Utah Implement-Vehicle Co. v. Bowman

• Decision Date: 18 November 1913
• Citation: 209 F. 942
• Parties: UTAH IMPLEMENT-VEHICLE CO. v. BOWMAN et al.
• Court: U.S. District Court — District of Idaho

209 F. 942

UTAH IMPLEMENT-VEHICLE CO. v. BOWMAN et al.

United States District Court, D. Idaho, Eastern Division.

November 18, 1913

St Clair & St. Clair, of Idaho Falls, Idaho, for plaintiff.

O. E McCutcheon, of Idaho Falls, Idaho, for defendant Bowman.

William A. Lee and John W. Jones, both of Blackfoot, Idaho, for defendant D. W. Standrod & Co.

DIETRICH District Judge.

A very brief statement of the facts will suffice to make clear the nature of the single question which has been argued and submitted for decision. The suit is brought to foreclose a mortgage given to the plaintiff by N. C. Mickelson on the 6th day of February, 1911, to secure the payment of a promissory note of the same date for $12,575.75, which mortgage was, on February 21, 1911, recorded in the office of the county recorder of Bingham county, Idaho, where the property is situate. Mickelson later became a bankrupt, and his trustee is made a party defendant. The other defendant, D. W Standrod & Co., a corporation, is the trustee for the Idaho Lumber Company and others, who claim liens upon or equitable interests in the mortgaged property. It is unnecessary to explain the nature of this trust further than to say that the interests of all beneficiaries thereof save one originated in mechanics' liens for services rendered and materials furnished in the construction of a building upon a portion of the mortgaged premises. The original validity of these liens is not now called into question, and for the purposes of the decision it is assumed that in due time the several parties filed their claims of lien in the form prescribed by law, and that within the statutory period they commenced proceedings in the proper state district court to enforce the liens, and that such suits were consolidated, and later a decree was entered adjudging the several claims to be liens upon the property of the mortgagor, and that thereafter the property was duly sold to satisfy the amounts adjudged to be due, at which sale Standrod & Company became the purchaser, as trustee for all concerned. It is further assumed that, while some of these claims were filed with the recorder shortly before and some shortly after the execution and recording of the plaintiff's mortgage, by relation the liens may have all antedated the lien of the mortgage. Although its mortgage was of public record when they were commenced, the mortgagee, the plaintiff here, was not made a party to the lien suits, and its contention now is that therefore not only is it not bound by such foreclosure proceedings, but also that through lapse of time the liens have been lost, and as to it they are no longer of any validity. The precise question therefore is whether or not a lien claimant under the mechanics' lien law of Idaho loses his priority of lien as against a junior mortgagee, by foreclosing his lien without bringing in and making a party to such foreclosure suit the mortgagee, the period provided by the statute in which proceedings may be commenced for the enforcement of the lien, expiring during the pendency of the suit.

A mechanic's lien is wholly the creature of statute, and therefore the question must be referred to the statutory law of the state. In construing such statutes two principles are to be borne in mind: Upon the one hand, they are to be construed liberally, with a view to effecting their object and doing substantial justice; and, upon the other hand, we must take them as we find them. The question of policy is one exclusively for the Legislature, and it is our function only to ascertain, if possible, the intent of the statutes, and then administer them in such a manner as to give effect thereto.

Section 5110 of the Idaho Revised Codes provides generally that every person performing labor upon, or furnishing materials to be used in, the construction of a building, has a lien upon the same for the work done or materials furnished. Section 5114 provides that such liens are preferred to other incumbrances attaching subsequent to the time when the building was commenced or the work done or materials furnished. Section 5115 requires that any person claiming a lien shall, within the period therein prescribed, file his verified claim therefor, containing certain statements of fact, in the office of the county recorder of the county in which the property is situated. Section 5118 is as follows:

'No lien provided for in this chapter binds any building, mining claim, improvement or structure for a longer period than six months after the claim has been filed, unless proceedings by commenced in a proper court within that time to enforce such lien; or, if a credit be given, t/en six months after the expiration of such credit; but no lien shall continue in force under this chapter for a longer period than two years from the time the work is completed, or credit given, unless proceedings to enforce the same shall have been commenced.'

Section 5124 provides that the general rules of civil procedure prescribed by the Code shall apply in proceedings to foreclose liens. No other provisions are thought to have any material relation to the question under consideration, and it is apparent that, of those referred to, section 5118, which is set out in full, is of primary importance.

Admittedly, if no action at all is commenced within the period therein named, the lien lapses and absolutely ceases to exist as to all the world. The contention of the defendant, however, is that, under this section, 'proceedings' are 'commenced' when a suit to foreclose the lien is brought by the lienor against the owner of the property upon which the lien is claimed. The reasoning is that, in a suit of foreclosure of a mortgage or of a mechanic's lien, the owner of the title to the property is the only indispensable party, and that, while others may be proper parties, their presence is not essential to the validity of the decree which may be entered therein. It is doubtless true that the owner of the property is the only indispensable party to such suit, and in a case where he is the sole defendant the decree is not void; it is effective to the extent of cutting off his rights and estate, and doubtless a deed issued to a purchaser upon a proper sale had under the provisions of such decree operates to transfer his title to the purchaser. But upon the other hand, it is also undoubtedly the case that incumbrancers who are not made parties to such suit are in no wise affected by the decree, and their liens remain unimpaired. If not entirely aside from the point, therefore, it is certainly not conclusive of the question under consideration to say that the decree entered in the consolidated case in the state court, foreclosing the liens of the several claimants, is valid. Like-wise a decree would be valid if the suit were prosecuted against but one of several part owners of the property; but in such case what would be the status of the lien as touching the interests of the other part owners? So the plaintiff here, conceding that the decree in the former suit is conclusive upon the parties thereto, contends only that it is in no wise bound thereby, and that, the time having long since elapsed for foreclosing the liens against it, they have therefore ceased to exist, so far as its interest is concerned. And it must be conceded that its rights were not, and could not be, affected by a suit to which it was not a party. The record in that case cannot operate even as prima facie evidence against it. If it were assumed that the lien claimants are not prejudiced by the lapse of time, still they could not now bring forward the decree as the measure or evidence of their rights, but as against the plaintiff they would be compelled to make proof de novo in support of their claims, the same as if such decree had never been entered. Hassall v. Wilcox, 130 U.S. 493, 9 Sup.Ct. 590, 32 L.Ed. 1001. And it follows that no proceedings were ever commenced to enforce the liens against the interest of this plaintiff.

The real question, therefore, is whether or not the commencement of a proceeding against one party in interest operates to keep alive the lien as to all parties in interest. It will be observed that section 5118 does not purport in terms to prescribe who shall be made parties to the suit,either plaintiff or defendant, and in giving to it a practical construction it is necessary to interpolate a...