Ennis v. Eden Mills Paper Co.

• Decision Date: 04 March 1901
• Citation: 65 N.J.L. 577,48 A. 610
• Parties: ENNIS v. EDEN MILLS PAPER CO. et al.
• Court: New Jersey Supreme Court

48 A. 610

65 N.J.L. 577

ENNIS

v. EDEN MILLS PAPER CO. et al.

Court of Errors and Appeals of New Jersey.

March 4, 1901.

Error to circuit court Morris county.

Action by Charles W. Ennis against the Eden Mills Paper Company and others. Petition to open a judgment in favor of plaintiff. Order to plaintiff to show cause was discharged, and defendants bring error. Affirmed.

C. L. Corbin and R. P. Wortendyke, for plaintiffs in error.

Mahion Pitney and John B. Vreeland, for defendant in error.

DEPUE, C. J. This is an action for the enforcement of a mechanic's lien for materials furnished by the plaintiff below to the Eden Mills Paper Company, builder and owner. The lien claim was filed in the office of the clerk of the county of Morris on the 14th day of March, 1808, claiming a lien upon the mill of the defendant, and a certain tract upon which the same was located, for the sum of $1,333.33, for materials furnished the said owner between the 13th day of August 1897, and the 23d day of February, 1898. Judgment by default was entered on the 13th of July, 1809, for $1,512.89, both generally against the Eden Mills Paper Company, as builder, and specially, as a lien upon the premises mentioned. The defense is that the plaintiff has not prosecuted his lion claim in the manner required by the statute, and that by reason of his failure in that respect the lien was discharged, and the judgment erroneous. This presents the construction and effect of section 13 of the original mechanic's lien act of 1853 (Revision, p. 671), as amended by section 4 of the act of 1895 (P. L. 1895, p. 315; 2 Gen. St. p. 2074). That section as amended provides that no debt shall be a lien unless a claim is filed within four months from the date of the last work done or materials furnished for which such debt is due, nor shall any lien be enforced by virtue of this act unless the summons in the suit for that purpose shall be issued within 90 days from the date of the last work done or materials furnished in such claim; and the time of issuing such summons shall be indorsed on the claim by the clerk upon the sealing thereof, and if no such entry be made within four months from such last date, or if such claimant fail to prosecute his claim diligently within one year from the date of issuing such summons, or such further time as the court may by order direct, such lien shall be discharged. The date of the last work exhibited in the bill of particulars was February 23 1898. The lien claim was filed March 14, 1898,—within the time prescribed by the statute. The summons was sealed and issued on the same day, and the time of issuing was indorsed upon the lien claim by the clerk. It was served on the 14th of March, and returned on the 25th of March, 1898. The declaration was filed on the 13th of April, 189a Everything was done in compliance with the statute, except that the plaintiff failed to enter judgment by default within a year from the time the summons was issued. To excuse this delay the plaintiff relies, in the first place, on an order made by the circuit court allowing the plaintiff three months' further time from the date of the order to prosecute his claim upon the mechanic's lien. This order was made on the 3d of June, 1899, —more than a year from the date of the last work for which the lien is claimed, and more than a year from the date of issuing the summons on the mechanic's lien. I think the proper construction of this statute requires an order of the court allowing further time to be made while the lien claim was still in force and undischarged. The statute, it seems to me, cannot be construed to authorize the court to revive a lien claim which by force of the act has expired, without regard to time or the changes that may have arisen in the state of the title. The mechanic's lien law is a special statutory proceeding. It confers special rights upon a class of creditors that other creditors do not possess. Throughout the entire act there are statutory limitations with respect to the steps to be taken to obtain and enforce a mechanic's lien. No reason exists for straining the construction of the section in question so as to extend to the lien claimant in the prosecution of his suit unlimited time, at the discretion of the court. It is quite possible that the section may be so construed as to allow the owner of the land, after the expiration of the year, to have from the circuit court an order fixing a time within which the claimant shall prosecute his claim, where he has diligently, but not successfully, prosecuted it within the year. But this question is not before us. The decision of this ease must turn upon the existence of facts which justified the plaintiff in the delay in prosecuting his suit Everything had been done by him—filing his claim, issuing summons, having it properly indorsed and served, and filing his declaration—in strict compliance with the statute. He may be said to have prosecuted his claim with diligence. His neglect was simply in the failure to enter the judgment he was entitled to. The inqury, then, is whether the plaintiff's failure to enter his judgment discharged the lien.

