Claude A. Hinton, Jr., Inc. v. Institutional Investors Trust, 49597

• Citation: 133 Ga.App. 364,211 S.E.2d 169
• Decision Date: 31 October 1974
• Docket Number: No. 49597,No. 2,49597,2
• Parties: CLAUDE A. HINTON, JR., INC., et al. v. INSTITUTIONAL INVESTORS TRUST
• Court: United States Court of Appeals (Georgia)

Page 169

211 S.E.2d 169

133 Ga.App. 364

CLAUDE A. HINTON, JR., INC., et al. v. INSTITUTIONAL INVESTORS TRUST.

No. 49597.

Court of Appeals of Georgia, Division No. 2.

Oct. 31, 1974.

Rehearing Denied Nov. 21, 1974.

Syllabus by the Court

1. Where the plaintiff contractor sued the owner of premises and the lender jointly, seeking to establish its lien priority over the deed to secure debt given by the owner to the lender as security on a promissory note the proceeds of which were to be used in the construction, a cross bill filed by the lender against the co-defendant owner for the indebtedness represented by the note was properly allowed.

2. There was no error in including a sum representing 10% of the amount of indebtedness on the note as reasonable attorney fees.

3. The evidence supports the award of interest in the amount entered in the judgment.

B.L.I. Construction Company filed an action against Claude A. Hinton, Jr., Inc. and Hinton individually seeking a balance due on a contract for the erection of an apartment complex. It joined as defendant Institutional Investors Trust, the construction lender and grantee in the deed to secure debt, seeking to establish its construction lien as superior to the lender's title. By amendment a conspiracy count and other defendants were added. The Trust filed a counterclaim against the plaintiffs seeking declaratory judgment to establish its deed and rent assignments as liens superior to those of the plaintiff, and also a declaration of right to proceed with the sale of the project under power contained in the deed. It also filed a conterclaim against Hinton and the Hinton corporation, one count of which prayed for recovery of $2,580,000, the balance due on the promissory note secured by the Trust's deed to secure debt on the property, together with attorney fees. The trial court granted summary judgment as to this count, and the counterclaim defendants appeal.

Hatcher, Meyerson, Oxford & Irvin, Henry M. Hatcher, Jr., Atlanta, for appellants.

Smith, Cohen, Ringel, Kohler, Martin & Lowe, Robert W. Beynart, Atlanta, for appellee.

DEEN, Judge.

1. Federal Civil Practice Rule 13(g) from which our CPA (Code Ann. § 81A-116(g)) was cloned has been held generally remedial in character, intended to promote an expeditious and economical adjudication in a single action of the entire subject matter arising from a given set of facts. Providential Development Co. v. United States Steel Co., 10 Cir., 236 F.2d 277. It should be given a liberal construction (E. J. Korvette Co. v. Parker Pen Co., 17 F.R.D. 267) in determining whether it 'aris(es) out of the same transaction or occurrence' as the original claim. Danner v. Anskis, 3 Cir., 256 F.2d 123. Specifically, the amendment to subdivision (g) allowing cross claims to be filed where 'relating to any property that is the subject matter of the original action,' was intended to broaden the sphere of such permitted pleadings. The Notes of Advisory Committee on Amendments to Rules (Rule 13, 28 U.S.C.A., note) state that this amendment was intended for situations 'such as where a second mortgagee is made defendant in a foreclosure proceeding and wishes . . . to secure a personal judgment for the indebtedness and foreclose his lien. A claim of this sort by the second mortgagee may not necessarily arise out of the transaction or occurrence that is the subject matter of the original action.' The general purpose is to afford a means of determining the entire controversy with a minimum of procedural steps. Lumbermens Mut. Cas. Co. of Ill. v. Timms & Howard, 2 Cir., 108 F.2d 497.

The plaintiff contractor seeks to have its lien declared superior to the deed to secure debt to the premises. This deed from the owner to the lender is security for a promissory note representing the construction loan, and antedating the construction contract. Evidence establishing the note, the deed to secure debt, the loan, and the dates and purposes of the transaction will doubtless be the same. The same property is involved, and the instruments represent a single transaction. Under these circumstances there was no error in allowing the defendant lender to cross claim against the defendant owner for the amount due on the note, although the plaintiff does not deny the owner's indebtedness to the lender but only seeks to obtain priority over the security instrument by which it is supported.

The debt itself is not denied by anyone. Under these circumstances it was not...