Ex parte Douthit
| Decision Date | 28 June 1985 |
| Citation | 480 So.2d 547 |
| Court | Alabama Supreme Court |
| Parties | Ex Parte Robert DOUTHIT. (Re Robert DOUTHIT v. Paul T. WILKS, Sr., Jene C. Wilks, William F. Aldridge, Valley Federal Savings & Loan Association, Timothy John Morgan, Kimberly K. Morgan and Central Bank of the South). 83-1112. |
J.A. Dardess, Sheffield, for petitioner.
William F. McDonnell, Sheffield, for respondent.
This case concerns the priorities among several parties in the enforcement of a mechanic's lien. Robert Douthit petitioned this Court for a writ of certiorari following the Court of Civil Appeals' affirmance of the trial court's judgment in favor of the respondents, Paul T. Wilks, Sr., Jene C. Wilks, William F. Aldridge, Valley Federal Savings and Loan Association, Timothy John Morgan, Kimberly K. Morgan, and Central Bank of the South 480 So.2d 544. The case was heard by the trial court without a jury.
The record before this Court reflects the following facts:
Douthit entered into a contract with Paul and Jene Wilks on June 24, 1982, to repair fire damage to their residence. The work was completed on July 9, 1982, and the payment of the contract price of $7,187.11 became due on August 9, 1982. Douthit perfected a mechanic's lien by filing a lien statement on September 16, 1982. He brought suit to enforce the lien on November 16, 1982.
At the time the repairs to the Wilkses' house were commenced, there were two prior mortgages on the property. The Wilkses purchased the property in 1970 from Aldridge. The Wilkses assumed a prior mortgage to Valley Federal Savings and Loan Association and executed a second mortgage to Aldridge. Subsequent to the commencement of the repairs, Aldridge foreclosed his mortgage on August 16, 1982, and purchased the property at the foreclosure sale.
Aldridge agreed orally on September 3, 1982, to sell the property to Timothy and Kimberly Morgan in exchange for $11,500.00 cash and the assumption of the Valley Federal mortgage of $20,298.74. The On September 15, 1982, Douthit informed the Morgans that he had not been paid for his work on the house and that he intended to obtain a lien against the property. On September 17, 1982, one day after Douthit perfected his interest by filing his lien statement, the Morgans executed a mortgage to Central Bank of the South for the $7,500.00 balance of the purchase price. This balance was paid to Aldridge on September 22, 1982.
Morgans paid to Aldridge $100.00 on September 3, 1982. Aldridge conveyed the property by general warranty deed dated September 8, 1982, and recorded the deed September 14, 1982. The Morgans paid an additional $3,900.00 of the purchase price on September 9, 1982, and took possession of the property on September 12, 1982.
The Court of Civil Appeals, ultimately affirming the trial court's judgment in its entirety, found that the mortgage from Aldridge to Valley Federal Savings and Loan Association and the mortgage from the Wilkses to Aldridge were recorded prior to commencement of Douthit's repairs on the building and, therefore, had priority over Douthit's mechanic's lien. The court also determined that the Morgans had purchased the property from Aldridge as innocent purchasers for value, without notice, and thereby took title to the property free of Douthit's lien claim. It was further adjudged that the mortgage obtained from the Morgans by Central Bank of the South after Douthit had commenced work on the house and obtained his lien also had priority over Douthit's mechanic's lien. This Court granted Douthit's petition for certiorari. We reverse.
The petitioner cites as error the Court of Civil Appeals' finding: (1) that the Morgans were bona fide purchasers, for value, without notice, even though the Morgans had acquired actual notice of the mechanic's lien prior to full payment of the contract purchase price; (2) that the mortgage given to Central Bank subsequent to the commencement of work on the Morgans' property and recorded after the mechanic's lien statement was filed was superior to the prior recorded mechanic's lien; and (3) that Aldridge's interest in the property mortgaged to the Wilkses amounted only to a right of equitable redemption, which was extinguished by the subsequent foreclosure of the mortgage.
