Fly v. Cline

Several actions in the superior court were consolidated and tried as one. The trial resulted in a judgment adverse to Milton A. Fly, the appellant. The controversy presents the question as to whether appellant had the right to redeem the property, a lot in the city of Los Angeles, from a redemption previously made by the Hammond Lumber Company.

The facts necessary to an understanding of the questions presented by the appeal are these:

On February 26, 1913, Della Ingerson, the then owner of the premises, mortgaged the property to the Security Trust & Savings Bank to secure her promissory note for $2,500.

Desiring to erect an apartment house on the premises, Mrs. Ingerson, on April 28, 1913, entered into the following written agreement with appellant:

“Los Angeles, Cal., April 28th, 1913.

“Memorandum of agreement made and entered into by and between Mrs: Della Ingerson, party of the first part, and Milton A. Fly, party of the second part, both of Los Angeles, California. The party of the first part agrees to give to the party of the second part a contract for the construction of one brick apartment house to be located at 230 South Beaudry avenue, fourth lot north of Third Street, east side of Beaudry avenue, Los Angeles, California, being Lot 15, Block 8 of the Woolen Mill Tract. Said apartment house to have about fifty-four apartments of two and three rooms each and the cost not to exceed $45,000. The party of the first part hereby authorizes the party of the second part .to order blue print plans and specifications for the party of the first part, and also to arrange for a building loan at 5Yz% or 6%, the lot to be clear of incumbrance. This agreement signed in duplicate this 28th day of April, 1913.

“Mbs. Della Ingerson.

“Milton A. Fly.”

About three months later plans for an apartment house, to cost about $65,000, were prepared by an architect.

On December 29, 1913, Mrs. Ingerson entered into a building contract with the Dutro-Wren Construction Company, as contractor, for the construction of an apartment house upon the premises. By this contract, which was a formal written building contract, the contractor, the DutroWren Construction Company, agreed to construct on the lot, pursuant to the previously prepared plans, a three-story, class C, brick apartment house, and Mrs. Ingerson agreed to pay therefor the sum of $65,000. Fly was not a party to nor mentioned in this building contract. Work under this contract was commenced by the Dutro-Wren Construction Company about January 19, 1914, and was continued by the -contractor until October 13, 1914, on which day work on the apartment house ceased, and was not resumed until more than thirty days thereafter.

On March 2, 1914,'Mrs. Ingerson executed a grant deed to the premises to her attorney, George H. Woodruff. This deed to Woodruff was recorded in the office of the county recorder on the day of its execution. On December 9, 1914, Woodruff and wife executed to Ada Webster, the daughter of Mrs. Ingerson, a quitclaim deed to the premises. This deed was recorded December 10, 1914. One of the claims made by appellant is that Mrs. Ingerson’s deed to Woodruff and the latter’s deed to Mrs. Webster were made to hinder, delay, and defraud Mrs. Ingerson’s creditors; or, if not made for that purpose, then that the deed to Woodruff was given as security, to secure any indebtedness that thereafter might become due him from his client, Mrs. Ingerson, and that, therefore, it was but a mortgage.

On February 24, 1916, Mrs. Webster, who, on the face of the records in the county recorder’s office, was the then absolute owner of the property, conveyed it, for a valuable consideration, to W. H. Elliott, by grant deed recorded February 25, 1916; and Elliott and wife, for a valuable consideration, by a grant deed bearing date February 25, 1916, conveyed the property to the Hammond Lumber Company,

On December 5, 1914, Fly, claiming that he had performed work in the construction of the apartment house under his memorandum agreement with Mrs. Ingerson of date April 28, 1913, a copy of which is set forth supra, filed in the office of the county recorder a mechanic’s lien claim for $4,414.38. On December 29, 1914, he commenced an action in the superior court to foreclose his alleged mechanic’s lien. He made Mrs. Ingerson and her immediate, grantee, Woodruff, parties defendant; but Mrs. Webster, though then appearing of record as the sole owner, was not made a party to the action. Because Mrs. Webster was not made a party to Fly’s action to foreclose his alleged mechanic’s lien, the decree in that action is not res adjudicata as to her or as to either of her successors in title—Elliott and the Hammond Lumber Company. On February 1, 1917, a foreclosure decree was entered in that action, whereby the court declared that Fly had a mechanic’s lien on the property for $4,414.38, and decreed that the lien be enforced by sale of the premises.

