. 9. Statements found in supreme court decisions relative to the law must be read in connection with the facts of each particular case. Oil and Gas Leaseholds — Mechanics' Liens — If Lien Indexed in County Records in Name of Owner of Leasehold, Immaterial That also Indexed Under Other Name. 10. Where an oil and gas well lien was properly abstracted and indexed in the county records in the name of the owner of a leasehold, the fact that it may also have been indexed under other names did not invalidate the lien. Mechanics' Liens — Overstatement of Amount Due Does not Alone Invalidate Lien. 11. A bare overstatement of the amount due from the lienee to the lienor in the claim of lien under the oil and gas lien statute does not invalidate the lien.

Appeal from District Court, Liberty County; C.B. Elwell, Judge.

Mr. H.S. Kline, for Appellant, submitted an original and a reply brief; Mr. C.F. Morris, of Counsel, argued the cause orally.

Mr. L.E. Rhodes, Mr. O.C. Hauge, Mr. Russell E. Smith and Mr. S.C. Ford, for Respondent, submitted a brief; Mr. Ford argued the cause orally.

There were two separate debts, one of Hardie and Burns, the other of the Havre Oil and Gas Company, and the lien was filed or claimed against all of the above-named parties and the Bears Den Oil Company. The two contracts or debts could not be tacked together and one lien filed to cover the same. (40 C.J. 178, 181; Meyer Lumber Co. v. Trygstad, 262 N.D. 558, 134 N.W. 714; Badger Lumber Co. v. Stepp, 157 Mo. 366, 57 S.W. 1059-1064; Berry v. Rombauer Coal Co., 197 Mo. App. 659, 198 S.W. 1130; Allen Co. v. Frumet Mining Smelting Co., 73 Mo. 688; Exchange Nat. Bank v. Okeya Oil Gas Co., 107 Okla. 62, 229 P. 765; Hoag v. Hay, 103 Iowa, 291, 72 N.W. 525; Sheldon v. Chicago B. S. Co., 190 Iowa, 945, 181 N.W. 282.)

The courts of Iowa, from which state our mechanic's lien law was taken, have repeatedly held that blanket or joint liens are valid where there is a single or joint contract, and are illegal and not enforceable where there are no such contracts. So, also, have the courts of North Dakota held, whose lien law was likewise taken from Iowa. ( Edinger Co. v. Hildreth M.U.E. Church, 199 Iowa, 1117, 201 N.W. 569; Sheldon v. Chicago B. S. Co., 190 Iowa, 945, 181 N.W. 282, 283; Chase v. Garver C. M. Co., 90 Iowa, 25, 57 N.W. 648.)

The lien did not give the name of the owner or reputed owner of the leasehold, or his agent or trustee. This court held in Missoula Mercantile Co. v. O'Donnell, 24 Mont. 65, 60 P. 594, "that a recorded lien for materials furnished in the construction of a building, failing to state that the person to whom such materials were furnished was the owner or interested therein, was invalid."

The lien did not show the amount claimed, or declared a lien against the respective parties or defendants. "The lien claimant should have filed a separate lien statement * * *; the inclusion of all claims in one `hotch potch' vitiates the entire lien claimed." ( Exchange Nat. Bank v. Okeya Oil Co., supra.)

The court erred in refusing defendant's motion to compel the plaintiff to elect against which defendant he would proceed, as there was a misjoinder of parties defendant. It appeared from the testimony introduced by the plaintiff that the liabilities of Hardie and Burns, and the Havre Oil and Gas Company, were not joint, but separate and successive, consequently they could not be joined as defendants in the same cause of action. (47 C.J. 76, 227; Bracht v. Johnson, 187 Mo. App. 220, 173 S.W. 692; Louisville Gas Elec. Co. v. Nall, 178 Ky. 33, 198 S.W. 745; Baker v. Hanson, 72 Mont. 22, 231 P. 902; French v. Central Construction Co., 76 Ohio St. 509, 81 N.E. 751, 118 Am. St. Rep. 891, 12 L.R.A. (n.s.) 669.)

