Summary
In Pilcher v. E. R. Porter Co., 208 Ala. 202, 94 So. 72, the difference, as to the extent and nature of the lien, as affecting mortgage rights where the material was used in making new and independent improvements on mortgaged land and where used merely in repairs and betterments, was clearly indicated, and the lien for improvements as "a mere betterment" may not be enforced against the rights of a mortgage, unless the suit is brought within six months "after the maturity of the entire indebtedness secured thereby."
Summary of this case from Sturdavant v. First Ave. Coal Lumber Co.Opinion
4 Div. 946.
June 15, 1922. Rehearing Denied October 12, 1922.
Appeal from Circuit Court, Houston County; H. A. Pearce, Judge.
Sollie Sollie, of Ozark, for appellant.
The jurisdiction to decree and establish a materialman's lien appertains solely to courts of equity. 94 Ala. 240, 10 So. 157, 14 L.R.A. 305; 191 Ala. 238, 68 So. 43; 202 Ala. 157, 79 So. 641; 203 Ala. 206, 82 So. 455; Code 1907, § 4764. Appellees, not having brought their suit in equity within six months after the alleged accrual of the demand, must be deemed to have lost the right to bring it. Code 1907, § 4777; 95 Ala. 608, 10 So. 834; 203 Ala. 93, 82 So. 107; 204 Ala. 439, 85 So. 709. A materialman's lien, for materials furnished in the repair of an existing building, there being an outstanding mortgage on the lot, extends only to the increase in value of the building, due to the work done and materials furnished. 191 Ala. 238, 68 So. 43; 94 Ala. 240, 10 So. 157, 14 L.R.A. 305.
Farmer, Merrill Farmer, of Dothan, for appellees.
As between Damon, or his assignee, and the appellee, the buildings did not become a part of the realty; and appellant holds a mortgage superior to appellee on the naked lots, and appellee holds a prior lien on the buildings. 203 Ala. 93, 82 So. 107.
With respect to the relative rights of lienors and prior mortgagees, under sections 4754 and 4755 of the Code, declaring and defining the liens of mechanics and materialmen, and the remedies for their enforcement, the following propositions seem to be clearly settled by our decisions:
1. Where a new building or structure is erected on land which is already subject to a mortgage or other incumbrance, as to the land, the lien is subordinate to the prior incumbrance, but, as to the building or structure, the lien is superior to such incumbrance; the theory being that, so far as the lienor is concerned, the building or structure does not become a part of the land, is not affected by any prior incumbrance on the land, and "may be sold and removed without affecting the mortgage security." Turner v. Robbins, 78 Ala. 592, 595; Wimberly v. Mayberry, 94 Ala. 240, 10 So. 157, 14 L.R.A. 205; Vesuvius Lbr. Co. v. Ala., etc., Co., 203 Ala. 93, 95, 82 So. 107.
2. In such a case, the enforcement of the lien already seasonably established in an action at law or otherwise, though the prior incumbrancer were not made a party thereto, against such building or structure, by a bill in equity, which does not seek the subjection thereto of any property, land or improvements, which was originally covered by the mortgage, but merely the determination of priorities between the lienor and the prior incumbrancer of the land as to the added improvement, and its separation from the land, is not such a suit for the enforcement of the lien as, under section 4777 of the Code must be commenced "within six months after the maturity of the entire indebtedness secured thereby." Vesuvius Lbr. Co. v. Ala., etc., Co., 203 Ala. 93, 82 So. 107; Id., 204 Ala. 439, 85 So. 709; Jefferson County Sav. Bk. v. Ben F. Barbour Co., 191 Ala. 238, 247, 68 So. 43.