On June 1, 1915, the Security Trust & Savings Bank, the holder of the first mortgage—the mortgage for $2,500—■ commenced a foreclosure action in the superior court, making parties defendant Mrs. Ingerson, the Dutro-Wren Construction Company, the Hammond Lumber Company, Ada Webster, and a number of mechanic’s lien claimants. This foreclosure suit resulted in a decree whereby it was adjudged, among other things, that $3,068.75 was due the plaintiff in that action, the Security Trust & Savings Bank, on the $2,500 mortgage that Mrs. Ingerson had executed to it February 26, 1913; that $45,000, with interest, was due the Hammond Lumber Company on the Burt’ mortgage that had been assigned to it; that the premises be sold, and that the proceeds of the sale, after payment of sheriff’s fees, etc., be applied, first to the payment of the amount due the Security Trust & Savings Bank on the mortgage held by it, and then, if there should be any surplus, to the payment of the Hammond Lumber Company’s claim for $45,000, and interest, due on the Burt mortgage. By this decree the court made no attempt to pass upon the validity of Fly’s claim of lien. That is a matter that was not passed upon or determined.

The next day, March 23, 1916, the Hammond Lumber Company, by whom the $45,000 mortgage was held, and who, in the foreclosure action that had been brought by the Security Trust & Savings Bank to foreclose its $2,500 mortgage, had been adjudged to be the holder of the $45,000 mortgage, claiming the rights of a redemptioner, paid the purchaser at the sheriff’s 'sale, the Security Trust & Savings Bank, the amount that it had paid the sheriff for the property, $3,195.19, with interest thereon at one per cent per month. At the same time, the Hammond Lumber Company gave the sheriff written notice of redemption, accompanied by a copy of the docket of the judgment in the mortgage foreclosure action wherein the court had adjudged the- Hammond Lumber Company to be the holder of the $45,000 mortgage. The Hammond Lumber Company also presented to the sheriff an affidavit showing the amount that it claimed to be due to it on the “judgment lien'” which it claims was created by the docketing of the decree in the mortgage foreclosure action. On March 24, 1916, the sheriff executed and delivered to the Hammond Lumber Company a certificate of redemption. Thereafter, on the expiration of a year, the sheriff executed a sheriff’s deed to the Hammond Lumber Company, and, as we have said, that corporation now claims to be the absolute owner of the property.

In addition to the action that he had commenced on December 29, 1914, to foreclose his alleged mechanic’s lien, Fly, on February 16, 1916, brought an action of debt against Mrs. Ingerson to recover for work and labor that he el aim a to have performed in the construction of the apartment house under the written memorandum agreement that he and Mrs. Ingerson had entered into on April 28, 1913. The sole party defendant in that action was Mrs. Ingerson, who

On May 22, 1916, Fly, claiming that the Hammond Lumber Company’s redemption was fatally defective in certain particulars which we have not deemed it necessary to mention, and that, by reason of such defects, that company had not acquired any right as a “redemptioner,” but that its sole right was that of an equitable assignee of such right to the property as the Security Trust & Savings Bank had acquired as the original purchaser at the sheriff’s sale, undertook to redeem the property by tendering to the sheriff, for the Hammond Lumber Company, the amount that the latter had paid the Security Trust & Savings Bank, viz., $3,325.67, with interest thereon at two per cent per month, and no more. This attempted redemption by Fly was based on the mechanic’s lien that he claimed to have acquired by the filing of his mechanic’s lien claim in the county recorder’s office on December 5, 1914, and also on the judgment lien that he claimed to have acquired by the docketing of the personal judgment against Mrs. Ingerson in the action of debt that he had brought against her. The sheriff, treating the Hammond Lumber Company as one who had become a “redemptioner,” with all the statutory rights of a redemptioner, refused to receive the tendered sum of $3,325.67, with interest thereon at two per cent per month, on the ground that it was not accompanied by the amount due on the Burt mortgage held by the Hammond Lumber Company, namely, $45,000 and interest thereon. •

On March 21, 1917, a judgment, purporting to be a judgment foreclosing appellant’s alleged mechanic’s lien, having been entered on February 1, 1917, and docketed February 19, 1917, appellant again attempted to redeem the property by again tendering to the sheriff, for the Hammond Lumber Company, the amount which the latter had paid the original purchaser at the sheriff’s sale. Fly based this second attempted redemption on his alleged mechanic’s lien and on the decree foreclosing the same, docketed February 19, 1917. Again the sheriff refused Fly’s tender of payment. This refusal was on the same ground as before, namely, that the amount tendered should have included the sum due the Hammond Lumber Company on the Burt mortgage.

Under the view we take of the case, it will not be necessary to consider appellant’s claim that the Hammond Lumber Company did not acquire the rights of a “redemptioner” and that it is only an equitable assignee of the rights acquired by the Security Trust & Savings Bank as the original purchaser at the sheriff’s sale. This is so for the reason that, as we view the case, appellant himself never became vested with the rights of a redemptioner. And if, as we hold, appellant’s attempted redemptions were without authority of law and abortive, then, for that reason alone, the judgment must be affirmed.

