Boise Payette Lumber Co. v. Winward

• Decision Date: 17 April 1929
• Docket Number: 4979
• Citation: 276 P. 971,47 Idaho 485
• Parties: BOISE PAYETTE LUMBER COMPANY, a Corporation, Appellant, v. CHARLES WINWARD, FLORENCE WINWARD, His Wife, HOME TRUST AND SAVINGS COMPANY, a Corporation, and HARVEY BALL, Sole Trader as BALL ELECTRIC COMPANY, Defendants. JULIUS FRANKEL, Plaintiff in Intervention, v. FLORENCE WINWARD and CHARLES WINWARD, Her Husband, BOISE PAYETTE LUMBER COMPANY, a Corporation, HARVEY BALL, Doing Business as BALL ELECTRIC COMPANY, COMMERCIAL STATE BANK, a Corporation, and J. G. FRALICK, Commissioner of Finance of the State of Idaho, Defendants in Intervention and Respondents
• Court: Idaho Supreme Court

276 P. 971

47 Idaho 485

BOISE PAYETTE LUMBER COMPANY, a Corporation, Appellant, v. CHARLES WINWARD, FLORENCE WINWARD, His Wife, HOME TRUST AND SAVINGS COMPANY, a Corporation, and HARVEY BALL, Sole Trader as BALL ELECTRIC COMPANY, Defendants.

JULIUS FRANKEL, Plaintiff in Intervention, v. FLORENCE WINWARD and CHARLES WINWARD, Her Husband, BOISE PAYETTE LUMBER COMPANY, a Corporation, HARVEY BALL, Doing Business as BALL ELECTRIC COMPANY, COMMERCIAL STATE BANK, a Corporation, and J. G. FRALICK, Commissioner of Finance of the State of Idaho, Defendants in Intervention and Respondents

No. 4979

Supreme Court of Idaho

April 17, 1929

MORTGAGES-FUTURE ADVANCES-MECHANICS' LIENS-PRIORITIES.

1. Mortgage given to secure future advances has priority over mechanics' liens subsequently arising, to the extent of the full amount advanced, including amounts advanced after the mechanics' liens accrue, where the advances are obligatory upon the mortgagee under the terms of his contract, but not so where the advances are voluntarily made after mechanic's lien accrues and mortgagee has notice.

2. Where part of funds represented by mortgage note was required to be advanced by mortgagee in payment for work done and materials furnished in construction of building, upon compliance by mortgagors with condition of agreement calling for improvement of premises, advances so made were protected by mortgage and constituted lien prior to that of materialman fur- nishing materials after execution of mortgage but before balance remaining in mortgagee's hands for construction of building had been completely paid up.

APPEAL from the District Court of the Eleventh Judicial District for Cassia County. Hon. T. Bailey Lee, Judge.

Action to foreclose materialman's lien. From judgment awarding priority to other liens, plaintiff appeals. Affirmed.

Judgment affirmed. Costs to respondents.

Bothwell & Chapman, for Appellant.

Priority under appellant's materialman's lien dated from the time of the delivery of the first material. (C. S., sec 7346; Pacific States Savings, Loan & Bldg. Co. v Dubois, 11 Idaho 319, 83 P. 513.)

A recorded mortgage does not become a lien on property mortgaged until the money has been actually advanced. (W. P. Fuller & Co. v. McClure, 48 Cal.App. 185, 191 P. 1027; 27 Cyc. 1162; Virgin v. Brittoin, 80 N.H. 340, 117 A. 14; Sanders v. Southern Traction Co. of Ill., 253 F. 511; W. A. Allen Co. v. Emerton, 108 Me. 221, 79 A. 905; Gray v. McClellan, 214 Mass. 92, 100 N.E. 1093; Culmer Paint & Glass Co. v. Gleason, 42 Utah 344, 130 P. 66; C. S., sec. 6355.)

Appellant's lien is a preferred lien and takes priority over any mortgage or other incumbrance which attached subsequent to the time materials were commenced to be furnished for the building. (C. S., sec. 7345.)

