Summary
In Hamilton Bros. Company v. Baxter, 188 Miss. 610, 195 So. 335 (1940), an insurance company held a prior deed of trust on a hotel in which the appellants installed a steam boiler and oil burner.
Summary of this case from Enterprise Plumbing Co. v. Bailey Mortgage Co.Opinion
No. 34100.
April 8, 1940.
1. FIXTURES.
Heating equipment which was easily detachable from the realty and when so detached could be immediately removed without substantial impairment to the realty would be subject to mechanic's and materialman's lien, notwithstanding prior deed of trust against the realty (Code 1930, sec. 2269).
2. LIMITATION OF ACTIONS. Mechanics' Liens.
Petition to enforce mechanic's and materialmen's lien against real property wherein heating equipment was installed, filed within 12 months after material was furnished and installed, was sufficient, but if not, amended petition averring that, subsequent to filing of original petition, property had been foreclosed under deed of trust and praying that mortgagee and subsequent purchaser be made parties, and that lien be enforced against the equipment, was sufficient and did not state a new cause of action so as to bar lien because not filed within time allowed for enforcement thereof (Code 1930, sec. 2269).
3. MECHANICS' LIENS.
Where contract under which heating equipment was furnished was not recorded, and it did not appear that lis pendens notice was filed at time that suit to enforce mechanic's lien was instituted, grantee of mortgagee which became purchaser at foreclosure sale took the property free from lien if the equipment was to be considered as real estate fixtures and if grantee was a purchaser for value without actual notice of the lien (Code 1930, sec. 2269).
4. SALES.
If heating equipment remained personal property after installation, materialman's lien was enforceable as to the equipment so long as it remained in hands of purchaser or of one deriving title or possession through him, with notice that the lien money or any part thereof was unpaid, and suit to enforce lien did not need to be brought within twelve months as required in case of suit affecting real property, though contract under which material was furnished was not recorded and no lis pendens was filed at time suit to enforce lien was instituted (Code 1930, secs. 2243-2253, 2255, 2257, 2269).
5. SALES.
A writ for the seizure of property is an essential step in the enforcement in rem of a mechanic's lien against personal property when it is out of possession of the person entitled to the lien (Code 1930, secs. 2239, 2243-2253, 2255, 2257, 2269).
6. LIS PENDENS.
The mere filing of a suit to enforce a mechanic's lien against personal property and of an ordinary summons to a defendant does not operate as constructive notice to subsequent purchasers under the general common-law doctrine of lis pendens (Code 1930, secs. 2239, 2243-2253, 2255, 2257, 2269).
7. SALES.
Subsequent purchaser of hotel property with actual notice of unpaid lien against heating equipment would be in same position, as respects rights of lienholder, as if a lis pendens notice had been recorded or a writ of seizure had been executed (Code 1930, secs. 2239, 2243-2253, 2255, 2257, 2269).
8. SALES.
In suit to enforce a mechanic's lien against personal property, where contract under which material was furnished was not recorded, no lis pendens notice was filed, and there was no writ for seizure of the property, defense of being a purchaser for value without notice was an affirmative matter which purchaser who desired to take advantage of such status had burden of alleging and proving, unless such fact appeared from allegations or proof made by lienholder, and in absence of such proof and findings sustaining that proof lienholder would be entitled to recover (Code 1930, secs. 2239, 2243-2253, 2255, 2257, 2269).
APPEAL from the circuit court of Hancock county; HON. L.C. CORBAN, Judge.
Edward I. Jones, of Bay St. Louis, for appellant.
The appellant's contention is that the amended suit was merely to more specifically describe the property upon which the lien was asserted and reverted back to the original suit filed, but because of the court's holding that the amended suit did constitute a new cause of action it refused the peremptory instruction for the plaintiff. The law is well settled in the case of Dinkins v. Bowers, 49 Miss. 219, wherein the courts stated "if the complainant herein, at the outset, had preferred a petition to subject the property to the lien, but, by reason of some imperfection, it became necessary to amend, then he would have sued within the six months as intended by the statute, but he makes no claim under his lien until two years after he had begun his personal action. We think that he thereby abandoned his lien."
In the suit at bar there is no contention, doubt, or possibility of misconstruing that the plaintiff did, at the outset, prefer a petition to subject the property to the lien and that he did subject all of the property to the lien and described it all, but that his amended suit merely set forth more precisely the property covered by the lien.
Section 2269 of the Code of 1930 clearly states that special writ of execution shall issue for a fixture or structure erected or constructed or put on land subsequent to a former encumbrance, and the purchaser shall obtain the same, free from such former encumbrance, and his purchase shall authorize him to enter and remove such fixture, structure or building with reasonable dispatch, and this is clearly and correctly construed by the court in the case of Big Three Lumber Co., Inc., v. Curtis, 93 So. 488.
