Opinion
39639.
DECIDED SEPTEMBER 6, 1962.
Materialman's lien. Chattooga City Court. Before Judge Boney.
Robert Edward Surles, for plaintiffs in error.
Archibald A. Farrar, contra.
A materialman's lien does not have priority over a warranty deed executed and recorded during the time the material is being supplied, where the grantee does not have actual or constructive notice, does not expressly or impliedly consent or does not take some action which would lead to an estoppel.
DECIDED SEPTEMBER 6, 1962.
Plaintiff lumber company, a partnership, brought suit to foreclose a duly filed and recorded materialman's lien against Ellenburg, former owner, and Appliance Buyers Credit Corporation, Ellenburg's grantee in a warranty deed. The deed was executed and recorded during the time that material was being supplied for improving the realty but before the claim of lien was recorded. Payton, a subsequent grantee of Appliance Buyers Credit Corporation, was allowed to intervene.
On the trial, plaintiff attempted to introduce 31 delivery tickets which allegedly represented material delivered to the construction site by plaintiff or picked up at plaintiff's place of business by Ellenberg or his servants for use in the construction. The trial judge ruled that the plaintiff could only recover for that portion of the material actually used in the improvement of the real estate and rejected the en masse tender of the delivery tickets. Plaintiff could identify only a portion of the tickets as representing materials that he knew were used in the improvement of the land, but did not offer them separately.
A verdict was directed in favor of all the defendants although Ellenburg was in default and made no defense. Plaintiff brought a direct bill of exceptions to this court.
1. Defendants in error have made a motion to dismiss the bill of exceptions on the grounds that a motion for new trial is a necessary prerequisite for testing the exclusion of evidence outlined above and that a direct bill of exceptions does not lie in this case. Under Code § 6-804, the direct bill of exceptions route may be taken only where the final judgment "necessarily has been controlled" by the prior rulings. As the Supreme Court has said, "The real question in such a case is whether a complaining party would have succeeded in his contention if the law had been as he contended. . . . The fact that in our opinion the plaintiff in error's view of the law is incorrect would not affect her right to have her bill of exceptions considered if the decision of the question controls or did control the result in the trial of the case." Slade v. Slade, 155 Ga. 851 (1), 855, 856 ( 118 S.E. 645). And see, for a similar case involving the exclusion of evidence, Campbell v. Campbell, 195 Ga. 15 (1) ( 22 S.E.2d 788). Thus the test is whether the prior ruling was "necessarily controlling" and not whether the ruling was right or wrong. The motion to dismiss the writ of error is denied.
2. Materialmen's liens arise under Code § 67-2001 (1), as amended, which provides in pertinent part: ". . . persons furnishing material for the improvement of real estate . . . shall each have a special lien on such real estate." Of course, a showing by the materialmen of actual use of the material in the improvement of the real estate will satisfy the statutory requirement of "furnishing." However, the problem here is that the materialman did not show actual use but attempted to show "furnishing" either by a delivery to the construction site or to Ellenburg's agents who picked the material up for use at the site. This question has not been definitely answered in this State and we do not find it necessary to reach it now.
Compare Burton v. Meinert, 136 Ga. 420 (2) ( 71 S.E. 870) ("actual use" test) and Chambers v. Williams Bros. Lumber Co., 80 Ga. App. 38 (3) ( 55 S.E.2d 244) ("delivery" and "use" test) with Howell v. Cordray, 22 Ga. App. 195 ( 95 S.E. 762) (owner estopped to deny use). Cf. Koppe Steinichen v. Rylander, 33 Ga. App. 686 ( 128 S.E. 68), affd. 162 Ga. 300 ( 133 S.E. 236) (estoppel); Christian v. Bremer, 199 Ga. 285 (5) ( 34 S.E.2d 40) (Materialman need not show which of several parcels of real estate improved by furnished material where lien sought against all parcels. See Annot., 39 ALR2d 394).
The controlling question here is whether or not the warranty deed has priority over any lien that the materialman may have.
Apparently, the cases have established four ways in which the grantee in a deed may lose his priority over a materialman's lien. They are where the grantee: (a) has actual notice of the claim of lien, Ashmore v. Whatley, 99 Ga. 150 ( 24 S.E. 941) (warranty deed); Bennett Lumber Co. v. Martin, 132 Ga. 491 ( 64 S.E. 484) (security deed); Oglethorpe Savings c. Co. v. Morgan, 149 Ga. 787 ( 102 S.E. 528) (trust deed); see, Annot. 80 ALR2d 179, 224; (b) has constructive notice because the lien has been previously recorded, Ashmore v. Whatley, 99 Ga. 150, supra; (c) has consented to the making of the improvement either expressly or impliedly, Williams v. Brewton, 170 Ga. 164 (2), 168 ( 152 S.E. 441) and citations; or (d) has misled the materialman as to the ownership of the property, giving rise to an estoppel. See Reaves v. Meredeth, 123 Ga. 444 (3) ( 51 S.E. 391); Georgia State Savings Assn. v. Wilson, 189 Ga. 21 (7) ( 5 S.E.2d 14). Furthermore, there is a presumption of no notice to the grantee in a warranty deed, security deed or even a quitclaim deed. See respectively, Williams v. Smith, 128 Ga. 306 (1b) ( 57 S.E. 801); Milner v. Wellhouse, 148 Ga. 275 (1) ( 96 S.E. 566); Marshall v. Pierce, 136 Ga. 543 (4) ( 71 S.E. 893).
Here there is no contention that the grantee had any actual or constructive notice. Plaintiff relies on the facts that the owner-grantor, Ellenburg, remained in possession and continued to construct the houses and that Ellenburg collected rents on one of the houses after it was completed. However, there is no showing that the grantee, Appliance Buyers Credit Corporation, knew that Ellenburg remained in possession and completed the buildings.
Even such a showing would probably not be enough because "Mere knowledge that improvements are to be made will not subject the title of the true owner to a lien for material." Georgia State Savings Assn. v. Wilson, 189 Ga. 21, supra, at 28. Furthermore, "The true owner, though cognizant that a stranger to the title is having improvements made on the premises, is under no legal duty to give to a materialman any information touching the ownership of the property. . ." Reaves v. Meredeth, 123 Ga. 444 (3), supra. See Dwight v. Acme Lumber c. Co., 186 Ga. 825 (2) ( 199 S.E. 173); Rutland Contracting Co. v. Gay Estate, 193 Ga. 468, 470 ( 18 S.E.2d 835) and citations; Marshall v. Peacock, 205 Ga. 891 ( 55 S.E.2d 354); Harris v. Parham, 213 Ga. 725 ( 101 S.E.2d 722); Gignilliat v. West Lumber Co., 80 Ga. App. 652 (1) ( 56 S.E.2d 841).
Since there was no evidence to make a factual issue as to any of the four ways by which the grantee in the warranty deed could lose his priority over the unrecorded materialman's lien, it was not error to direct a verdict as to the defendant, Appliance Credit Buyers Corporation, or the intervenor, Payton.
3. However, the defendant Ellenburg was in default and made no effort to defend the case even though he was called as a witness. A verdict against him was demanded.
Judgment affirmed as to Appliance Credit Buyers Corporation and Payton; reversed as to Ellenburg. Carlisle, P. J., and Russell, J., concur.