§ 84. Subrogation.

Any person holding a lien for labor or materials furnished upon any premises subject to any prior recorded lien, incumbrance or mortgage may pay off any such prior lien, incumbrance or mortgage, and shall thereupon be subrogated to all the rights of the prior holder of such lien, incumbrance or mortgage.10 In case the property covered by the lien is held by the vendee in a land contract, and he surrenders or forfeits his rights thereunder, the person or persons holding such liens may be subrogated to the rights of such vendee, as his rights existed immediately before such surrender or forfeiture, by performing the covenants contained in such contract within thirty days after such forfeiture or surrender is made.11 Where the claims are all ascertained when the sale is ordered, the court at the same time may order distribution of the proceeds of the sale, after deducting all lawful charges and expenses, among the several creditors to the amount of their respective claims, if there is sufficient surplus; if there is not sufficient surplus, then it shall be divided and distributed among the creditors in proportion to the amount due each; but with the proviso that the original contractor shall be subrogated to the rights of his subcontractors, materialmen and laborers, who shall first be paid in full, and that the subcontractors shall be subrogated to the rights of their materialmen and laborers, who shall first be paid in full.12

12

1915 (14811), How. 2nd Ed. §13781, C. L. 1897 (10725). Under this section materialmen and laborers are first entitled to be paid in full, then subcontractors in full, then the contractor. 27 Cyc. 231. See §§37 and 40 as to pro rata distribution.

10. 89 of Act 179 of 1891 as amended by Act 199 of 1893, and Act 143 of 1897, C. L. 1915 (14804), How. 2nd Ed. §13774, C. L. 1897 (10718).

11. §3 of Act 179 of 1891, C.

L. 1915 (14798), How. 2nd E1. $13768, C. L. 1897 (10712). Where the defendant offers to subrogate the claimant to the rights of an alleged contract purchaser from defendants, the offer must be acted upon and accepted in order to confer upon claimant the rights involved. Fuller v. Detroit Loan & Building Ass'n, 119 Mich. 71 (74), 77 N. W. 642.

12. §16 of Act 179 of 1891, C. L. 1915 (14811), How. 2nd Ed. §13781, C. L. 1897 (10725).

CHAPTER XII.

PROCEEDINGS TO ENFORCE LIENS.*

§ 85. Time Within Which Proceedings to Enforce to Be Instituted, Perfected or Extended to Add New Parties.

86. Nature of Proceedings and Requirements of Bill, in General. 87. Prerequisites to Filing of Bill, in General.

88. Prerequisites to Filing Bill to Enforce, by Contractor.

89. Parties to Proceedings to Enforce.

90. Practice in Proceedings to Enforce, in General.

91. Practice in Proceedings to Enforce (Cont'd) Amendments. 92. Practice in Proceedings to Enforce (Cont'd) Evidence. 93. Defenses in Suits to Enforce Liens.

94. Appeals.

§ 85. Time Within Which Proceedings to Enforce to Be Instituted, Perfected or Extended to Add New Parties.

The proceedings for enforcement are statutory.' The several liens provided for by statute continue for one year after the claim, statement or account is filed in the office of the register of deeds, and no longer unless proceedings are begun to enforce the same. The action is in rem and must be in the jurisdiction of the location of the property,

*In general as to the subjects comprehended in Chapter XII, see Title "Mechanics' Liens," 34 Ćent. Dig. §§427-654, and 13 Dec. Dig. §§245-310.

1. §10 of Act 179 of 1891 as amended by Act 394 of 1913, C. L. 1915 (14805), How. 2nd Ed. §13775, C. L. 1897 (§10719), and subsequent sections of act. Relative to proceedings to enforce, in general, see: Jones on Liens, 3rd Ed. §§1553-1617; Rockel on Mechanics' Liens,

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S$196-302; Boisot on Mechanics' Liens, §§507-604, 605-704; Phillips on Mechanics' Liens, 3rd Ed. §§305, 336, 684-792; Overton on Liens, §§571-573; Wilkinson on Mechanics' Liens, pp. 70-81; 27 Cyc. 317 et seq.

2. 89 of Act 179 of 1891, as amended by Act 199 of 1893, and Act 143 of 1897, C. L. 1915 (14804), How. 2nd Ed. §13774, C. L. 1897 (10718); 27 Cyc. 218-220, 335-344. As to limitations upon enforcement of me

and where the claim of lien is filed. The suit is to be regarded as instituted when the bill is filed, and the time is computed from the date of filing the claim of lien with the register of deeds to the date of filing the bill to foreclose or cross bill. The lien terminates at the expiration of the statutory period, notwithstanding a bill was previously filed where it was fatally defective and prematurely filed in that the contractor did not, before filing, serve the owner with the requisite sworn statement required in section 4 of the lien law, though after the expiration of the year, where the original bill was filed in time, an answer in the nature of a cross bill may be amended to properly restate the facts constituting the cause of action set forth in the original answer though probably not to state a new and distinct cause of action; and although the year for bringing suit has expired, amendments have been permitted, to add new proper parties, and even after hearing, amendments have been permitted to add new parties as well as to add a verification to the bill, where the opposite party had appeared generally and demurred.10 Where a proper or necessary party defendant is added by amendment, only the newly added de

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chanics' liens, see: Boisot on Mechanics' Liens, §§13-14, 720-731; Phillips on Mechanics' Liens, 3rd Ed. §§266-271, 322-336; Houck Law of Liens, §§180-187; Overton on Liens, §576.

