Bear Lake Irrigation Co. v. Garland - 164 U.S. 1 (1896)
U.S. Supreme Court
Bear Lake Irrigation Co. v. Garland, 164 U.S. 1 (1896)
Bear Lake and River Waterworks
and Irrigation Company v. Garland
Argued May 8, 1896
Decided October 19, 1896
164 U.S. 1
On the 16th of August, 1889, a statute was in force in the Territory of Utah providing for the creation of mechanic's liens for work done or materials furnished under contracts in making improvements upon land, but, in order to enforce his lien, a contractor was required within 60 days after completion of the contract to file for record a claim stating his demand and describing the property to be subjected to it, and no such lien was to be binding longer than 90 days after so filing unless proper proceedings were commenced within that time to enforce it. On that day, G contracted with an irrigation company to construct a canal for it in Utah. He began work upon it at once, which was continued until completion, December 10, 1890. He claimed (and it was so established) that after crediting the company with sundry payments, there was still due him over $80,000, for which amount he filed his statutory claim on the 23d day of the same December. On the 1st day of October, 1889, the company mortgaged its property then acquired or to be subsequently acquired to a trustee to secure an issue of bonds to the amount of $2,000,000, the proceeds of which were used in the construction of the company's works, including the canal. On the 12th of March, 1890, the Legislature
of Utah repealed said statute and substituted other statutory provisions in its place, and enacted that the repeal should not affect existing rights or remedies and that no lien claimed under the new act should hold the property longer than a year after filing the statement unless an action should be commenced within that time to enforce it. On the 1st day of May, 1890, C contracted with the company to do work on its canal, and did the work so contracted for. The balance due G not having been paid, he brought an action to recover it, making the company, the mortgage trustees, and C defendants, which action was commenced more than 90 days after the filing of his claim. To this suit C replied, setting up his mechanic's lien. The court below made many findings of fact, among which were, (29th) that the right of way upon which the canal was constructed was obtained by the company under Rev.Stat. § 2339 and (33d) that the work done by G and C, respectively, had been done with the consent of the company after its entry into possession of the land. Exception was taken to the 29th finding as not supported by the proof. The court below gave judgment in favor of both G and C, establishing their respective liens upon an equality prior and superior to the lien of the mortgage trustees. Held:
(1) That this Court will not go behind the findings of fact in the trial court to inquire whether they are supported by the evidence.
(2) That G's action was commenced within the time required by the statutes existing when it was brought.
(3) That the judgment of the court below thus establishing the respective liens of G and of C was correct.
A clause in a mortgage which subjects subsequently acquired property to its lien is valid, and extends to equitable as well as to legal titles to such property.
Under Rev.Stat. §§ 2339, 2340, no right or title to land or to a right of way over or through it or to the use of water from a well thereafter to be dug vests, as against the government, in the party entering upon possession from the mere fact of such possession, unaccompanied by the performance of labor thereon, and as the title in this case did not pass until the ditch was completed, the mortgage was not a valid encumbrance until after the liens of G and of C had attached, and will not be held to relate back for the purpose of effecting an injustice.
The Act of March 12, 1890, is to be construed as a continuation of the act in force when the Garland contract was made, extending the time in which an action to foreclose its lien should be commenced, and, as this was done before the time came for taking proceedings to effect a sale under the lien, it was not an alteration of the right or the remedy as those terms are used in the statute.
The appellants herein have appealed from a judgment of the Supreme Court of the Territory of Utah affirming a judgment of the District Court of the first Judicial District of the territory
in favor of the respondents, William Garland and Corey Brothers & Company.
