Brown v. Brown & Co.

• Citation: 160 S.W.2d 431,25 Tenn.App. 509
• Decision Date: 05 November 1941
• Docket Number: 7.
• Parties: BROWN v. BROWN & CO. et al.
• Court: Tennessee Court of Appeals

160 S.W.2d 431

25 Tenn.App. 509

BROWN v. BROWN & CO. et al.

No. 7.

Court of Appeals of Tennessee, Eastern Section.

November 5, 1941

Certiorari Denied by Supreme Court February 7, 1942.

Appeal from Chancery Court, Hamilton County; J. Lon Foust Chancellor.

Suit to enforce mechanics' lien by W. L. Brown against Brown & Co. and others. From the decree, the complainant appeals.

Affirmed.

Cantrell Meacham & Moon, of Chattanooga, for appellant.

S. J McAllester and L. C. Harris, both of Chattanooga, for appellee Chattanooga Properties Co.

Coffey, McCoy & Durand, of Chattanooga, for appellee First Federal Savings & Loan Ass'n.

McAMIS Judge.

This is a suit to enforce a mechanic's lien for materials furnished and labor performed under special contract with the defendant Brown & Company, a corporation. The Chattanooga Properties Corporation, having acquired title during the progress of the work, was made a party defendant. After it acquired title the Chattanooga Properties Corporation executed a first mortgage or deed of trust upon the property to the First Federal Savings & Loan Association of Chattanooga and it was likewise named as a defendant to the bill. The Chancellor dismissed the bill because complainant failed to file a statement of his claim within ninety days after the date when the Chancellor found the building was completed. Complainant appeals.

The bill alleges that after the contract was completed on or about March 11, 1940 a deed was recorded transferring title from Brown & Company to Chattanooga Properties Corporation. This was more than ninety days prior to the registration of the lien claim on June 27, 1940. An attempt was made, in taking proof, to show that the building was completed less than ninety days prior to June 27, 1940. The proof does show that on April 24, 1940, evidently under contract with the new owner Chattanooga Properties Corporation, certain minor repairs were made upon one of the buildings located upon the involved premises. We have read and considered the entire proof in the case, consisting solely of the testimony of complainant, and, without stating the proof in detail, we have concluded that under the allegations of the bill and the testimony of complainant himself the Chancellor was correct in finding that complainant's claim was not filed within ninety days after the completion of the work.

The primary question for consideration is one of priority between complainant on the one hand and the Chattanooga Properties Corporation and its mortgagee First Federal Savings & Loan Association. Since the claim is based upon Code, Section 7919, we quote its provisions:

"In order to [preserve] the virtue of the lien, as concerns subsequent purchasers or encumbrancers for a valuable consideration without notice thereof, though not as concerns the owner, such lienor, who has not so registered his contract, is required to file for record in the office of the register of deeds of the county where the premises, or any part affected lie, a sworn statement similar to that set forth in section 7929, and pay the fees; the register to file, note and record same, all as in said section stipulated. Such filing for record is required to be done within ninety days after the building or structure or improvement is demolished, altered and/or completed, as the case may be, or the contract of the lienor expires or is terminated or he is discharged, prior to which time the lien shall be effective as against such purchasers or encumbrancers without such registration."

By stipulation it appears that Chattanooga Properties Corporation acquired the property by deed, dated June 6, 1939 and duly recorded on March 11, 1940. On March 11, 1940 the First Federal Savings & Loan Association recorded a deed of trust dated March 6, 1940 securing an indebtedness of Chattanooga Properties Corporation in the amount of $7,500. It thus appears that Chattanooga Properties Corporation became the owner of the recorded title and the First Federal Savings & Loan Association acquired a first mortgage lien upon the property during the ninety days within which the statute required the registration of complainant's lien.

It is well established by numerous holdings that a mechanic's lien relates back to the date of the visible commencement of the work and if complainant had complied with the statute by recording his claim within the ninety day period there can be no question but that his claim would have priority over the title of Chattanooga Properties Corporation and the lien of the First Federal Savings & Loan Association. Hence they are "subsequent purchasers and encumbrancers" mentioned in the statute and the question for decision is: Are their rights, acquired during the period within which complainant could have perfected his lien, superior to a mechanic's lien filed after the lapse of ninety days?

The question is substantially the same as in S. R. Henderson et al. v. Samuel Henderson Watson et al., Knox Equity, this day decided, 25 Tenn.App. 506, 160 S.W.2d 429. The claim in that case was under Code Section 7929. Without having filed a claim for registration, as required by ...