The court erred in overruling defendant's motion to dismiss at the close of plaintiff's case. Plaintiff had alleged a joint contract of the defendants Hardie and Burns and the Havre Oil and Gas Company. The testimony offered proved and the findings show not a joint contract of the defendants but successive and separate contracts. It did not prove the contract as alleged with either or any of the defendants. "The proof must correspond with the pleadings with respect to the parties for or against whom the claim or defense sought to be established exists * * * there is substantial departure where joint liability is alleged and several is shown by the evidence." (49 C.J. 813.) "Two or more persons whose respective liabilities depend on causes of action which are essentially distinct and several, cannot be joined as defendants in one action * * * where several persons are successively liable, each for his own act alone, although in respect to the same matter." (47 C.J. 76; Bracht v. Johnson, 187 Mo. App. 220, 173 S.W. 692.)

There was no tacking together of two claims or debts and only one lien filed. Where, under facts such as those involved in this action, the filing of two liens would jeopardize respondent's rights, and especially where no harm is done to anyone by the filing of one lien, the rule of liberal construction requires that he be permitted to file one claim and one lien and let the lienees, who have all the information, furnish proof for its proper division. ( S.H. Bowman Lumber Co. v. Newton, 72 Iowa, 90, 33 N.W. 377; Lewis v. Saylors, 73 Iowa, 504, 35 N.W. 601; Lehmer v. Horton, 67 Neb. 574, 93 N.W. 964, 965; Demarest v. Holdeman, 157 Ind. 467, 62 N.E. 17; Braun Ferguson Co. v. Paulson, (Tex.Civ.App.) 95 S.W. 617; Busset v. California Builders Co., 123 Cal.App. 657, 12 P.2d 36.)

In determining whether or not the name of the owner is sufficiently designated all the facts in the statement are to be considered. ( United States Blowpipe Co. v. Spencer, 40 W. Va. 698, 21 S.E. 769; McMonegal v. Wilson, 103 Mich. 264, 61 N.W. 495.) When, as here, the labor has been performed, the equities are then strong in favor of the maintenance of the lien, and the court will not hold a lien invalid because the lien statement does not verbatim follow the statute or from the fact that it is awkwardly or inartistically drawn, nor will it be defeated by technicalities in relation to the manner or form in which the statement is made, the purpose of the lien being to give notice of the lienor's claim. ( Durling v. Gould, 83 Me. 134, 21 A. 833; Grace v. Oakland Bldg. Assn., 166 Ill. 637, 46 N.E. 1102.)

The statute does not specifically require that the name of the owner or person interested be stated in the lien, but it does state that the county clerk abstract and index the lien; and by reason thereof this court has held that the lien must set forth the name of the owner, or at least the name of the person whose interest in the property is to be subjected to the lien. ( Missoula Mercantile Co. v. O'Donnell, 24 Mont. 65, 60 P. 594.) That is the only purpose of this requirement. In this case the clerk had no such difficulty. Unlike a mechanic's lien, which ordinarily attaches to the entire property, real estate and building alike, an oil and gas lien attaches only to the interest of the party for whose benefit the work was done. ( Callender v. Crossfield Oil Syndicate, 84 Mont. 263, 275 P. 273; Sunburst Oil Refining Co. v. Callender, 84 Mont. 178, 274 P. 834.) The indexing of the lien on the county records is for the purpose of giving notice. In this case it appears that there has been no change in ownership and no innocent third party has been injured. A liberal interpretation by the court, which is the proper equity rule, can injure no one. ( Continental Supply Co. v. White, 92 Mont. 254, 12 P.2d 269.)

There was no misjoinder of parties or causes of action. Where the subject of the action has become so complicated that the rights of the parties are involved in doubt and it is difficult to determine who is liable and who is not, or to divide the liability, equity permits a joinder of all so related to the controversy, so that liability may be fixed where it belongs. (47 C.J. 84; Busset v. California Builders Co., supra; Fransioli v. Thompson, 55 Wn. 259, 104 P. 278; Demarest v. Holdeman, supra; Lehmer v. Horton, supra; Lewis v. Saylors, supra; Williams v. Judd-Wells Co., 91 Iowa, 378, 59 N.W. 271, 51 Am. St. Rep. 350.) The rule is also established that where, as here, the new company, Havre Oil and Gas Company, was but a new name for its predecessors, in other words, a "reincarnation of the old," as such, it becomes liable for the debts of its predecessor. (15 A.L.R. 1114, note II; Stanford Hotel Co. v. M. Schwind Co., 180 Cal. 348, 181 P. 780; Friedenwald Co. v. Asheville Tobacco Works, etc., 117 N.C. 544, 23 S.E. 490.) Here, Havre Oil and Gas Company absorbed the entire business and property of its predecessors, and thereby became obligated for the partnership debts. ( Skirvin Operating Co. v. Southwestern Electrical Co., 71 Okla. 25, 174 P. 1069, 15 A.L.R. 1104; Altoona v. Richardson Gas Oil Co., 81 Kan. 717, 106 P. 1025, 26 L.R.A. (n.s.) 651; Friedenwald Co. v. Asheville Tobacco Works, etc., supra; Hibernia Ins. Co. v. St. Louis etc. Co., 13 Fed. 516; 4 McCrary, 432; Blair v. St. Louis etc. Co., 22 Fed. 36, 24 Fed. 148.)

