28 Ohio N.P. (n.s.) 32

Common Pleas Court of Montgomery County.

West Side Lumber Co. v. Ballinger.*

Decided June 18, 1929.

Ozias & Ozias, and W. I. Rhotehammel, for plaintiff.

Kreitzer & Ratchford, for West Side Building & Loan Co.

Snediker, J.

This case is before the court on a question of distribution of funds in the hands of the sheriff of this county, which arise from the sale of property conveyed to the defendant Ballinger by Ada A. Cetone, his codefendant, and upon which a mortgage filed by the West Side Building & Loan Company, given by Ballinger to secure the money to pay the purchase price and certain mechanics liens imposed by material men, contractors and laborers are unsatisfied. Prior to the time of acquiring title to this property Ballinger was a tenant of Mrs. Cetone. While such tenant he entered into negotiations with her looking to a purchase thereof. Before he had his deed, which Mrs. Cetone had agreed to deliver, he started the construction of a building in which a business was conducted known as the Farmer’ Boys Inn. In constructing this building it became necessary for him to employ men in different trades and to purchase material used therefor. This work was done by these last named parties and this *33material was furnished by them in most instances, all or in part before the mortgage was executed to the West Side Building & Loan Company. We understand that in one case the work was done afterwards.

The deed from Mrs. Cetone to Ballinger was dated October 26, 1925. It was left with the building association. Delays occurred in securing a loan, during which time the instructions of Mrs. Cetone to the building association were that the deed should not be delivered until the loan of $2,500 which was intended to pay for the property, had been secured. There was a delay of approximately a month due to some irregularities in description, and on November 25, the building association came finally into the possession of facts which were satisfactory to it. On November 24, the mortgage of the building association was drawn, on the 27th a check for $2,500, which the mortgage was given to secure, was executed, payable to William E. Ballinger, was at once endorsed by him to Ada A. Cetone, and the deed from Cetone to Ballinger was delivered to the latter. No releases of lien were taken by the Building Association.

Mrs. Cetone had knowledge that a structure was being erected on this property, but evidently did not communicate that fact to the West Side Building & Loan Company. After the mortgage was given the liens were filed. The last date of the furnishing of materials and doing of work was for the Ohio Metal & Mfg. Co., Oct. 10, 1925, for Charles Roof, Nov. 23, 1925, for Guy Carlton, Nov. 23, 1925, and the West Side Lumber Company furnished its last material on Nov. 20, 1925.

These lienholders, if they are entitled at all to participate in this fund, would under' the law of Ohio have such a lien from the first day of the furnishing of material and doing of labor under their respective contracts with Ballinger. We think it will be stating a fact to say that such first day was of a time prior to the delivery of the deed to Ballinger and that at the time these respective lienholders began to do their work and furnish their material, he was still only a tenant with a verbal agreement *34of purchase. However, having subsequently become the fee owner, unless the mortgage of the West Side Building & Loan Company is here entitled to consume the fund, these lienholders would have a lien entitled to be recognized in the distribution. We understand them each to have been a principal contractor with respect to his part of the work, and the law with respect to the rights of each is stated in Section 8310 of the General Code as follows:

“Shall have a lien to secure the payment thereof upon such house * . * * and upon the interest, leasehold, or otherwise, or the owner, part owner, or lessee, in the lot or land upon which they may stand, or to which they may be removed, to the extent of the right, title and interest of the owner, part owner, or lessee, at the time the work was commenced or materials were begun to be furnished by the contractor, under the original contract, and also to the extent of any subsequent acquired interest of any such owner, part owner, or lessee.”

This being true, it is only left for us to consider whether the West Side Building & Loan Company’s mortgage has priority over the claims of these lienholders. Counsel for the Building and Loan company insist that they have a right to participate:

On the principle which gives a vendor the same right under his equitable lien. In some states this has been held to be the law. It is not the law of the state of Ohio. As far back as the 13th Ohio Report, in the case of Stansell v. Roberts, Jennings et al., at page 149, the Supreme Court established the rule that a first mortgage given to secure money borrowed to pay for the land has no priority over an incumbrance previously filed, and they say:

“A third person advancing money to enable a purchaser to buy cannot claim a vendor’s lien.”

This case was commented upon with approval and followed in the opinion of Judge Johnson in the case of Newman V. Newman et al., 103 O. S., pages 230-241, and he quotes from the 13th Ohio this language;

*35“The purchase money is what passes between vendor and purchaser, and the lien is the right of the vendor to look to the thing sold for the price for which it was sold, but money advanced by a third person to enable the purchaser to buy is no part of this transaction, nor is money so advanced privy to sale nor can it be construed into a resulting trust which exists where the land is purchased with the money of another.”

So that as we cannot find that the West Side Building & Loan Company is entitled to a lien in the nature of a vendor’s lien, its mortgage must take its place in contemplation of the mechanics lien law of Ohio and of those sectións of the Code which relate to the acquisition of lien by the filing of a mortgage.

In the case of Rider v. Crobaugh et al., 100 O. S., page 88-93, where a mortgage given and recorded subsequent to the commencement' of the construction or improvement under consideration, the decision of the Supreme Court of the United States in the 85 U. S., at page 659 is commented upon and followed. They used the opinion of Justice Bradley to this effect:

“The language of the eighth section “of the mechanics’ lien law of Montana is unambiguous. The liens secured to the mechanics and material-men have precedence over all other incumbrances put upon the property after the commencement of the building. And this is just. Why should a purchaser or lender have the benefit of the labor and materials which go into the property and give it its existence and value?”

The Supreme Court of Ohio says that the Montana mechanics’ lien law is similar to that in our own Code and contains almost identical language. So that we are constrained to hold that this mortgage and these liens in the distribution of the fund now in the hands of the sheriff should take their approprite places under the statutory provisions which relate to the time from which a lienholder’s lien becomes such and the time from which a mortgage constitutes an incumbrance of record on the property.

An entry may be drawn accordingly.

West Side Lumber Co. v. Ballinger
28 Ohio N.P. (n.s.) 32

Case Details

West Side Lumber Co. v. Ballinger
Decision Date
Jun 18, 1929

28 Ohio N.P. (n.s.) 32




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