VARNER v. NEW HAMPSHIRE SAV. BANK , 240 U.S. 617 (1916)

Messrs. Chester I. Long, J. A. Brubacher, George Gardner, and A. M. Cowan for appellants.

[240 U.S. 617, 619]   Messrs. Kos Harris, Samuel C. Eastman, V. Harris, R. L. Holmes, C. G. Yankey, and W. E. Holmes for appellees.

Mr. Justice McReynolds delivered the opinion of the court:

This is a contest for priority between creditors of a bankrupt. Appellees claim under mortgages upon certain real estate in Wichita, alleged to have been recorded before building operations on the property were commenced. Appellants maintain construction began prior to recordation, and that they are secured by preferred mechanics' liens created by the Kansas statute. Disagreeing with the district court, but in accord with the referee's opinion, the circuit court of appeals (132 C. C. A. 631, 216 Fed. 721) held that no 'such work as amounted to the commencement of the building within the meaning of the Kansas statute' was performed prior to the time when the mortgages were placed on record, and 'that what was done was but a mere pretense at the commencement of a building, done to defeat bona fide prior liens.' And it accordingly adjudged the mortgage creditors entitled to priority.

The essential question presented is one of fact; and there is sharp dispute in the testimony. Substantial difficulties are disclosed, but, after considering the evidence, we think it sustains the conclusions reached by the Circuit Court of Appeals; and the judgment entered there is accordingly affirmed.