Streuli v. Brooks

• Decision Date: 09 April 1958
• Citation: 203 Tenn. 373,313 S.W.2d 262,7 McCanless 373
• Parties: , 203 Tenn. 373 Walter STREULI, d/b/a Crown Coal and Lumber Company, v. Otis BROOKS et al.
• Court: Tennessee Supreme Court

Page 262

313 S.W.2d 262

7 McCanless 373, 203 Tenn. 373

Walter STREULI, d/b/a Crown Coal and Lumber Company, v. Otis BROOKS et al.

Supreme Court of Tennessee.

April 9, 1958.

Robert M. McRae, Jr., and Apperson, Crump, Duzane & McRae, Memphis, for appellants.

Graham Moore, Memphis, for appellees.

TOMLINSON, Justice.

Streuli furnished materials which went into, and became a part of, premises owned by defendants, Brooks and wife. His bill seeks payment therefor through enforcement of the furnisher's lien created by T.C.A. Section 64-1112 et seq. This bill acknowledges superiority of a lien created by deed of trust to a third party created and registered after the furnisher's lien commenced. He seeks a sale subject to the lien of that trust deed.

Eliminating recitation of collateral matters immaterial to the decision, it is sufficient to say that this furnisher complied with all pertinent provisions of the furnisher's lien statute necessary to the preservation of his furnisher's lien in so far as such lien applies to the owner of the premises, unless there was a non-compliance with this statute in that his written notice to the owners of his claim to a lien on the premises was not, in legal contemplation, filed with the County Register.

It was because of such lack of registration that the Chancellor sustained the owners' demurrer. He did so on the authority of this Court's 1957 decision in Chattanooga Lumber and Coal Corporation v. Phillips, Tenn., 304 S.W.2d 82, 83. The Chancellor, after referring to certain previous holdings of this Court, said with reference to the Chattanooga case:

'Though this Court cannot reconcile the language and reasoning in the cases last above cited with the holding on the issue presented in the Chattanooga case, the Court considers itself bound by the decision in Chattanooga, etc. Corporation v. Phillips, et al.'

The furnisher's appeal is based on his insistence that, as against the owner of the premises, registration of the claim notice is not required by the statute as a prerequisite to the preservation of the furnisher's lien.

Technically, the issue presented in the Chattanooga case was whether the furnisher had a furnisher's lien against the owner of the property because of the fact that he, the furnisher, had failed to register, in legal contemplation, notice of its claim to such a lien. That this was the issue, technically, must be recognized by the fact that the Court was acting upon the demurrer of the owner directed to the proposition that the furnisher had lost his lien against the owner by reason of a failure to register his claim.

In this Chattanooga case there was registered a deed of trust creating a lien in favor of the third party on the owner's premises. It was the contention of the furnisher that his lien, though not registered, was superior to the lien created by said deed of trust because his, (the furnisher's) 'first delivery of materials was prior to the date of the registration of the aforesaid deed of trust'.

The battle was so earnestly waged over that issue as to cause this Court to overlook the entire question presented by the owner's demurrer, to-wit, whether there was any lien on the property even as against the owner, since the furnisher had failed to register his claim. Thus, by this inadvertence, the Court limited its consideration to the question of priority by reason of lack of registration between the furnisher's lien and the lien created by the properly registered deed of trust.

The foregoing limitation of consideration by this Court of the entire question in the Chattanooga case is clearly established by several remarks made by it in the course of its opinion. For instance this:

'The importance of registration and acknowledgment of an instrument, which purports to establish a lien, is that it affects the title and interest of all subsequent purchasers and lienors. It does not affect the owner otherwise than to give him notice that the claimant has furnished material to the contractor. And since the claim of lien in the case at bar was not executed as required by law, and was not acknowledged, it was without any legal efficacy to sustain it as against the holders of the deed of trust.'

And this

'against the right of the mortgagee, or holder of the deed of trust on the property * * * the complainant must comply with the statute as to recordation and acknowledgment of its claim.'

Appellee owner in the case at bar says that the furnisher filed no petition to rehear in the Chattanooga case. It may be that the furnisher did not regard his lien subject to the lien of the deed of trust as being of substantial value; hence, an idle gesture to call the Court's attention to the Court's oversight. However that may...