Petitioner contends that the standard of review in the present case should be de novo and that the ore tenus rule should not apply because the evidence is basically undisputed. It is true that when the evidence before the trial court is undisputed, the ore tenus rule is inapplicable and the appellate court will sit in judgment of the evidence de novo, indulging no presumption in favor of the trial court's application of the law to the facts. Kessler v. Stough, 361 So.2d 1048 (Ala.1978); Perdue v. Roberts, 294 Ala. 194, 314 So.2d 280 (1975). However, in the present case, the facts most crucial to the outcome of the court's decision were not stipulated. The facts concerning whether the Morgans had actual knowledge of Douthit's specific lien claim prior to entering their contract for the purchase of the property from Aldridge were disputed. As to these disputed facts, the court heard ore tenus testimony and personally observed the witnesses. Where the facts are contradicted, such as in the present case, the rule of law which dictates that we must defer to the trial court in regard to findings of fact is clearly applicable and we, therefore, proceed on the presumption of the correctness due to be accorded the findings of the trial court.
Did the court err by finding that the Morgans were innocent purchasers, for value, without notice of Douthit's lien and thereby take title to the property free from the lien?
A mechanic's lien is purely statutory. Code 1975, § 35-11-211, states in pertinent part: "Such lien as to the land and buildings or improvements thereon, shall have priority over all other liens, mortgages or incumbrances created subsequent Since Code 1975, § 35-11-211, does not refer to subsequent purchasers, it has become the rule that the holder of a mechanic's lien has the obligation to show that the subsequent purchaser of an existing building had either actual or constructive notice of the lien at the time of the purchase, Starek, supra. We have also noted that it is difficult, if not impossible, to lay down any general rule as to what facts will in every case be sufficient to charge a party with notice or put him on inquiry. Veitch v. Woodward Iron Co., 200 Ala. 358, 76 So. 124 (1917).
to the commencement of work on the building or improvement...." A purchaser taking as absolute owner of the fee is clearly not included within any class mentioned in the statute. A purchaser is neither lienor, mortgagee, nor encumbrancer, but the absolute owner; and if he purchases without notice, actual or constructive, the statute gives no priority as against him. Guaranty Pest Control, Inc. v. Commercial Investment & Development Corp., 288 Ala. 604, 264 So.2d 163 (1972); Grimsley v. First Ave. Coal & Lumber Co., 217 Ala. 159, 115 So. 90 (1928); Martin v. Clarke, 154 Ala. 425, 46 So. 232 (1908). This rule that allows a subsequent purchaser without knowledge of an outstanding debt to have priority over a later-filed lien applies only to existing buildings. However, a mechanic's lien, properly filed within the prescribed statutory six-month period, on a new building, has priority over a purchaser regardless of actual notice. The purchaser of a new building is charged with constructive notice during the statutory period and takes subject to a mechanic's lien filed on the property during this period. Starek v. TKW, Inc., 410 So.2d 35 (Ala.1982).
In the present case, the trial court found that there was not sufficient evidence to charge the Morgans with notice of Douthit's lien. We must affirm the trial court's decree if it is fairly supported by credible evidence under any reasonable aspect, regardless of what might be our view of the evidence. Patterson v. Brooks, 285 Ala. 349, 232 So.2d 598 (1970). When the trial court hears evidence presented ore tenus, its judgment is presumed correct and will not be disturbed unless plainly and palpably erroneous. League v. McDonald, 355 So.2d 695 (Ala.1978). As stated previously, the issue of what notice, if any, the Morgans had was disputed and the trial court listened to the testimony of both parties in this regard. On appeal, this Court indulges all favorable presumptions in favor of the evidentiary conclusion reached in the trial court, and will not disturb such conclusion unless it is palpably erroneous or manifestly unjust. Decker v. Hays, 282 Ala. 93, 209 So.2d 378 (1968). In light of the testimony as reflected in the record and the presumptions favoring the trial court's finding, we cannot say that the court's conclusion was palpably erroneous or manifestly unjust. The evidence was sufficient to find that the Morgans were, in fact, without notice of Douthit's lien.
Douthit requests that we consider additional facts pertaining to the notice issue at hand. This same request was made to the Court of Civil Appeals and apparently rejected. The facts Douthit wishes to be considered here are those contained in an affidavit by Mrs. Morgan which tended to support the petitioner's motion for summary judgment prior to the trial of the case. The affidavit, or the facts contained therein, was never brought forward by Douthit during the trial of the case, so far as the record reflects. Since this additional evidence was not offered at the trial of this cause, there was nothing preserved in the record and, therefore, that evidence is not before us for review. Lipscomb v. Tucker, 294 Ala. 246, 314 So.2d 840 (1975). Even if the evidence were to be considered by this Court, it would not alter our decision as to the holding of the Court of Civil Appeals.
Douthit also asserts that the Morgans were not...
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