Davis Estate v. West Clayton Realty Co.

• Decision Date: 18 December 1935
• Docket Number: 33285
• Citation: 89 S.W.2d 22,338 Mo. 69
• Parties: Davis Estate, a Corporation, v. West Clayton Realty Company et al., Defendants, Myers Construction Company, a Corporation, Appellant
• Court: Missouri Supreme Court

89 S.W.2d 22

338 Mo. 69

Davis Estate, a Corporation, v. West Clayton Realty Company et al., Defendants, Myers Construction Company, a Corporation, Appellant

No. 33285

Supreme Court of Missouri

December 18, 1935

Appeal from Circuit Court of City of St. Louis; Hon. R. W McElhinney, Judge.

Affirmed.

Albert Chandler for appellant.

(1) The intervener-appellant should prevail under the maxim "He who seeks equity must do equity," as applied in Missouri. Baumhoff v. Grueninger, 178 S.W. 102; Woodward v. Mastin, 106 Mo. 364; Porter v. Boyd Paving Co., 214 Mo. 22; Nevius v. Moore, 221 Mo. 361; Long v. Greene County Abstract & Loan Co., 252 Mo. 158; Bradshaw v. Yates, 67 Mo. 221; Phillips v. Phillips, 50 Mo. 608; Kline v Vogel, 90 Mo. 239; Lanyon v. Chesney, 186 Mo 554; Corby v. Bean, 44 Mo. 382; Cravens v. Moore, 61 Mo. 178; Plum v. Kansas City, 101 Mo. 534. (2) A contract vendee has an interest in real estate which under equitable principles may suffice to create a lien for improvements. Jodd v. Duncan, 9 Mo.App. 417; O'Leary v. Roe, 45 Mo.App. 567; Short v. Stephens, 92 Mo.App. 151; Dougherty-Moss Lbr. Co. v. Churchill, 114 Mo.App. 578; Curtin Hardware Co. v. Churchill, 126 Mo.App. 462; Westport Lbr. Co. v. Harris, 131 Mo.App. 94; Ward v. Nolde, 259 Mo. 285, 168 S.W. 596; Hudler v. Muller, 55 S.W.2d 419. (3) "A court of equity looks not so much to the legal formalities with which a transaction is clothed, as to its very pith and substance." And this in the light of the surrounding circumstances. Pomeroy v. Benton, 57 Mo. 551; Walsh v. Sovereign Camp, 148 Mo.App. 179; Bruegge v. Bedard, 89 Mo.App. 551; Ebbs v. Neff, 220 Mo.App. 1070, 282 S.W. 74; Kolb v. Golden Rule Baking Co., 9 S.W.2d 840; Donovan v. Boeck, 217 Mo. 87; Thompson v. Lindsay, 242 Mo. 72.

Nagel, Kirby, Orrick & Shepley and Harry W. Kroeger for respondent.

(1) Courts of equity will not declare a lien on land for work done or materials furnished for an improvement thereon, on the basis of a mere oral contract and the performance thereof, after the analogy of a statutory mechanic's lien, in a case where the mechanic's lien statutes do not apply. South Fork Canal Co. v. Gordon, 73 U.S. 561; Van Stone v. Mfg. Co., 142 U.S. 136; Withrow Lbr. Co. v. Glasgow Inv. Co., 101 F. 868; Mellon v. St. Louis Union Trust Co., 225 F. 699; Joplin Supply Co. v. West, 149 Mo.App. 90; Crowder v. Burlington Elevator Co., 176 Mo.App. 657; Realty & Inv. Co. v. Washington Sav. & Bldg. Assn., 63 S.W.2d 169; Houston v. Hunt, 96 Kan. 778; 40 C. J. 42. (a) A fortiori a court of equity will not declare such a lien on the land of one person for work done or materials furnished by another person for an improvement thereon, on the basis of a mere oral contract with a third person and the performance thereof. Crowder v. Burlington Elevator Co., 176 Mo.App. 657; Washington Market Co. v. District of Columbia, 172 U.S. 371; Rennie v. Young, 2 DeG. & J. 136, 44 Reprint 939; Ramsden v Dyson, L. R. 1 H. L. 129; Dart v. Hercules, 57 Ill. 446; Green River Chemical Co. v. Iler, 140 Ky. 359; Union Hall Assn. v. Morrison, 39 Md. 281; Moore v. Cable, 1 Johns. Ch. 385; 37 C. J. 321. (2) If appellant is entitled to an equitable lien on the real estate of respondent, after the analogy of a mechanic's lien, such lien is nevertheless subordinate to respondent's vendor's lien secured by legal title. (a) Under the mechanic's lien statutes, where a contract vendee of land employs a contractor to make improvements thereon of a lienable nature, and the improvements are made, the rights of the contract vendor, who has reserved title to secure the purchase money, or who has taken a purchase money deed of trust, are superior to the rights of the mechanic's lien claimant. Schroeter Bros. Hdw. Co. v. Gymnastic Assn., 332 Mo. 457; Wilson v. Lubke, 176 Mo. 215; Schulenberg v. Hayden, 146 Mo. 589; Russell v. Grant, 122 Mo. 177; Stumbaugh v. Hall, 30 S.W.2d 160; Joplin Cement Co. v. Greene County B. & L. Assn., 224 Mo.App. 1064; Ford v. Dixon, 171 Mo.App. 281; Jones on Mortgages, secs. 203, 588, 842.

