Kemler Lumber Co. v. Naumann ( 1922 )

Per Curiam :

Two petitions were filed in case No. 1818 L. R. in the circuit court of Cook county under the Torrens act to remove memorials from the register. One of these petitions was filed by Adolph Naumann against Joseph F. Haas, the Kemler Lumber Company and P. Robert Johnson to remove memorials of mechanics’ liens filed by the lumber company and Johnson covering lots 12, 13, 14 and 15, also known, respectively, as Nos. 2532, 2534, 2538 and 2540 Blaine place, in Chicago. The other petition was filed by Charles J. and Mary J. Deckert against Joseph F. Haas and the Kemler Lumber Company to remove a memorial of a mechanic’s lien by the lumber company and involves lot 11, also known as No. 2530 Blaine place, in Chicago. The defendants to the petitions filed answers and the issues were referred to the examiner of titles, who made his report recommending that the prayer of the petitions be granted and that the memorials of the liens claimed by the defendants, the Kemler Lumber Company and Johnson, be canceled and removed from the register. Objections were filed to the report, which were overruled and exceptions taken by the defendants to both petitions. The circuit court overruled the exceptions and a decree was entered in. each petition as prayed, and the defendants have prosecuted this appeal.

The facts appearing in the record are the following: Lots 38 and 39 in Bowman’s Second subdivision of the east half of the southeast quarter of section 12, township 40, north, range 13, east of the third principal meridian, were duly registered in the office of the registrar of titles in Cook county in the name of John Bickel, free and clear of all incumbrances, and a certificate of title was issued to Bickel therefor. Thereafter a part of said subdivision was further subdivided into lots, the lots in question being a part of the subdivision lotted, and Mathias Huberty and Frank Loheinrich became registered owners of all five of said lots. In the summer of 1915 Huberty and Loheinrich, who then held the registered title to the five lots, undertook the erection of a two-story flat-building on each of the lots. They obtained a loan of $4000 on each lot from Edward G. Pauling to erect the buildings, and for said sums gave a trust deed which was a first lien on the lots. They also procured a further loan of $2000 on each lot, for which they gave a second mortgage to Emil Seeman as trustee. In the early part of 1916 Pluberty and Loheinrich failed and were adjudged bankrupts in the United States district court for the northern district of Illinois. The property of the bankrupts was sold by the trustee in bankruptcy, and William G. Wise purchased the five lots and received from the trustee in bankruptcy a deed thereto by order of said court. He filed the deed in the office of the registrar of titles and a certificate of title was issued to him November 14, 1916. The claim of appellant P. Robert Johnson for mechanic’s liens against Huberty and Loheinrich for $225 on each of lots 12, 13, 14 and 15 was filed with the registrar of titles July 24, 1916. The claim of appellant the Kemler Lumber Company for mechanic’s liens for labor and materials against Huberty and Loheinrich for $2239.94, giving notice of liens on all five lots, was filed January 29, 1917, in the registrar’s office. At the time Huberty and Loheinrich became bankrupts the buildings on said lots were unfinished, and Pauling and See-man furnished the money necessary to complete the buildings in addition to the loans already made by them, and their trust deeds or mortgages are registered in the registrar’s office as liens.

On December 19, 1917, almost a year after it had filed notice of its liens in the Torrens office, the Kemler Lumber Company filed a bill in the superior court of Cook county to foreclose its mechanic’s liens against said five lots, making William G. Wise, Edward G. Pauling and Emil H. See-man parties defendant. Thereafter P. Robert Johnson filed his intervening petition in said lien suit to’ foreclose his liens on lots 12, 13, 14 and 15. It appears that these suits for liens are still pending and undetermined in the superior court, and that no notice of lis pendens of that proceeding in the superior court has at any time been filed in the office of the registrar of titles of Cook county, as provided by section 84 of the Torrens act. It was also shown that notice of the liens of the Kemler Lumber Company was filed with the registrar more than four months after the last material had been delivered by it and payment for its claims had become due. Johnson filed his claim for mechanic’s liens with the registrar within the time required by section 7 of the Mechanic’s Lien act, and this is not questioned.

On December 23, 1919, William G. Wise and wife conveyed lots 12, 13, 14 and 15 to appellee Adolph Naumann, and the title thereto was registered in Naumann and a registrar’s certificate of title was issued to him. Naumann paid Wise $4800 for his interest in the lots, and the deed to Naumann was made subject to the trust deed to Pauling and Seeman. On October 14* 1919, Wise conveyed lot 11 to appellees Charles J. and Mary J. Deckert for $3700, subject to said trust deeds, and the title thereto was registered and a registrar’s certificate was issued to the Deckerts. Wise paid the trustee in bankruptcy $50 for lot 11, $25 each for lots 12 and 13, and $10 each for lots 14 and 15. Said lots are each of the value of about $1000 in addition to the buildings thereon, which are each worth about $6500. Wise had been for ten years the attorney for Pauling and Seeman and filed their appearance in the superior court in the mechanic’s lien suit. He testified that they had nothing to do with his purchase at the trustee in bankruptcy’s sale, and that his purchase price of the lots was not furnished by them but that part of the purchase price paid him by the Deckerts and Naumann was paid to Pauling and Seeman on their liens. He had no specific agreement with Pauling and Seeman about being reimbursed for the funds he had expended in the purchase of the lots. He knew of the lien claims of Johnson before he purchased the lots, but did not know about the claim of the Kemler Lumber Company until about the time it filed its bill in the superior court. He discussed the state of the title on the certificate with ■ Deckert and Naumann’s attorney but did not disclose to them the pendency of the bill in the superior court, and they made no inquiry of him concerning that suit.