There is no question but that under the statutes granting liens (Chapter 44, Code of 1930) there is a lien given on fixtures or buildings, etc., regardless of their constituting part of the realty, and this peremptory judgment is contrary to good law and pleading, and was greatly prejudicial to appellant's cause of action.
Gex Gex and Conner Conner, all of Bay St. Louis, for appellees.
This action is governed by the provisions of Chapter 44 of Mississippi Code of 1930. By Section 2258 of that chapter the right to a lien on real property for labor or materials used in the erection, construction, alteration, or repair thereof is granted. The concluding portion of that section, however, reads as follows: "Such lien shall take effect as to purchasers or encumbrances for a valuable consideration without notice thereof, only from the time of commencing suit to enforce the lien, or from the time of filing the contract under which the lien arose, in the office of the Clerk of the Chancery Court; delivery of material to the job is prima facie evidence of its use therein."
These lien statutes have been so frequently construed by this court that it is difficult to select citations of authorities from the numerous decisions. However, each time these statutes have been under consideration by the court, it has unhesitantly held that as to the realty such a lien is subject to a prior encumbrance thereon. It has further held that Section 2258 means exactly what it says, or that is to say, that the lien is ineffective as to purchasers or encumbrances for a valuable consideration without notice of the lien.
Appellant contends that since he filed his petition asking for a lien on the realty alone within twelve months after the debt became due that he was after such twelve months' period entitled to amend his petition for the purpose of specifically describing the equipment and asking for a lien thereon, it being strictly personal property and not a part of the realty. He further contends that the amended petition merely further and more specifically described the property upon which the lien was sought to be placed. The defense was two-fold: (1) That as to the real property he was not entitled to a lien except subject to the rights of Lamar Life Insurance Company by virtue of its deed of trust, as well as the right of C.A. Reed who purchased the property under foreclosure, prior to the filing of the suit; (2) That having filed his suit originally claiming a lien on the real property alone, without making the prior lienholders parties thereto, and having waited more than 12 months thereafter to join those parties therein on the amended petition which for the first time sought a lien on the equipment furnished by the plaintiff, his right to a lien thereon was barred; since Section 2262 provides that such suits shall be commenced within 12 months next after the time when the money became due and payable and not after.
Parsons v. Foster, 154 Miss. 363; Flake v. Central Hardware Co., 50 So. 461; Hervey v. Commercial Bank of Clarksdale, 152 Miss. 894; Hollis Ray v. Isbell, 124 Miss. 807.
All of the authorities are to the effect that an amendment may be made, after the running of the statute of limitations, if it merely sets out in particular and more perfect language the claim originally instituted; but that no such amendment may be made which undertakes for the first time to state a new and different cause of action.
Cox v. American Freehold and Land Mortgage Co., 40 So. 739.
The statute provides that action for the enforcement of mechanic's or materialman's lien must be brought within 12 months after the date when the amount becomes due and payable and not after.
As to the propriety of the ruling of the lower court that the relief sought in the amended petition could be granted only if it was filed within 12 months from the due date of the bill sued upon, we refer the court to the case of Dodds v. Cavett et al., 97 So. 813.
On June 1, 1936, appellee Baxter was the owner of a hotel property, real and personal, known as Weston Hotel, in Bay St. Louis. On that date he executed to the Lamar Life Insurance Company a deed of trust covering said property, real and personal, together with all personal property which might thereafter be placed in the hotel. On or about October 6, 1936, Baxter made a contract with appellant by which the latter was to furnish and install in the hotel a stream boiler and an oil burner as a part of the heating equipment of the hotel. The installation was made by appellant, and the work concluded about October 31, 1936; and there was thence owing to appellant therefor the sum of $816, the contract price, all of which was later paid except $176, which has never been paid. There was a dispute of fact and the issue was submitted to the jury as to when the money for the work and material became actually due; but, as we shall later point out, that issue was wholly immaterial and had no proper place in the case.
On July 1, 1937, all the balance being then admittedly past due, appellant filed its petition against Baxter to enforce its mechanic's and materialmen's lien, in which petition it described the equipment installed and sought a lien against the real property wherein the material was placed. On November 15, 1937, appellant filed an amended and supplemental petition, averring that since the filing of the original petition the property had been foreclosed by the appellee, Lamar Life Insurance Company, under the deed of trust, at which sale the Insurance Company had become the purchaser and had later conveyed the entire property to C.A. Reed. It was prayed that the Insurance Company and Reed be made parties, and that the lien be enforced against the aforementioned boiler and oil burner. Reed and the Insurance Company appeared and answered, urging the points that their title arose out of the foreclosure of the prior mortgage and which, because of its priority in date, was superior to the lien of appellant, and that the amended and supplemental petition filed November 15, 1937, presented a new cause of action which, so far as any lien was concerned, was barred because not filed within the time allowed by law for the enforcement of such a lien.