MR. JUSTICE MATTHEWS delivered the opinion of the court.

In 1929 J.J. Hardie, B.D. Burns, D.S. MacKenzie and V.C. Miller were the holders of an oil and gas lease on certain lands in Liberty county, taken in the name of Hardie and Burns, trustees, and on which drilling operations were being conducted by the trustees. On September 23, 1929, the plaintiff, T.H. Blose, was employed by Burns, confirmed by Hardie, to take charge of the well at a wage of $200 per month. In January, 1930, Burns informed Blose that the operators were short of funds and were going to Chicago to seek financing, and that he would have to agree to a temporary reduction of wages to $100 per month. In April the leaseholders incorporated under the name of Havre Oil Gas Company, each taking stock in the corporation to the extent of his interest in the lease, and, on April 28, 1930, the trustees assigned the lease to the corporation. Burns, who was made manager, then informed Blose that "the company has organized to sell stock and as far as you are concerned you continue just as you have been." Blose had charge of the operations, without interruption, continuously from September 23, 1929, to October 4, 1930, under the direction of Burns, during which time he drilled, cleaned out the well, swabbed and pumped oil, and kept the well "in a state of repair and operation."

On October 6, 1930, Blose filed a "claim for labor lien," to which he attached his "statement of account for labor furnished in connection with the drilling of oil and gas well" made "to J.J. Hardie, Bears Den Oil Company, B.D. Burns and Havre Oil and Gas Company." The statement is of debits and credits over the entire period of service, and shows a balance due of $1,765.28. On March 22, 1931, Blose brought action against the original associates, the trustees, and the corporation, jointly, for the full amount claimed and for the foreclosure of his asserted lien.

By a joint answer the defendants admit practically all of the allegations of the complaint, but assert that the employment of the plaintiff was by Hardie and Burns up to the time of incorporation, and by the corporation thereafter. They deny the correctness of the statement of account for each period, and allege the invalidity of the "claim of lien." Certain alleged counterclaims are set up which are not material here. Issue being joined, the cause was tried to the court without a jury.

On the trial the defendants demanded that the plaintiff be compelled to elect as to whether he would proceed against the individuals or the corporation, which demand was refused; they objected to the introduction in evidence of the claim of lien filed, which objection was overruled.

At the close of the trial the court made findings of fact and conclusions of law, upon which it entered judgment in favor of the plaintiff, and against Hardie and Burns, trustees, in the sum of $761.08 under the contract, for $150 attorneys' fees and for costs, and against the Havre Oil Gas Company in the sum of $678.65. The court decreed that the plaintiff has a valid and existing lien against all the right, title and interest of all of the defendants in and to the leasehold for the total of the judgments, and decreed the foreclosure of the lien and sale of the property.

The defendants have appealed from the judgment; they specify error upon the receiving of the lien in evidence, the overruling of the motion to compel an election, in overruling their motion for judgment of dismissal at the close of plaintiff's case, and upon numerous findings of fact made.

The position taken by counsel is that the plaintiff worked under two separate contracts — the first with the trustees, on which he was entitled to maintain an action against them; the second with the corporation, on which he was likewise entitled to maintain an action against it — which could not be united in a single action, and that, as there was no continuous service under a single contract, the single claim of lien for the full amount was invalid and cannot become the basis of a foreclosure suit.

