foreclosure of his mortgage, he is entitled to be reimbursed the sum actually paid before the sale in discharge of such liens.80 Foreclosure. § 328. The existence of mechanics' liens on mortgaged property does not prevent the mortgagee from foreclosing, and the lien claimant cannot have such foreclosure enjoined.$1 In order to make such foreclosure binding on the lien claimants, they should be made parties defendant to the foreclosure suit. A lien claimant who is made a defendant in such suit is, of course, bound by any decree rendered therein.82 And, conversely, if he is not made a defendant, he is not so bound.83 But the mortgagee need not include among the defendants in his foreclosure suit a material man who has so failed to comply with the provisions of the mechanic's lien law as to lose his right to a lien, nor one whose lien did not attach until after the suit was begun.85 Where suit is brought to foreclose the lien, mortgagees are proper parties defendant. If not made parties, they are not bound by the decree,se and a subsequent purchaser at a foreclosure sale under the mortgage takes title in such case superior to that acquired through the foreclosure of the lien.87 mortgagee may voluntarily come into the suit, and defend against the lien.88 But a subsequent mortgagee has no absolute right to intervene in a process to enforce a mechanic's lien; and it is proper for the court to refuse his application if he delays it until the me chanic is about to have judgment, and the effect of the intervention 80 Fitch v. Stallings, 38 Pac. 393, 5 Colo. App. 106. 81 Van Loan v. Heffner, 30 La. Ann. 1213. Ꭺ 82 Grosbeck v. Ferguson, 43 Iowa, 532. But, if the lien is superior to the mortgage, such lien is not affected by a decree foreclosing the mortgage, even though the lien claimant is a party defendant, if the complaint does not ask to have his account ascertained and paid out of the proceeds of the sale, and the decree contains no provision to that effect. Emigrant Industrial Sav. Bank v. Goldman, 75 N. Y. 127. 83 Paine v. Bonney, 4 E. D. Smith (N. Y.) 734. 84 Eaton v. Bender, 1 Neb. 426. Hards v. Insurance Co., Fed. Cas. No. 6,055, 8 Biss. 234. 86 Williams v. Chapman, 17 Ill. 423; Hokanson v. Gunderson, 56 N. W. 172, 54 Minn. 499; Russell v. Grant, 26 S. W. 958, 122 Mo. 161. See post, § 532. 87 Lomax v. Dore, 45 Ill. 379. 88 McAdam v. Bailey, 1 Phila. (Pa.) 297. MECH.LIENS-21 (321) 89 would be to postpone the judgment. And it has been held that, under a statute giving a special proceeding to enforce mechanics' liens to be had in a court of inferior jurisdiction, mortgagees have no right to intervene, and are not bound by the decree.9o § 329. Where a mortgage does not provide for repairs to be made by the mortgagee, the right to a lien, if any exists, for such repairs, must rest on the mechanic's lien statute; and such lien cannot be sustained on a bill to foreclose the mortgage which does not aver the facts on which the lien could be predicated under the statute."1 Upon foreclosure of a mortgage in a court which has no jurisdiction to enforce mechanics' liens, it is proper to order the property sold, and the proceeds held until the mechanics' liens on the property can be adjudicated.92 But, where the court has jurisdiction, it will usually determine the rights of all the parties, and divide the proceeds of the sale between the various claimants, whether mortgagees or mechanics, according to their respective rights.93 If the mortgage is a first lien on the land and a second lien on the building, the master, in a suit to foreclose the mortgage, should ascertain the value of the land and building, and also the value of the land without the building." In Louisiana, a party holding the builder's priv ilege, duly recorded, does not lose the benefit of such privilege when the property has been subsequently mortgaged, and, after the death of the privilege and mortgage debtor, has been sold without a separate appraisement of the land and building before the sale. Such appraisement may be made after the sale, and the privilege creditor is entitled to be paid out of such sale in preference to the mortgage creditor.95 89 Hocker v. Kelley, 14 Cal. 164. 92 Livingston v. Mildrum, 19 N. Y. 440. 93 Whitehead's Ex'rs v. Protestant Church, 15 N. J. Eq. 135; Bradley v. Simpson, 93 Ill. 93; German Bank v. Schloth, 13 N. W. 314, 59 Iowa, 316; Curtis v. Broadwell, 24 N. W. 265, 66 Iowa, 662; Lacoste v. West, 19 La. Ann. 446. 94 Whitehead's Ex'rs v. Protestant Church, 15 N. J. Eq. 135. 