Finlayson v. Waller, 7042

• Decision Date: 05 March 1943
• Docket Number: 7042
• Citation: 64 Idaho 618,134 P.2d 1069
• Parties: A. M. FINLAYSON, Appellant, v. R. E. WALLER, ANNA WALLER and FARMERS and MECHANICS SAVINGS BANK OF MINNEAPOLIS, a corporation. Respondents
• Court: Idaho Supreme Court

134 P.2d 1069

64 Idaho 618

A. M. FINLAYSON, Appellant, v. R. E. WALLER, ANNA WALLER and FARMERS and MECHANICS SAVINGS BANK OF MINNEAPOLIS, a corporation. Respondents

No. 7042

Supreme Court of Idaho

March 5, 1943

CONTRACTS-ARBITRATION CLAUSE, WAIVER-TRIAL-NONSUIT-MECHANICS' LIEN-MERGER-DEED-GRANT-MORTGAGES-PRIORITIES-VENDOR AND PURCHASER-LIENS-HUSBAND AND WIFE-COMMUNITY PROPERTY.

1. Where contract sued upon provided for arbitration and defendant failed to plead as a defense, lack of arbitration proceedings prior to suit, defense was "waived."

2. "Motion for nonsuit" made at conclusion of plaintiff's evidence and challenging sufficiency thereof is equivalent to a "demurrer to the evidence" and hence must be tested by that version of evidence most favorable to plaintiff.

3. Under statute giving to word "grant" as used in a deed implication that estate conveyed is free from incumbrances of grantor or anyone claiming under him, where claimant of mechanic's lien on apartment for services and materials furnished under contract conveyed by grant deed premises to party against whom lien was asserted, claim of lien for services and materials prior to delivery of deed was "merged" in deed and unenforceable in absence of reservation of title because of lien or otherwise. (I.C.A sec. 54-612.)

4. Under sec. 54-729 relating to notice imparted by proper recording of an instrument affecting title to real property a lien existing on property before a mechanic's lien is attached has priority, and sec. 44-506 relating to priority of mechanics' liens over liens unrecorded at time work was done or materials were commenced to be furnished has no application. (I.C.A., sec. 44-506; sec 54-729, as amended by Sess. Laws, 1935, chap. 33.)

5. Where vendor under contract conveyed to purchaser partly completed apartment building which vendor agreed to finish and for which purchaser was to pay vendor proceeds of a loan on premises, vendor had no "vendor's lien" superior to mortgage executed by purchaser to secure such loan. (I.C.A., sec. 54-729, as amended by Sess. Laws, 1935 chap. 33.)

6. As between a latent and secret vendor's lien and a legal lien by mortgage arising at same time, mortgage lien will prevail. (I.C.A., sec. 54-729, as amended by Sess. Laws, 1935, chap. 33.)

7. A mortgage in hands of assignee takes precedence over mechanic's lien which attached prior to assignment but subsequent to execution of mortgage. (I.C.A., sec. 44-506; sec. 54-729, as amended by Sess. Laws, 1935, chap. 33.)

8. Where vendor conveyed apartment house to purchaser to enable purchaser to mortgage property to acquire funds to pay vendor's compensation agreed upon, vendor's conduct was inconsistent with intent to retain an implied "vendor's lien" and constituted a "waiver" of such lien.

9. Where plaintiff performed his part of contract requiring conveyance to husband and wife of apartment building, in exchange for equity in farm lands, husband and wife could not rely on their failure to have their signatures to contract acknowledged to escape liability for failure to convey their equity in farm lands notwithstanding statute providing that community real estate cannot be sold unless wife join husband in executing and acknowledging instrument of conveyance. (I.C.A., sec. 31-913.)

10. Purpose of statute prohibiting conveyance of community real estate unless wife joins husband in signing and acknowledging instrument of conveyance is to protect community and statute does not permit one who has substantially profited by such a contract to defeat payments to which he has agreed. (I.C.A., sec. 31-913.)

11. In action to establish and foreclose mechanics' liens, evidence required denial of motion for nonsuit.

12. Equity having obtained jurisdiction of subject matter of a dispute will retain it for settlement of all controversies between parties with respect thereto.

Appeal from the District Court of the Ninth Judicial District for Bonneville County. Hon. C. J. Taylor, Judge.

This case is here on appeal from judgment of non-suit and dismissal entered by the trial court upon separate motions of respondents, at the conclusion of plaintiff's evidence.

Affirmed as to respondent Farmers and Mechanics Savings Bank of Minneapolis, a corporation, and reversed as to respondents R. E. Waller and Anna Waller.

A. A. Merrill and L. H. Merrill for appellant.

On a motion for a nonsuit and dismissal, the defendant must be deemed to have admitted all the facts which the evidence tends to prove. (Schleiff v. McDonald, 37 Idaho 423; Pilmer v. Boise Traction Co., 14 Idaho 327; S. Idaho Adventists v. Hartford F. Ins. Co., 26 Idaho 712; Golden Smith v. Snow Strom M. Co., 28 Idaho 403.)