The defendants cite a number of decisions condemning the tacking of one contract debt to that of an independent contract debt as the basis of a single lien claim, the latest of which is an oil-well case ( Exchange National Bank of Tulsa v. Okeya Oil Gas Co., 107 Okla. 62, 229 P. 765, 766), wherein the correct rule on this subject is stated. Therein the defendant, owner of a leasehold, on four separate occasions entered into separate contracts with one Mays to drill four wells on the leasehold. The wells were completed at different times. Within the statutory period after the completion of the last well, but beyond the period as to the other wells, Mays filed a claim for the total amount due on all of the wells and claimed a single lien upon the entire leasehold. The court declared that neither of the contracts was dependent upon the other, and that "no such contract, or the moneys due thereunder, can be tacked onto another contract, so that the contractor doing the work can procure a lien for the work done under two such separate contracts, by filing one claim within the time required as to one of the contracts, * * * if the time has expired as to the other contract." With this rule we are in accord, but it has no application here.

Defendants cite one case which supports their contention ( Gerard B. Allen Co. v. Frumet Milling Smelting Co., 73 Mo. 688), by holding that, where a contracting firm incorporated, took over the property, and assumed the debts of the firm, in the midst of the performance of the contract, and continued the operations without interruption, there were two independent contractors, because "in the eye of the law, the firm and the corporation are different persons," and therefore a single statement and claim of lien was invalid. This decision was rendered in 1881. We doubt that the supreme court of Missouri would so hold to-day; though the exact point has not since been raised in that court, it has held that the amount due under separate contracts on the same structure may be united in a single lien claim, if filed within the statutory period after completion of each contract. ( Schroeter Bros. Hardware Co. v. Croatian "Sokol" Gymnastic Assn., (Mo. Sup.) 58 S.W.2d 995, citing Grace v. Nesbitt, 109 Mo. 9, 18 S.W. 1118.) At any rate, we cannot subscribe to the extremely technical construction given the lien law to defeat such a lien, a law which "should not be hypercritically interpreted" ( Hubbell v. Schreyer, 56 N.Y. 604, 15 Abb. Pr. (n.s.) 300; Williamson v. Shank, 41 Ind. App. 513, 83 N.E. 641), and which will later be shown to be contrary to the rule elsewhere.

While mechanics' lien laws did not exist at common law and are [1] unknown in England, our forefathers were so imbued with the spirit of justice and fair dealing that such laws came into being in this country almost simultaneously with our Constitution. The first "Act to encourage master builders by establishing a lien for their just claims" was passed in Maryland in 1791; the idea spread rapidly to all the original states and to territories and states as they were created. The lien exists to-day in every state in the Union. (Lloyd on Building Buildings, 413.) Such a law has existed in Montana since the earliest territorial days. (Bannack Laws, p. 332.) For a history of our law, see Merrigan v. English, 9 Mont. 113, 22 P. 454, 5 L.R.A. 837, and Lane v. Lane Potter Lumber Co., 40 Mont. 541, 107 P. 898.) These laws are based upon the biblical injunction that "the laborer is worthy of his hire." (Luke x:7.) Their object is to make the pay of those whose labor or material has gone to enhance the value of another's property prompt and secure against both the misfortune and the possible dishonesty of employers, and the construction to be given to them is that which, without violating the true signification of the language used, shall best promote the object and efficiency of the statute in all its parts. (Phillips on Mechanics' Liens, 3d ed., 28.) "Their equity and beneficence are conceded" by all. ( Shaw v. Young, 87 Me. 271, 32 A. 897, 898.)

The controlling statute in the instant case is Chapter 152 of the Session Laws of 1923, which provides in part: "Any person * * * who shall under contract, expressed or implied, with the owner of any leasehold for oil and gas purposes * * * perform labor * * * in * * * drilling, torpedoing, completing, operating, or repairing of any oil or gas well, * * * shall have a lien upon all of the right, title and interest of such owner in and to the whole of such leasehold. * * * The liens herein created shall be enforced in the same manner * * * as now provided * * * for * * * mechanic's liens, except that the time within which such liens must be filed shall be six months instead of ninety days. * * *"

Desiring to avail himself of the benefits of the foregoing statute, the plaintiff was required to file with the county clerk, within six months after the labor was performed, a "just and true account of the amount due him, after allowing all credits, and containing a correct description of the property to be charged with such lien, verified by affidavit, but any error or mistake in the account or description does not affect the validity of the lien, if the property can be identified by the description." On an open account, the claim must be filed within six months after the date of the last item. (Sec. 8340, Rev. Codes 1921.)