Nothing was said in the answer about whether the respondents had any notice of the materialmen's lien at or prior to the time of their respective purchases of the property; and the proof is silent on that point, except that it perhaps is sufficient to show that the Insurance Company had such actual notice or knowledge.
The facts are not sufficiently developed in this record to enable us to determine, with certainty, whether the boiler and the oil burner became, upon installation, real estate fixtures, or whether they remained chattels; but, if we consider them as a part of the realty, the proof is sufficient to show that they were easily detachable, and, when so detached, could be immediately removed, and this without substantial impairment to the original security of the prior incumbrancer. Wherefore, under Section 2269, Code 1930, and notwithstanding the prior deed of trust, the boiler and oil burner would still be subject to the mechanic's and materialmen's lien, but not including the land. Big Three Lbr. Co. v. Curtis, 130 Miss. 74, 93 So. 487.
And, in this view of the case, the original petition filed within twelve months after the material was furnished and was installed, was sufficient; or if not, the amendment later made did not state a new cause of action. See Broom v. Southern Ry., 115 Miss. 493, 76 So. 525; and Illinois Cent. R. Co. v. Wales, 177 Miss. 875, 171 So. 536.
But the contract under which the material was furnished was not recorded, and so far as this record shows, no lis pendens notice was filed at the time the suit was instituted or afterwards. Consequently, if the property is to be considered as real estate fixtures, and if Reed was a purchaser for value without actual notice of the lien, he would take the property free of the lien. McKenzie v. Fellows, 97 Miss. 31, 52 So. 628.
If, on the other hand, we should consider the boiler and burner as having remained personal property, the materialmen's lien was enforceable as to that property so long as it remained in the hands of Baxter, or of one deriving title or possession through him with notice that the lien money or any part thereof was unpaid. Whatever may have been the arrangement of the sections in previous codes, the first twenty sections of the present code chapter on Statutory Liens, Chap. 44, Code 1930, deal exclusively with liens on personal property. The general personal property materialmen's lien is found in Section 2255, Code 1930, and by Section 2257, Code 1930, it is provided that lienholders, under Sec. 2255, who have parted with possession, "shall retain their liens to the extent that is allowed in cases of liens for purchase-money of goods [see Section 2239, Code 1930], and may enforce the same in like manner as is provided" for the enforcement of purchase-money liens, and Sections 2243-2253, Code 1930, are those which deal with the manner of enforcement.
It will be observed that there is no requirement that a suit to enforce the materialmen's lien as against personal property shall be filed within twelve months next after the time when the money became due, as is necessary when the suit affects real property as such, Sections 2258, 2262, Code 1930; but the personal property lien suit may be filed at any time short of the general statute of limitations so long as during that time the property remains in the hands of the original lienor, or of one deriving title or possession through him, with notice that the lien money was unpaid. Section 2239, Code 1930.
In this case, however, there was no writ for the seizure of the property, which is an essential step in the enforcement in rem of a mechanic's lien against personal property when it is out of the possession of the person entitled to the lien. The mere filing of a suit and of an ordinary summons to a defendant does not operate as constructive notice to subsequent purchasers, under the general common-law doctrine of lis pendens, for the statute requires more than that to be done if the personal property itself is to be looked to or pursued. When the suit affects real property, a lis pendens lien must be filed, in order to affect a subsequent purchaser for value; and, as to personal property, the writ of seizure must issue, as a statutory equivalent of the lis pendens notice. Since, then, the filing of the original suit and a personal process to the defendant Baxter without more did not constitute constructive notice to Reed, the subsequent purchaser, the determinative question becomes: Was Reed a purchaser for value without actual notice of the lien and that the lien money or a part of it had not been paid?
If the subsequent purchaser, Reed, had actual notice of the unpaid lien money, he would be in the same position as respects the rights of the lienholder as had a lis pendens notice been recorded, or a writ of seizure executed. And the defense of being a purchaser for value without notice is an affirmative matter — the burden of allegation and proof is always on him who would avail himself of the advantages of that status, unless the fact appears from the allegations or proof made by the opposing side. In this record, so far as Reed is concerned, there is no such allegation or proof on either side; and in the absense of proof and a finding sustaining that proof, to-wit, that Reed was a purchaser for value without actual notice, appellant would be entitled to recover.
The case was tried in the circuit court on the theory finally therein adopted by both sides, that the lien was one on personal property, and that a suit to enforce such a lien must be begun in one year from the due date of the money, the defendants contending that the amendment made on November 15, 1937, was a new suit so far as any personal property lien was concerned and the plaintiff insisting to the contrary as respects the amendment; and the defendants contending that the lien money was due immediately upon completion of the work, and plaintiff averring that it was due in monthly installments thereafter. The correct issue as hereinabove pointed out seems never to have been in the minds of either party at the time of the trial. The sole issue submitted to the jury was as to the due date of the debt, an issue which had nothing to do with the case; from which it follows that the judgment must be reversed and the cause remanded.
Reversed and remanded.