For the purpose of this appeal, we shall assume that the possessor of a mechanic’s lien has the same right to redeem as has the holder of a mortgage lien, although the . language of subdivision 2 of section 701 of the Code of Civil Procedure would seem to confine the right of redemption to “a creditor having a lien by judgment or mortgage.” This assumption that the possessor of a mechanic’s lien may exercise the right of redemption finds some support in the fact that subdivision 1 of section 705 makes reference to a redemption upon “a mortgage or other lien.” If we assume, for the purposes of this appeal only, that the possessor of a mechanic’s lien is entitled under our code to redeem “property that has been sold at sheriff’s sale, then, in order to entitle appellant to invoke the rights possessed by a redemptioner, it must appear that he had either: (1) a lien by judgment; or (2) a mechanic’s lien. No other form of lien is claimed by him. In our opinion, appellant never acquired either of such liens.

[1] Appellant did not acquire a judgment lien: The personal judgment against Mrs. Ingerson, entered March 3, 1916, m favor of appellant, in the action of debt that he had commenced against her on February 16, 1916, did not create a judgment lien on the property in controversy, for the reason that, when that judgment was docketed, March 9, 1916, the title to the property was not in Mrs. Ingerson,

To support his claim that, at’the times when he sought to redeem the property from the sheriff’s sale, Mrs. Ingerson was the true owner of the property, and that, therefore, he had a judgment lien when he thus sought to effect a redemption, appellant contends that the deed from Mrs. Ingerson to Woodruff, and likewise the deed from Woodruff and wife to Mrs. Webster, were made to hinder, delay, and defraud the creditors of Mrs. Ingerson; or • that, if those deeds were not made for that purpose, then the deed to Woodruff was made as security for such indebtedness, if any, as might become due to him from Mrs. Ingerson during such time as he might act as her attorney, and that, therefore, the deed to Woodruff was but a mortgage. Neither of these contentions,. if borne out by the evidence, could aid appellant; for the respondent Hammond Lumber Company,

If it be true that, as claimed by appellant, the deed from Mrs. Ingerson to Woodruff and the deed from Woodruff and wife to Mrs. Webster were made to hinder, delay, and defraud Mrs. Ingerson’s creditors, each deed, though void as to such creditors, was good as between the parties thereto; and Elliott and the Hammond Lumber Company, as innocent purchasers for value, took the title discharged of any fraud with which it may have been infected. [3] It is the settled doctrine that a conveyance in fraud of creditors, 'although declared by statute to be void as to them, is, nevertheless, valid as between the parties; [4] and a bona fide purchaser from the fraudulent grantee takes the title, even against the creditors of the fraudulent grantor, purged of the anterior fraud that had affected the title. (Paige v. O’Neil, 12 Cal. 484 ; Morrow v. Graves, supra; Williams v. Borgwardt, supra; Denike v. Santa Clara etc. Soc,, 9 Cal. App: 229, 232, [ 98 Pac. 687 ].)

If, as claimed by appellant, the deed to Woodruff, though absolute in form, was intended as a mortgage given to se'cure a possible future indebtedness from Mrs. Ingerson to Woodruff, the result will be the same as if the deed were, in fact, what on its face it purported to be—^an absolute eon

For these reasons we conclude that, at the time when the 'clerk docketed the personal judgment against Mrs. Ingerson in Fly’s action of debt against her, and likewise at the time when the decree purporting to foreclose Fly’s mechanic’s lien was docketed, the title to the property was not in the 'judgment debtor, Mrs. Ingerson; or, at any rate, so far as the rights of respondent Hammond Lumber Company are concerned, the title cannot be regarded as being in the judgMent debtor at those times, nor at any time since then, but Must be taken to have been vested at each of those times in the person in whom it appeared on the face of the recorded ‘chain of title. We think it clear, therefore, that appellant never had the status of a redemptionér having a lien by judgment.

[6] Appellant was not entitled to redeem as the possessor of a mechanic’s lien: The only judgment to which our 'attention has been called that purports to establish appellant’s status as a mechanic’s lien claimant is that given and Made in the action brought by him to foreclose his alleged lien. The then record owner of the title was Mrs. Webster, Who, as we have seen, must be regarded as the true owner 'at that time, in so far as the respondent Hammond Lumber 'Company’s rights are affected. - She was not made a party to appellant’s action to foreclose his alleged mechanic’s lien. 'The foreclosure decree in that action is, therefore, not res adjudicata in any action between appellant and Mrs. Webster, or between appellant and Mrs. Webster’s successor in title, the Hammond Lumber Company. For this reason the 'court below, if the evidence adduced before it warranted, was justified in finding, as it did, that appellant never had 'a mechanic’s lien, anything in the decree in the action that