While under the foregoing statute, and kindred statutes, the [2] labor must be performed under a contract, express or implied, the contract may be with the owner, his agent or trustee. ( Love Bros. v. Mardis, 189 Iowa, 350, 176 N.W. 616; Lane v. Lane Potter Lumber Co., above.) The lien so secured is said to be "the ligament which binds certain property to a certain debt or claim for its payment or satisfaction." ( United States Blowpipe Co. v. Spencer, 40 W. Va. 698, 21 S.E. 769, 771.) The proceeding to foreclose such a lien is in the nature of an action in rem: a [3, 4] suit against the property liened upon, rather than against the defendant personally (Lloyd on Building Buildings, 458), brought on the equitable side of the court ( Simonton v. Kelly, 1 Mont. 483; Soliri v. Fasso, 56 Mont. 400, 185 P. 322), controlled by the general spirit of equity ( Schultz v. Teichman Engineering Construction Co., 79 Misc. 357, 140 N.Y. Supp. 429), and is like unto a suit to foreclose a mortgage ( Valett v. Baker, 129 App. Div. 514, 114 N.Y. Supp. 214). In order to warrant a decree foreclosing the lien, the plaintiff must prove the existence of a debt against the party or parties with whom he contracted, and is entitled to a judgment for the amount of the debt in the foreclosure suit. ( Wertz v. Lamb, 43 Mont. 477, 117 P. 89.)

Conceding for the moment that two contracts are here involved, the plaintiff had a lien against the property on each, and, as the statute had not run against the lien under the associates' contract, at the time he filed his claim of lien, the single property was chargeable under each contract. ( McCormack v. Bertschinger, 115 Or. 250, 237 P. 363.)

Under Chapter 152, above, as under the ordinary mechanic's [5] lien laws, when the mechanic perfects his lien by compliance with the statute, his lien, theretofore in existence by virtue of the statute, takes effect as of the date of the commencement of his work on the property charged. ( Continental Supply Co. v. White, 92 Mont. 254, 12 P.2d 569.) The manifest object of the law in so providing is "to prevent wrong to the mechanic by alienations or incumbrances during the progress of the work." ( Mellor v. Valentine, 3 Colo. 255.) The contract for the erection of a structure, whether a house or an oil-well, is in effect the granting of power to charge the land for the purpose of the contract, and the commencement of the work is notice to all the world of the existence of that power. (Phillips on Mechanics' Liens, 404.)

It has been held that there can be no "innocent purchaser" of property upon which an erection has been commenced, as against mechanics' liens which are asserted within the time and in the manner provided by law. ( Bell v. Koontz, 172 Ark. 870, 290 S.W. 597; Owen v. Continental Supply Co., 175 Ark. 741, 300 S.W. 398, 400.) Where a transfer is made after the lienable materials or labor were furnished, on perfecting the lien, an action against the original owner for the amount due may be blended with a suit to foreclose the lien against the property, by making the purchaser a party to the proceeding. ( Eddy v. Lloyd, 90 Ark. 340, 119 S.W. 264.) And where a transfer is made before the completion of a contract which gives rise to such a lien, and the purchaser permits the contractor to continue the work, the purchaser will be liable for the amount due under the original contract from the date of sale to completion, or until he notifies the contractor to cease work. ( Watkins v. Wassell, 15 Ark. 73; Id., 20 Ark. 410.)

In Mellor v. Valentine, above, it is said that "subsequent alienations or incumbrances are not prevented, but made subordinate to the right of the mechanics who, at the time, were engaged in working, and continued afterward to work under previous employment by the vendor," and "where the work done, or materials furnished, is continuous in its character, the contract is to be regarded as an entirety, and the lien attaches for work done and materials furnished, after, as well as before the purchase," citing Phillips on Mechanics' Liens, sections 228, 229, 230; Monroe v. West, 12 Iowa, 119, 79 Am. Dec. 524; Jones v. Swan, 21 Iowa, 181; Milner v. Norris, 13 Minn. 455 (Gil. 424); Miller v. Barroll, 14 Md. 173. To the same effect, see the following cases: Gale v. Blaikie, 126 Mass. 274; Jeffersonville Water Supply Co. v. Riter, 138 Ind. 170, 37 N.E. 652; Trustees Caldwell Inst. v. Young, 2 Duv. (Ky.) 582; Watkins v. Wassell, above; Rollin v. Cross, 45 N.Y. 766; Heath v. Tyler, 44 Md. 312; Hewett v. Currier, 63 Wis. 386, 23 N.W. 884; Hutchins v. Bautch, 123 Wis. 394, 101 N.W. 671, 107 Am. St. Rep. 1014; Rockel on Mechanics' Liens, 64.

