Lovingood v. Butler Const. Co.

• Decision Date: 15 November 1930
• Parties: LOVINGOOD et al. v. BUTLER CONST. CO.
• Court: Florida Supreme Court

131 So. 126

100 Fla. 1252

LOVINGOOD et al. v. BUTLER CONST. CO.

Florida Supreme Court, Division A.

November 15, 1930

Suit by the Butler Construction Company against Alvin Lovingood and others. From an adverse decree, defendants appeal.

Reversed with directions. Appeal from Circuit Court, Dade County; H. F Atkinson, judge.

COUNSEL

Benjamin Carey and Shipp, Evans & Kline, all of Miami, for appellants.

Semple & Hirschman, of Miami, for appellee.

OPINION

ELLIS J.

Alvin Lovingood was the owner on October 15, 1925, of a lot described as lot 9 of block 2 of 'Howard Place, a subdivision in Dade County, Florida, according to a plat at that time not yet recorded.' He entered into a verbal agreement with the Butler Construction Company for the building of a residence upon the lot. Under the terms of the agreement the construction company was to furnish the plans and specifications for the building and supervise the erection of it, in consideration for which the construction company was to have been paid by Lovingood 15 per centum of the total cost of labor and materials upon completion of the house. Lovingood under the terms of the agreement was required to furnish the 'pay roll' weekly, and to pay whatever was 'necessary to take care of material bills and labor.' The contractor was to be paid $800 when the house was framed. Under the provisions of that agreement Lovingood was required to supply all labor and materials, and the contractor, the construction company was required to furnish the plans and specifications for the building and supervise its erection.

J. D. Butler is president of the construction company. He and Lovingood married sisters. H. H. Jordan was vice president of the company, which is a corporation, and J. W. Lawler is secretary and treasurer. The Butler Construction Company maintained its office in Lovingood's office, and used a part of the latter's clerical assistance. The business relations between the construction company and Lovingood were close, and Lovingood was interested financially in some of the construction company's activities. The plans and specifications for the building were prepared by the construction company, and work upon the structure began.

On the 6th of February, 1926, Lovingood and wife executed a mortgage upon the property to George A. Taylor to secure a loan of $10,000. The money was borrowed by Lovingood through the agency of J. P. Bradley for the purpose of paying for the labor and material used in the construction of the building which at that time was not completed. The Butler Company knew that the loan was going to be made and the security given for that purpose. Mr. Bradley and Mr. Taylor went together to view the property, and conferred with Mr. Jordan about the loan, and he 'assisted in valuing and appraising the property so that Dr. Taylor could make the loan.'

Mr. Bradley testified that Mr. Jordan of the Butler Construction Company worked in harmony with Bradley and Mr. Lovingood to obtain the loan which would never have been obtained but for that circumstance.

The loan was made. Lovingood received the money, out of which he paid for Mr. Bradley's services and had left $8,500; $400 of which was applied to the payment of sidewalk and street improvements. The remaining $8,100 were paid to the construction company. Mr. Jordan for the company testified that the total amount received from Mr. Lovingood 'on bills and pay rolls under the contract' was $8,209.25.

Work was discontinued upon the house about April 10, 1926. Lovingood paid the pay rolls and some bills beside for which the construction company gave him credit.

On the 20th day of August, 1926, the construction company began its suit in the circuit court for Dade county against Lovingood and wife, Dr. George A. Taylor, the mortgagee, and F. E. McPike, trustee, and wife, and prayed that a lien be declared to exist upon the lot and building in favor of the construction company for 'labor, materials and services furnished'; that Lovingood be decreed to pay the amount found to be due by him to the construction company on 'the contract'; that he should also pay solicitors' fees, and in default of such payment that the lot and building be sold and the proceeds of sale applied to the amount so found to be due to the complainant; and that Lovingood and all persons claiming through or under him whose rights are inferior to those of the complainant be barred and foreclosed of all right to redeem, etc.