The decision of the circuit court that appellees were entitled to have the memorials of the mechanic’s liens of Johnson and the Kemler Lumber Company canceled and removed from the register in the registrar’s office is based, first, upon the fact that the Kemler Lumber Company did not have the memorials of its liens for materials registered or filed within four months after the last delivery of materials or within four months after the last payment was due, as required by section 7 of the Mechanic’s Lien act; and second, because the lumber company and Johnson did not file in the office of the registrar of titles any notice of the foreclosure suit in the superior court to enforce the liens, as required by the provisions of section 84 of the Torrens act. It is the claim of appellees that the proof of either one of the foregoing facts, — that the claims for liens were not filed in the registrar’s office in the time provided for in the Mechanic’s Lien act and that no notice of the suit to foreclose the liens had at any time been filed with the registrar, — was a sufficient ground or reason for the removal of the memorials. The facts are undisputed, and if each set of facts furnishes a sufficient ground for the cancellation and removal of the memorials the court’s decree must be sustained in toto, both as to the liens of the lumber company and the liens of Johnson.

Section 7 of the Mechanic’s Lien act provides, in substance, that no contractor shall be allowed to enforce his lien against or to the prejudice of any other creditor or incumbrancer or purchaser, unless within four months after completion of the work, or if extra or additional work is done or material is delivered, within four months after completion of such extra or additional work or final delivery of such extra or additional material, he shall either bring suit to enforce his lien or file with the clerk of the circuit court a statement of claim for his lien. In Hacken v. Isenberg, 288 Ill. 589, it was decided by this court that in counties where the Torrens system of registering titles is in force, a claim for mechanic’s lien, as against other purchasers and creditors, must be filed within the four months’ period provided for in the Mechanic’s Lien act in the office of the ' registrar of titles and a memorial be entered on the register, but as against the owner of the premises the claim may be filed at any time within two years after the completion of the contract. This holding was made in view of the provisions of sections 89 and 90 of the Torrens act requiring such filing and notice of a mechanic’s lien. The Kemler Lumber Company filed notice of its liens in the registrar’s office, but as the undisputed fact is that it did not file such notice in the time required by the statute it did not acquire a lien as against appellees, who are subsequent purchasers for value.

In VonTobel v. Ostrander, 158 Ill. 499, this court held that the knowledge by a purchaser of real estate, at the time of his purchase, that a claim for mechanic’s lien on the property had been filed with the circuit clerk but that it was filed after the expiration of the four months’ period allowed by law will not affect such purchaser’s title in the property. It was also said in that case that the filing of notice nearly ten months after the last payment became due amounted' to no more than if it had not been filed at all, as against a subsequent purchaser. The holding in that case is entirely applicable to this case, as the Kemler Lumber Company filed its notice of lien, with the registrar about ten months after the last payment became due to it. It theréfore has no lien as against appellees Naumann and the Deckerts, and the court properly held that appellees by their petitions were entitled to have the memorials of the Kemler Lumber Company canceled and removed from the register in the registrar’s office, as appellees were subsequent purchasers for value.

As the Kemler Lumber Company was the only one of appellants to file notice of its lien claim against lot 11 in the registrar’s office and to have a memorial thereof entered upon the register, the decree of the circuit court as to the petition of Charles J. and Mary J. Deckert for the removal of such memorial will have to be sustained in toto. For the same reason the decree as to the petition of Naumann against the lumber company and Johnson must also be sustained as to the lumber company.

