Bond v. Westine

• Decision Date: 08 June 1929
• Docket Number: 28,707
• Citation: 278 P. 12,128 Kan. 370
• Parties: BEN C. BOND, Receiver of the AMERICAN BUILDING AND LOAN ASSOCIATION OF TOPEKA, Appellant, v. A. P. WESTINE et al., Appellees
• Court: Kansas Supreme Court

278 P. 12

128 Kan. 370

BEN C. BOND, Receiver of the AMERICAN BUILDING AND LOAN ASSOCIATION OF TOPEKA, Appellant, v. A. P. WESTINE et al., Appellees

No. 28,707

Supreme Court of Kansas

June 8, 1929

Decided January, 1929.

Appeal from Shawnee district court, division No. 1; GEORGE A. KLINE judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. LIENS--Priorities--Evidence. In an action by the receiver of a building and loan association to determine priority of liens, the evidence considered and held sufficient to support the findings and judgment of the trial court.

2. MECHANICS' LIENS -- Sufficiency of Ownership -- Possession Under Verbal Agreement to Convey. A person in possession of real estate under a verbal agreement to convey the fee-simple title to him is an owner thereof within the meaning of our statute relating to materialmen's liens, and may subject his interest therein to such a lien. (Following Drug Co. v. Brown, 46 Kan. 543, 26 P. 1019.)

3. SAME--Priorities--Purchase Price--Mortgage. Under the facts stated in the opinion, where a purchaser of land practically simultaneously with execution of the deed to him, executed a mortgage to secure borrowed money, a part of which was used to pay for the land, held, that as to such part, the lien of the mortgage was prior and superior to mechanics' or materialmen's liens for improvements begun after the execution but before the recording of such instruments.

J. J. Schenck and C. P. Schenck, both of Topeka, for the appellant.

W. Glenn Hamilton, B. J. Lempeneau, Barton E. Griffith, Lester M. Goodell and Paul H. Edgar, all of Topeka, for the appellees.

OPINION

HOPKINS, J.:

This controversy involves the question of priority of a mortgage over certain mechanics' or materialmen's liens. The mortgagee prevailed in part only and appeals.

The facts are substantially these: The United Investment Company, owner of the property in controversy, executed a deed to A. P. Westine dated August 20, 1926. Either on the same day, or the following day, Westine and wife executed a mortgage to the American Building and Loan Association for $ 5,000 on the same property. The instruments were recorded August 25 following; the deed at 3:05 o'clock and the mortgage at 3:25 o'clock p. m. This, with other property, was already encumbered by a $ 9,000 mortgage which was released September 26, 1926.

This action is to foreclose the $ 5,000 mortgage. The defendants answered setting up the mechanics' or materialmen's liens above mentioned.

A check dated August 25, 1926, for $ 1,000 of the $ 5,000 was executed by the loan association to the investment company to pay for the lots, there being no building thereon at the time of the execution of the mortgage by Westine and wife to the loan association. The balance of the $ 5,000 went into the construction of the building on the premises.

The court found the plaintiff entitled to a first lien for $ 1,000 on the theory that this amount was a part of a purchase-money mortgage on the property in question. Next, a lien in favor of certain defendants; third, a lien in favor of plaintiff for balance due on its mortgage of something over $ 4,000; and fourth, a lien in favor of the North American Life Insurance Company for $ 256.

The theory upon which the defendants claim priority over the lien of the plaintiff's mortgage (except the $ 1,000) is that the construction of the building was commenced prior to the recording of the mortgage, while the plaintiff contends that the execution of the deed from the investment company to Westine, the release of the $ 9,000 mortgage from the investment company to the plaintiff and the execution of the mortgage from Westine and wife for $ 5,000 to the loan association, constituted one transaction. It argues that the defendants had constructive notice at least of the $ 9,000 mortgage which was held by the association in full force until after it had secured a mortgage from Westine for the $ 5,000; that the $ 9,000 mortgage was released in order to make the $ 5,000 mortgage a first lien on the premises; that there was never an interval of time when Westine owned the property free and clear of encumbrances; never a time when he could have conveyed it so as to defeat the loan association's mortgage; never an interval of time when he had title sufficient to create liens prior to plaintiff's mortgage. Also, that the $ 5,000 mortgage was a purchase-money mortgage.

It appears that work on the house in question was begun at 9 o'clock the morning of August 24, 1926. As above noted the mortgage was delivered to the secretary of the loan...