First Ave. Coal & Lumber Co. v. Rimer

• Decision Date: 02 April 1931
• Docket Number: 6 Div. 513.
• Citation: 222 Ala. 545,133 So. 589
• Parties: FIRST AVENUE COAL & LUMBER CO. v. RIMER ET AL.
• Court: Alabama Supreme Court

133 So. 589

222 Ala. 545

FIRST AVENUE COAL & LUMBER CO. v. RIMER ET AL.

6 Div. 513.

Supreme Court of Alabama

April 2, 1931

Appeal from Circuit Court, Jefferson County; Wm. M. Walker, Judge.

Bill by the First Avenue Coal & Lumber Company against F. D. Rimer and P. H. Vickrey (individually and as partners) and others to enforce a mechanic's lien. From a decree denying the relief sought, complainant appeals.

Affirmed.

BOULDIN J., dissenting in part.

Wilkinson & Burton and Frank A. Wilkinson, all of Birmingham, for appellant.

Howze &amp Brown, of Birmingham, for appellee.

BOULDIN J.

The bill was filed by a materialman against the owner to enforce a mechanic's lien.

Pending the suit, the owners sold and conveyed the property, and the purchaser went into possession. Some ten months later, the purchaser sold and conveyed to a sub-purchaser who went into possession and so remains.

No notice of lis pendens was ever filed by complainant as per statute.

The subvendee, purchasing in good faith for value more than six months after complainant's demand accrued, had no notice of the pending suit. He was made a party respondent some two years later.

Under this state of facts, the court below decreed complainant's materialman's lien was lost as against the present owner. In this the court followed the case of Reeder v. Cox, 218 Ala. 182, 118 So. 338.

By supplemental brief, appellant strongly challenges the correctness of that decision.

The full court has considered the question, and reached the conclusion that there is no sufficient reason to overrule the same.

The further insistence that the lien on the building is not governed by the same rule in this regard is untenable.

While the law does, for the protection of those whose labor and material have brought the building into being, sever the same from the land, if need be, in working out priorities, it cannot be said the building is not part of the realty purchased, and subject to the same rule of lis pendens in favor of the bona fide purchaser.

Affirmed.

All the Justices concur except the writer who dissents in part.

BOULDIN J. (dissenting).

Is a materialman who furnishes material to the owner for the erection of a building, and duly files in the probate court notice of his lien under Code,§ 8836, and brings suit for its enforcement within six months after maturity of the entire indebtedness thereby secured under Code, § 8855, and prosecutes the same with due diligence to final decree under the mechanic's lien law, required also to file a lis pendens notice under Code, § 6878, and, failing therein, does he lose his lien as against a bona fide purchaser pending the suit? We have so declared in Reeder v. Cox, 218 Ala. 182, 118 So. 338, provided the purchase is made more than six months after the maturity of the demand of the materialman.

We are asked to reconsider the question and depart from the ruling in Reeder v. Cox, supra, as unsound.

Under the well-known doctrine of lis pendens, one who purchases real property, the subject-matter of a pending suit, from one of the litigants, takes it subject to the decree rendered therein.

The doctrine is said to be based on the necessity to conserve the property, the subject of litigation, to await the result; otherwise judgments and decrees might become empty gestures, or parties might indefinitely prolong and multiply litigation by passing the subject-matter on from one to another. Thompson v. Johnson, 201 Ala. 315, 78 So. 91; Stein v. McGrath, 128 Ala. 175, 30 So. 792; Greenwood v. Warren, 120 Ala. 71, 23 So. 686.

The result of this doctrine at common law was to charge all persons with notice of pending suits touching specific property they are about to purchase from or through litigants. This rule has often been spoken of as a harsh one. Rooney v. Michael & Lyons, 84 Ala. 585, 4 So. 421.

To remedy this our statute was enacted, requiring a person who brings a suit to "enforce a lien upon, right to, or interest in, or to recover any real estate" to file an appropriate notice of "lis pendens" to be recorded in the office where records of deeds and incumbrances on real estate are kept. Code, § 6878.

The statute declares, with perfect clearness, the effect of a failure to have such notice recorded, viz.: "Such suit *** shall not affect the rights of a bona fide purchaser, mortgagee, or other lienee, of such real estate unless they have actual notice of the suit or levy." Code, § 6881.

A bona fide purchaser without actual notice of the suit stands in like position as if there were no pending suit.

Such statutes, however, do not repeal, but merely limit, the common-law doctrine of lis pendens. As to all persons, not within the class named, the rule of lis pendens at common law remains in full force and effect. 1 Freeman on Judgments (3d Ed.) § 521; 17 R. C. L. p. 1016, § 10; note to 56 Am. St. Rep. 856 et seq.; note to 10 A. L. R. page 306.

The purchaser protected under our statute, in the absence of lis pendens notice, must be: First, a bona fide purchaser; second, without actual notice of the suit.

No definition of bona fide purchaser is given.

The English statute, 2 Victoria, Ch. 1157, followed by some American statutes, requires express notice of the suit, but does not otherwise define the purchaser to be protected. Even in such case it is said:

"If no notice is filed, pendente lite purchasers are wholly unaffected by the judgment, unless they have actual or constructive notice of equities which would bind or charge their rights, or actual knowledge of the suit, in which event they are not protected by the statute." 1 Freeman on Judgments, § 520, pp. 1117, 1118 (5th Ed.); Wood v. Price, 79 N. J. Eq. 620, 81 A. 983, 38 L. R. A. (N. S.) 772, Ann. Cas. 1913A, 1210.

Since our statute expressly employs the term "bona fide purchaser," we construe it to be used in the accepted legal sense under the laws of Alabama. So construed, constructive notice of liens already shown by other recording acts is in no way modified or repealed by the lis pendens statute.

Since the prospective purchaser of lands in his search for title must examine these other records, found in the same office as the lis pendens record, and, finding such record of a lien, must follow it up to see if it has been satisfied, no good reason appears why an additional lis pendens notice should also appear. Differently stated, one purchasing in the face of the constructive notice imported by the record of an instrument made pursuant to a recording act is not a bona fide purchaser, and hence the common-law lis pendens still applies to him. He must look out for pending suits. 38 C.J. p. 30, § 44, p. 33, § 48, note 49.

True, in suits to enforce unrecorded mortgages, or dormant liens or equities of any kind, or creditors' suits and the like where the lien arises on the filing of the bill, cases in which a bona fide purchaser would take without suit pending, and where the complainant must rely on lis pendens to sustain his lien against a purchaser, the lis pendens notice is essential. Marsh v. Elba Bank & Trust Co., 221 Ala. 683, 130 So. 323; 38 C.J. p. 33, § 48, note 45.

This brings us to consider the effect of the statement of a mechanic's or materialman's lien made, verified and recorded under Code, § 8836.

This statement must show the name of the lienholder, the name of the owner, the amount of the demand for which a lien is claimed, with a description of the property. Unless filed within a specified time, the lien is lost, but the lienholder is safeguarded against loss by any mistake in the amount or in the name of the owner or proprietor.

The...