Appellant Johnson has shown clearly that his notice of mechanic’s liens on lots 12, 13, 14 and 15 was filed in apt time in the registrar’s office and proper memorials thereof entered on the register. He thereby perfected his liens on said lots, and it is unquestioned that the liens were still in force when the suit in foreclosure was filed in the superior court. The claim of appellees is that he lost his liens at the expiration of thé two-year period within which suit must be commenced to enforce the liens because of his failure to comply with the provisions of section 84 of the Torrens act. Section 84 provides: “No suit, bill or proceeding at law or in equity, for any purpose whatever affecting registered land, or any estate or interest therein, or any charge upon the same, shall be deemed to be lis pendens or notice to any person dealing with the same, until a certificate of the pendency of such suit, bill or proceeding under the hand and official seal of the clerk of the court in which it is pending shall be filed with the registrar and a memorial thereof entered by him upon the register of the last certificate of the title to be affected.” (Harker’s Stat. 1035.) It is not contended that the beginning of the foreclosure proceedings affected in any way the lien of Johnson created by the filing of his claim in accordance with the provisions of section 89 of the act, and, manifestly, no such claim could be made. When a claim is filed within four months, as provided in section 7 of the Mechanic’s Lien act, the lien attaches, as against subsequent purchasers, as of the date of the contract with the contractor, (Hacken v. Isenberg, supra; Boyer v. Keller, 258 Ill. 106; Pittsburg Plate Glass Co. v. Kransz, 291 id. 84;) but the lien ceases to exist if suit is not filed within two years, as required by section 9 of the Mechanic’s Lien act. If the suit of Johnson had been prosecuted to a decree within this two-year period, and a certificate stating the date and purpose of that decree, or a certified copy of the decree, had been filed in the office of the registrar and a memorial of the same entered upon the register of the last certificate of title to be affected, as provided by section 85 of the Torrens law, his failure to comply with the requirements of section 84 would not have affected his lien. The general purpose of the Torrens system of registration of land titles has been variously stated by courts and other authorities to be, to provide a system of registration whereby it shall be possible for an intending purchaser of land to ascertain by an inspection of the register who may convey to him the title; (Glos v. Kingman & Co. 207 Ill. 26;) to create an independent system of registration of land titles so that all instruments intended for the purpose of passing or affecting any title to real estate registered thereunder should be filed and registered in the office of the registrar and at no other place; (Hacken v. Isenberg, supra;) to establish a system for the registration of title to land whereby the official certificate will always show the state of the title and the person in whom it is vested; (Robinson v. Kerrigan, 151 Cal. 40, 90 Pac. 129;) to establish a method by which the title to a particular piece of land will be always ascertainable by reference to a certificate issued by a government official, made by law conclusive in that regard; (3 Tiffany on Real Property, — 2d ed.- — 2273;) and to establish a system for the registration of title to land whereby the official certificate will always show the state of the title and the person in whom it is vested. (23 R. C. L. 273.) The basic principle of the system is the registration of the title to the land, instead of registering, as under the old system, the evidence of such title. (34 Cyc. 598.)

These general statements are the ideal which it was hoped the system would reach, but the practical question presented is how near the ideal may be approached in view of other established rules of property. The certificate of title is not always entirely conclusive, (In re Peters, 119 Minn. 96, 137 N. W. 390; Annotation, the Torrens Law, L. R. A. (1916D) 14 etseq.;) but the difficulties discussed in the authorities last cited are not presented in this proceeding. At the time the Torrens law was enacted the provisions of the Mechanic’s Lien act with respect to filing the claim and enforcing the lien were substantially the same as they are now, and it must be presumed that the legislature had the Mechanic’s Lien act in mind at the time it enacted the provisions of the Torrens law affecting mechanics’ liens. By the enactment of the Torrens law the legislature did not change the procedure by which mechanics’ liens are enforced, but specifically provided that the proceedings to enforce the lien should be the same as the proceedings provided in the Mechanic’s Lien act. The legislature did, however, place an additional burden upon the mechanic or material-man who seeks to charge registered land with a mechanic’s lien, by requiring that notice of the suit to enforce the lien must be noted upon the register of the certificate of title to the land affected or the suit would not be deemed to be Us pendens or notice to any person dealing with the land. The fact that the legislature imposed this additional burden upon the mechanic or material-man who seeks to enforce his lien against registered land does not affect the validity of section 84 of the Torrens law. (25 R. C. L. 905; State v. American Surety Co. 91 Neb. 22, 135 N. W. 365.) An act complete in itself is not necessarily within the prohibition of section 13 of article 4 of the constitution merely because it repeals, modifies or amends by implication a former act. Holmgren v. City of Moline, 269 Ill. 248; New York Central Railroad Co. v. Stevenson, 277 id. 474; People v. Stokes, 281 id. 159.

We have already held that the only person entitled to have a memorial of a lien entered upon the register is the person entitled to enforce the lien. (Curtis v. Haas, 298 Ill. 485.) Appellant Johnson was therefore required, by the provisions of section 84 of the Torrens law, to cause a memorial to be entered on the register within the two-year period in which he could bring suit to enforce his lien that he had brought such a suit and that the suit was pending in order to bind appellee Naumann, who is a subsequent purchaser of the registered lands sought to be charged with appellants’ liens. The court properly canceled and removed from the register the memorial of Johnson’s liens.

Appellants complain that the court erred in not allowing them to further cross-examine the witness Wise with the view of showing that Wise’s purchase of the lots was not in his own interest and in his own right, but was, in fact, a purchase by him in the interests of Seeinan and Pauling,'the owners of the trust deeds. The court allowed some of this cross-examination, but it was not material to any issue in the case. Wise, as a purchaser from the trustee in bankruptcy, took his title subject to all existing liens against the bankrupts. ' Seeman and Pauling were creditors, and their claims as creditors would not be affected in any way by the fact, if it was a fact, that Wise simply acted as their agent in purchasing the property. Naumann and the Deckerts were subsequent purchasers and were likewise not affected by the notice of the lumber company of its liens filed with the registrar, as such notice was not filed in time and amounted to no notice whatever of its liens to either creditors or purchasers.

The decree of the circuit court is affirmed.

Decree affirmed.