3. 27 Cyc. 318-320, 323; Prather Engineering Co. v. Detroit, Flint & Saginaw Ry., 152 Mich. 582 (585), 116 N. W. 376; Comstock v. McElroy, 52 Mich. 324, 17 N. W. 931.

4. Sheridan V. Cameron, 65 Mich. 680 (682), 32 N. W. 894; Casserly v. Wayne Circuit Judge, 124 Mich. 157 (161), 82 N. W. 841.

5. Hannah & Lay Co. v. Mosser, 105 Mich. 18 (27), 62 N. W. 1120. 6. Dittmer v. Bath, 117 Mich. 571, 76 N. W. 89.

Terra-Cotta Co., 113 Mich. 141, 71 N. W. 466.

8. A receiver of the owner was held proper to be added. Prather Engineering Co. v. Detroit etc., Railway, 152 Mich. 582 (585), 116 N. W. 376. A contractor was permitted to be added against objection of other parties: Casserly v. Wayne Circuit Judge, 124 Mich. 157 (161), 82 N. W. 841.

9. Principal contractor added on rehearing after appeal to Supreme Court. Godfrey Lumber Co. v. Kline, 167 Mich. 629 (630), 133 N. W. 528; 160 Mich. 565 (568), 125 N. W. 682.

10. Daschke V. Schellenberg, 125 Mich. 216, 84 N. W. 67; Prather Engineering Co. v. Detroit etc., Railway, 152 Mich. 582 (585), 116 N. W. 376.

fendant can successfully raise the objection that he was not made a party within the year."

§ 86. Nature of Proceedings and Requirements of Bill, in General.

Proceedings to enforce such lien are required to be by bill in chancery, under oath, and notice of lis pendens filed for record in the office of register of deeds, has the effect to continue such lien pending the proceedings.1

The bill should set up every substantial requisite and every fact essential to jurisdiction including the allegation that defendant was either owner, part owner or lessee of the land upon which the lien is sought to be enforced, or set out his other interest, therein or connection therewith.13 A bill not containing proper averments in this respect is unless cured by amendment fatally defective.

The bill need not negative exceptions to the liability of the owner contained in the statute following the provisions declaring the lien;1 to state generally the interests of other lien holders, or incumbrancers in the property, is sufficient; a bill to foreclose a lien, joining as a defendant the receiver of the debtor's estate must aver leave of court to sue the receiver. Where the bill states that notice of the claim of lien was properly given to the owner, it is not essential that the bill also aver demand for payment of the claim before the bill was filed.15 A bill will not lie to enforce a lien where the contract for a building provided that the work should be done to the satisfaction of the owner and not be paid for until satisfactory, where it appears that the owner's claim that the work was not completed to his satisfaction is not captious and has substantial basis,16 nor for extras furnished until after allowed in arbitration or by agreement, where the contract provided that until the value of extras has been fixed by arbitration or agreement, the same shall not be due.17 The bill should show that the defendant had some interest in the land at the time the materials were furnished; it is not sufficient to show defendant's ownership at the time the bill was filed, only.18 Formerly the circuit courts in chancery had no jurisdiction of bills to enforce mechanics liens for amounts of less than one hundred dollars; this limitation has, however, been removed by statute and a bill to enforce a lien for less than that amount will not be objectionable if otherwise proper. Where the

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14. Smalley v. Ashland BrownStone Co., 114 Mich. 105 (108109), 72 N. W. 29.

15. Steel Brick Siding Co. v. Muskegon Machine & Foundry Co., 98 Mich. 616 (619), 57 N. W. 817.

16. Boots V. Steinberg, 100 Mich. 134 (139), 58 N. W. 657.

17. The extras claimed cannot be called due, for they were to be submitted to arbitration, and no step has been taken to that end. The parties have seen fit to

20

make their contract, and it is not for us to make one for them. They have provided their own forum to determine the value of extras, and it is not for us to deprive either of the right to such forum. Boots v. Steinberg, 100 Mich. 135 (139), 58 N. W. 657.

18. Willard v. Magoon, 30 Mich. 273.

19. Dewey v. Duyer, 39 Mich. 509.

20. Act 129 of 1881; C. L. 1915