Grand Opera House Co. v. McGuire
| Decision Date | 14 July 1894 |
| Citation | 37 P. 607,14 Mont. 558 |
| Parties | GRAND OPERA-HOUSE CO. et al. v. McGUIRE. |
| Court | Montana Supreme Court |
Appeal from district court, Lewis and Clarke county; Horace R. Buck Judge.
Action against the Grand Opera-House Company to foreclose a mortgage. Judgment for plaintiff, and McGuire, a claimant under a mechanic's lien, appeals. Reversed.
Wm Scallon, for appellant.
Forbis & Forbis, for respondents.
As regards the point relating to the reformation of the mortgage, we find no ground to disturb the finding and holding of the trial court to the effect that appellant's lien claim ought not to apply precedent to the mortgage on the east 17 1/2 feet of lot 16, which the building covered. It appears the building covered the west one-half of lot 14 all of lot 15, and the east 17 1/2 feet of lot 16. The mortgage was executed, delivered, and recorded in September 1888, prior to the commencement of the building through which the lien rights accrued, and correctly described said land, except as to the 17 1/2 feet of lot 16. As to that, the word "west" was inserted by mistake, as alleged, in the original mortgage, instead of the word "east," as the parties had agreed and intended. Thereafter, in the month of February, 1889, upon discovery of this mistake, as appears, the parties to the mortgage executed and caused to be recorded an instrument setting forth said mistake, providing and covenanting therein that the original mortgage was corrected thereby in the particular mentioned, by substituting the word "east" for the word "west," as written in the original mortgage, in respect to the 17 1/2 feet of lot 16. But in the meantime the erection of the opera house on said premises had been commenced. The facts relative to the alleged mistake, and the reformation thereof by the parties to the mortgage, are set forth in the complaint, accompanied with a prayer that the mortgage, as voluntarily reformed by the parties thereto, be held precedent to the lien claim of appellant accruing through furnishing labor or material for said building, in so far as it related to the 17 1/2 feet of the east side of said lot 16, as well as the rest of said premises. Appellant, by answer, contested plaintiff's right to such relief, but does not deny the facts alleged in regard to said mistake and the voluntary correction thereof by the parties. The evidence introduced on the trial in relation to this point in controversy is not here for our review. So far as shown, this mistake was so circumstanced as to be quite palpable to any one coming into such relation to the property as the parties to this action afterwards sustained. Besides, there may have been legitimately shown in evidence facts and circumstances in reference to the knowledge and understanding of the parties contracting to erect the building or furnish material therefor which would have aided the trial court in reaching the conclusion that those who became lien claimants were in no wise misled to their injury by reason of said mistake. In short, it may have been shown that the lien claimants understood, as well as the proprietor contracting for the erection of said building, that the mortgage covered the premises on which the same was erected. It was certainly pertinent to show in evidence the relations and understanding of the parties in reference to this subject. We do not hold that such a correction in a mortgage would, under all circumstances, be sustained as against liens having their inception prior to the correction; but in this case, as the same is here presented, there is no showing to warrant our disturbing the finding and ruling of the trial court on that point.
The main question presented for our determination by this appeal relates to the ascertainment and deter mination of the rights of a lien claimant in and to the improvement alone, as against the holder of a prior existing mortgage on the land whereon the improvement was erected, and as to the right of severance of the improvement from the land by the lien claimant, as against the right of such prior mortgagee, under the provisions of our statute in that regard.
Having passed beyond the point as to correction of said mistake in the mortgage, we have here a case wherein plaintiff is mortgagee of the premises, under a mortgage executed and delivered to secure payment of $17,000 and interest, evidence by promissory note, which mortgage was recorded prior to the commencement of the improvement on the same premises. After execution, delivery, and recording of the mortgage, the mortgagor undertook the erection of an opera house on said premises, of large dimensions, involving great cost. Through the construction of said building, certain claims arose in favor of parties furnishing labor and material therefor which claims, by compliance with the provisions of the statute, were applied as liens thereon. These liens were in due course foreclosed by action against the proprietor of said premises and building, in which action, however, plaintiff, as holder of the prior mortgage, was not joined as a party. Under a decree foreclosing such liens, all right, title, and interest of the mortgagor and proprietor in the premises--both building and land--were sold, and purchased by such lien claimants, through which sale, after several redemptions by lien claimants, in order of succession, appellant succeeded to the rights of such lienors and their certificates of sale under their foreclosure decrees, respectively, and, by virtue thereof, obtained deed of all right, title, and interest of the proprietor in and to the premises, subject, of course, to the mortgage existing on the land prior to the accruing of the lien claims through the erection of said improvement. Thereafter, this action was instituted by said mortgagee to foreclose its mortgage, wherein appellant, being made a party, by his answer sets up the acquirement of title by foreclosure and sale of the improvement and of the proprietor's interest in the land, to enforce said liens, and seeks to have the mortgage restricted, by decree foreclosing it, to the land alone, and make available to appellant said improvement as security for payment of labor and material involved in the erection thereof. The trial court held defendant's right and title in said premises, acquired through said liens, both as to the improvement as well as the land, subsequent and subject to the mortgage of respondent. Appellant complains of this as being contrary to the provisions of the statute applicable to the facts shown by the pleadings and findings, and by this appeal brings into consideration the question whether the decree of the trial court, in view of the provisions of the statute on the subject and the facts shown, has properly adjusted and preserved the rights of these parties in and to said premises. In short, the question is whether, under such...
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