On the same day the lien claim was filed by the plaintiff the Eden Mills Paper Company went into the hands of a receiver; William A. Macy being appointed receiver by the court of chancery. The debt due from the company to the plaintiff has been admitted by the receiver, and the property on which this lien was claimed was sold by the receiver on the 15th of September, 1898, and purchased by George A. Bagley. Macy testified that the announcement was made at the sale, and before the property was sold, that the sale of the real estate was subject to a first mortgage of $20,000 and interest, a second mortgage of $5,000 and interest a claim of C. W. Ennis aggregating about $1,300, and a claim of George B. Smith of about $100. Bagley testified that he was made aware of this lien claim, and of the amount of it, at the time he purchased the property. The evidence is indisputable that he purchased the property at the receiver's sale, not only with knowledge of the plaintiff's claim, but subject to it. He does not stand, then, in the place of a bona fide purchaser. He did not, by what occurred at the time of his purchase, assume the payment of the incumbrances, but he took the title subject to those incumbrances. December 30, 1898, the plaintiff wrote to Mr. Bagley, sending him a statement of the amount of the lien claim and costs, $1,303.23, and interest from March 4, 1898, $66.90 (total, $1,430.13), and asking that it be paid, and saying that if it was paid he would have the lien crossed off the record in the clerk's office. To this letter Bagley replied under date of January 10, 1899, as follows: "I would be glad, of course, to do as you desire regarding the payment of your claim against the Eden Mills Company; but, as you know, I bought it subject to existing liens. I have paid out considerable money already for insurance, taxes, etc., and have been unable to find anybody to take the property, and reimburse me for the amount I have paid, and assume the liens. * * * Some parties * * * have an impression that there is little but legality of your claim and that of another party; but, until I can find some one who will take the property off my hands, I am not in shape to advance another penny on the property, preferring to let it go rather than assume more liability." On July 12, 1899, Bagley entered into an agreement with the Stony Brook Paper Company to sell the premises to that company, which is now the owner. The lien claim not having been paid, the plaintiff took steps to have his judgment entered. On the 29th of May, 1899, he presented a petition to the chancellor, asking permission to prosecute his suit on the mechanic's lien, notice of which application was served on the receiver. On that day the chancellor made an order that the plaintiff be permitted to prosecute his suit commenced in the Morris county circuit court on the 14th of March, 1898, upon a mechanic's lien claim filed by him against the property of the defendant; the receiver to be saved harmless of all costs and damages. This order was filed in the clerk's office of the county of Morris on the 3d of June, 1899, On the same day the judge of the circuit court granted a rule on the defendant ordering that the defendant plead within 30 days after service of a copy of the rule upon it, or that judgment by default be entered against it. This rule was entered in the clerk's office of the county of Morris on the 3d of June, 1899. It was duly served on the president of the Eden Mills Paper Company, personally, on June 12, 1899, and also on the receiver; service on him being duly acknowledged by his attorney. No plea or demurrer having been filed within the time limited by law, and 30 days having elapsed since the service of a copy of the said order to plead, it was on the 13th day of July, 1899, ordered that judgment final be entered, and judgment final was thereupon entered.

It is objected that the rule to plead should have been served on Bagley or the Stony Brook Paper Company, and, not having been so served, the judgment is irregular. The mechanic's lien law recognizes as owner throughout the entire proceedings the person who was owner when the lien claim was filed. Purchasers after lien claim filed are purchasers pendente lite, and take title subject to the issue of the pending suit. If a party acquiring an interest subsequent to the filing of the lien claim desires to contest it, he should apply to the court for leave to defend by an appropriate plea in the name of the person who was owner when the lien was filed. This order the court, in its discretion, will grant, either with or without terms. The circuit court would have no power to make an order that the lien was discharged for want of diligence in the prosecution of the suit. That question is one of fact, upon which the...