Albuquerque Lumber Co. v. Montevista Co.

• Decision Date: 23 November 1934
• Docket Number: No. 3951.,3951.
• Parties: ALBUQUERQUE LUMBER CO.v.MONTEVISTA CO.
• Court: New Mexico Supreme Court

39 N.M. 6

38 P.2d 77

ALBUQUERQUE LUMBER CO.

v.MONTEVISTA CO.

No. 3951.

Supreme Court of New Mexico.

Nov. 23, 1934.

Appeal from District Court, Bernalillo County; Helmick, Judge.

Action by Albuquerque Lumber Company against Montevista Company wherein defendant filed a cross-complaint. From an adverse judgment, defendant appeals.

Affirmed.

Abandonment of improvement through fault of owner and without fault of mechanic's lien claimant constitutes “constructive completion,” both as respects right to lien and time for filing, and interest of vendor not posting notice of nonliability is charged along with that of purchaser in possession, although vendor actually may be blameless as respects abandonment. Comp.St.1929, § 82-210.

John F. Simms, of Albuquerque, for appellant.

George S. Klock, of Albuquerque, for appellee.

SADLER, Justice.

Montevista Company, the appellant, as owner of an addition to the city of Albuquerque, contracted the sale to one Townsend of a lot and fractional lot in said addition. Townsend was a builder engaged in the construction of residence properties on lots purchased under executory contracts. According to his practice, after construction of the building, he would incumber the lot and improvements with a mortgage from the proceeds of which the claims for labor and material and balance due on the lots were satisfied.

The appellant knew of his practice and that he proposed to construct on the lots in question a building of brick for residence purposes. The contract called for $1 down and the balance in installments. The down payment represents all ever paid on the contract. Before he had purchased any materials from Albuquerque Lumber Company, the appellee, its representative visited the office of appellant and inquired if Townsend had title to the lots. The representative was informed that he did not, but was purchasing on contract. Upon being told that appellee proposed to sell him the material for the job, appellant's representative remained silent, making no comment the one way or the other. The appellee then began furnishing materials and continued doing so until the value thereof reached $804.37, for which amount it filed its claim of lien.

The appellant knew the work was started, but did not post the property. No credit was extended appellant by appellee, all materials being charged to Townsend. When Townsend got the foundation in and started to lay brick on the wall, a creditor attached him and ruined his credit. The appellant intervened in the attachment suit and got an order adjudging that Townsend had no title to the land in question (which was also attached), and the writ was vacated as to that property, the appellant resuming possession and canceling Townsend's contract for failure to pay.

The foundation and part of a wall constructed as aforesaid are of no value to the land and contribute nothing of value thereto in the way of betterments or otherwise. Within the time allowed by law, the appellee filed its claim of lien against Townsend and the land, and foreclosed in the suit out of which this appeal arises. Certain junior lienholders against Townsend were made parties to the foreclosure suit along with Townsend, his wife, and the appellant. The junior lienholders passed out on adverse ruling, and the contest narrowed down to the appellee as material lien claimant against the appellant. The court entered a decree foreclosing appellee's claim of lien as against appellant's estate in the land and dismissed the latter's cross-complaint against appellee, asking for cancellation of its lien claim as a cloud. This appeal followed.

[1] A nice question confronts us at the very threshold of this appeal. Does knowledge by appellee that Townsend, its customer, was merely an executory vendee in possession, with ownership of the legal title in appellant, deny effect to the latter's failure to post? The appellee, by invoking the provisions of Comp. St. 1929, § 82-210, furnishes a negative answer to the inquiry. The appellant affirms the contrary.

This statute appears as section 11 of chapter 16 of the Session Laws of 1880, the original Mechanics' Lien Act. It furnishes an easy means whereby the owner of property in possession of another under tenancies, purchase contracts, or otherwise may, after knowledge that such other has commenced repairs, alterations, or improvements, relieve his (the owner's) estate in the premises from liability therefor by posting in some conspicuous place on the premises or improvements a notice of nonliability. In default of such posting, the statute declares the improvements or repairs “shall be held to have been constructed at the instance of such owner,” and his interest “shall be subject to any lien filed” in accordance with the provisions of said act.