S. T. Lowe, for Respondents.

A mortgage recorded prior in point of time to a materialman's lien, both being on the same property, is superior to the materialman's lien. (C. S., sec. 7345; Pacific Coast Pipe Co. v. Blaine County Irr. Co., 32 Idaho 705, 187 P. 940; Pacific States Savings, Loan & Building Co. v. Dubois, 11 Idaho 319, 83 P. 513; Tapia v. Demartini, 77 Cal. 383, 11 Am. St. 288, 19 P. 641; Valley Lbr. Co. v. Wright, 2 Cal.App. 288, 84 P. 58; Preston v. Sonora Lodge, 39 Cal. 116; Rose v. Munie, 4 Cal. 173; Ferguson v. Miller, 6 Cal. 402.)

Where the mortgage money is to be advanced and used for carrying on work and the lien claimants have furnished labor or materials with actual or constructive notice thereof, a mortgage is entitled to priority. (Joralmon v. McPhee, 31 Colo. 26, 71 P. 419; Young v. Haight, 69 N.J.L. 453, 55 A. 100; Platt v. Griffith, 27 N.J. Eq. 207; McAdams v. Piedmont Trust Co., 167 N.C. 494, Ann. Cas. 1916B, 669, 83 S.E. 623; Culmer Paint & Glass Co. v. Gleason, 42 Utah 344, 130 P. 66; Wroten v. Armat, 31 Gratt. (Va.) 228; Wright v. Vaughn (Va.), 33 S.E. 595; Wisconsin Planing Mills Co. v. Schuda, 72 Wis. 277, 39 N.W. 558.)

It was obligatory upon the Home Trust & Savings Company to advance to the defendants, Winwards, the amount specified in the mortgage. (Machado v. Bank of Italy, 67 Cal.App. 769, 228 P. 369; Savings Bank of Southern California v. Asbury, 117 Cal. 96, 48 P. 1081; Sivers v. Sivers, 97 Cal. 518, 32 P. 571; Langerman v. Puritan Dining Room Co., 21 Cal.App. 637, 132 P. 617; Valley Lumber Co. v. Wright, 2 Cal.App. 288, 84 P. 58; Savings etc. Society v. Burnett, 106 Cal. 514, 39 P. 922; W. P. Fuller & Co. v. McClure, 48 Cal.App. 185, 191 P. 1027.)

A mortgage for future advances becomes an effective lien from the time of its execution, or as to subsequent purchasers or incumbrancers from the time of its recordation, rather than from the time when each advance is made, where the making of the advances is obligatory upon and not merely optional with the mortgagee. (Allis-Chalmers Co. v. Central Trust Co., 190 F. 70, 111 C. C. A. 428, 39 L. R. A., N. S., 84; Valley Lumber Co. v. Wright, supra; Weissman v. Volino, 84 Conn. 326, 80 A. 81.)

BRINCK, District Judge. Budge, C. J., and Givens and Wm. E. Lee, JJ., concur.

OPINION

BRINCK, District Judge.

On October 1, 1919, Charles Winward and Florence Winward husband and wife, executed to the Home Trust & Savings Company their mortgage upon certain real estate to secure the payment of their note to said mortgagee in the sum of $ 7,000. The court found that said note and mortgage were executed for the purpose of paying off a former mortgage owed by the mortgagors to the mortgagee upon which there was owing about $ 4,000, and that the remainder of said $ 7,000 was to be used in the improvement of the real estate mortgaged; and further found that the portion of the $ 7,000 not applied to payment of the former mortgage was by the mortgagee paid for work done or materials furnished in the construction of a building upon the mortgaged premises, except as to about $ 300 thereof which was applied to interest becoming due on the $ 7,000 mortgage; that after the new mortgage was recorded, and before the mortgagee had paid out the balance remaining in its hands for the construction of the building in question, the plaintiff, Boise Payette Lumber Company, had commenced furnishing to the Winwards materials for said building, which materials it continued to furnish until after the mortgagee had expended the said balance remaining in its hands of the mortgage proceeds; that the plaintiff knew of the existence of the mortgage when it began to furnish material, and was advised by the Winwards of the portion of the proceeds of the mortgage which was to be used in the construction of the building; and that plaintiff did not notify the mortgagee that they were furnishing materials, nor was the...