Title Guarantee & Trust Co. v. Wrenn

• Citation: 35 Or. 62,56 P. 271
• Parties: TITLE GUARANTEE & TRUST CO. v. WRENN et al. [1]
• Decision Date: 27 February 1899
• Court: Oregon Supreme Court

56 P. 271

35 Or. 62

TITLE GUARANTEE & TRUST CO. v. WRENN et al. ^[1]

Supreme Court of Oregon

February 27, 1899

Appeal from circuit court, Multnomah county; Alfred F. Sears, Jr. Judge.

Suit by the Title Guarantee & Trust Company against Ralph E. Wrenn A.S. Pattullo, Carl H. Jackson, and others, defendants. From a decree dismissing the lien sought to be foreclosed by plaintiff, but allowing other liens on the property plaintiff and defendant Pattullo appeal. Decree modified.

This suit was originally brought by Inman, Poulsen & Co. to foreclose a lien for material furnished by them, and used in the construction of certain buildings on lots 7 and 8 in block 135, Caruthers' addition to the city of Portland. Other claimants, who were made parties defendant, filed answers, setting up their alleged liens, and thereafter, and pending the final determination of the suit, the liens of the original plaintiffs and of all the defendants except the respondents Jackson and others were assigned and transferred to the present plaintiff, the Title Guarantee & Trust Company, and the suit thereafter proceeded in its name. The facts are that on October 23, 1894, Emil Pohl, Anna Pohl, his mother, and Anna Jordan, his sister, were the owners of the property referred to, subject to a mortgage in favor of Mary E. Rust upon the undivided half thereof to secure the payment of $1,260. On the day named, Emil Pohl, who was the agent of his mother and sister, executed and delivered to one Schuck a bond for a deed of the property in question, conditioned that he would make and deliver to Schuck or his assigns a good and sufficient conveyance therefor on or before the 23d of January, 1894, provided Schuck would, on or before that day pay or cause to be paid to him the sum of $3,000. On the same day Schuck assigned and transferred said bond to the defendant Ralph E. Wrenn, who immediately entered into possession of the property, and began the construction of four dwelling houses thereon, purchasing the material from the several lien claimants who are parties to this suit, and on the 22d of December conveyed the east 33 1/3 feet to the present plaintiff as security for the sum of $350. On the 29th of March, 1895, Inman, Poulsen & Co. commenced this suit to foreclose their lien upon the buildings in question, making Emil Pohl, Anna Pohl, Anna Jordan, Ralph E. Wrenn, the Title Guarantee & Trust Company, and the several lien claimants parties. As already indicated, the defendant lien claimants filed answers setting up their respective liens, but no process was issued thereon, nor did they make service thereof on the owners of the property within six months after the filing of their respective liens. While the suit was pending, Wrenn, having failed to comply with the terms of his bond, assigned and transferred the same to Emil Pohl, who, in August and September, 1895, acquired the interest of his mother and sister, and on September 14, 1895, sold and conveyed the entire property to A.S. Pattullo in consideration of the payment by him of $500 each to Anna Jordan and Anna Pohl, $500 on a mortgage in favor of one Clayson, and the assumption of the Rust mortgage, which had been renewed a few days before the filing of any of the claims of mechanics' liens. On September 18, 1895, Pattullo, through the Title Guarantee & Trust Company, which had acted as his agent in the entire transaction, borrowed of the Portland Trust Company $5,100 on the property, and, in view of the pending suit and the unsatisfied liens on the property of the guarantee company, issued to the trust company its title policy, and received the money so borrowed by Pattullo, from which it paid $500 to Anna Pohl, the like sum to Anna Jordan, the Clayson mortgage, and placed the balance thereof in its vaults, to the credit of Pattullo, and subject to his check. The guarantee company, in order to protect itself from liability on its title policy, purchased and had assigned to it, between the 18th and 25th of September, 1895, the Rust mortgage, and all the alleged mechanics' liens involved in the suit then pending, except those claimed by the respondents Jackson, Kern, Smith Bros., Gates, and Findlay; and it was subsequently, by order of the court, substituted for such parties. On September 30, 1895, Pattullo, upon being substituted as a party defendant in place of the former owners of the property to whose interest he had succeeded by deed, filed a motion to strike out the answers of the respondents Jackson and others on the ground that six months had expired since their liens had been filed, and no suit had been brought to enforce the same. This motion being overruled, he interposed a demurrer to the answers for the same reason, which was likewise overruled, whereupon he answered the complaint and cross bills, putting in issue the validity of all the liens. The respondents Jackson and others subsequently filed amended answers, setting up their liens, and alleging, in effect, that in making the pretended purchase of the Rust mortgage and the several mechanics' liens the Title Guarantee & Trust Company was in fact acting as the agent and representative of Pattullo, the owner of the property, and that such transfer was in fact a payment and satisfaction of such liens, and not a purchase. After moving against and demurring to these amended answers, Pattullo, protesting that the court was without jurisdiction, and that the respective liens were barred, answered, denying the material allegations of these amended answers or cross bills, and alleged that the buildings were constructed without the authority or knowledge of his predecessors in interest. Thereafter the Title Guarantee & Trust Company also answered the amended cross bills of the respondents Jackson and others, denying the material allegations thereof, and alleging that the purchase of the Rust mortgage and the several mechanics' liens was made by plaintiff with its own money, in its own behalf, and not for or on behalf of Pattullo, and that it took the same with the express purpose and intention that such liens should be foreclosed in the suit then pending. Upon the issues made by these pleadings the cause was tried, and as against Pattullo the liens claimed and owned by the Title Guarantee Company were sustained, but as between the title company and the respondents Jackson and others it was held that the Rust mortgage and the several mechanics liens which had been assigned to the guarantee company were satisfied and extinguished, and that those of Jackson and others were first liens upon the property, and entered a decree accordingly. The Title Guarantee & Trust Company and the defendant Pattullo both appeal.

