Matthews v. Quaintance
| Decision Date | 20 October 1925 |
| Docket Number | 36650 |
| Citation | 205 N.W. 361,200 Iowa 736 |
| Parties | EDWARD MATTHEWS, Appellant, v. O. E. QUAINTANCE et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Mahaska District Court.--D. W. HAMILTON, Judge.
ACTION to foreclose a mechanic's lien. The lower court dismissed plaintiff's petition. On appeal the case is affirmed in part and reversed in part.--Affirmed in part; reversed in part.
Affirmed in part; reversed in part.
Edward A. Schmidt and James G. Patterson, for appellant.
McCoy & McCoy, I. C. Johnson, and John E. Lake, for appellees.
In March, 1918, B. O. Cruzen was the owner of the property in controversy herein. On the 29th of that month, he executed to R. K. Davis three promissory notes, totaling $ 15,500, and at the same time executed to Davis a mortgage on the property. This mortgage, on the first of March, 1922, was duly transferred by Davis to the Mahaska County State Bank.
B. O Cruzen died, and Frank Cruzen was the duly qualified executor of his estate.
B. O. Cruzen conveyed said property to O. E. and Mary A. Quaintance. They assumed and agreed to pay the said mortgage. The property in controversy was used for garage purposes, and Quaintance had contracted with the tenant to make some improvements thereon. He employed the plaintiff herein to make such improvements, which consisted largely of cement work. This work was done in the latter part of the year 1920 and the early part of 1921.
On the 5th of March, 1921, Quaintance made to the plaintiff two promissory notes, amounting to $ 1,100, for the work and material furnished by plaintiff in making said improvements. Quaintance claims that this amount represented the sum total of plaintiff's contract for such improvement. Plaintiff claims that there was still an amount of $ 443.47 due, over and above these notes, which Quaintance had agreed to pay in cash in a few days.
On the 2d of May, 1921, the plaintiff herein, Matthews, filed with the clerk of the district court of Mahaska County a statement of account and affidavit for a mechanic's lien, as provided by law, for the material procured and the work done by him on the property in controversy.
The Oskaloosa Savings Bank held four notes given by the defendants Quaintance and wife, totaling $ 16,200, dated January 18, 1922. On the 21st of May, 1922, Quaintance and wife conveyed the property in controversy herein to the said Oskaloosa Savings Bank by warranty deed, as security for the payment of the notes last described. These last described notes, together with the deed securing the same, were duly assigned to the Mahaska County State Bank by the Oskaloosa Savings Bank. While the conveyance was in the shape of a warranty deed, it is recognized and treated by all parties in these proceedings as in truth and in fact a mortgage.
On the 11th day of February, 1921, Quaintance and wife executed to the McKey-Fansher Company a mortgage on the above described premises for the sum of $ 1,878.79.
At the October, 1922, term of the district court of Mahaska County, the Mahaska County State Bank commenced an action against Quaintance and wife, Frank Cruzen, as executor of the estate of B. O. Cruzen, this plaintiff, Edward Matthews, the McKey-Fansher Company, and several other defendants. In that action the bank sought to foreclose the mortgage made to Davis and assigned to that plaintiff, herein first described, and also to foreclose the mortgage deed it had acquired from the Oskaloosa Savings Bank; and prayed, so far as the plaintiff Matthews is concerned, that the lien of the bank, by virtue of its mortgage, be declared superior to the mechanic's lien of Matthews. To the petition of the Mahaska County State Bank Matthews appeared, and filed what he designates as a cross-petition against the plaintiff therein, the Mahaska County State Bank, and all his codefendants, sets up his mechanic's lien, asks for judgment against Quaintance and wife for the total amount due thereunder, and prays that his mechanic's lien be decreed superior to the claims of all other parties in the litigation, including the Mahaska County State Bank, and that the same be foreclosed. While this alleged cross-petition was filed, nothing more was ever done with the same, and no notice of its filing was ever served on any of the parties.