3. The principles just above stated are not affected in any way by the circumstance that the action at law for the enforcement of the lien, and the judgment thereon, is against the entire property of the defendant, both the land and improvement (Vesuvius Lbr. Co. v. Ala., etc., Co., supra; B'ham B. L. Ass'n v. May, etc., Co., 99 Ala. 276, 13 So. 612), nor by the fact that either the mortgage or the statutory lien has been foreclosed, and the property bought in at the sale (Vesuvius Lbr. Co. v. Ala., etc., Co., supra; B'ham B. L. Ass'n v. May, etc., Co., supra; Wimberly v. Mayberry, supra; Magnolia Land Co. v. Malone Inv. Co., 202 Ala. 157, 158, 79 So. 641). This assumes, of course, that the lienor, in the one case, or the mortgagee, in the other, was not made a party to the suit or foreclosure proceeding.
4. But, "where the improvement is a mere betterment, or where repairs are made, upon a building or improvement upon which there is a valid lien, and the owner has only a qualified right, it would be unjust and inequitable in many cases * * * to enforce the lien and give it priority on the entire building or improvement"; and hence "the mortgagee's lien is superior and prior as to the property covered by the mortgage before the mechanic's or materialman's lien attached, and subordinate to the lien given to the mechanic or materialman, for what he added; and so the lien of the mechanic or materialman is upon the whole property, but subordinate to the mortgage as to the property covered by the mortgage when his lien attached." Wimberly v. Mayberry, supra, 94 Ala. 248, 249, 10 So. 160 (14 L.R.A. 205); Jefferson Co. Sav. Bk. v. Ben F. Barbour, etc., Co., supra.
5. Where the statutory lien is of the character just above stated, its priority "cannot be adjusted and protected in a court of law." but is a matter of equitable jurisdiction exclusively. Wimberly v. Mayberry, supra; Jefferson County Sav. Bk. v. Ben F. Barbour, etc., Co., supra.
6. In such a case, the suit being a primary proceeding for the establishment of a lien upon the property of the mortgagee — property to which his mortgage attached in its inception, and upon which he relied as security for its satisfaction — and affecting his interests by a premature and compulsory foreclosure of his claim if the security has been enhanced in value, it is held to be such a suit as the statute (Code, § 4777) requires to be commenced "within six months after the maturity of the entire indebtedness secured thereby." Jefferson County Sav. Bk. v. Ben F. Barbour Co., supra; Vesuvius Lbr. Co. v. Ala., etc., Co., supra.
The foregoing principles and distinctions have been clearly enunciated, and must be regarded as settled. The point of difference between counsel for the respective parties in interest is, as we understand it, not with respect to the principles above reviewed, but as to their application to the facts of this case.
The original bill of complaint, in the sixth paragraph, alleges that W. C. Pilcher, the original owner and mortgagor, "borrowed money from Damon and the Pilchers, and used it in erecting the buildings which are on the lands in question, and that, after said buildings and improvements had been practically completed, appellees began to advance to W. C. Pilcher materials to be used in finishing up or fitting out said buildings theretofore erected on said lands, and which in part were used in and about finishing up said buildings."
The answer and cross-bill contains the following statement:
"In answer to the sixth paragraph of the bill respondents and each of them separately and severally say that they admit that during the early part and prior to the 2d day of July, 1914, the said W. G. Pilcher began the erection of certain buildings upon said land described in the second paragraph of the bill. They deny that, after said buildings and improvements had been practically completed, and on or about the 2d day of July, 1914, respondents began to advance to W. C. Pilcher certain materials to be used by him in finishing up or fitting out said buildings theretofore erected upon said lands, and which in part were used in and about the finishing up of said buildings. They admit that materials were furnished by them from July 2d, on various days, at intervals thereafter, until and including the 31st day of August, 1914; and they aver that said materials so furnished, for said purpose, were used by W. C. Pilcher for the erection upon said land, and that the same was furnished or advanced by these respondents under and by virtue of a contract and agreement between them and W. C. Pilcher."
