Carolina Lumber Co. v. Cunningham, 13054
| Decision Date | 28 November 1972 |
| Docket Number | No. 13054,13054 |
| Citation | 192 S.E.2d 722,156 W.Va. 272 |
| Parties | CAROLINA LUMBER COMPANY, a corporation, v. J. Fred CUNNINGHAM et al., etc., Peter Ramella and Leon Ramella. |
| Court | West Virginia Supreme Court |
Syllabus by the Court
1. The mechanics' liens statutes, Code, 38--2--16, 38--2--17, and 38--2--18, pertaining to the priority of perfected mechanics' liens in relation to other liens, must be read in pari materia and any ambiguous provisions in the statutes should be interpreted in such a manner as to avoid conflict and give effect to all of the provisions of the related sections of the statutes.
2. The purpose of the mechanics' liens statutes is to protect any person who increases the value of another person's real property by furnishing labor or materials. These statutes are remedial, and, therefore, are to be liberally construed in order that they serve the purpose for which they have been enacted.
3. Under the provisions of the mechanics' liens statutes of this state all perfected mechanics' liens attach at the time the initial mechanic's lien comes into existence after the construction of the building or structure begins and they take priority over all other liens created by deeds of trust, or otherwise, that are not recorded before the initial mechanic's lien comes into existence.
Marshall & St. Clair, James W. St. Clair, Huntington, for appellant.
Carney M. Layne, Huntington, for appellee, Wetherall Concrete.
BERRY, Acting President:
The appellants, Carolina Lumber Company, a building supply company, and Peter Ramella and Leon Ramella, bricklayers, appeal from an order of the Circuit Court of Cabell County on May 4, 1970 which denied the appellants' exceptions to the report of a special commissioner appointed by the court to determine the priorities of liens against a certain tract of land owned by J. Fred Cunningham and which entered judgment adopting the findings of the report in toto with regard to the priorities of the liens.
The appellants contend that their mechanics' liens on the property as a result of furnishing materials and performing labor during the construction of a six unit apartment building should have equal priority under Code, 38--2--18, with the initial mechanic's lien that came into existence after the beginning of construction and thus their liens would be superior to a deed of trust on the property recorded subsequent to the initial perfected mechanic's lien but prior to the performing of the labor and furnishing of material giving rise to the appellants' liens.
The facts of the case are undisputed. J. Fred Cunningham acquired title to certain property in Huntington, Cabell County, West Virginia, by deed from William and Anna Brown dated January 7, 1969 and recorded in the office of the Clerk of the County Court of Cabell County, West Virginia, on January 31, 1969.
On February 3, 1969 J. Fred Cunningham and his wife executed and delivered to the Valley National Bank of Huntington, West Virginia, two promissory notes totaling $25,000 secured by deeds of trust on the property. The first trust deed securing the note in the amount of $10,000 was recorded on February 3, 1969. The second trust deed securing the note for $15,000 was recorded on February 7, 1969 in the Clerk's office. A credit for payment on the second note of $8,900 was allowed, leaving the amount of $6,100 due on the note and secured by the second deed of trust.
On April 12, 1969 Mr. Cunningham began erecting a six unit apartment building on the real estate. Pursuant to an oral contract, Delbert Mathes began certain plumbing work on the property on April 12, 1969.
Subsequent to the labor performed by the plumber, Mathes, Mr. Cunningham delivered a third deed of trust covering the premises to John Meredith. The deed of trust dated May 12, 1969 was executed to secure a $25,000 promissory note and was recorded May 13, 1969.
On May 21, 1969 Ernest R. Mays commenced performance of certain labors on the apartment complex pursuant to an oral contract with J. Fred Cunningham. Wetherall Concrete, Inc. began furnishing materials on May 29, 1969. J. Fred Cunningham then executed and delivered to the Universal Auto Credit Corporation a promissory note for $43,215. A deed of trust on the real estate, dated May 26, 1969 was recorded on June 5, 1969 to secure Mr. Cunningham's note to Universal.
Pursuant to an oral contract with Mr. Cunningham, Pete Ramella and Leon Ramella started work on the building on June 9, 1969. On June 23, 1969 Carolina Lumber Company delivered material to the building site at the request of Mr. Cunningham.
Mr. Cunningham, in attempting to dispose of the property, approached the officers of the Valley National Bank of Huntington to assist potential buyers in obtaining financing. He agreed to assign $5,000 of the proceeds from the sale to the bank as payment for a prior unsecured debt he had with the bank. This assignment was effected on July 25, 1969.
In August, 1969 David Williams began to furnish labor to Mr. Cunningham for use in the apartment complex and on August 21, 1969 Perry and Derrick Company began to furnish materials for the project. On October 1, 1969 Donald Adkins commenced working and supplying materials to the building.
David Williams obtained a judgment on January 2, 1970 against J. Fred Cunningham for $800. This judgment was subsequently recorded so as to constitute a valid lien against the property. Liens for all of the previously mentioned work performed and materials supplied were properly perfected by the various parties.
The appellants, Carolina Lumber Company and Peter and Leon Ramella, instituted this civil action to preserve and enforce their perfected mechanics' liens pursuant to Code, 38--2--34. On January 21, 1970, January 28, 1970, February 7, 1970 and February 10, 1970 hearings were held before a special commissioner to determine the nature, amount, and priorities of any or all liens attached to the real property. The commissioner found that the liens of the Valley National Bank of Huntington, resulting from their two deeds of trust, had the first and second priority, followed in order of priority by the lien of Delbert Mathes and the deed of trust given in favor of John Meredith.
The commissioner held that both Ernest R. Mays and Wetherall Concrete, Inc. had valid liens, without priority between themselves, but of less priority than John Meredith's deed of trust. Universal Auto Credit Corporation's lien was determined inferior to all of the aforementioned liens but superior to the mechanics' liens of Pete and Leon Ramella and Carolina Lumber Company, which were of equal dignity between themselves.
The commissioner found that the assignment to the Valley National Bank of Huntington constituted a valid lien on the property which was subservient to the previously mentioned liens, but which was prior to all liens hereinafter described.
The mechanics' liens of David Williams, Perry and Derrick Company and Donald Adkins were valid and without priority among themselves, but they were determined to be inferior to the voluntary assignment in favor of Valley National Bank. In priority, the final lien on the property owned by Mr. Cunningham was the judgment lien held by David Williams. The commissioner found that these claims totaled $85,676.06.
These findings were adopted in toto by the Circuit Court of Cabell County over the exceptions filed by Pete Ramella and Leon Ramella and by the Carolina Lumber Company. The court further appointed special commissioners to arrange for the sale and transfer of the property involved in this action.
The property was sold for $49,000 by the special commissioners at public auction. The proceeds of the sale have been placed in a savings account pending the outcome of this appeal.
The appellants contend that the receipts from the sale will satisfy only the liens of the Valley National Bank, Delbert Mathes, and John Meredith and that no other materialmen or laborers will be paid under the decision of the Circuit Court of Cabell County.
The question presented in this case is the priority of perfected mechanics' liens in relation to other liens recorded against the property. The answer to the question involves the construction of the mechanics' liens statutes, which appear to be contradictory in some respects. The specific statutes involved are Co...
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