From the foregoing rules we conclude that, when a mechanic is employed to erect an improvement upon the lands of another, by a contract which, in the contemplation of the parties, is to be continuous until the erection is completed, and commences work on the improvement, a lien for his services immediately attaches to the property, which cannot be defeated by the then owner selling the property, and, if the purchaser with knowledge of the facts permits the mechanic to continue the work under the contract, or, as here, requests him to do so, the contract is to be deemed an entirety, and the single lien may be perfected for the amount due both before and after the transfer of the property.

The plaintiff did not seek to hold the Havre Oil Gas Company for that part of the debt incurred prior to the assignment of the lease to it, and, in order to foreclose his lien against the property, it was necessary to make the original associates parties to the "blended" action.

There was no misjoinder of causes of action or parties [6, 7] defendant ( Rasmusson v. Liming, 50 Wn. 184, 96 P. 1044), and, since when a court of equity takes jurisdiction, if it grants the equitable relief sought, it will retain jurisdiction to render judgment in relation to all matters involved and growing out of the controversy ( Stevens v. Equity Mut. Fire Ins. Co., 66 Mont. 461, 213 P. 1110), having found that the property involved was subject to a lien for the full amount found to be due to plaintiff, but that the present owner was liable only for a portion thereof, the court was justified in rendering judgment against each debtor before it, in order that a decree of sale might be entered ( Owen v. Continental Supply Co., above).

Defendants assert that the court erred in admitting the lien claim in evidence because it "did not give the name of the owner or reputed owner of the leasehold" and was therefore invalid.

The general rule is that "whenever the particular statute [8] requires the claim to contain the name of the owner or reputed owner, the omission of this detail is fatal to the lien." (Phillips on Mechanics' Liens, 345, quoted in Missoula Mercantile Co. v. O'Donnell, 24 Mont. 65, 60 P. 594, 991.) In the O'Donnell Case this court pointed out that our general lien statute does not require the claim to contain the name of the owner, but that the next succeeding section (sec. 8341, Rev. Codes 1921) requires the county clerk to "abstract" each lien in a proper register, and therein to show "the name of the person against whose property the lien is filed," and therefore held that "a recorded lien claim for materials furnished in the construction of a building, failing to state that the person to whom such materials were furnished was the owner or interested therein, was invalid."

Section 8341, above, applies as well to a claim filed under Chapter 152, Laws of 1923. The O'Donnell rule has been twice approved by this court. ( Cook v. Gallatin Ry. Co., 28 Mont. 340, 72 P. 678; Interstate Lumber Co. v. Magill-Nevin Co., 57 Mont. 334, 188 P. 144.) The statement made in the O'Donnell opinion is, however, not accurate; the name which must appear in the claim in order to enable the county clerk to perform his duty is not necessarily that of "the person to whom such materials were furnished," but that of "the person against whose property the lien is filed." The lien affects the title of the owner at the time of filing, regardless of who owned the property at the time the contract was made or the lien attached; it is therefore the name of the owner at the time of filing which must appear. ( Davis v. Big Horn Lumber Co., 14 Wyo. 517, 85 P. 980; Robinson-Slagle Lumber Co. v. Rudy, 156 La. 174, 100 So. 296; Sprague Inv. Co. v. Mouat Lumber Investment Co., 14 Colo. App. 107, 60 P. 179, 183; Willamette Lumber Co. v. McLeod, 27 Or. 272, 40 P. 93; Collins v. Snoke, 9 Wn. 566, 38 P. 161; Corbett v. Chambers, 109 Cal. 178, 41 P. 873; Lang v. Adams, 71 Kan. 309, 80 P. 593.)

Under Chapter 152, Laws 1923, it is not the owner of the land, but rather the owner of the leasehold at the time of filing the claim, whose name must appear therein. ( Sunburst Oil Ref. Co. v. Callender, 84 Mont. 178, 274 P. 834; Callender v. Crossfield Oil Syndicate, 84 Mont. 263, 275 P. 273.) The reason for this requirement is to insure the indexing of the lien in such manner as to advise the owner, subsequent proposing purchasers or encumbrancers, and parties examining the title, of the existence of the lien. ( Robinson-Slagle Lumber Co. v. Rudy, above.) A claim of lien which does not contain the name of the person whose property is charged, if permitted to stand, might affect the rights of persons not indexed as parties to the lien, and work injustice to innocent third parties.

