This cause was certified to this court by the court of appeals of Cuyahoga county because its decision was in conflict with the judgment pronounced upon the same question by the court of appeals of Fairfield county in the case of The West Side Lumber & Mfg. Co. v. The Lancaster Paper Mill Co. et al., reported in 5 Ohio App., 253.
The Crobaugh Mortgage.
The Crobaugh mortgage was filed for record on the 8th day of March, 1917. It is not claimed that this was a construction mortgage. Smith, one of the leading claimants, began work on the building on January 8, 1917. The- Cuyahoga Builders’ Supply Company furnished materials on the 22d of February, 1917. The other lien claimants began work or furnished materials after the date of the filing of the Crobaugh mortgage. Counsel repre
“Sec. 8321. §12. The several liens herein provided for shall be liens from the date the first labor was performed, or the first machinery, materials, or fuel, was furnished by the contractor under the original contract, and shall continue for six years after said affidavit is filed in the office of the county recorder. If the action be brought to enforce such lien within that time, it shall continue in force until final adjudication thereof, and such liens shall take priority as follows:
“First. If several liens be obtained by several persons upon the same job, in the manner herein-before prescribed, they shall have no priority among themselves, except that liens filed by persons performing manual labor shall have priority to the extent of the labor performed during the thirty days immediately preceding the date of the performance of the last labor.
“Second. They shall be preferred to all other titles, liens or incumbrances, which may attach to or upon such construction, excavation, machinery, or improvement, or to, or upon the land upon which they are situated, which shall either be given orPage 93recorded subsequent to the commencement of said construction, excavation, or improvement.”
The second paragraph of the section quoted is unambiguous. It provides in plain terms that the several liens obtained by several persons upon the same job shall be preferred to any lien or incumbrance given or recorded subsequent to the commencement of the construction or improvement. This particular provision of the lien law was enacted by the legislature in April 1913 (103 O. L., 376). Similar provisions, containing almost identical language, had theretofore been adopted by various states, and these have been construed as giving lienholders in the same situation as these priority over a mortgage executed after the actual commencement of the building. (Kay v. Towsley, 113 Mich., 281; Dubois’ Admr. v. Wilson’s Trustee, 21 Mo., 213; Kerr-Murray Mfg. Co. v. Kalamazoo Heat, L. & P. Co., 124 Mich., 111; J. Thomas & Co. v. Mowers, 27 Kans., 265, and Davis v. Bilsland, 85 U. S., 659.) The latter case involved the construction by the supreme court of the United States of a mechanics’ lien law of the. territory of Montana, and the law contained a provision very similar to the second paragraph of Section 8321, General Code. It appeared in that case that work was begun on the building on .May 1, 1869, and that the plaintiff lienor .was employed upon the building from July to November, 1869, while the defendant Davis received a mortgage as security on the property, which mortgage was filed for record on June 9, 1869. The court held that under the Montana law the mechanics’
However, defendants in error in this case contend that the obvious meaning of the second paragraph of the lien law under discussion applies only to a case where a general contractor has been given a contract for the entire job, and that this construction can be gleaned from the first sentence of Section 8321, General Code. We see nothing in that clause which can override the obvious language contained in the second .paragraph of the act. Manifestly the language contained in the first section of the act was intended to fix a date under which all the liens arising under original contracts become effective against the owner of the property. It does not attempt to determine priority between liens. The first and second paragraphs deal with priorities and preferences, and the latter paragraph of the act gives preference to the several liens upon the same job over an encumbrance recorded subsequent to the commencement of the construction.
While Section 8542, General Code, giving
If it had been reasonably apparent to the mortgagee when his mortgage was filed for record that the construction was not actually and palpably commenced, the mortgagee would have been in a better situation to make the contention he now does, but the facts are otherwise. The agreed statement of facts discloses that Smith had begun his work and The Cuyahoga Builders’ Supply Company had furnished materials prior to the filing of the Crobaugh mortgage for record.
We all agree that when the mortgage has been filed for record by the mortgagee it is equivalent to record within the meaning of the second paragraph of Section 8321, General Code. The mortgagee has thereby done everything that he possibly can do, and the delay or neglect of the recorder in performing his ministerial duty will not have the effect of postponing his lien to the time of its actual recording.
The Cuyahoga Savings & Loan Company Mortgage.
This mortgage was executed and placed on record January 4, 1917, before any work was begun or materials furnished. It was given for the purpose of constructing a building upon the premises, and thé proceeds thereof were substantially paid
“Sec. 8321-1. Except as hereinafter provided in this section, the lien of a mortgage given inPage 97whole or in part to improve real estate, or to pay off prior encumbrances thereon, or both, the proceeds of which are actually used in such improvement in the manner contemplated in sections 8310 and 8311 of the General Code, or to pay off prior encumbrances or both, and which mortgage contains therein the correct name and address of said mortgagee, together with a covenant between the mortgagor and mortgagee authorizing and empowering the mortgagee to do all things in this act provided by said mortgagee to be done,- shall be prior to all mechanic’s, material-men’s and similar liens and all liens provided for in this chapter that are filed for-record after said improvement mortgage is filed for record, to the .extent that the proceeds thereof are used and applied for the purposes aforesaid and pursuant to the provisions of this section, and such mortgage shall be a lien on the premises therein described from the time it is filed for record for the full amount that is ultimately and actually paid out under said mortgage, regardless of the time when the money secured thereby is advanced.”- ,
The act then provides that laborers and material-men' may serve notice on the mortgagee showing the kind and nature of the labor performed or to be performed, or of the material, etc., furnished or to be furnished. It is further provided by the act that the mortgagee shall not be required to pay out any of the mortgage fund for fifteen days after filing his mortgage, and that at the end of that period he may refuse to go forward with the loan or to pay out the fund, or if he elects to complete
The question to be determined here is whether this section of the mechanics’ lien law applies to a mortgage given and filed before work was begun or material furnished, although the same was given for the avowed purpose of improving real estate, or applies only to construction mortgages given and filed after the work has commenced on the improvement.
Counsel for plaintiff in error concede that there is a lack of clarity in the act, and in this we agree. An inspection of the entire act, however, would clearly indicate that the legislative intention was to apply its force only to mortgages which were given and filed for the purpose of improving real estate, after the actual commencement of operations. There was a genuine necessity, in the field of building construction, for the passage of Section 8321-1, General Code. In April 1913, as noted in this opinion in relation to the Crobaugh
Under the provisions of Section 8542, General Code, mortgage liens take effect from the time they are filed. That section is not expressly repealed by Section 8321-1, General Code, and it is not clearly apparent that the legislature intended to . repeal it by implication.
We are, therefore, of the opinion that Section 8321-1, General Code, applies only to construction mortgages given and filed after the commencement of the improvement, and that this savings and loan mortgage, having been recorded before any work was begun or material furnished, takes priority over all the other liens.
The judgment .of the court of appeals is modified and the case remanded to that court for distribution of the fund in accordance with this opinion.
Judgment modified.