The defendants Wallers cannot "take the position that their contract is void, they themselves having received all the benefits therefrom." (Mitchell v. Atwood, 55 Idaho 772.)

"Plaintiff had a security he could foreclose--it was the business of equity to avoid a multiplicity of suits and adjudicate the subject matter and likewise proceed from it without let for further adieu." (Mochel v. Cleveland, 51 Idaho 468.)

"Mechanic's lien is superior to mortgage lien." (Pipe Company v. Blaine County Irrigation Co., 32 Idaho 705.)

St. Clair, Peterson & St. Clair and Richards & Haga for respondent, Farmers and Mechanics Savings Bank of Minneapolis.

An assignment of a mortgage and the debt secured thereby invests the assignee with all the rights, powers and equities of the mortgagee; and in the hands of the assignee takes precedence over a lien attaching prior to the assignment but subsequent to the mortgage. (Vol. 1, Jones on Mortgages, 8th Ed., p. 598; Vol. 41, Corpus Juris, p. 683; 27 Cyc., p. 1298; Mitchell v. Koch, 95 N.E. 231 (Ind.) ; Coonrod v. Kelley, 119 F. 841.)

A person owning certain property at the time improvements are being made cannot claim a mechanic's lien against one to whom he afterwards sells the property. (Philips on Mechanic's Liens, p. 390; Babb v. Reed, 5 Rawle (Penn.) 151; Littleton Savings Bank v. Osceola Land Co., 76 Iowa 660; Alexander v. Slavens, 7 B. M., p. 14.)

Where a lien claimant conveys certain property, the deed of conveyance takes effect upon delivery, and where a mortgage upon the same property is made simultaneously, such conveyance and mortgage is in law considered as one act, and such lien claimant could not create any lien which could take precedence over such mortgage. (Guy v. Carrierre, 5 P. St. Rep. (Cal.) 511; Vol. 2, Jones on Liens, p. 692; Perkins v. Davis, 120 Mass. 408; Thaxter v. Williams, 14 Pick (Mass.) 49.)

A vendor who gives a deed with warranty to a purchaser and allows the purchaser to obtain credit on the faith of the ownership of the property will not be allowed to claim a vendor's lien as against other creditors. (Larschied v. Kittell, 20 Amer. & Eng. Annot. Cases (Wis.) 576; Ferger v. Allen, 170 P. 861 (Cal.) ; Vol. 2, Jones on Liens, Sec. 1091; Henson v. Westcott, 82 Ill. 224.)

Alvin Denman for respondents, R. E. Waller and Anna Waller.

Where the contract so provides, the contractor cannot recover his compensation until he furnishes proof that all liens and bills incurred in constructing the building have been paid and released. (9 C. J. 831; Leverone v. Aranico (Mass.), 61 N.E. 45; Mondioli v. American Building Co. (Wash.), 145 P. 577; Franklin v. Schultz (Mont.), 57 P. 1037.)

The agreement to arbitrate in accordance with the arbitration laws of this state is binding, and a condition precedent to payment. (Zindorf v. Western Am. Co. (Wash.), 67 P. 376; Holmes v. Ruchet (Cal.), 38 Am. Rep. 57.)

Where one party to a void agreement has fully performed, the court will not require performance of the other party, even though a money judgment will effect the result, but will leave the parties where it found them. (13 C. J. 507; Funk v. Gallivan (Conn.), 44 Am. Rep. 210; Bowman v. Phillips (Kans.), 3 L. R. A. 631; McFall v. Arkoosh, 37 Idaho 246.)

A vendor's lien is only permitted as security for payment of purchase price, and not for any other indebtedness or liability. There must be a certain, absolute debt owing for the purchase price. The lien does not exist in behalf of any uncertain, contingent or unliquidated demand. (3 Pomeroy's Equity Jur. 2508.)

Judgment affirmed as to respondent Farmers and Mechanics Savings Bank of Minneapolis, a corporation, and reversed as to respondents, the Wallers; and a new granted to appellant as against respondents, R. E. Waller and Anna Waller. Costs awarded to appellant as against respondents, the Wallers.

DUNLAP, J. Holden, C.J., Ailshie, Budge and Givens, JJ., concur.

OPINION

DUNLAP, J.

Prior to January 9, 1939, appellant was the owner of certain real property in Idaho Falls, upon which he had started the construction of an apartment house. On that date he made a contract with the respondents, Mr. and Mrs Waller wherein it is agreed the apartment house was to be deeded to the Wallers, who were to place an F. H. A. loan thereon for $ 12,500.00, which amount was to be used, as far as necessary, in completing said building in accordance with the plans and specifications required by the F. H. A. Appellant was to complete the building and the Wallers were to pay him the sum of $ 12,500.00 from said F. H. A. loan, payments to be advanced to appellant as the building progressed, and in accordance with the rules and regulations of the F. H. A. In this agreement, the Wallers bound themselves to trade for the apartment house certain farm lands in Bingham County, Idaho, and upon which they were to pay taxes and water assessments up to and including 1938 and also interest and delinquencies up to March 1, 1939 on the Federal Land Bank contract which evidenced the Wallers' equity in the...