First Nat. Bank of Fergus Falls v. Sec. Bank of Minn.

• Decision Date: 06 May 1895
• Citation: 63 N.W. 264,61 Minn. 25
• Parties: FIRST NAT. BANK OF FERGUS FALLS v. SECURITY BANK OF MINNESOTA.
• Court: Minnesota Supreme Court

61 Minn. 25

63 N.W. 264

FIRST NAT. BANK OF FERGUS FALLS

v.SECURITY BANK OF MINNESOTA.

Supreme Court of Minnesota.

May 6, 1895.

(Syllabus by the Court.)

1. The plaintiff and B., owners of adjoining lots, executed a party-wall agreement, duly recorded, whereby plaintiff was granted the right to and did erect one-half of the wall of its building on B.'s lot, who covenanted, for herself and assigns, to pay plaintiff or its assigns one-half of the cost of the wall whenever she or they used it in erecting a building on her lot, but the ownership of the whole wall was to be in the plaintiff until such payment was made. Upon making the payment the wall was to become a party wall. H., a subsequent purchaser of B.'s lot, erected a building thereon, and used the wall as a part of his building, but never paid for it. Defendant is now the owner and in possession of B.'s lot and building thereon, by virtue of the foreclosure of certain mortgages thereon, executed since the party-wall agreement was recorded. Held, that such agreement created an equitable charge and lien on B.'s lot to secure the payment of one-half of the cost of the party wall, and, being recorded, affects with notice all subsequent purchasees and mortgagees, and they take the lot subject to the equities, charges, easements, and servitudes created thereon or therein by the agreement. Held, further, that the plaintiff is entitled to enforce its lien on B.'s lot, now owned by the defendant, but it is not entitled to a personal judgment against the defendant for the amount thereof.

2. Evidence considered, and held to justify the findings of fact by the trial court.

Appeal from district court, Otter Tail county; L. L. Baxter, Judge.

Action by the First National Bank of Fergus Falls against the Security Bank of Minnesota for breach of covenant, and other relief. From a judgment for plaintiff, defendant appeals. Modified.

Cobb & Wheelwright, for appellant.

Williams & Cowing, for respondent.

START, C. J.

On the 8th day of July, 1884, the plaintiff and Elsie Mathies were owners of adjoining lots, situated in the city of Fergus Falls,-the former owning lot 9, and the latter lot 10, in block 13 of the original plat of the city,-and on that day they mutually executed a party-wall agreement relating to their lots, respectively, which was duly recorded in the office of the register of deeds of the proper county on July 11, 1884. This agreement, after the recital of the ownership of the adjoining lots by the parties, and that the first party (the plaintiff) was about to erect on its lot a brick building, provided that the first party might build one-half of the brick and stone wall of its building on the lot of the second party (Mathies), such wall to be used as a party wall, upon the terms, conditions, and considerations named therein, and, further, the second party, for herself, her executors and assigns, covenanted with the first party, its successors or assigns, to pay to it or them at the time, and whenever, the construction of a building shall be commenced on lot 10, one-half of the cost of so much of the party wall as shall be used, in length, in the construction of such building. The rest of the here material provisions of the agreement are as follows: “And it is understood and agreed that the party of the first part hereby covenants that upon the payment by the party of the second part for that portion or any portion of said partition wall hereinbefore described, according to the terms hereinbefore specified, said party of the second part shall become the owner in fee of an undivided one-half of such portion of said partition wall as she shall be entitled to use in the manner and for the purposes hereinbefore specified; it being understood that such part and portion of said partition wall so used in construction of such building on said lot ten (10) as rests upon said lot ten (10) shall thereby become the property of the said party of the second part, her heirs or assigns. It is mutually agreed by and between the parties hereto that this agreement shall be perpetual, and at all times be construed as a covenant running with the land of the said party of the second part, being said lot ten (10) of said block thirteen (13), but that no part of the fee of that part of lot ten (10) upon which the said party wall above described is to stand in part shall pass or be vested in the said party of the first part, its successors or assigns, by virtue of these presents.” After this agreement was made and recorded, and in the year 1884, the plaintiff erected its brick building, and placed one-half of its party wall on lot 10, pursuant to the agreement. On May 3, 1887, the original covenantor, Mathies, conveyed by warranty deed lot 10, and her grantees on November 8, 1887, mortgaged the lot to M. J. Clark to secure the payment of $2,500; and thereafter, and on September 10, 1888, they conveyed it by warranty deed to Willis J. Holmes, who on the 31st day of August, 1889, mortgaged it to T. E. Penny to secure the payment of $6,500; and, during the summer of 1889, Holmes erected a brick building on the lot, and in so doing used 85 feet in length of the party wall as the wall of his building on the side next to the plaintiff's lot. On January 31, 1893, the defendant, by virtue of the two mortgages on lot 10, and a foreclosure thereof, became the owner of lot 10 and the building thereon erected by Holmes, and has ever since been in the possession, use, and enjoyment thereof. The plaintiff has never been paid any part of the cost of the party wall, although it demanded such payment from Holmes and from the defendant after it became the owner of the building and lot, which was refused. Thereupon the plaintiff brought this action. The prayer of the plaintiff's complaint was for equitable relief, that the amount it was entitled to recover be ascertained by the court, and that it have judgment therefor against the defendant, and that the same be adjudged a lien upon lot 10. The trial court found substantially the foregoing facts, and that one-half of the cost of so much of the party wall as was used in the erection of the defendant's building was the sum of $831.82, and, as a conclusion...