National Homestead Ass'n v. Graham

147 So. 348, 176 La. 1062, 1933 La. LEXIS 1643
CourtSupreme Court of Louisiana
DecidedFebruary 27, 1933
DocketNo. 32079.
StatusPublished
Cited by26 cases

This text of 147 So. 348 (National Homestead Ass'n v. Graham) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Homestead Ass'n v. Graham, 147 So. 348, 176 La. 1062, 1933 La. LEXIS 1643 (La. 1933).

Opinion

ODOM, Justice.

This proceeding is in the nature of a eoncursus and involves the distribution of the proceeds of the sale of certain real estate situated in New Orleans, which belonged to Warren C. Graham, which proceeds are now being held subject to the rights of the creditors of said Graham.

Graham owned a structure described as 4125 Fontainebleau drive in New Orleans, which he desired to convert into a modern apartment house consisting of eight apartments. Instead of having the work done by contract he undertook the construction himself and let no contracts except with furnishers of material and those who might be employed to do such work as plumbing, painting, etc. He began the work in June or July, 1928, at which time the property was incumbered with a mortgage. It appears that he did not have sufficient funds with which to complete the work, and on October 11, 1928, obtained a loan from the National Homestead Association, plaintiff herein, which obtained from him a vendor’s lien and privilege on the property under the rules regulating the transfer and retransfer of property under the building and loan laws.

Having failed to pay the homestead association, it foreclosed its mortgage in July, 1930, and the property was adjudicated' to the Whitney National Bank for the sum of $16,500 cash, which sum was paid into the hands of the civil sheriff.

On April 16, 1931, the plaintiff homestead association filed a rule to cancel all liens against the property and to distribute the fund realized from the sale, and served all parties who had filed liens or held judicial mortgages against the property. The rule was heard, and on April 24, 1931, was made absolute, ordering the cancellation and «rasure from the records of all inscriptions of liens and other incumbrances, and further ordering that all claims be referred to the proceeds of sale.

The lien claimants came into court and asserted claims against the fund; these claims amounting in the aggregate to $12,585.01. The court appointed a commissioner to take the testimony of the claimants and report his findings. The commissioner made his report recommending that fourteen of the claims, amounting to $11,573.67, be paid in full by preference over that of the homestead association, and that the others be rejected.

The claim of the homestead association amounts to $15,972.01. It filed answer to the interventions of the other claimants opposing their claims on various grounds, and con *1067 tends that the entire sum now in the hands of the sheriff should be paid to it by preference. The contest therefore is between the homestead association on one side and the lien claimants on the other. And in this connection it may be stated that the homestead association does not dispute the verity of any of the claims filed. Its contention is that the claimants are not entitled to have their claims paid by preference. It is contended that some of the claimants are not entitled, as a matter of law, to liens on the building owing to the nature of the claims, and that others, although entitled under the law to liens, did not file their claims in time, and that still others who were entitled to liens and who did file their claims within the time prescribed, and therefore obtained liens, have lost their liens by prescription.

(1) As to the facts, there is but little dispute except as to the date on which the building was finally completed, and in view of the conclusions which we have reached on the questions, of law raised, this point is of no importance, except in so far as the claim of Colon Neville is concerned.

It is shown that at the time the homestead association made the loan to Warren C. Graham and obtained a lien on the property, the work of reconstructing the building was in progress, and Graham, the owner, had already contracted with these claimants to furnish the material for which they claim payment, and, further, that while all the material had not been delivered, yet the materialmen had commenced to deliver materials prior to the date on which the homestead association obtained and recorded its lien.

Section 12, Act No. 298 of 1926, gives to the holders of vendor’s privileges and mortgages a superior claim against the property mortgaged “if said vendor’s privilege or mortgage exists and has been duly recorded before the work or labor is begun or any material is furnished.” Where work is done and material furnished under one continuous contract, the lien is timely when filed, under section 12 of this act, within 60 days from the date the last work is done or the last material furnished under the contract, and when so filed the lien primes the vendor’s mortgage even though filed after the mortgage is recorded. Gleissner v. Hughes, 153 La. 133, 95 So. 529.

Therefore, if the furnishers of materials in this case are entitled to liens under the law, and if they have filed and preserved them as the act requires, they must be paid by preference over the homestead association. Whether they are entitled to liens and whether they have filed and preserved them are questions of law presented for consideration, and these questions involve a construction and interpretation of certain parts of the act.

(2) Section 12, Act No. 298 of 1926, provides that when the owner undertakes the construction, improvement, repair, or erection of any work, for which no contract has been entered into, or when a contract has been entered into but has not been recorded as required by the act, then, “Any person furnishing service or material or performing any labor on said building or other work may record in the office of the Clerk of Court or Recorder of Mortgages in the parish in which said work is being done or has been done a copy of his estimate or an affidavit of his claim or any other writing evidencing same, which *1069 recordation, if done within sixty days after the date of the last delivery of all material upon said property or the last performance of all services or labor upon the same, by said furnisher of material or said laborer, shall create a lien and privilege upon the building or other structure and upon the land upon which it is situated, in favor of any such person who shall have performed service or labor or delivered material in connection with the said work of improvement, as his interest may appear. Said lien and privilege, re-' corded as aforesaid, shall constitute a lien and privilege, against the said property for a period of one year from the date of its filing, unless interrupted by judicial proceeding, during which judicial proceeding said prescription shall not run.”

The questions which arise are these:

1. Whether the above-quoted section allows a lien in favor of those who contract with the owner to do certain portions of the work necessary in the construction of the building as a whole.

2. Whether it is contemplated under said section of the act that each claimant must file his lien within 60 days from the date of the last work done or last material furnished by him, or whether his claim may be filed within 60 days from the completion of the building.

3. When liens have been properly filed, whether prescription is interrupted by the filing of suit, or whether it is interrupted only by citation served on the owner.

We shall dispose of the questions raised in the order named.

1.

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Bluebook (online)
147 So. 348, 176 La. 1062, 1933 La. LEXIS 1643, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-homestead-assn-v-graham-la-1933.