Williams v. Brewton
| Decision Date | 21 February 1930 |
| Docket Number | 7152. |
| Citation | 152 S.E. 441,170 Ga. 164 |
| Parties | WILLIAMS et al. v. BREWTON et al. |
| Court | Georgia Supreme Court |
Rehearing Denied March 1, 1930.
Syllabus by the Court.
The liens of laborers and materialmen, sought to be enforced in this case, do not rest upon contract, but upon the law which gives to laborers and materialmen liens for labor performed and material furnished in the improvement of real estate.
The title of the true owner of land cannot be subjected to liens for material furnished or labor done in its improvement unless he expressly or impliedly consents to the contract under which the improvements are made.
Where the owner of land conveys it to another by warranty deed, and simultaneously takes from the purchaser a deed to secure the purchase money, in which security deed the vendor in the deed first mentioned agrees that the vendee-purchaser shall have the right to place a permanent loan on the land conveyed and on a house to be erected thereon, not to exceed 60 per cent of the appraised value of said house and lot, and further agrees that said vendee shall have the right to place a pay-roll loan on said lot not to exceed $1,500, the owner of the lot (vendor in the first deed) in these circumstances consents to the improvement of the real estate by the purchaser, thus impliedly authorizes it, thus co-operates with the purchaser in its improvement, and is active and instrumental in having the real estate improved; and in such circumstances the liens of laborers for work done, and of materialmen for material furnished, in the improvement of the real estate are superior to the vendor's claim for the purchase money secured by the deed of the purchaser.
Error from Superior Court, Fulton County; Edgar E. Pomeroy, Judge.
Equitable petition by J. C. Brewton and others against S. G. Galloway in which J. T. Williams filed an intervention. To review a judgment sustaining exceptions of law to report of auditor, intervener and others bring error.
Affirmed.
Owner must consent to contract for improving realty before his title can be subject to liens for material or labor.
On May 19, 1928, S. G. Galloway purchased from Glendale Terrace, Inc., a certain described lot of land. Glendale Terrace, Inc., executed and delivered to Galloway a warranty deed to the lot, and simultaneously therewith Galloway executed and delivered to Glendale Terrace, Inc., a purchase-money security deed to secure the payment of 60 notes for $35 each, aggregating $2,100. The first of these notes matured June 9, 1928. The loan deed was recorded May 30, 1928. None of the notes were ever paid by Galloway. The following recital appears in the loan deed referred to: "Glendale Terrace Inc. agrees that S. G. Galloway shall have the right to place a permanent loan on the above lot, and a house to be erected thereon, not to exceed 60 On May 19, 1928, Galloway executed and delivered to J. T. Williams a warranty deed to the same lot to secure a loan of $1,500, due sixty days after date. This security deed was recorded on June 28, 1928, and was made a first lien by agreement with Glendale Terrace, Inc. On August 6, 1928, J. C. Brewton filed and had recorded a lien against the property and against Galloway for $500 for material and labor. Immediately upon the execution and delivery of the notes above referred to, Galloway began the erection of a house on the lot, and work proceeded until August 6, 1928. On August 14 J. C. Brewton, for himself and four named workmen employed by him as a contractor under Galloway, filed an equitable petition against Galloway. He alleged that J. T. Williams held a first lien against the lot for $1,500; that Galloway owed various materialmen for materials furnished in the construction of a six-room bungalow on the lot; that the house had been completed with the exception of a few minor details, which could be completed at a cost of $25; that Galloway was insolvent and had not been able to secure a loan, for the reason that his credit was bad; that the house was not worth more than $6.500, and that the outstanding claims and liens against it were in excess of $3,000, in addition to the recorded security deeds in favor of Williams and Glendale Terrace, Inc. The claims of Brewton and the four workmen mentioned totaled $531.48, and these workmen were asserting their claims through Brewton as the contractor under Galloway, the owner. On August 29, 1928, permanent receivers were appointed. On November 3, 1928, the property was sold by the receivers to James T. Williams for $4,375 cash.
On November 2, 1928, Glendale Terrace, Inc., filed its intervention setting up that it held a purchase-money security deed for a loan of $2,100 against the lot, that the same was a second lien against the lot, and that it had agreed with Galloway for Williams to place a first loan of $1,500 against the lot ahead of its deed. Prior to the receivers' sale, Williams filed his intervention setting up his claim for $1,500 as a first lien; and on November 20, 1928, he filed an amendment setting up that he had acquired from Glendale Terrace, Inc., the purchase-money security deed and sixty notes therein described, prior to the sale of the property by the receivers; and he asked that he be allowed to retain, out of the purchase price he agreed to pay for the property, the amount of his two claims.
Brewton the persons named as having been employed on the job, and certain materialmen filed answers to the intervention of Williams, alleging that Glendale Terrace, Inc., agreed for Galloway to place a $1,500 payroll loan ahead of its loan; that Galloway reserved the right, in said loan deed, to place a permanent loan against the building to the extent of 60 per cent. of the appraised value of the house and lot; that such permanent loan was for the purpose of paying off the pay roll of $1,500, and the balance was to be used for the purpose of paying creditors, materialmen, and laborers; that the appraised valuation of the house and lot was $8,000; that the creditors and materialmen relied upon the contents of the security deed, which Glendale Terrace, Inc., subrogated itself to the extent of 60 per cent. of the appraised value of the house and lot, and furnished work, labor, and materials; that the property was sold for $4,375, representing less than 60 per cent. of the appraised value; that the creditors and materialmen are entitled to all of this sum, because Glendale Terrace, Inc., was, by the terms of said loan deed, constituted the agent of Galloway in making contracts for the improvement of the lot to the extent of 60 per cent. of the appraised loan value; that it was the scheme of Galloway and Glendale Terrace, Inc., that Galloway should construct a house on the lot and obtain a loan thereon for a sufficient amount to pay for the cost of constructing it, and that this loan should be prior to the balance due Glendale Terrace, Inc., on the purchase-money notes on the lot; that Galloway was insolvent at the time he purchased the lot, and this was known to Glendale Terrace, Inc., and Williams; and that they knew no one would furnish Galloway labor and material if their claims should be postponed to that of Glendale Terrace, Inc. Respondents asked that their claims be decreed prior to that of Williams for the $1,500 pay roll loan, since the $1,500 represented a trust fund for the benefit of all of the materialmen, and since Brewton and all of his workmen performed their work and labor with the full knowledge, consent, and approval of Williams. The court appointed an auditor to hear and determine all questions of law and fact and the priorities of the claims of the parties. The auditor filed his report, to which exceptions of law and fact were filed. A motion to dismiss the exceptions of law was overruled, and the court passed the following order by which the exceptions of law were sustained, and it was ruled: Williams, Glendale Terrace, Inc., and Galloway excepted on the following grounds: (1) There was no privity of contract in favor of the parties claiming a right under the clause contained in the loan deed in favor of Glendale Terrace, Inc. (2) It was not shown that the parties claiming a right under the clause in the loan deed acted...
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