At the time of the filing of the cross-petition by Matthews, he also filed an answer to the petition of the Mahaska County State Bank, in which he denied all allegations of the plaintiff's petition, except that he admitted the corporate capacity of the then plaintiff and the fact that Frank Cruzen was the executor of the estate of B. O. Cruzen, deceased. He denies knowledge or information as to the allegations with reference to the Davis mortgage, makes all of the allegations of his cross-petition a part of his answer, and asks that his lien be decreed superior to that of the Mahaska County State Bank and all other codefendants in said action, that it be "decreed to be a preferred claim," and that it be the first to be paid out of the proceeds of any sale of said premises, and for other and further equitable relief.
The case proceeded to trial, and on the first of December, 1922, decree was rendered therein. While the decree is important in the pending litigation, it is too lengthy to set out in hace verba. Suffice it to say that it provides for the foreclosure of both mortgages of the Mahaska County State Bank. It fixes the status of the various parties, and holds that the Davis mortgage, subsequently transferred to the Mahaska County State Bank, was a first lien on the property, and superior to all other claims. It gave to the McKey-Fansher Company mortgage second place, and declared it superior to all other claims except the first mortgage then owned by the Mahaska County State Bank. It decreed the deed originally made to the Oskaloosa Savings Bank to be a mortgage, but held it to be junior and inferior to the mechanic's lien of Edward Matthews.
No reference whatever is made in the decree to the alleged cross-petition, nor was the prayer of the cross-petitioner, Edward Matthews, for the foreclosure of his mechanic's lien, granted.
It further appears that at this time there was an outstanding lease between Quaintance and his tenant, Lambertson-Hunt Company, which had been assigned to the Mahaska County State Bank. Under the terms of this lease, certain provisions were made for improvements to be put upon the said property. Whereupon, after due notice, a receiver was appointed to take possession of said property, and on application of such receiver, he was authorized to borrow and expend $ 5,500 for the purpose of carrying out the terms of said lease, which was done, and the amount thus expended by that receiver was made first lien, as against all lien claims except the first (Davis) mortgage, and it was placed on equality with that mortgage.
On the 21st of February, 1923, the plaintiff herein, Edward Matthews, filed a petition in equity in the case at bar, making defendants all the parties who were in any way parties to the original foreclosure case, to which reference is above made. In this petition he seeks, among other things, to foreclose his mechanic's lien, and that part of his petition is in the usual form. He seeks judgment against Quaintance and his wife for $ 1,543.47, and asks that said judgment be established as a prior and superior lien upon the property in controversy, and that any rights or claims made by the defendants or any of them be decreed junior and inferior to the claim of the plaintiff, and that, "should the court find that any portion of the defendants' lien is superior to the claim of this plaintiff, then that the property be sold, and that the plaintiff shall be prorated with that claim found to be superior or of equal grade of this plaintiff, that the rights of redemption of the defendants be forever barred and foreclosed, and that a special execution issue for the sale of said property," and for other equitable relief.
To this petition the Mahaska County State Bank, the McKey-Fansher Company, and the receiver filed separate answers, in which they denied knowledge or information as to the allegations of the plaintiff's petition, and further pleaded that all matters involved herein have been fully adjudicated and determined in the action herein referred to as the Mahaska County State Bank v. Cruzens et al., and pleaded that adjudication as a complete defense to the claim of the plaintiff of a prior and superior lien on said building. Matthews, the plaintiff, filed reply to the answers just specified, wherein he denies that the aforesaid decree adjudicates the questions raised herein. He also states that the decree only allowed the Mahaska County State Bank a superior lien to the amount of $ 15,500, represented by the first mortgage on said premises; and alleges that the McKey-Fansher Company's lien, which was decreed to be superior to the claim of Matthews, was not in fact superior, because they took the same with full knowledge of his rights.
In the third paragraph he pleads that the Mahaska County State Bank sold the property under execution and bid it in at the execution sale for $ 34,625.09 on the third of March, 1923, and that the Mahaska County State Bank, or the sheriff of Mahaska County, now holds the amount of money thus bid, less the $ 15,500 which it took to satisfy the first mortgage. His prayer is that the Mahaska County State Bank be compelled to pay over the money bid in excess of $ 15,500, and that so much as may be necessary to satisfy plaintiff's claim be so applied, and for other relief.
Quaintance and his wife filed separate answers. They deny...
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