Colonial Trust Co. v. Vale-Oregon Irr. Co.

265 F. 393, 1920 U.S. Dist. LEXIS 1120

• Court: District Court, D. Oregon
• Decided: May 10, 1920
• Docket: No. 7841
• Status: Published

Opinion

WOFVERTON, District Judge

(after stating the facts as above). The crucial controversy attending this case is whether the liens of the mechanic’s lien claimants are paramount to that of plaintiff’s mortgage, and this depends upon whether it may be considered that the work of construction was entered upon prior to the time of the recording of plaintiff’s mortgage.

[1] The lien of a mechanic or contractor, under the statute, is preferred to the lien of a mortgage or other incumbrance which may -have attached to the land subsequent to the time when the building or improvement was commenced, or the materials were commenced to be furnished and placed upon and adjacent to the land, and so of a mortgage or other incumbrance which was unrecorded at the time such building, structure, or other improvement was commenced, etc. Section 7418, Ford’s Oregon Faws. It can scarcely be questioned that, under a statute like this, the lien of the mechanic or contractor has relation back to the commencement of the building, structure, or other improvement, and this whether the particular contract or arrangement under which the work was done was entered upon, or the work was so done, subsequent to the time of the attachment of the mortgage or other incumbrance or not. Henry v. Hand, 36 Or. 492, 59 Pac. 330; Taylor v. Burlington, C. R. & M. Ry. Co., 23 Fed. Cas. 737, No. 13,783; Davis v. Bilsland, 18 Wall. 659, 21 L. Ed. 969; Brooks v. Railway Co., 101 U. S. 443, 25 L. Ed. 1057; Neilson v. Iowa, etc., R. Co., 44 Iowa, 71; Flint & Walling Manuf’g Co. v. Douglass Sugar Co., 54 Kan. 455, 38 Pac. 566. The question of greatest difficulty is in determining whether the work that was actually done on the dams and reservoirs and upon the ditch or canal, prior to the time when the Bully Company transferred the property to the Vale-Oregon Company, is to-be considered under the conditions attending the controversy.

[2] The mechanic or contractor is given a lien for labor performed, material furnished, etc., for the construction of any ditch, flume, tunnel, or aqueduct, or any structure or superstructure. Section 7416, L- O. L. The Legislature, in adopting this' statute, probably did not have in view an irrigating system, which comprises in many instances reservoirs, dams, flumes, tunnels, and aqueducts, headgates, laterals, and all things incident thereto, or it would have made suitable provision to cover such a system. What it did do was to give a lien upon the specific structures therein enumerated. Any one performing work upon any one of the structures specified in the statute is entitled to a lien thereon; but that would not entitle him to a lien upon another of such structures, unless he did work on it also, and likewise claimed his lien thereon. The only way in which he could be entitled to a lien upon a whole system, which includes ditches, flumes, tunnels, aqueducts, and other structures, such as reservoirs, dams, and the like, would be to tie them all together under a contract for constructing the system. Bearing out these propositions, it has been decided 'in the state court (by which this court is bound, because this is a construction of a state statute) that the liens given are specific, and extend to the particular building, structure, or edifice upon which the labor was performed or in which the materials were used. Dalles Lumber & Mfg. Co. v. Wasco Woolen Mfg. Co., 3 Or. 527; Kezartee v. Marks & Co., 15 Or. 529, 16 Pac. 407. It has been further held, however, that:

“A single lien upon separate buildings is allowed when they are erected for any common purpose or connected use, as in tbe case of barns, stables, and oilier outhouses used in connection therewith, and within the curtilage of a dwelling, or where the buildings have been erected for some general and connected use.” East Side Mill Co. v. Wilcox, 69 Or. 266, 138 Pac. 843.

Beyond this, also, it is permissible to file a single lien upon several structures or buildings situated in proximity to one another, belonging to the same person, where the construction was done under a single contract for a stipulated sum. Willamette Mills Co. v. Shea, 24 Or. 40, 32 Pac. 759. Without the tying together of the several structures under one contract for their construction, it is clear that they could not be covered by a single lien.

[3] The most that can be claimed for the work done by the Bully Company is that the company had stripped off the rock from the mountain side at the Lamberson dam site preparatory to making a toe wall for the dam, had cleared off the sagebrush and rubbish for quite a distance along the survey preparatory to excavating for the canal, and had made extensive excavations on the line of the survey. In view of the statute, this would indicate that the Bully Company had performed work on a structure, namely, the Lamberson dam site, and on a ditch or canal, and the persons doing the work were entitled to liens upon the specific structure or canal upon which the work was done, but not upon both, unless the work was done under a contract for the building in whole or in part of both.

The lien, when filed, would have relation back to the commencement of the work on the particular structure, canal, or aqueduct, and not upon all of them, upon which work had been done, unless they were tied together by a contract for construction of the whole, simply because the statute does not give a lien upon a project or system, but, I repeat, upon particular structures that may enter into or go to make itp the project or irrigation system. Elsewhere the statute gives a lien upon railroads. Without that, a contractor or workman could procure a lien upon station houses, warehouses, and tracks, conforming to the particular structure upon which the work was done, but not upon the railroad as a project or system. This is a fair illustration of the principle which manifestly applies here. The defendants Maney Bros. & Co. claim a lien upon the entire project, but they do this by specifying the particular structures that go to constitute the project; and this they may do, as they have a contract with the Vale-Oregon Company to construct the entire system, and the separate and specific structures are tied together by contractual relations. But they are not entitled to avail themselves of the work previously done under the auspices of the Bully Company upon a particular structure, canal, or aqueduct of the system for carrying their lien upon the entire project back to the commencement of such work. I concur, therefore, with the conclusion reached by the learned judge of the circuit court of the state in another proceeding in that court. Equitably, Maney Bros. & Co. were dependent entirely upon the bonding of the property for their pay in forwarding the work of construction. They refused to proceed with the work until money was provided for them, and it was in view of the Vale-Oregon Company procuring the mortgage for providing funds for meeting the obligations of that company that they entered into the contract for construction and undertook the work, and it may well be questioned whether they ought now to be allowed to claim a lien superior to the mortgage of plaintiff.

It follows that the plaintiff’s mortgage is superior and paramount in time and right to Maney Bros. & Co.’s lien, and likewise to the lien of the defendant High, and the cause will be referred to the master, to determine the amount of the mortgage and of the liens of defendants.