Mortgage Clearing Corp. v. Baughman Lumber Co.

• Decision Date: 14 November 1967
• Docket Number: No. 41397,41397
• Citation: 1995 OK 40,435 P.2d 135
• Parties: MORTGAGE CLEARING CORPORATION, Plaintiff in Error, v. BAUGHMAN LUMBER COMPANY, a corporation, M. J. Lee Construction Company, E. G.(Tex) Tannehill, and Mill Creek Lumber and Supply Company, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 135

435 P.2d 135

1967 OK 232

MORTGAGE CLEARING CORPORATION, Plaintiff in Error, v. BAUGHMAN LUMBER COMPANY, a corporation, M. J. Lee Construction Company, E. G.(Tex) Tannehill, and Mill Creek Lumber and Supply Company Defendants in Error.

No. 41397.

Supreme Court of Oklahoma.

Nov. 14, 1967.

Syllabus by the Court

A contract must receive such interpretation as to make it lawful, operative, reasonable, definite, and capable of being carried into effect, if such can be done without violating the intention of the parties.

Appeal from District Court of Washington County; Laton L. Doty, Judge.

Action to foreclose mechanics' and materialmen's liens wherein Mortgage Clearing Corporation intervened asserting superior rights under purported assignments of lien claims. The trial court decreed lienholders' claims to be superior and ordered foreclosure in satisfaction. Intervenor appeals. Affirmed.

Jones & Michael, by Glen E. Michael, Tulsa, for plaintiff in error.

Harris, Graham & Harris, Bassett & Laughlin, Bartlesville, Gable, Gotwalls, Hays, Rubin & Fox, Tulsa, for defendants in error.

BERRY, Justice:

This is an appeal from the trial court's judgment decreeing priority of mechanics' and materialmen's liens against the claim of plaintiff in error, Mortgage Clearing Corporation, and ordering foreclosure and sale of property in satisfaction of senior liens.

Baughman Lumber Company was plaintiff in the original lien action brought against Jamestown Corporation, a builder, and its successor, London House-Bartlesville, Inc. The petition alleged the furnishing of building materials under contract with Jamestown for use in construction, and that there was due and owing $3,692.44, for which amount lien had been perfected; Jamestown's interest had been acquired by London House, whose rights were junior and inferior to plaintiff's lien. Plaintiff asked judgment decreeing the amount and superiority of this lien, foreclosure and application of the proceeds, and other equitable relief. Three additional parties (E. G. 'Tex' Tannehill, M. J. Lee Construction Company and Mill Creek Lumber and Supply Company) were allowed to intervene, by reason of separate claims based upon similar perfected liens, which varied only as to dates, items and amounts. No conflict existed between these parties, and further reference to plaintiff may be understood to include all claimants above mentioned.

Plaintiff in error, Mortgage Clearing Corporation, herein designated Intervenor, also was granted leave to intervene and filed petition alleging plaintiff had assigned all rights and claims against the property prior to filing the foreclosure action; that plaintiff had included in its claim an amount ($738.70) for invoices dated prior to assignment (May 21, 1961), and all of which rights under such claim had been assigned to Intervenor by voucher and subsequent endorsement of the check paid for such assignment; that action sought recovery of this amount together with the total amount included in the assignment, and it was necessary for Intervenor to appear and defend its lien, which was valid and superior to the lienholders' claims. This petition made identical allegations in respect to other parties named, and also asked money damages for lienholders' breach of agreements not to file claims against the property. The controversy involved goes solely to the issue of priority between the lien claimants and Intervenor.

Intervenor's asserted ownership of these liens by assignment from the various lien claimants, is based upon the claim that it paid a portion of the claim of each lienholder and secured from each an assignment of that supplier's lien. It appears that during, or after, the time materials or labor was furnished for building construction, the Intervenor made certain payments which admittedly were less than the amount due under each lien. It was not contended such payments represented a compromise of a doubtful or disputed claim, and the trial court found specifically that these claims were liquidated and undisputed.

The basis of the claim presented to the trial court, and on appeal, evolves from language contained in written instruments furnished by Intervenor purportedly containing the contract between the parties. The 'Request For Disbursement Voucher' was the builder's certification that plaintiff was entitled to the amount stated for materials or labor incorporated into the construction. This request, directed to Intervenor, also contained the following language, which the claimant was required to execute upon forms furnished:

'Request For Disbursement Voucher

(Conditions and Terms)

CLAIM

'For the purpose of inducing Mortgage Clearing Corporation to disburse funds in connection with the above referred property to him (it) the payee does hereby guarantee that he (it) has properly performed all of the work and delivered all of the material on the above described premises for which the payment is to be made and does certify that he (it) has paid for all labor and any material for which such payment is to be made. The payee agrees to accept the above stated sum in full and complete satisfaction for work and labor done and performed and/or any and all materials furnished on the premises described and agrees to assign its lien rights for such labor or material to Mortgage Clearing Corporation; the assignment to be incorporated in payee's endorsement of the check in payment of the herein claim.

'Payee does hereby appoint the Bearer hereof as his (its) agent with full and binding authority to execute all instruments necessary for and incidental to the payment of this voucher.'

(properly signed and dated)

On the face of the check by which payment was made to the supplier there was this statement:

'NOTICE

'This check is in payment of all sums due payee to the date of the check on the property herein described. By endorsing hereof, payee assigns all his/its rights in such property to Mortgage Clearing Corporation, releases all rights and claims to the property, covenants never to file a claim against the property, represents that there are no unpaid sums due third parties and guarantees Mortgage Clearing Corporation that the work, services, material or other item for which this check is payment is satisfactory in all respects and in the event of defect agrees to forthwith correct the same to the satisfaction of ...