9 Lenel's Succession, 34 La. Ann. 868. (322) Foreclosure by Sale. § 330. Where the holder of a mortgage on improved property subject to a mechanic's lien, which is superior to the mortgage so far as the building is concerned, sells the property, equity will treat the proceeds of the building in his hands as subject to the lien." In a case in New York it appeared that the owner of lots upon which was a building-loan mortgage deeded them to another, under an agreement whereby the latter promised to erect buildings thereon, and to give a mortgage to secure payment of the consideration, and the grantor promised to advance the balance due on the buildingloan mortgage. The grantor was on the property after the deed was made; and, after the grantee had contracted with plaintiff to do part of the work in erecting the buildings, the grantor took a deed back from the grantee through a third person, on default in the payment of the mortgage given to him by the grantee, and in consideration of the release by the grantor of a note given as liquidated damages. It was held on these facts that the transaction was valid, and did not show fraud as to mechanics and material men.97 Where a material man's lien for improvements on mortgaged premises is superior to that of a prior mortgage, such lien is not divested by a foreclosure of the mortgage under the power of sale therein.98 Redemption. § 331. After a mortgage has been foreclosed, the question whether a lien holder can redeem from the foreclosure sale depends on the statutes governing redemptions. In Iowa the statute declares that a mechanic's lien before judgment thereon does not give a right to redeem from prior incumbrances." The judgment that gives a right of redemption under this statute must be a judgment establishing a lien on the land, and not a mere money judgment on the lien debt.100 96 Gaty v. Casey, 15 Ill. 189. 97 Altieri v. Lyon (Super. N. Y.) 13 N. Y. Supp. 617. 98 Laird-Norton Co. v. Herker (S. D.) 62 N. W. 104. 99 Spink v. McCall, 3 N. W. 471, 52 Iowa, 432; Shepardson v. Johnson, 14 N. W. 302, 60 Iowa, 239. 100 Spink v. McCall, 3 N. W. 471, 52 Iowa, 432. Even where a lienholder has the right to redeem from prior incum- Marshaling Assets. 33 332. Where a mortgage covers two lots, and there is a subsequent mechanic's lien on one of them, the court may direct the other lot to be first applied in satisfaction of the mortgage.10 In a case in Minnesota it appeared that the owner of a farm containing 92 acres had created a mechanic's lien on the property, and then mortgaged it. The state statute entitled him to a homestead to the extent of S80 acres. The lien was foreclosed in a suit to which the mortgagee was not a party, and was established on 40 acres of the land, leaving only 52 acres for the homestead. The homestead estate was superior to the mechanic's lien, but inferior to the mortgage. Afterwards the mortgage was foreclosed, and it was held that a purchaser of the land on such foreclosure could insist that 80 acres be exempted from the lien, since the mortgagee was not bound by the lien foreclosure, and the purchaser succeeded to all the rights of the mortgagor.105 The holder of a judgment on a lien claim upon a building erected on premises covered by a mortgage is not entitled to the benefit of a release, made after the commencement of the building, of other land embraced in the mortgage, unless the mortgagee knew of the claim when he executed the release, and acted in bad faith.1 106 101 Card v. Bank, 23 Conn. 353. 102 Goodman v. White, 26 Conn. 317. 103 Spink v. McCall, 3 N. W. 471, 52 Iowa, 432. 105 Talbot v. Barager, 34 N. W. 23, 37 Minn. 208. 106 Ward's Ex'rs v. Hague, 25 N. J. Eq. 397. His knowledge that a building was in progress on the land is not sufficient. Id. Consent of Mortgagee. § 333. Under a statute defining the word "owner" as extending to and including a person having "any estate or interest, legal or equitable, in the lands upon or in respect of which the work is done, at whose request and upon whose credit or on whose behalf or with whose privity or consent or for whose direct benefit any such work is done," a prior mortgagee who has had nothing to do with the contract under which the work was done is not an owner.10' So, a lien for labor performed or materials furnished in the erection of a building does not take precedence of a mortgage, otherwise valid, and recorded before the labor or materials were contracted for, the mortgagee not being the party by virtue of a contract with whom, or by whose consent, the services were rendered or the materials were supplied; and written notice to prevent the lien is not required where the labor or materials were furnished without the mortgagee's knowledge.10 In a case in California there was a contract for specified work, and such extra work at a certain rate of price as the owner might direct. The owner then mortgaged, and afterwards. extra work was done with the knowledge of the mortgagee, and without objection from him. On these facts, it was held that, through the acquiescence of the mortgagee, the mechanic acquired a lien for the extra work, superior to the lien of the mortgage.108 But, where the statute expressly makes the lien of a prior recorded mortgage paramount to a mechanic's lien, a provision of the statute requiring the owner or person claiming an interest in the land to give notice that he will not be responsible for the cost of the improvement does not apply to such mortgagee.110 Where a deed absolute on its face is given as a mortgage, the land is subject to mechanics' liens for improvements made by direction of the mortgagee.111 107 Bank of Montreal v. Haffner, 29 Grant (U. C.) 319, affirmed in 10 Ont. App. 596. 108 Morse v. Dole, 73 Me. 351. Otherwise as to work done and materials furnished after the record of the mortgage, but under a legal contract, then in force, with the mortgagor in possession. 109 Soule v. Dawes, 14 Cal. 247. Id. 110 Williams v. Mining Ass'n, 5 Pac. 85, 66 Cal. 193. 111 Price v. Merritt, 55 Mo. App. 640. |