Ferguson, C. Hyde and Bradley, CC., concur.

OPINION

FERGUSON

The plaintiff, Davis Estate, a corporation, owned a 193-acre tract of unimproved land in St. Louis County, partly within the corporate limits of University City and partly within the corporate limits of the city of Clayton. The Davis Estate entered into a contract for the sale of this tract to the West Clayton Realty Company, a corporation, hereinafter referred to as the realty company. The terms of the contract will later be set out. The realty company made certain payments on the purchase price and went into possession of the land under the contract; the Davis Estate, however retained the title to secure the payment of the remainder of the purchase price and the performance by the realty company of the contract. The realty company did some grading and employed the Myers Construction Company, a corporation (hereinafter referred to as the construction company), to install a sewer line on a part of the land. The realty company made some payments to the construction company on its account for installation of the sewer but a balance remains unpaid. The realty company defaulted upon its contract of purchase with the Davis Estate and continuing in default the Davis Estate brought this suit in equity against the realty company seeking to enforce its vendor's lien and foreclose the equitable title and interest of the realty company in the land. Whereupon, leave of court being first had, the construction company filed an intervening petition to have the court find and declare it entitled to an equitable lien against the land for the unpaid balance of slightly more than $ 15,000 of its charge for the sewer installation, declare such lien prior to plaintiff's lien and enforce same. The cause was tried in the Circuit Court of St. Louis County, the realty company making default. The chancellor found against the construction company, dismissed its bill and entered a decree in favor of plaintiff foreclosing the equitable title and interest of the realty company in the land. The construction company has appealed.

The written contract between the Davis Estate corporation and the realty company for the sale and purchase of the land was dated July 7, 1925. The contract provides that the purchase price of $ 564,000 be paid as follows: $ 1000 at the signing thereof; $ 4000 on the "closing of the sale;" $ 165,000 in serial installments over a period of twenty months from the date of the "closing of the sale" and the balance on or before five years after the date of the "closing of the sale." Taxes were to be adjusted as of the date of the "closing of the sale" and the purchaser was to pay all taxes "thereafter." The sale was to be "closed" on or before August 1, 1925, subject to a reasonable extension of time in the event of title objections, which did not materialize. Upon "closing the sale" the Davis Estate was required to, and did, deposit a general warranty deed conveying the land to the purchaser, in escrow, with the St. Louis Union Trust Company (who is made a party defendant in this suit) and the purchaser, the realty company, was required to, and did, pay the sum of $ 4000 on the purchase price, mentioned above, and deposit a "purchase money deed of trust," securing the payment of the purchase price installments, in escrow, with the trust company. Delivery of the warranty deed to the realty company was to be made upon the payment by it of $ 50,000 on the purchase price together with "the interest accrued" to that date "on the part purchase money deed of trust," interest thereafter to be paid "at six months intervals." The contract then provides:

"On the payment of Fifty Thousand Dollars ($ 50,000.00) on said purchase price, the purchaser or assigns will prepare and execute a plat of subdivision mutually satisfactory to the purchaser and the seller, and the seller will cause the holder of the purchase money Deed of Trust to join therein dedicating and releasing from said Deed of Trust all alleys, streets, parkways and easements shown on the plat of subdivision of the aforesaid Tract No. 1 to be filed of record in St. Louis County, Missouri, and after a further payment of Fifty Thousand Dollars ($ 50,000.00) bringing the credit on said purchase to One Hundred Thousand Dollars ($ 100,000.00) like action shall be had as to the aforesaid Tract No. 2, but after closing the sale and before said payment, grading shall be permitted.

"The purchaser will be permitted to make improvements on said Tract No. 1, when the first Fifty Thousand Dollars ($ 50,000.00) is paid on said purchase price and on Tract No. 2, when a further Fifty Thousand Dollars ($ 50,000.00) is paid, making a total of One Hundred Thousand Dollars ($ 100,000.00) paid on said purchase price.

"The purchaser or assigns will provide two (2) bonds in the sum of Fifty Thousand Dollars ($ 50,000.00) each, one (1) on each tract, suitable to the Trustee, to insure that improvements which will include grading, will be commenced within eight (8) months of the date of closing and to protect the property against liens and will maintain said bonds until the final completion and full payment for said improvements on said tracts, which improvements will include five foot (5) granitoid walks, sewers, concrete, asphalt or oil penetration macadam streets (excepting Ladue and Old Bonhomme Road which shall be improved with granitoid walks) gas and water mains and electric service lines in streets or rear easements for each lot, which agreed improvements shall be recited in contracts for the sale of the respective lots in said subdivision. . . .

"It is mutually agreed that the purchaser and assigns shall be entitled to release any...