This statute has been before the state and territorial Supreme Courts many times for consideration, although none of the decisions dealing with it involves the precise question here presented. Its effect, either to bind the owner's estate if with knowledge he fails to post, or to relieve him, if without knowledge, or having knowledge, where he posts, has never been questioned in any of said decisions. Post v. Miles, 7 N. M. 317, 34 P. 586 (same case on subsequent appeals under other titles, see Mountain Electric Co. v. Miles, 9 N. M. 512, 56 P. 284, and Armijo v. Mountain Electric Co., 11 N. M. 235, 67 P. 726); Ford v. Springer Land Ass'n, 8 N. M. 37, 41 P. 541; Post v. Fleming, 10 N. M. 476, 62 P. 1087; Pearce v. Albright, 12 N. M. 202, 76 P. 286; Stearns-Roger Mfg. Co. v. Aztec Gold Min. & Mill. Co., 14 N. M. 300, 93 P. 706; Albuquerque Lumber Co. v. Tomei, 32 N. M. 5, 250 P. 21; Mitchell v. McCutcheon, 33 N. M. 78, 260 P. 1086.

But appellant reminds us that our Mechanics' Lien Act was adopted from California (Ackerson v. Albuquerque Lumber Co., 38 N. M. 191, 29 P.(2d) 714). It relies upon four California decisions in support of its contention that actual knowledge by appellee that appellant held the legal title to the property obviated the necessity of posting to relieve appellant's estate from liability for the improvements being made. The cases cited are Jurgenson v. Diller, 114 Cal. 491, 46 P. 610, 55 Am. St. Rep. 83; Ayers v. Green Gold Min. Co., 116 Cal. 333, 48 P. 221; Reese v. Bald Mountain Consol. Gold Min. Co., 133 Cal. 285, 65 P. 578 and Street v. Hazzard, 27 Cal. App. 263, 149 P. 770.

There are statements in some of these cases which tend to support appellant's position. However, as held in a later decision by the Supreme Court of California, Leoni v. Quinn, 189 Cal. 622, 209 P. 551, 552, where, in a controversy between a lien claimant and a lessor, the question now argued was squarely put, the point was not involved in those cases and they were not deemed decisive. The court said:

“It is earnestly contended that actual knowledge must be held to be the equivalent of the notice prescribed by the Code. To so hold would be to hold in effect that the giving of an informal verbal notice would be a substantial compliance with the requirements of the section. This would amount to a repeal of the express provisions thereof which require the posting of a formal notice in writing and specifying what it must contain, and further require that a verified copy thereof must be filed for record. As was said in the case above cited: ‘This provision is for the benefit of the owner, and he must avail himself of it, or otherwise, according to its terms, his interest will be liable for the lien.’ *** What was said in Jurgenson v. Diller, 114 Cal. 491, 46 P. 610, 55 Am. St. Rep. 83, and Reese v. Bald Mountain, etc., Co., 133 Cal. 285, 65 P. 578, is not in point here. As was expressly pointed out in the latter case, section 1192, Code of Civil Procedure, was not applicable to either of those cases because they involved subtractive mining which was not ‘the construction, alteration *** or repair of any building or other improvement.’ In Ayers v. Green Gold M. Co., 116 Cal. 333, 48 P. 221, it was expressly held that this section was not there applicable because the owner had no knowledge or notice of the doing of the work. Street v. Hazzard, 27 Cal. App. 263, 149 P. 770, is not in point for the reason that it was there stipulated that the owner had posted the notice of nonliability in full compliance with all of the requirements of the section as it then read (before the amendment of 1911).

“The case of Pasqualetti v. Hilson, 43 Cal. App. 718, 185 P. 693, in which an application for rehearing was denied by this court, is squarely in point here, and goes even further than is necessary to sustain appellant's contentions in the instant case. It was there conceded that the owner had in due time posted written notice of nonliability which fully complied in all respects with the requirements of the section; that within the required time a true copy thereof had been filed for record; and that the plaintiff had actual knowledge thereof. It was held, notwithstanding these facts, that the owner's interest in the property was subject to the lien, for the sole reason that the copy of the notice which was filed for record was acknowledged before a notary public instead of being verified as the law requires.”

As pointed out in the opinion just quoted from, the case of Pasqualetti v. Hilson, 43 Cal. App. 718, 185 P. 693, presents facts even stronger for the contention made than those disclosed in Leoni v. Quinn. Nevertheless, the court in that case held a failure to observe the requirements of the nonliability statute was fatal to the owner's claim of immunity.

Later, in Flora v. Hankins, 204 Cal. 351, 268 P. 331, the Supreme Court of that state ruled that personal oral notice by the owner of premises that she would not be responsible for any work done by contractors on building constructed under contract with lessee was insufficient under the California statute to relieve the owner's estate from...