Bruce Const. Corp. v. Federal Realty Corp.

• Decision Date: 25 January 1932
• Citation: 139 So. 209,104 Fla. 93
• Court: Florida Supreme Court
• Parties: BRUCE CONST. CORPORATION v. FEDERAL REALTY CORPORATION et al.

139 So. 209

104 Fla. 93

BRUCE CONST. CORPORATION v. FEDERAL REALTY CORPORATION et al.

Florida Supreme Court

January 25, 1932

Commissioners' Decision.

Suit by the Bruce Construction Corporation against the Federal Realty Corporation and others. From an adverse decree, complainant appeals.

Reversed. Appeal from Circuit Court, Dade County; A. J Rose, Judge.

COUNSEL

Loftin Stokes & Calkins, of Miami, for appellant.

S. J Barco and Benson, McGarry & Sullivan, all of Miami, for appellees.

OPINION

ANDREWS C.

This cause is here upon appeal from a final decree of the circuit court of Dade county, dismissing the cause, which had for its purpose the enforcement of a lien for labor and material furnished by the Bruce Construction Company (appellant here) in the sum of $31,545.11, and the only question presented here is whether the trial court committed error in holding that the mortgage of $80,560 held by appellee L. M. Adams was prior in dignity to the lien held by complainant.

The bill of complaint in substance alleges that on September 12, 1925, it entered into a contract with the Federal Realty Corporation, the owner of the premises, for the construction of a building on its described lot in Miami at a cost of about $82,000; that between September 12, 1925, and May 18, 1926, the owner had paid $42,409.77, leaving at the time a balance of $51,545.36 due complainant; that on May 18, 1926, complainant caused to be recorded a notice of lien for labor and material furnished in the lastnamed amount; that on May 20, 1926, the owner of the premises executed and delivered to L. M. Adams, a mortgage covering this and two other pieces of property to secure the sum of $80,560, and that on the same date (May 20, 1926) the owner paid $20,000 to complainant, leaving $31,545.36, with interest thereon, still due complainant; that at the time the mortgage was made Adams had actual and constructive notice of complainant's lien, and by reason thereof the said mortgage became subject and inferior to complainant's statutory lien, and complainant prayed that a final decree be entered foreclosing said lien and fixing the priority of complainant's lien with costs, attorneys' fees, etc.

Defendant Adams filed his plea wherein he admits having had notice of the existence of complainant's lien, and alleges in substance that before accepting the mortgage complainant on May 20, 1926, executed a release of its statutory lien and therein specifically agreed to look to the owner for payment of its claim until such time as it should file a new lien, and that he required such release from said lien before making the loan and relied thereon; that thereafter, on July 22, 1926, complainant filed said lien for $31,545.11, which was inferior in dignity to that of defendant Adams.

Appellee Adams contends that, the release of the first statutory lien having been made for the express purpose of giving priority to his mortgage, the release is a complete bar to the bill of complaint, in so far as it seeks to have complainant's lien adjudged prior in dignity to that of his mortgage.

A copy of the release attached to said plea provides in substance that, 'whereas the Federal Realty Company desires to borrow from the Bankers Bond and Mortgage Company about $20,000.00 to be paid to the Bruce Constitution Corporation,' and whereas, 'in consideration of the payment to it of the said $20,000.00, to waive and release its lien on the said building to enable the said owner to borrow enough money * * * for the completion of the building,' and further provides that

'Whereas it is the intention of the said Bruce Constitution Corporation in waiving its lien that it shall reserve to itself all rights it may have to file a lien at any time in the future to project itself against any payments that may be due it on the construction of the said building, that are due either now or shall become due at any time in the future, it being the purpose of the Bruce Construction Corporation in signing this release not to waive any rights it may have to file subsequent liens against the said building for either the amounts that may be due it now, or any amounts that may become due it at any other time as liens against the said building under the laws of the State of Florida while the construction work on the said building shall be prosecuted to completion.

'That the undersigned, Bruce Construction Corporation, a corporation under the laws of Florida, for and in consideration of the matters and things and sums of money mentioned aforesaid unto it moving, the receipt of all of which is hereby acknowledged, has released, and does by these presents release all its right, claim and demand of laborers, materialmens, mechanics or other statutory liens which it may have by reason of the Statutes of the State of Florida, or otherwise, for work done, materials furnished, or for any other reason on or about, or in any way connected with the lands and property mentioned herein.

'And until the said Bruce Construction Corporation does file its lien against the said building for any sums of money that may now be due it, or may be due it at any time in the future for any portion of the work on said building that may be unpaid for at its completion agrees to look to the owner of said premises for the payment of any claim or demand which it may have against said above described premises, or the improvements thereon.'

There are other provisions in the release, but they do not appear to qualify or vary the effect and purpose of those above quoted and noted. The instrument recites a valuable consideration of $20,000 to complainant, even though that is not the whole sum claimed in the lien to be due to complainant nor the amount borrowed. It is also noted that the first above quoted paragraph provides that it is the intention of complainant 'in waiving its lien that it shall reserve to itself all rights it may have to file a lien at any time to protect itself against any payments that may be due * * * either now or shall be due in the future,' and, by last quoted paragraph, that, 'until the said Bruce Construction Corporation does file its lien against said building for any sums of money that may now be due it, at any time in the future for any portion of the work on said building that may be unpaid for at its completion,' it agrees to look to the owner of said premises for the payment of any claim or demand which it may have against said premises. (Italics ours.)

It should be noted that the building appears to have been practically completed at the time of the release.

The main point to be determined is, What was the ultimate contract of the parties? It must be conceded that it is rather difficult to determine from the face of the release itself as to its true intent and meaning. Therefore it is under the rule susceptible of inquiry by means of testimony to arrive at a proper judicial interpretation of the release; likewise as to whether the trial court committed error in its order allowing the said plea of Adams to be filed.

The fact that the release in question names the Bankers' Bond & Mortgage Company as releasee would in some measure complicate the transaction in the absence of any explanation given by the representatives of said company. But it is shown that Mr. MacElhinny at the time of the release directed attention of Mr. Bruce to the fact that the name of L. M Adams should have been designated as the releasee, as he was the one lending the money to the Federal Realty Corporation, and that seems to have been...