Miller v. Condit

Vanderburgh, J.

This action was brought to foreclose and enforce a mechanic’s lien'in favor of Bixby & Co. against certain real property in the city of Minneapolis, belonging to the defendants Condit, Mayhew, and Daynes, and on which the defendant Drexel holds certain mortgages, executed June 1, 1889. In the same action numerous other lien claimants have been brought in and made parties. The only questions for consideration upon this appeal arise between the mortgagee, Drexel, and the defendants Johnson & Hurd, Loring T. Boss, receiver of Mayhew Bros., and Peter Mayhew. It is expressly found by the trial court that “the defendant Drexel received and accepted each of the mortgages, aforesaid as security for the moneys loaned by him with full notice that each and all the lien-claimants had been and were furnishing material and labor for the construction of the building on the real estate in question.”

1. In respect to the claim of Johnson & Hurd, it appears that they filed .'separate ’ lien statements, arising under separate contracts, in one of which the last item of materials is shown to have been furnished October 16, 1889, and in the other November 22, 1889. Separate actions had been brought by them to enforce these liens on July 18, 1890. But prior to that date this action in favor of Bixby & Co. had been commenced and was then pending, and on the trial of this action an order was made by the court, of the date of February 20, 1891, consolidating therewith the actions above mentioned of Johnson & Hurd, and their liens were accordingly adjudicated herein. The objection urged against the claims of Johnson & Hurd is, in form, that no valid proceeding was begun for the enforcement thereof within one year from the date of the last item of the account. The ground of this objection is that the statute allows but one action in such cases, and that by its terms all the lien claimants must be joined or come in and be made parties therein; and hence, since the action in favor of Bixby & Co. had already been commenced, and the complaint and lis pendens filed therein, before Johnson & Hurd commenced their actions, the latter were inhibited by the statute, and invalid and ineffectual.

The provision of the statute relied on is as follows: “After commencement of and before final judgment in any such action to foreclose any such lien as aforesaid upon any certain property, no other such action to foreclose any other such lien upon the same property, or any part thereof, shall be commenced; but the claimant of any other such lien, not a party to such action firstly commenced, shall apply to be made, and shall be admitted, a defendant in the action last mentioned.” It is claimed that in the case of Johnson & Hurd there was a clear violation of an express prohibition of the statute. But a further clause provides: “And if he shall nevertheless commence such other action, the same shall be consolidated with and merged in the action firstly commenced upon motion of any party to the earlier action, or by the court upon its own motion.” We think the court below rightly construed the statute. The object of it is to regulate the practice merely, and the provision'first cited must be construed with the further clause cited, and the general purpose •of the provisions on the subject. The provision in question involves no penalty or forfeiture of legal rights. The object aimed at is to have an adjudication of all the lien claims in one suit,' and one sale to satisfy the same through an equitable division of the proceeds. Hence the statute contemplates but one' general action, in which all the claims shall finally be consolidated and disposed of; but, if such •consolidation is seasonably made, a departure from the strict letter of the statute in the matter of practice is not jurisdictional or matter of substance. McCoun v. New York. Cent, & H. R. R. Co., 50 N. Y. 176.

If, therefore, a claimant neglects to comply with the direction of the statute, and brings a second action, instead of joining in a prior action, the statute points out the disposition of such action, and provides for its consolidation with the prior action, but does not make the proceeding void or a nullity. Until the order of consolidation, it is nevertheless an action pending.

2. The defendant Drexel also objects to the allowance of the claim •of Mayhew Bros., represented by Loring T. Ross, receiver of their insolvent estate. It is found that between the 17th day of May, 1889, and the 26th day of October, 1889, they furnished certain building materials used in and about the erection of the buildings in question, but before the account was filed they became insolvent, and the defendant Loring T. Eoss was appointed receiver of the property and effects of,the insolvents, and he. thereupon, *as such receiver, seasonably filed the account and statement of their claim in due form. But by mistake and inadvertence, as the court finds, it is stated therein that the first item of their claim was furnished on the 10th day of July, 1889, instead of May 17, 1889, as the fact is. It is contended by the defendant Drexel that the lien on the property did not pass to the receiver as incident to the debt, and that he had no authority to file the lien statement, and prosecute the claim. In our opinion, however, the transfer of the debt to an assignee or receiver in insolvency carries with it all the securities of whatever nature owned by the insolvent, or to which he is entitled, and that he is clothed with all the requisite authority to enforce such liens.

It could never have been contemplated that there should be a severance of the debt and lien in such cases, which would result in a very serious loss to the estate of the debtor. The purpose of the insolvency statute is to invest the assignee with all the nonexempt property of the debtor. This must necessarily include credits and choses in action, and should be held to include lien claims securing debts due him. The statute is a remedial one, and must have a liberal construction to advance the remedy; and we have no doubt that it was fairly within the intention of the legislature to include claims of this character, and that the assignee or receiver is authorized to take all necessary proceedings to enforce the same.

3. A further objection relates to the mistake in the account filed as respects the date of furnishing the first item, which is by mistake stated to have been on July 10th, instead of May 17th. This would not avoid the lien in this ease, for, if a strict construction were insisted on, the claim would in any event still be good for all the materials embraced in the account between the dates specified; nor should the lien in question be postponed and made subordinate to the mortgages of Drexel, of an earlier date than the first item specified, because — First, it is found, as before stated, that Drexel had actual notice of the claim; and, second, he had constructive notice from the fact that the building of which plaintiffs’ material became an inseparable and component part as one entire improvement was actually in process of construction, to his knowledge, when the loan was made. The statement for a lien, notwithstanding the error, embraces a claim for the whole account claimed, including the materials furnished after May 17th and before July 10th, as well as those delivered after this last date. The error in this case, therefore, was not in any manner prejudicial, and was immaterial. Cases may arise, as may readily be supposed, in which the claimant would be estopped to allege an earlier date than stated in the account filed, but for the reasons stated this is not such a case, and the court ought not to give the statute a construction so strict and technical as tha.t claimed by the appellant. The lien statement, as we may assume, on its face purports in all things to be in compliance with the statute.

There is no mistake as to the amount of the claim, property, own-ship, or other essentials. It was seasonably filed, and it was entirely immaterial, as we have seen, as to the rights of these parties, whether the delivery of the materials commenced on the one date or the other. The variance was therefore immaterial in this case. The ruling of the court was right, and the evidence was properly received. The case of Peter Mayhew depends upon the same questions, and must be decided in the same way.

Judgment affirmed.