Williams Lumber & Supply Co. v. Poarch

• Decision Date: 10 May 1968
• Citation: 428 S.W.2d 308,25 McCanless 540,221 Tenn. 540
• Parties: , 221 Tenn. 540 WILLIAMS LUMBER AND SUPPLY COMPANY, Inc., Petitioner, v. Charles W. POARCH et ux., et al., Respondents.
• Court: Tennessee Supreme Court

Page 308

428 S.W.2d 308

25 McCanless 540, 221 Tenn. 540

WILLIAMS LUMBER AND SUPPLY COMPANY, Inc., Petitioner, v. Charles W. POARCH et ux., et al., Respondents.

Supreme Court of Tennessee.

May 10, 1968.

Stevens & Bagley, Fayetteville, for petitioner.

Jack Green, Nashville, for respondents.

OPINION

CRESON, Justice.

This case comes to this Court from the Court of Appeals, Middle Section, on writ of certiorari heretofore granted. It involves the question of priority as between a mechanic's lien asserted under T.C.A. §§ 64--1101 et seq., and the lien of a trust deed on the same property. The petitioner, complainant below, Williams Lumber and Supply Company, Inc., seeks enforcement of a mechanic's or furnisher's lien on property owned by the respondent, Charles W. Poarch and his wife. The respondent, Mid-State Homes, Inc., is the present holder of a mortgage or deed of trust on the Poarch property, by transfer from respondent Jim Walter Corporation.

In the Lincoln County Chancery Court, the complainant was awarded a decree against the owner of the property for his debt, and priority of his lien over that of the trust deed of Jim Walter Corporation and Mid-State Homes, Inc.

The Court of Appeals, Middle Section, reversed, and entered a decree awarding priority to the lien of the trust deed. The issue posed, therefore, presents a rather important problem of construction and application of the Tennessee Mechanic's Liens statutes, particularly § 64--1104.

The record clearly shows that on March 9, 1966, Mr. Poarch contracted with the Jim Walter Corporation for the construction of a 'shell' house on his property. He and his wife executed a deed of trust by which they conveyed the land in question to William T. Robertson, Jr., as trustee, to secure a promissory note to the Jim Walter Corporation for $9,072.00. Under the contract, Mr. Poarch was to lay the foundation, after which Jim Walter Corporation was to erect the 'shell' house. Accordingly, Mr. Poarch purchased building blocks and built the foundation between March 15 and March 17, 1966. Jim Walter Corporation commenced construction of the house on March 17, 1966. The deed of trust on the property was recorded on March 21, 1966, in the Register's Office of Lincoln County. Shortly thereafter, on March 24 or 25, Jim Walter Corporation completed the 'shell'. On March 26, 1966, complainant Williams started delivery of materials under a separate contract with Mr. Poarch. The complainant continued to deliver materials until May 18, 1966. On May 27, 1966, the complainant filed its sworn statement of account due, which was duly recorded in the Register's Office of Lincoln County.

The complainant later, and timely, filed this bill in the Chancery Court of Lincoln County to enforce his lien. He prayed for a decree against Mr. and Mrs. Poarch for the amount of the debt, for attachment, for enforcement of the lien against the property, and to have such lien declared superior to that of the trust deed.

Complainant, and petitioner here, urges that under the law of Tennessee that lien is superior to the deed of trust held by Jim Walter Corporation and Mid-State Homes, Inc.; that this case is controlled by T.C.A. § 64--1104, which is:

'64--1104. Time of attachment of lien.--Such lien shall relate to and take effect from the time of the visible commencement of operations, except that, where demolition is involved in the work of improving, liens other than for demolition shall relate to and take effect from the visible commencement of operations excluding demolition and delivery of materials therefor. (Code 1932, § 7915.)'

The argument is that the date of visible commencement of operations was March 15, 1966, when Mr. Poarch began laying the foundation of the house; and, thus, that the mechanic's and furnisher's lien was superior to the lien of the trust deed by the express terms of the pertinent statute.

Jim Walter Corporation takes the position that the visible construction on March 15, 1966 was in no way related to the complainant, but was under separate contract between Mr. Poarch and Jim Walter Corporation. Respondents say that delivery of materials by the complainant commenced five days after the deed of trust had been recorded, and at least one day after the completion of the shell home. In other words, that the visible commencement of operations for the purpose of complainant's lien was on the first day of delivery by it.

The Chancellor, after hearing the cause and taking same under advisement, filed a memorandum in the case. It was there stated:

'The general rule is the priority of a mechanic's lien over a mortgage depends upon the time when the lien attaches which is purely statutory. 36 Am Jur, Mechanics' Liens, Sec. 181. 57 C.J.S., Mechanics' Liens, Sec. 200(a). It attaches at visible commencement of operations under our statute. TCA 64--1104. Since Jim Walter Company did not record its mortgage before visible commencement of operations Williams Company's mechanics' lien is first.'

As indicated before, the Court of Appeals, Middle Section, reversed the holding of the Chancellor. In that opinion, the complainant's lien was held inferior for the reasons that (1) the Poarch deed of trust was Executed before the visible commencement of operations, and (2) the Poarch deed of trust was Recorded before the complainant made any delivery to...