Metro Bank v. Henderson's Builders Supply Co., Inc.

• Decision Date: 22 January 1993
• Citation: 613 So.2d 339
• Court: Alabama Supreme Court
• Parties: METRO BANK, an Alabama corporation v. HENDERSON'S BUILDERS SUPPLY COMPANY, INC., a corporation. 1911841.

Page 339

613 So.2d 339

METRO BANK, an Alabama corporation v. HENDERSON'S BUILDERS SUPPLY COMPANY, INC., a corporation.

1911841.

Supreme Court of Alabama.

Jan. 22, 1993.

Hugh E. Holladay of Blair, Holladay and Parsons, Pell City, for appellant.

Erskine R. Funderburg of Church, Trussell & Funderburg, P.C., Pell City, for appellee.

HOUSTON, Justice.

This case involves a dispute as to the priority of respective liens.

In March 1991, Carol Chandler, as president of Lakeside Cove, Inc., began constructing a commercial building in St. Clair County. (Hereinafter Chandler and Lakeside Cove will be referred to collectively as "Chandler.") Chandler obtained financing for the construction from Metro Bank and obtained building materials from Henderson's Building Supply Company, Inc. ("Henderson"). ¹ On March 22, 1991, Chandler executed a $125,000 mortgage to Metro Bank. On March 25, 1991, Chandler contracted with Henderson to supply materials for the construction of the commercial building. On that same date, Chandler received statutory notice of a lien filed by Henderson, and Chandler acknowledged that Henderson would be supplying materials for the construction of the commercial building and that Henderson claimed a lien on the real property on which the commercial building was situated. On March 26, 1991, Henderson began delivering the materials. On April 2, 1991, Metro Bank recorded the mortgage from Chandler in the probate office of St. Clair County in Pell City. Chandler defaulted on the payment to Henderson for the materials furnished and on the loan to Metro Bank. On July 26, 1991, within six months after furnishing materials and within the statutory period provided by law, Henderson filed a materialman's lien in the amount of $22,742.60 (the total due for materials delivered on March 26, 1991, and subsequently).

On August 2, 1991, Metro Bank sued Chandler on the promissory note. Henderson moved to consolidate and to intervene in Metro Bank's suit against Chandler, claiming that its materialman's lien was superior to Metro Bank's mortgage lien. On January 21, 1992, the trial court entered a default judgment for Metro Bank and ordered the foreclosure and sale of the property. Henderson moved to set aside the trial court's order and to enjoin the foreclosure sale of the property pending a final determination of priority, because the trial court had entered judgment for Metro Bank without ruling on Henderson's motion to consolidate and intervene. The trial court determined that its order of January 21, 1992, would remain in effect except to the extent that it adjudicated the priority of the lien or liens on the real property owned by Chandler and on which Metro Bank held a mortgage; it granted Henderson's motion to intervene and to consolidate; and by consent of the parties, it enjoined the foreclosure sale of the property. Thereafter, the trial court held that Henderson's materialman's lien was prior to and senior to Metro Bank's mortgage lien to the extent of $17,500. Metro Bank appealed "from the order giving a $17,500 priority of lien on behalf of [Henderson]." We affirm.

"[A materialman's] lien comes into existence immediately when one provides any materials or performs labor upon the property but remains inchoate unless a statement of lien is timely filed with the judge of probate of the county in which the property is situated (§ 35-11-213), and unless suit is timely filed to perfect the [materialman's] lien (§ 35-11-221). Once these two steps are timely undertaken, the lien relates back to the date that...