Reverting to the three Montana cases in which the rule was applied, we find that, in the first, the lien would be indexed as against the property of O'Donnell, whereas it should have been in the name of Peterson, the grantee of O'Donnell; in the second, against the Yellowstone Park Railway Company, when it should have been against the Gallatin Company; and, in the third, in the name of McGill-Nevin Company, when it should have been against one Umhang. In no one of these cases would a person searching the record have discovered the existence of the lien. This situation does not exist in the case at bar. While the claim is inartistically drawn, it informs the owner of the leasehold, and the world, that Blose claims a lien for labor performed on the oil-well "drilled by J.J. Hardie and Havre Oil and Gas Company" on land accurately described, and at their special instance and request, which lien is upon the well, the machinery and appurtenances, "and upon the lease for oil and gas purposes upon said parcel of land." Here the county clerk would have no difficulty in abstracting and indexing the lien under the name of the owner of the leasehold, for the claim does "contain the name of the owner" and does show "the name of the person against whose property the lien is filed," and in the action to foreclose the lien the interest of no third person could be affected, as was the case in the three decisions commented upon above. The rule in the O'Donnell Case is announced in Sprague Investment Co. v. Mouat Lumber Inv. Co., above, with the addition, "as against these subsequent incumbrancers and grantees."

It was early held in New York that, where the statute does not declare in set terms that the claim shall state who is the owner of the property, the law is satisfied if the claim contains the name of the person against whose interest the lien is claimed and a statement of the facts subjecting that interest to the lien. ( Ross v. Simon, 16 Daly, 159, 9 N.Y. Supp. 536.)

In Nebraska it is held that the Act intended to secure those who have contributed to the erection of a building compensation for their labor, remedial in its character, should be given a "most liberal construction" in order to give full effect to its provisions ( Way v. Cameron, 94 Neb. 708, 144 N.W. 172), and that, in the absence of statutory requirement, as between the parties, the rights of third parties not having intervened, the failure to give the name of the owner does not invalidate the lien ( Hays v. Mercier, 22 Neb. 656, 35 N.W. 894; Garlichs v. Donnelly, 42 Neb. 57, 60 N.W. 323).

The supreme court of North Dakota has declared a similar rule, and, commenting on a contrary decision, said, "It seems to us that this case illustrates a dangerous tendency on the part of courts to tamper with the plain import of statutory law, by reading into unambiguous statutes a conjectured meaning, which the legislature has excluded therefrom," but said that, had an innocent purchaser or encumbrancer dealt with the owner before the action to foreclose, "it might be that the plaintiff would be estopped from setting up the lien as against such purchaser or encumbrancer. But no such question arises in this case." ( Red River Lumber Co. v. Children of Israel ( Friel), 7 N.D. 46, 73 N.W. 203, 204.)

As this court has so often said, the pronouncements in a given [9-11] decision must be read in connection with the facts of the case decided. In each of our cases cited above, the rule invoked was necessary for the protection of third parties, and, while each case was correctly decided, they do not militate against the validity of the present lien, as between the lienor and the owner of the leasehold, whose name appears in the filed claim which was undoubtedly abstracted and indexed under the name of Havre Oil Gas Company, as owner. The fact that it may also have been indexed under other names is immaterial. ( Church E. Gates Co. v. Empire City Racing Assn., 225 N.Y. 142, 121 N.E. 741.)

The defendants urge that, because the lien claim declares that the claimant performed the work "at the special instance and request of" the parties named "and the persons and corporations for whose immediate use and benefit the said labor was performed," it is indicated that others than those mentioned were interested in the property. The whole sentence means no more than that the persons mentioned were the parties at whose request, and for whose use and benefit, the labor was performed.

The bare overstatement of the amount due the lienor does not, under the statute, invalidate the lien. ( Eskestrand v. Wunder, 94 Mont. 57, 20 P.2d 622.)

No reversible error appearing in the record, the judgment must be affirmed.

MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES ANGSTMAN, STEWART and ANDERSON concur.

Rehearing denied April 13, 1934.