The action was brought be the plaintiff, William Garland, against the Bear Lake Company, the Jarvis-Conklin Mortgage Trust Company, as trustees, Corey Brothers & Company and others for the purpose of enforcing an alleged mechanic's lien in favor of the plaintiff and against the Bear Lake Company for work done by the plaintiff for that company in the construction of its canal from its initial point (the Bear River Canyon) for a distance of twelve miles on both sides of the river. The complaint alleged that on the 16th of August, 1889, the plaintiff and the Bear Lake Company entered into a contract for the construction by plaintiff of the portion of the work above mentioned, and under that contract the plaintiff commenced work on the 31st of August, 1889, and continued it to and including December 10, 1890. Various payments on account of the work were made the plaintiff, and after crediting the same, the plaintiff alleged there was still due him from the Bear Lake Company at the time of filing his claim for a lien (December 23, 1890), the sum of $80,250.50, and interest thereon, as set forth in the complaint. The Jarvis-Conklin Mortgage Trust Company and Corey Brothers & Company and the other defendants were made parties to the action as subsequent mortgagees or other encumbrancers. The answer of the mortgage trust company set up the fact that it was the mortgagee in a mortgage executed by the Bear Lake Company to it, as trustee, on the 1st day of October, 1889, to secure the payment of $2,000,000 of the bonds of the mortgagor company, and that such mortgage covered all the water rights, franchises, lines of canal, and other property upon the whole or any part of which the plaintiff claimed a lien, and that the mortgage also, by its terms, covered all after-acquired property of every kind. The mortgage was duly recorded in Box Elder County, Utah, November 14, 1889; in Bear Lake County, Idaho, December 24, 1889; in Weber County, Utah, February 6, 1890. The bonds secured by the mortgage were all delivered between October 1, 1889, and February 1, 1891, and in large part paid for, and the balance was to be paid for
by drafts drawn upon the mortgage company by the treasurer of the Bear Lake Company as fast as the money was needed to pay for the construction of the works. At the time the plaintiff, Garland, entered into the contract already mentioned, and when he commenced work thereunder, the statutes of Utah provided a mechanic's lien, under the provisions of which a contractor, within 60 days after the completion of his contract, was to file for record with the county recorder a claim stating his demand, and giving a description of the property to be subjected to the lien. By § 3814, s. 1065, no lien provided for by the chapter upon liens was to bind any of the property longer than ninety days after the claim was filed, "unless proceedings be commenced in a proper court within that time to enforce the same." 2 Compiled Laws of Utah 1888, p. 406, from § 3806 to and including § 3820. The answer further set up the fact that while the above act was in force, and on the 12th of March, 1890, the Legislature of Utah passed an act in relation to mechanics' liens, and § 32 thereof repealed the former and above-mentioned lien act, but added the following proviso:
"Provided, that the repeal of said acts or parts of acts or any of them shall not affect any right or remedy, nor abate any suit or action or proceeding existing, instituted or pending under the laws hereby repealed."
The answer then set forth that the plaintiff did not commence his action to enforce his lien within the ninety days given by the act in force when the work was commenced under the contract, and therefore the lien no longer existed at the time the action was commenced to enforce it.
The answer of Corey Brothers & Company was in the nature of a cross-complaint, and set up the fact that they entered into a contract with the Bear Lake Company on the 1st of May, 1890, to construct certain portions of the canal of the company, and that between such date and the 5th of December, 1890, they did the work provided for in the contract, and on the 7th of January, 1891, they filed their claim for a lien for the balance of the money due them under the contract (which was about eleven thousand dollars), and
they asked for a decree enforcing their lien as a prior encumbrance to that of the mortgage upon the property of the Bear Lake Company.
The Bear Lake Company set up the same facts as a defense against the plaintiff's cause of action that were alleged by the Mortgage Trust Company, and it answered the claim of Corey Brothers & Company by alleging that the mortgage to the mortgage trust company had been executed and duly recorded, and was in existence long before and at the time of the execution of the agreement which Corey Brothers & Company made with the Bear Lake Company, and that therefore the lien of Corey Brothers & Company was subsequent and subject to the lien of the mortgage upon the after-acquired property of the Bear Lake Company.
No question arises with reference to the other defendants.
The case came on for trial upon the issues thus found, and the court, after hearing the evidence, gave judgment in favor of plaintiff and of Corey Brothers & Company, establishing their liens, respectively, upon an equality, and making them prior and superior to the lien of the mortgage trust company by reason of its mortgage, and decreeing the sale of the property to satisfy such liens. 9 Utah 350.