Campaign Starts to Amend Lien Law Toward Justice for Materialmen

At the recent meeting of the Mill Institute of California the subject was broached of beginning a campaign to amend the California Lien Law in order to secure justice for the materialmen.

This movement, as explained by Atty. Morgan J. Doyle at that meeting, aims to so amend the present lien law as to give liens of materialmen and sub-contractors precedence over first mortgages and deeds of trust.

This proposition was heartily and unanimously indorsed by the Millwork Institute, and the assistance and cooperation of ev;gry materialman in the state is now being sought in the campaign already started for securing the desired amendment.

The campaign is already under way. The millwork men are getting in behind the measure strong. For the purpose of conducting this particular effort, there has been created the Construction Industries Legislative work of this Bureau at this time will Other matters of like character may be

Bureau. The sole be this legislation. handled by the Bureau later.

Morgan J. Doyle, famous attorney of San Francisco, is Legislative Counsel. H. T- Didesch, of Los Angelqs, is Organizing Director.'Mr. Didesch's office at 6715 Hollywood Boulevard, is the Bureau headquarters.

The aim and purpose of the Bureau is to correct the in. justices, abuses, and frauds which have been and are every day being perpetrated upon materialmen and sub-contractors by the crooked contractor, the "shoestring" operator, and the "slicki' loan company, and to do that thing by amending the Lien Law to make the liens of materialmen and sub-contractors take precedence over first mortgages and deeds of trust. The men who have the work in hand believe that it CAN be done. They feel that they will have the support of the good loan companies, of the building mechanics generally, of the building materialmen as a whole, and upon everyone else interested in fair and square building methods. The public will be greatly benefited. They feel that with coordinated effort this amendment can be secured.

To bring about the required changes in the Lien Law will require minor amendments in File 4 Chapter 2, and considerable change in Section 1186 of the Code of Civil Procedure.

The change asked for will be this: all mortgages or deeds of trust recorded less than 6O days preceding date the building improvements or structure was commenced or materials commenced to be furnished, shall give precedence to Materialmen's Liens; when mortgages or deeds of trust are recorded more than 6O days before commencing of work or delivery of materials, the owner must be notified that material shall take precedence over his mortgage of deed, and must accept such conditions.

Put that into the Lien Law, and many of the worst troubles of the building materialmen are over. If the owner whose mortgage is on file more than 6O days refuses to' accept the precedence of the Materialmen's Lien, he doesn't get the material. When the mortgage is filed less than 6O days in advance, no notice is necessary, the precedence of the Lien being automatic.

At the present time there is no way to force the contractor to pay for the materials. With this proposed amendment in efiect the loan company would be at no disadvantage, but would have to make certain that the builder pays for the labor and materials going into the job, and thus force the use of the money loaned for actu.al purpose for while it was loaned.

The following is a case, cited in a circular just issued_by the Construction Industries Legislative Bureau, showing how the materialman gets it in the neck every day, this being one of the abuses they seek to remove:

A owns a lot worth $5000.00. B desires to build on this lot for speculation. He does not wish to invest any of his own money in his own venture-or perhaps _he-_ las n9 money. He may be what we call a shoestring builder. B buys the lot from A, but being either unable or unwilling to pay for the lot in cash, he agrees to give A $6500.00 for it.

He pays A with a note for $6500 secured by a second deed of trust on the lot. B then arranges with a loan company to loag $10,m0.0O for the construction of a building upon the lot and gives the loan company his note for $1O,000.00 and a first deed of trust as security for the loan. After deducting brokerag-e, insurance, advance interest and other loan company chirges there will be then perhaps $8500.009f this loan-remaining available to B for construction of the building. Construction is started. Cement, lumber, millwork, roofing, glass, stucco, tile, plaster, brick, stone, electrical supplies, paint, paper, hardware, plumbing and other materials are furnished or installed by various concerns. Suppose you furnished the electrical supplies at an agreed prile of $500.0O; B neglects to pay you. You file a lien. Ahead of your lien is a first deed of trust for $10,00O.00 and a second of $650O.0O, or a total of $16,500.00. The lot is worth $5000.00 and the house not to exceed $85@.0O, making the property worth not to exceed $13,500.00, while it is encumbered for $16,500.00. Your lien is absolutely worthless, due to the fact that it is subservient to the first and second deeds of trust. You have put your good material and labor into the job-the loan company, or Mr. A, gets the benefit of your labor and materials, but you cannot collect a dime. Of course that is inequitable and unjust, but that is the law today.

:The support of every materialman in California is urgently solicited by the new Bureau.