Byrd v. Cooper ( 1914 )

Mr. Justice Moore

delivered the opinion of the court.

1. The parties having solemnly. admitted by their pleadings that an examination of the records of deeds in Multnomah County, Oregon, would have revealed the fact that the Home Installment Company held a conveyance of the lot herein described prior to the commencement of this suit, the question to be considered is, Did the failure of the plaintiff to make such corporation a party until more than six months had elapsed from the filing of his claim of lien bar a foreclosure thereof? As a preliminary matter, however, it is contended by plaintiff’s counsel that since no bill of exceptions has been settled or allowed herein, any error of the trial court will not be reviewed unless apparent on the face of the record. This is a suit in equity, in which case no bill of exceptions is required; the cause being tried anew on the merits by a reexamination of all the testimony given in the court below. Besides, the error complained of is apparent on the face of the record in the overruling of the demurrer and in the disregarding of the averments of the answer, to the effect that the suit, as to the Home Installment Company, had not been commenced within the time limited therefor.

The statute, prescribing the time within which a suit to foreclose a mechanic’s lien must be instituted, reads: “No lien provided for in this act shall bind any building, structure, or other improvement for a longer period than six months after the same shall have been filed unless suit be brought in a proper court within that time to enforce the same”: Section 7422, L. O. L. This suit was commenced 4 months and 8 days after the plaintiff’s notice was filed, and as to all the defendants named in the original complaint, the enforcement of the lien was undertaken within the time prescribed. As to the defendant the Home Installment Company, however, this suit was not begun until it was made a party. It is argued by plaintiff’s counsel that since the Acme "White Lead & Color Works answered the complaint herein and also filed a cross-bill to foreclose its lien, making the Home Installment Company a party defendant, 5 months and 20 days after plaintiff’s lien was perfected, the latter corporation thereby became a party to the original suit, and such being the case, no error was committed in foreclosing Byrd’s lien.

2. A text-writer in specifying indispensable parties to a suit to foreclose a mechanic’s lien, says: “The person who, when the suit is begun, owns the estate to which the lien attaches is, according to the better reasoning and the weight of authority, a necessary party defendant to a suit to foreclose the lien” (citing many decisions: Boisot, Mech. Liens, § 527).

In Osborn v. Logus, 28 Or. 302, 310 (42 Pac. 998), Mr. Justice Wolverton, discussing the subject says: ‘ ‘ The owner, of course, is an indispensable party, and his absence would be fatal to the proceeding; a decree without him would be a nullity.” Speaking of this excerpt, an author in a note ‘ observes, ‘ ‘ owner' an indispensable party dictum”: Bloom, Law Mechanics’ Liens, § 663. The language there criticised was employed in construing the words “shall” and “may” as made by the statute applicable to parties who were either necessary or proper in a suit to foreclose a mechanic’s lien: Section 7424, L. O. L. The question embraced in that case was whether in such a suit the-contractor was a necessary party, and it was determined that he was not. What was there said about the owner being an indispensable party was evidently intended to be used by way of illustration and comparison. But however that may be, it is believed that the language so employed is a correct declaration of the rule of law applicable to the question here involved. From this assertion it follows that, if the owner of real property whose conveyance of the title thereto is duly recorded at the time a suit is brought to foreclose a mechanic’s lien attaching to the premises is not then made a party or brought in within the time limited by the statute therefor, any decree that might be rendered in such suit is not binding upon him: Section 7424, L. O. L.

3. It remains to be seen whether or not the owner of the recorded title of land, when, within the time prescribed, he is made a party to a cross-bill, instituted by a defendant in an original suit, his real property subjected to the lien is thereby rendered liable to a foreclosure decree that may be given in the first suit. The statute regulating the foreclosure of mechanics’ liens, as far as important herein, reads:

“Suits to enforce the liens created by this act shall be brought in the Circuit Courts, and the pleadings, process, practice, and other proceedings shall be the same as in other cases. * * The proceedings npon the foreclosure of the liens created by this act shall be, as nearly as possible, made to conform to the proceedings of a foreclosure of a mortgage lien upon real property”: Section 7424, L. O. L.

If upon a sale of land under a decree foreclosing a mortgage thereon the sum of money received is more than sufficient to satisfy the plaintiff’s demands, the remainder is applied in discharging or on account of subsequent liens in the order in which they respectively attached to the premises. When, however, a sale is made pursuant to a decree foreclosing mechanics’ liens, in case the proceeds are insufficient to discharge all such liens, the lien claimants are to be paid pro rata: Section 7424, L. O. L.

In Title Guarantee Co. v. Wrenn, 35 Or. 62 (56 Pac. 271, 76 Am. St. Rep. 454), it was held that the filing of an answer by the holder of a mechanic’s lien in a suit to foreclose another lien was as effectual to save the lien from the bar of the statute of limitations as the bringing of a separate suit to foreclose, regardless of the facts that such answer was not served upon the owner of the property. The decision in that case proceeds upon the theory that a suit having been brought to foreclose a mechanic’s lien, wherein the owner and a lien claimant have been made parties, the filing of an answer by such claimant, setting forth the facts, constituting his lien and praying for the foreclosure thereof, was tantamount to the bringing of an original suit to foreclose his lien. If the Acme White Lead & Color Works had not made the owner, the Home Installment Company, a party defendant, but had answered the plaintiff’s complaint only, the owner would have had no notice of the proceedings, and would not have been bound thereby. Applying the rnle announced in the case of Title Guarantee Co. v. Wrenn, 35 Or. 62 (56 Pac. 271, 76 Am. St. Rep. 454), if the Home Installment Company had been made a party to the original suit, the answer of the Acme White Lead & Color Works to the complaint herein would have been notice to the owner, which corporation would have been bound by all the proceedings therein. There is not such a privity of estate or of contract existing between the several lien claimants that would render the answer of one of them, making the owner a party, equivalent to an amendment of the original complaint, and, such being the case, an error was committed in rendering a decree against the Home Installment Company.

The decree should therefore be reversed as to such owner, and this suit dismissed as to it; and it is so ordered. Reversed.

Mr. Chief Justice McBride, Mr. Justice Burnett and Mr. Justice Ramsey concur.