[7] The finding that appellant never acquired a lien under the mechanic’s lien law is amply supported by the evidence. Appellant testified that the only contract he ever had with the owner, Mrs. Ingerson, to do any work on the building was the written memorandum agreement of April 28, 1913, a copy of which is set forth, supra; and this was the only contract of employment relied upon by 'appellant in the claim of lien that he filed in the recorder’s office. By this memorandum agreement of April 28, 1913, Mrs. Ingerson did not employ appellant to do any work on the proposed apartment house or to furnish any material whatever. Its language, so far as pertinent, is: “The party of the first part [Mrs. Ingerson] agrees to give the party of the second part [appellant] a contract for the construction of one brick apartment house. . . . Said apartment house to have about fifty-four apartments of two and three rooms each and the cost not to exceed $45,000.” This agreement was not a contract by appellant to construct the 'apartment house for which plans were subsequently drawn and which later was erected upon the premises; nor was it a contract on the part of the then owner, Mrs. Ingerson, employing appellant to construct a definite and certain structure. It was nothing more than an agreement on the part ■of Mrs. Ingerson to thereafter enter into and execute a 'building contract with- appellant. To employ the language of the instrument itself, it was an agreement on Mrs. Ingerson’s part “to give” to appellant a contract for the construction of a brick apartment house. It was not a building 'contract; only an agreement to execute a building contract.

But, says appellant, an agreement to make and execute a certain written contract, the terms of which are mutually •understood and agreed upon, is in all respects as valid and obligatory as would be the contract which it was agreed should be executed. The vice of appellant’s contention is that the principle invoked by him, though unquestionably "sound, is not applicable here, for the reason that the memorandum agreement of April 28, 1913, is fatally uncertain respecting the terms and conditions of the proposed building contract, particularly as to the structural details of the proposed apartment house. It may be conceded that where the minds of the parties have met respecting the terms and con

[9] Moreover, if appellant was ever entitled to a lien for any amount whatever, his claim of lien was not filed for record within the time provided by statute. It is not claimed that he furnished any material on the building; and there is ample evidence to support the court’s finding that he never performed any labor or bestowed any still or other necessary services contributing to the construction of the apartment house after the contract for its erection was made by the owner with the Dutro-Wren Construction Company. O. W. Dutro, who testified that he had complete supervision of the construction of the apartment house under the contract that the Dutro-Wren Construction Company had made with Mrs. Ingerson, and that he was on the work at all times after its commencement, testified that he never saw appellant do any work on the building or in anywise superintend its construction. This testimony was corroborated by that of a number of other witness.es. Appellant’s reply to this is that the evidence shows that he did some work in connection with the grading of the lot and the removal of the trees—work which he says was of the nature of necessary preparatory work performed prior to the execution of the contract with the Dutro-Wren Construction Company for the erection of the apartment house. Even so, appellant must fail in his claim that he acquired a mechanic’s lien, for he did not file his claim of lien for record until long after the expiration of sixty days from the completion of such preparatory work. It may be conceded that if preparatory work of the nature of that which appellant claims to have performed be included in the building contract, the claim of lien may be filed for record, under section 1187 of the Code of Civil Procedure as it • stood at the time this work was completed, within sixty days after the completion of the building -contract, if filed by the original contractor, or within thirty days after such completion, if filed by a subcontractor, materialman, or laborer. But here the preparatory work of grading and clearing the lot, etc., was not included in the contract that the owner made with the contractor for the erection of the apartment house—the contract with the Dutro-Wren Construction' Company. The work of grading and clearing the lot, removing the trees,

For the reasons already given, it must be held that the memorandum agreement of April 28, 1913, because of its uncertainty and incompleteness as to almost all essential structural matters, as well .as the cost of construction, cannot be regarded as a contract employing appellant to do any work of any kind upon an apartment house the plan of which then lay in the womb of the future. The preparatory work that appellant claims to have done was not provided for by the contract that Mrs. Ingerson made with the DutroWren Construction 'Company. It was done under a separate and distinct contract—a contract that was fully completed on November 5, 1913, on which day, according to appellant’s testimony, the work of grading the lot, removing the trees, etc., was finished. When, therefore, the contract for such preparatory work was completed, all the laborers who performed any labor thereunder should have filed their lien claims not later than thirty days after its completion, i. e., within thirty days after November 5, 1913; and the original contractor should have filed his lien claim within sixty days thereafter. Appellant did not file his claim of lien in the recorder’s office until December 5, 1914—thirteen months after the completion of the contract for the work that he designates as necessary preparatory work.

For the foregoing reasons we are satisfied that when appellant attempted to redeem the property, and, for that purpose, tendered to the sheriff the amount that the respondent Hammond Lumber Company had paid to the original pur

Judgment affirmed.

Thomas, J., and Weller, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on November 24, 1920.

All the Justices concurred.