Model Home Building, Inc. v. Turnquist, 37882
| Decision Date | 29 April 1960 |
| Docket Number | No. 37882,37882 |
| Parties | MODEL HOME BUILDING, INC., Respondent, v. Arthur E. TURNQUIST et al., Defendants, St. Paul Federal Savings and Loan Association, Appellant, J. B. Weisser Lumber Co., Inc., Respondent, R & L Lumber Company d.b.a. Johnson Cashway Lumber Company, Respondent. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
Where payments are made on an indebtedness secured by a mortgage after mechanics liens have attached and the mortgagee thereafter voluntarily advances funds to the mortgagor so as to increase the mortgage indebtedness, the mortgage has priority over said liens only to the extent of the balance to which the mortgage had been reduced.
Gustav C. Axelrod, St. Paul, for appellant.
Johnson & Sands, James D. Rogers, Minneapolis, for respondent Model Home Building, Inc.
Beaudoin, Thuet, Todd & Pavlak, So. St. Paul, for respondent R and L Lumber Co.
Klein L. Johnson, Forest Lake, Minn., for respondent Weisser Lbr. Co.
This is an appeal from an order of the district court denying a motion for a new trial.
The facts are not in dispute. On and prior to September 16, 1955, defendants Arthur E. Turnquist and Jane A. Turnquist were the owners of a tract of land situated in Chisago County, Minnesota, used as their homestead. The description of the land is immaterial. On September 16, 1955, defendants Turnquist executed and delivered a mortgage upon these premises to St. Paul Federal Savings and Loan Association securing the sum of $3,000. The mortgage was recorded on September 21, 1955. On July 27, 1956, the Turnquists executed and delivered another mortgage to the same mortgagee securing the sum of $1,700. This mortgage was recorded on August 13, 1956.
On September 29, 1957, a fire occurred which substantially damaged the buildings on the mortgaged premises. On that date the amount due St. Paul Federal Savings and Loan Association on the two mortgages was $4,548.52.
Defendant J. B. Weisser Lumber Company, Inc., had done some work on the premises, which was completed before the fire occurred. Plaintiff and defendant R & L Lumber Company, doing business as Johnson Cashway Lumber Company, supplied material and labor at the request of defendants Turnquist to repair the dwelling damaged by the fire.
On or about December 31, 1957, St. Paul Federal Savings and Loan Association received the sum of $3,210.17 from the proceeds of a settlement of fire insurance carried on the premises as a result of the fire loss, and this sum was credited to the amount due on the mortgages, then leaving a balance of $1,423.11. At that time defendants Turnquist were indebted to St. Paul Federal Savings and Loan Association in an amount that was unsecured in addition to the amount secured by the mortgages.
This action was commenced on March 5, 1958, for a foreclosure of the mechanics lien filed by plaintiff. On August 13, 1958, defendants Turnquist requested St. Paul Federal Savings and Loan Association to return to them $2,112.51 of the money paid from the proceeds of the fire insurance in order that it might be credited to the unsecured indebtedness owed by the Turnquists to St. Paul Federal Savings and Loan Association under the terms of a written agreement which reads:
'On this 12th day of August, 1958, Arthur E. Turnquist and Jane A. Turnquist acknowledge receipt of the sum of Two Thousand One Hundred Twelve and 51/100 Dollars ($2,112.51) paid by the St. Paul Federal Savings and Loan Association concurrently herewith and that said amount is a refund of a prepayment which had been credited to their loan with said Association, being Loan No. 4574, and agree that the mortgage dated Sept. 16, 1955, July 27, 1956, and recorded in Book 49/52, at Page 279/15 of the Records of the Register's Office of Chisago County, Minnesota, secures the balance of said loan, after debiting the amount of this refund, in the same amount and to the same extent had said prepayment never been made and refunded, and agree to pay the balance due on the note secured by said mortgage including the amount of this refund. Above refund to be applied as follows:
'1. B--522--833.47
'2....
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Shaw Acquisition Co. v. Bank of Elk River
...that the advances the Bank made under its mortgages were optional, as opposed to obligatory. See, e.g., Model Home Bldg., Inc. v. Turnquist, 258 Minn. 53, 56, 102 N.W.2d 717, 719 (1960); Finlayson, 47 Minn. at 79, 49 N.W. at 400. As the Bank itself summarized, its "loan advances were option......
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Berke v. Resolution Trust Corp.
...426 N.W.2d 425, 427 (Minn.1988). A senior lien holder may not harm a junior lien holder's rights. See Model Home Bldg., Inc. v. Turnquist, 258 Minn. 53, 55, 102 N.W.2d 717, 719 (1960) (a mortgagee cannot "voluntarily enlarge the mortgage indebtedness to the detriment of subsequent lienholde......
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R.B. Thompson, Jr. Lumber Co. v. Windsor Development Corp.
...the full amount of the mortgages and not merely the sums advanced up to the attachment of the liens. Model Home Building, Inc. v. Turnquist, 258 Minn. 53, 56, 102 N.W.2d 717, 719 (1960). The trial court explained its finding as follows: On the face of the loan documents, Rothschild reserved......
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Shaw Acquisition Co. v. Bank of Elk River, C2-00-1803.
...no construction agreement setting out obligatory advances, intervening mechanic's liens have priority. Model Home Bldg., Inc. v. Turnquist, 258 Minn. 53, 56, 102 N.W.2d 717, 719 (1960). Appellant's failure to have a construction-loan agreement in place that set out obligatory advances resul......