Citizens' Nat. Bank v. Strauss

• Decision Date: 14 May 1902
• Citation: 69 S.W. 86
• Parties: CITIZENS' NAT. BANK OF WACO v. STRAUSS.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

69 S.W. 86

CITIZENS' NAT. BANK OF WACO v. STRAUSS.¹

Court of Civil Appeals of Texas.

May 14, 1902.

Appeal from district court, McLennan county; Marshall Surratt, Judge.

Suit by Ed. Strauss against the Pacific Hotel Company and the Citizens' National Bank of Waco. From a judgment for plaintiff, the bank appeals. Reversed in part and affirmed in part.

Clark & Bolinger, for appellant. Boynton & Boynton, for appellee.

FISHER, C. J.

This is an action by appellee against the Pacific Hotel Company and the Citizens' National Bank of Waco.

The plaintiff in his petition alleged that about the 1st day of February, 1899, he entered into a contract with the Pacific Hotel Company, the owner of a four-story building and the lots upon which it was situated in the city of Waco, to cover the building with a new roof; the old roof being defective, and by reason of leaks, the walls and interior of the building were being injured. That in pursuance of the contract he constructed the roof as agreed upon, and that by reason thereof the hotel company became liable to the plaintiff in the sum of $600, evidenced by two promissory notes, each of which drew interest at 8 per cent. per annum and provided for 10 per cent. attorney's fees. It was alleged that the plaintiff fixed his material man's and contractor's lien on the building and lots described in the petition in the manner required by law. It is also averred that, at the time of entering into this contract and before, one Francis Smith had a mortgage on the building and lots upon which it was situated. On the 8th day of June, 1899, in cause No. 8,562, the Provident National Bank of Waco filed suit against the hotel company, and at its instance a receiver was appointed. That on the mortgage previously executed to Francis Smith he obtained judgment on June 17, 1899, against the hotel company for the sum of $39,752.50, with interest thereon from the 17th day of June, 1899, at the rate of 10 per cent., with a foreclosure of said mortgage lien on the building and lots; that said Francis Smith set up his judgment of foreclosure and intervened in said receivership, and subsequently, under order of the court, said mortgage lien was foreclosed, and the real estate in controversy was sold under the receivership proceedings, and purchased by said mortgagee, Smith, and was subsequently transferred to the Citizens' National Bank of Waco; and that the plaintiff was not a party to said foreclosure suit, nor to the controversy involving the receivership, and that the bank purchased with full notice of the plaintiff's mechanic's lien. That the real estate prior to the making of the improvements by the plaintiff was really worth the sum of $40,000, and with the improvements added was worth the sum of $40,600. That the improvements so added were permanent, and could not be removed from the building without injuring and impairing its value.

The Citizens' National Bank in its answer alleged that on the 6th day of November, 1894, the Pacific Hotel Company mortgaged all of the property in controversy to secure Francis Smith in a debt due him of $40,260, and that this mortgage was recorded on the 14th day of November, 1894, and that on the 17th of June, 1899, said mortgage was duly foreclosed in the district court of the Forty-Fifth judicial district of the state of Texas, holding court in Bexar county, for the sum of $39,752.59, with 10 per cent. interest thereon from the date of said judgment and $29.75 costs of court; that an abstract of said judgment was duly filed for record in the office of the county clerk of McLennan county on the 27th day of June, 1899, and was duly recorded as required by law. It also alleged that in a suit pending, numbered 8,562, the Provident National Bank against the Pacific Hotel Company et al., one John K. Rose was appointed by the court as receiver of the property of the Pacific Hotel Company, including the property described in the plaintiff's petition, and that on the 5th day of March, 1900, judgment and decree was duly entered in cause No. 8,562 upon the intervention of Francis Smith on his judgment as aforesaid, wherein it was ordered, adjudged, and decreed by the court that the property described in plaintiff's petition should be sold, and the proceeds applied upon the indebtedness of Francis Smith in payment and satisfaction of his judgment. The sale was duly made in pursuance of this decree, at which sale Francis Smith became the purchaser. The sale was confirmed by the court and deed properly executed, and thereafter Francis Smith sold to the appellant, the Citizens' National Bank. It is also averred that neither Francis Smith, the mortgagee, nor the appellant bank, assented to the improvements placed by the plaintiff upon the building.

On the trial of the case in the court below judgment was rendered in favor of Strauss against the Pacific Hotel Company for the sum of $807.49, with 8 per cent. interest thereon from the date of the judgment. It was also decreed that the plaintiff's mechanic's lien was a prior lien upon the improvements to the mortgage in favor of Francis Smith, but was subordinate to that mortgage lien as to all of the land and the building thereon save and except as to the roof upon the building. The judgment established the value of the entire property, exclusive of the roof, at $40,000, and with the roof added at $40,600; that the appellant, the Citizens' National Bank, holds title to the property subject to the plaintiff's prior lien as to said improvements; that it was not possible to separate the improvements from the remainder of the property, so as to sell the same separately; and thereupon proceeds to decree and foreclose the lien in favor of the plaintiff for the sum of $600, and that the plaintiff have an order of sale to sell the property to satisfy his lien, and, in case of sale under the judgment, the proceeds to be divided between the appellant bank and the plaintiff in the proportion of $40,000 to the bank and $600 to the plaintiff. The plaintiff recovered judgment against the bank for part of the costs incurred.

The findings of fact and conclusions of law of the trial court are as follows: "(1) That on and long prior to the 1st day of February, 1899, to wit, on and before 1894, the Pacific Hotel Company, a private corporation, was owner of a tract of land in the city of Waco, McLennan county, Texas, located at the north corner of the intersection of Fourth and Franklin streets, described as follows: A part of lots 8 and 9 in block 7, as shown on the map of Waco, beginning at the south corner of lot 8, which is the point of intersection of the northeast line of Fourth street with the northwest line of Franklin street; thence N. 45 E. with the line of Franklin street 100 feet to the south corner of lot 10; thence N. 45 W. with the line between lots 9 and 10, 100 feet to the east corner of a 21-foot strip sold to Eagan; thence S. 45 W. with Eagan's south line 100 feet to Fourth street; thence along Fourth street 100 feet to the point of beginning. And there was located on said land, prior to 1894, a four-story brick building, the first floor of which was used for various purposes and the other stories for the hotel. (2) That in 1894 said hotel company became...