A.L. Veazie, for appellant Title Guarantee & Trust Co. Wallace McCamant, for appellant Pattullo.

G.G. Gammans and R.C. Wright, for respondent.

BEAN J. (after stating the facts).

The defendant Pattullo challenges the validity of all the mechanics' liens involved in this suit on the grounds (1) That section 3672 of the Code, under which it is sought to sustain such liens as against him, is unconstitutional and void; (2) that this section, when properly construed, is intended as a provision by which property owners otherwise liable to pay mechanics' liens might relieve themselves from such liability, and, therefore, has no application to a case of this character; and (3) that the evidence fails to show that the buildings in question were constructed with the knowledge of the owners of the property. The section referred to provides that "every building, or other improvement mentioned in section 3669, constructed upon any lands with the knowledge of the owner *** shall be held to have been constructed at the instance of such owner," and that his interest shall be subject to any lien filed in accordance with the provisions of the act, unless he "shall, within three days after he shall have obtained knowledge of the construction, *** give notice that he will not be responsible for the same, by posting a notice in writing to that effect in some conspicuous place upon said land, or upon the building or other improvement situated thereon." It is claimed that, inasmuch as a lien can only be created upon the land of another by his consent or authority, this section is unconstitutional and void, and the cases of Randolph v. Supply Co. (Ala.) 17 So. 721, and Meyer v. Berlandi, 39 Minn. 438, 40 N.W. 513, are cited in support of this contention; but neither of these cases is in point, because, by the statutes which were there held void, the fact that the person performing labor or furnishing material was not enjoined by the owner, or notified in writing not to do so, is made conclusive evidence that such labor was performed or material furnished with or by his consent, without reference to his knowledge thereof; while our statute, assuming that a lien cannot be created without the consent of the owner, express or implied, simply provides a rule of evidence by which such consent could be determined. Similar provisions of mechanic's lien laws have been sustained and enforced even in the state to whose reports we are referred for counsel's leading authority. See Wheaton v. Berg, 50 Minn. 525, 52 N.W. 926; Lumber Co. v. Newkirk, 80 Cal. 275, 22 P. 231; Harlan v. Stufflebeem, 87 Cal. 508, 25 P. 686; Allen v. Rowe, 19 Or. 188, 23 P. 901. So that we conclude this section is not open to the constitutional objection urged. Nor do we concur with counsel in the contention that the owner referred to therein is the person who caused the building to be constructed, and not the owner of the legal title. This question was considered and decided against such contention by the supreme court of California in the case of Lumber Co. v. Newkirk, supra, and, we think, rightly...