Lovingood and wife answered the amended bill of complaint, which was filed in May, 1927. They admitted the ownership of the land, the terms of the verbal contract with the construction company, that the defendant Lovingood under the terms of the contract was required to furnish the labor and material; and that the construction company was to be paid 15 per cent. of the total cost of labor and materials as compensation for plans and specifications and superintendence of the construction of the building.

The answer denied completion of the house by the complainant, and averred the presentation of bills to defendant Lovingood for materials that were never used in the building; denied the furnishing of labor and materials by the complainant; denied the existence of the debt alleged to be due for labor and materials, and denied that the complainant incurred any bills for labor and materials which the defendant has not paid; averred the payment of $8,209 to complainant; and denied that it was compelled to pay or advance the sum of money alleged to have been advanced by it at the defendant's request; and denied that the sum of $10,152.50 alleged to be due represented labor and materials actually used in the improvement of the premises. The answer denied any knowledge of the filing of the complainant's lien and all matters alleged in paragraphs 12, 13, and 14 dealing with the alleged inferiority of the lien of the Taylor mortgage, Mrs. Lovingood's knowledge of the furnishing of material and labor by the complainant and the conveyance of the property to F. E. McPike, trustee, and wife and the filing of the same after the filing of the lien.

The defendant George A. Taylor answered the bill; admitted the allegations of the ownership of the property by Lovingood; and disclaimed any knowledge of the matters alleged relating to the contract between the complainant and Lovingood and the amount to be paid for complainant's services, the furnishing of materials and labor by complainant and cost of the same, the amount paid on account thereof by the complainant, the amount due on account thereof, and the existence of the lien therefor. The answer averred the execution of the mortgage by Lovingood and wife to Taylor and the payment of the money derived from the loan to the complainant; averred the payment of insurance premiums upon the building to protect the lien of the mortgage; and averred the superiority of the mortgage over the complainant's alleged lien; and prayed for a foreclosure of the mortgage.

In November, 1927, F. E. McPike answered, averring his ownership of the title as trustee of the premises, and disclaiming any knowledge of the matters alleged in the bill, and denied any knowledge of the existence of complainant's alleged lien upon the premises at the time he acquired title to the lot.

A replication was filed to the answer of McPike. In that state of case the cause was referred to a general master to take testimony and report the same with his opinion upon the law and evidence.

The master reported the evidence taken with his findings upon it and his opinion of the law. He reported that the complainant had adequately proven all the material allegations of its bill of complaint; that the amount due complainant by Lovingood was $10,233.55 as the 'balance due on the costs of constructing the house'; that the interest accumulated was $1,641.42 to April 25, 1928; and that the 'complainant has a mechanic's lien upon the premises described in its to secure the same.' (The words 'bill of complaint' are omitted from the sentence as quoted from the master's report.) The master reported that Taylor has a mortgage upon the premises given to secure the payment of $10,000, and that there is due upon the notes and mortgage that sum, with interest; that, as the notes were shown to have been lost, no decree could be entered in favor of 'Taylor until and unless indemnity be given as required by section 2686, Rev. Gen. Statutes 1920, or until and unless they be re-established in the manner provided by section 3246 et seq., Rev. Gen. Stats. 1920'; That the mechanic's lien of the complainant is superior in dignity to the mortgage lien of the defendant Taylor; that the mortgage was given and recorded while the building was in course of construction. The master's reasoning, as shown in his opinion, was very cogent as based upon his interpretation of the issues and his findings upon the facts.

He recommended that a final decree be entered requiring Lovingood to pay the amount found to be due with interest to the complainant, and in default thereof that the premises be sold and the proceeds thereof applied to satisfy the same, and that all defendants be barred and foreclosed of their right, title, or interest in or liens upon the premises.

Taylor filed exceptions to the master's report in so far as it held that the defendant's lien could not be foreclosed because the notes, evidence of the debt secured by the mortgage, had been lost; that the complainant's lien was superior in dignity to the mortgage held by Taylor; that the complainant did not receive practically all of the proceeds of the mortgage loan, as the contention was not supported by the testimony. Exception was taken upon the further ground that the...