Ragon v. Howard

37 S.W. 136, 97 Tenn. 334
CourtTennessee Supreme Court
DecidedSeptember 30, 1896
StatusPublished
Cited by12 cases

This text of 37 S.W. 136 (Ragon v. Howard) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ragon v. Howard, 37 S.W. 136, 97 Tenn. 334 (Tenn. 1896).

Opinion

Wilkes, J.

These several bills, consolidated and heard together, were filed to have declared and enforced mechanics’ and furnishers’ liens on a block of buildings erected by defendant, Howard. The Chancellor held that the complainants were entitled to liens as against Howard and the Cincinnati Investment Co., and fixed the priorities of the several bills upon a lot of eighty-seven feet sold by the investment company to Howard, but not upon the remainder of the lot, which was sold to Howard by Dickey. He decreed that all of the complainants had liens prior to that of the investment company, under a deed of trust executed to it, except that as to Ragon, receiver, there was an admission that the investment company had a prior lien for $8,500 of purchase money. He .declined to give any personal judgment against the investment company. There was a reference to report the amounts of the debts and priorities, and a report thereon, and numerous exceptions to the report, which were all overruled except one as to the number of brick furnished [338]*338by Montague, and the sum due him was fixed at |1,850.06. Judgments were rendered against Howard for the amount of the debts claimed, but denied as to the investment company. The lot was ordered sold if the lien debts were not paid. The lien of Ragon, receiver, was declared to be inferior to that of the other creditors and to the investment company, to the extent of $8,500 purchase money, and all the other creditors were given priorities and placed on an equal footing.

The investment company and Montague alone appealed and assigned errors. The cause has been heard by the Court of Chancery Appeals, and they have affirmed the decree of the Chancellor, and from their decree the investment company prayed a broad appeal, and Montague appealed from so much of the decree as refused him a lien upon the entire Howard block and a personal judgment against the investment company, and taxed him with half the costs, and both parties have assigned errors.

The errors assigned by the investment company are, in substance, that the Court erred in holding that it was not necessary for the lien claimants to give the thirty days notice required by the Act of 1889 to be given the owner of the property. This error is based upon the theory that Howard had no title to the lot, and that it remained the property of the investment company until thirty days after the building was finished, and hence the lien claimants could fasten no liens on the lot by virtue of any [339]*339contracts with Howard, and such lien could only be fixed by the notice prescribed by Acts of 1889, to the investment company, as owner. The contention of the investment company rests primarily upon the proper construction and effect of a paper executed by it May 6, 1892, to Mr. C. C. Howard, in the following language:

‘ ‘ Dear SiR — Referring to the several conversations we have had concerning the sale to you of the property on Whiteside Street adjoining your building, 1 beg leave to say we will sell all the frontage we have on Whiteside Street, which is eighty-seven feet more or less, same depth as your lot, to you for $8,500, payable in five years, interest at 6 per cent, per annum, payable semiannually, and, should you purchase the property, we will, agree to loan you $5,500 on a building to be erected on the same property, the value of which shall not be less than $10,000, the money to be paid you when the building is completed and its value is certified by a competent person whom we may name, you to pay the expense of such examination and report. This $5,500 is not to be paid, however, until thirty days after the building is completed, and satisfactory proof is given that there are no mechanics’ liens or prior mortgages to that which will be given to us to secure the payment of the loan. Please advise us of your final acceptance of this proposition.
1‘Adolph S. Ochs, Sec’y.”

[340]*340Howard went into possession of the lot under this paper, and commenced the erection of a building on it, and one adjoining bought of Dickey, and complainants did work and furnished matez’ia 1 to be used in construction of the buildings. While, the block was being built the company advanced part of this $5,500 to Howard, and, thirty days after its completion, it paid the balance of the $5,500 agreed to be paid to him. It executed a deed to Howard for the lot, reciting a consideration of $14,000, and he executed to Geo. W. Ochs a deed of trust to secure the $14,000. The deed to Howard was executed November 12, 1892, and the deed of trust to Ochs was executed November 18, 1892, but both were registered the same day, November 21, 1892. No notice was given to the investment company by any of the complainants of any lien within thirty days, as prescribed by the Acts of 1889.

It is insisted that there was no fraud in the contract, and the mechanics and furnishers were bound to take notice that Howard, though in possession, was not owner, and it was their duty to inquire into and ascertain his interest, and they have no claim or lien against the investment company, and could get none on the lot except by giving the notice provided by the Act of 1889 to be given to the owner of the property, and, having failed to give such notice, the investment company was at liberty to secure itself, according to its contract with Howard, for its purchase money and money advanced, [341]*341by making the deed to Howard and taking the deed of trust back, as it did. The contention, narrowed down to its ultimate basis, is that the investment company was the owner of the property in the sense of the statute, and entitled to the notice, and, not having been given any notice, held the property free of liens of mechanics and material men. It is evident that if the Act of 1889 applies to this case,- and that the investment company was the owner of the property in the sense in which the term “owner” is used in that statute, then complainants cannot succeed, as no notice is claimed to have been given. It is, and has been, the policy of our law to protect and enforce this lien of mechanics' and fur-nishers, and not to allow them to be defeated by any technical niceties of construction. Burr v. Graves, 4 Lea, 552; Cole Mfg. Co. v. Falls, 90 Tenn. (6 Pick.), 466. At the same time, it cannot be held that the lien will be protected when there is an entire want of diligence and care to ascertain the true state of the title to the prejudice of the real owner.

In this case it is evident that the legal title to the property in controversy was not in Howard, but in the investment company, and an examination in the proper office would have disclosed this fact. At the same ° time, it is plain that the investment company allowed Howard to take possession of the lot and treat it as his own, and that its contract clearly contemplated that Howard should erect the buildings with the expectation and intention of putting the [342]*342legal title in him when the buildings were completed, and it is also evident that it expected and stipulated to be released from all liability for liens of mechanics and furnishers, and believed it had done so by the terms of its contract with Howard. The complainants, however, had no knowledge of this agreement between the company and Howard, and, seeing the latter in possession and dealing with it as his own, took it for granted that he was the owner.

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Cite This Page — Counsel Stack

Bluebook (online)
37 S.W. 136, 97 Tenn. 334, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ragon-v-howard-tenn-1896.