Iowa Loan & Trust Co. v. Plewe

• Decision Date: 17 March 1925
• Docket Number: 36521
• Citation: 209 N.W. 399,202 Iowa 79
• Parties: IOWA LOAN & TRUST COMPANY, Appellant, v. A. W. PLEWE et al., Appellees
• Court: Iowa Supreme Court

209 N.W. 399

202 Iowa 79

IOWA LOAN & TRUST COMPANY, Appellant, v. A. W. PLEWE et al., Appellees

No. 36521

Supreme Court of Iowa, Des Moines

March 17, 1925

OPINION ON REHEARING OCTOBER 20, 1925.

SECOND OPINION ON REHEARING JUNE 21, 1926.

Appeal from Polk District Court.--LESTER L. THOMPSON, Judge.

Suit for the foreclosure of a real estate mortgage. Numerous lien holders were made parties defendant. The trial court first fixed the order in which the mechanics' liens filed against the property should be paid. The court then established the plaintiff's mortgage as a lien on said premises, and provided that the portion of the proceeds thereof shown by the evidence to have been used in the construction of a building on the mortgaged premises should be paid. The decree then established the lien of the Sunset Park Land Company under its mortgage, and established the plaintiff's lien on the balance of the proceeds of the mortgaged premises. The facts are more fully set out in the opinion. The plaintiff alone prosecutes this appeal.--Modified and affirmed.

Modified and affirmed.

R. & F G. Ryan, for appellant.

Hume & Bump, for Sunset Park Land Company.

Gillespie & Canfield, for Queal Lumber Company.

C. I Spencer, for R. H. Webster and W. Inez Thayer.

Stewart & Hextell, for O'Dea Hardware Company.

C. C. Putnam and Judson E. Piper, for Bailey Plumbing Company.

Stipp, Perry, Bannister & Starzinger, for Carr-Baal Company.

F. T. Van Liew, for A. L. Chapman.

OPINION

PER CURIAM.

The Sunset Park Land Company was the owner of Lot 12 in Sunset Park in the city of Des Moines. Appellee Plewe contemplated the purchase of said lot and the erection of a dwelling house thereon. Negotiations were entered into between Plewe and the Sunset Park Land Company for the purchase of said premises. The purchase price was agreed upon at $ 1,450 and the assumption by Plewe of certain special assessments that had been levied against the property. The said sum of $ 1,450 was to be secured by a mortgage upon said premises. It was agreed between Plewe and the Sunset Park Land Company that said mortgage should be subject to a first mortgage which Plewe might place on said premises for the purpose of borrowing the necessary money to erect a house, as contemplated between the parties. The amount to be so secured by first mortgage was not stated in the contract between Plewe and the Sunset Park Land Company. In pursuance of this arrangement between Plewe and the land company, Plewe applied to appellant for a real estate loan of $ 4,800, the application providing that Plewe was to secure said loan by a first mortgage upon said Lot 12. This application was approved by appellant. On November 9, 1922, the Sunset Park Land Company executed and delivered a deed to said lot to Plewe. On November 28, 1922, Plewe signed and acknowledged the mortgage to appellant, which was recorded the day following. The mortgage of $ 1,450 to the land company was executed by Plewe on January 15, 1923. The lien holders Queal Lumber Company and O'Dea Hardware Company commenced the delivery of material for the construction of the building on the premises on November 28, 1922.

I. It is appellant's first contention that its claim for money advanced to Plewe upon its note and mortgage is superior to the claims of all of the parties to the action, including the mechanics' lien holders. The theory of appellant is that the written application of Plewe to it for a loan, and the agreement between the parties that such loan should be made and secured by the mortgage on the real estate, created, as of such date, an equitable lien upon the premises, and that the subsequent execution of the mortgage to secure the debt was not a waiver of said equitable lien.

At the time that the application for the loan was made by Plewe to appellant, he had not yet acquired any interest in the real estate in question. No money was advanced to him at that time. The record clearly establishes that the lien holders Queal Lumber Company and the O'Dea Hardware Company furnished labor and material for the construction of the building on the premises before appellant's mortgage was executed and recorded. Appellant clearly, as against these third parties (the lien holders), had no equitable mortgage or lien upon the premises prior to the execution of the mortgage given to it by Plewe.

The doctrine of equitable mortgage, as between the parties to a transaction, has no application here, as against the rights of the lien holders which came into existence prior to the execution of appellant's mortgage. The trial court was right in holding that the liens of the mechanics' lien holders were senior and superior to the lien of appellant's mortgage.

II. The mortgage to appellant was given to secure the sum of $ 4,800. The note secured by said mortgage was dated November 24, 1922, and provided for the payment of the principal sum in installments on the first days of March and September in each year. This amount of $ 4,800 was not paid over by appellant to Plewe at said time. It is the contention of appellant that it advanced sums to Plewe from time to time, part on Plewe's order or check, and other items represented by notes given by Plewe to appellant. The trial court so found.

It appears that appellant advanced the sum of $ 1,617.03 under this mortgage, which was used in connection with the construction of the building upon the property in question. Part of this sum appears to have been paid out, on the direct order of Plewe, to materialmen, or for labor, and part is evidenced by cashier's checks.

The only disputed question at this point is with regard to other sums, aggregating $ 1,700 and interest, claimed by appellant...