The chief point made by the demurrer to the cross-bill, and urged in brief, is that the cross-bill was not filed within six months after the maturity of the indebtedness secured by the lien; and this contention is based upon the theory that the cross-bill does not show that any of the buildings in question were constructed wholly with the materials alleged to have been furnished to the owner, Pilcher, and hence must be taken as admitting the allegation of the original bill that the materials were furnished for the completion or mere finishing of buildings already practically completed, which, as the argument runs, would give a prior lien, not on the buildings themselves, but only on the enhanced value of the entire property, for the enforcement of which a bill in equity must be filed within six months, as held in Jefferson County Sav. Bk. v. Ben F. Barbour Co., 191 Ala. 238, 68 So. 43.
This ground of the demurrer is very clearly without merit. If, as the cross-bill alleges, the materials were furnished for and used in the erection of new buildings, which were not a part of the security of the mortgage at its inception, it is wholly immaterial at what stage in the progress of the building such materials were furnished, nor how small a proportion they were of all the materials used in the buildings. The statute makes no such discriminations, but gives the lien equally to him who furnishes the paint for finishing, the brick or stone for foundations, or the lumber or other materials for the body of the building, in whatever quantity. There may be questions of priority as between the several lienors who contribute to the building, but, so far as the prior mortgagee of the lot is concerned, each of the lienors, from first to last in the order of their contribution, has priority as to the building.
Unquestionably, under the allegations of the cross-bill, the materials furnished by appellees were for use, and were used, in new buildings of which they formed a part, and were in no sense for repairs or betterments. And, as we have already pointed out, the statute preserves the separate identity of new structures in favor of lienors in such wise that, from inception to completion, they never become subject to the lien of the mortgage until the lienor's claims are discharged. The result is that the lien asserted by the cross-bill, against the buildings only, was seasonably and primarily established by the action at law against the owner, W. C. Pilcher, and the present bill in equity against the prior mortgagee of the lot for the determination of priorities merely, and the separation of interests, if need be, an equitable jurisdiction independent of the establishment of the lien, does not fall within the purview of the statute of limitations of six months.
The only lien asserted by the cross-bill is against the buildings for which cross-complainants furnished materials, and the relief sought is aimed at nothing else. It leaves no uncertainty as to the nature and extent of the lien claimed, and the third ground of demurrer is therefore not well taken.
From the face of the cross-bill it cannot be discerned that the lienors have been guilty of laches in the assertion and enforcement of their priority right as to the buildings, though four years have elapsed since the maturity of the lienors' claim. If there are any circumstances which could so charge them, they must be availed of by plea or answer. Fowler v. Ala. I. S. Co., 164 Ala. 414, 51 So. 393, headnote 9. The ground of demurrer, as for laches shown by the cross-bill, cannot be sustained.
Another objection raised by the demurrer is that the cross-bill "does not describe or set forth with reasonable certainty what portions of said buildings, or any of them, were improved, erected or constructed with or by means of said materials, or any of them." The clear allegation is that the materials were furnished for the buildings erected, and went into those buildings. It is wholly immaterial what portions of the buildings in question were constructed of the materials furnished. It is enough that they were furnished for and entered into the buildings erected, as a part of their structure before their final completion.
Whether or not, where there is a single contract for materials to be used in the construction of more than one building, the lienor must show what amount of the materials, or what particular item, went into each building, and thus show and rely upon separate liens, each restricted to and commensurate with the value of the materials respectively used in each, is a question not raised by the demurrer, and therefore not proper for present consideration. See, however, Cocciola v. Wood-Dickerson Co., 136 Ala. 532, 33 So. 856; 27 Cyc. 128-130.
Upon a very thorough consideration of the pleadings and of the arguments of counsel, our judgment is that there is equity in the cross-bill, and that it is not subject to any of the special grounds of demurrer assigned.
Let the decree of the circuit court be affirmed.
Affirmed.
ANDERSON, C. J., and McCLELLAN and THOMAS, JJ., concur.