Moreau Lumber Co. v. Johnson
Moreau Lumber Co. v. Johnson
Opinion of the Court
This is an action to foreclose a mechanics’ lien for $625.18, interest and costs. The material was sold to a homestead entryman, and used in the construction of a dwelling house and granary upon his unproven government homestead entry in Hettinger county. Final proof has not been made. The last item of material was furnished July 27, 1910. The statutory ninety-day period for filing lien as against subsequent purchasers and encumbrancers without notice expired October 25, 1910. Prior thereto, and on October 19, defendant filed in the district court of the United States for the district of North Dakota his petition in voluntary bankruptcy, and was forthwith ad
Admittedly the adjudication in bankruptcy, and likewise the discharge, would not have affected this lien had it been perfected. A mechanics’ lien comes within “the exception clause (D) of § 70, bankruptcy act, which provides that ‘liens given or accepted in good faith, and not in contemplation of or in fraud upon this act, and for a present consideration, which have been recorded according to -law, if record thereof is necessary in order to impart notice, shall not be affected by this act.’ ” Remington, Bankr. § 1155. To the same effect, see Collier on Bankruptcy, page 944. Against bankruptcy proceedings, as well as any purchaser or encumbrancer under the express and explicit terms of § 6820, Comp. Laws 1913, plaintiff had ninety days, or up to and including October 25, 1910, within which to file its lien statement. It had years if necessary, within which to file such statement of lien as against this defendant, the purchaser of the materials and owner of the buildings. “The filing of it within ninety days after the materials are furnished makes the lien effective as against everyone acquiring rights [during said period] in the land or building. If filed after said ninety days the lien is still preserved intact except as to those in good faith acquiring rights to the property after the ninety days and before the lien is filed.” As stated in Robertson Lumber Co. v. State Bank, 14 N. D. 511, at page 515, 105 N. W. 719; Wisconsin Trust Co. v. Robinson & C. Co. (C. C. A. 8th C.) 15 C. C. A. 668, 32 U. S. App. 435, 68 Fed. 778, and recited in Robinson Lumber Co. v. State Bank, the language of the statute is plain, and “no argument or exposition can make the purpose or effect of the provision of the statute clearer than their own words.” “The statute expressly declares that ‘a failure to ■.file the same within the time aforesaid shall not defeat the lien except against purchasers or encumbrancers in good faith without notice, whose
But there is no proof that a trustee was appointed, or ever assumed authority over tbe property, or asserted any rights to it. Tbe case stands no differently than if there bad never been bankruptcy proceedings taken except as to tbe debt independent of tbe lien, which debt is discharged. Tbe taking of a deficiency judgment over tbe proceeds of tbe sale under mechanics’ lien foreclosure against defendant is thus prevented. Tbe bankruptcy discharges tbe debt, not in a sense that tbe debt is paid or satisfied, but only that it is uncollectable by legal process. It still has life to furnish consideration for tbe lien, or for any valid contract that may thereafter be entered into concerning it. And tbe lien is preserved by force of tbe statute exempting it from being effected. Adam v. McClintock, 21 N. D. 493, 131 N. W. 394; John Leslie Paper Co. v. Wheeler, 23 N. D. 477, 42 L.R.A.(N.S.) 292, 137 N. W. 412; Burcell v. Goldstein, 23 N. D. 257, 136 N. W. 243; Lown v. Casselman, 25 N. D. 44, 141 N. W. 73.
Tbe proceedings in bankruptcy therefore could not impair plaintiff’s right to perfect bis lien; that was property, and paramount as such to any rights obtainable by tbe trustee in bankruptcy, whose rights ■accrued during tbe ninety-day statutory period within which plaintiff might have perpetuated bis lien by filing a lien statement. Tbe burden is upon tbe defendant to establish facts to defeat tbe lien, and be has failed to show that anything affecting it has been done; tbe plaintiff is entitled under § 6824, Comp. Laws 1913, to a lien on these buildings, although upon unproven government land held under homestead entry.
It is therefore ordered that tbe judgment appealed from be reversed, and foreclosure awarded as prayed for in the complaint. No deficiency ¡judgment,.however, will be taken against defendant.
Reference
- Full Case Name
- MOREAU LUMBER COMPANY, a Corporation v. JAMES B. JOHNSON
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- 2 cases
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- Published