Moulding-Brownell Corp. v. E.C. Delfosse Const. Co.

• Decision Date: 10 April 1940
• Docket Number: Gen. No. 40952.
• Citation: 304 Ill.App. 491,26 N.E.2d 709
• Parties: MOULDING-BROWNELL CORPORATION v. E. C. DELFOSSE CONST. CO. ET AL. NATIONAL FRATERNAL SOC. OF THE DEAF v. TRUMBULL ET AL.
• Court: United States Appellate Court of Illinois

304 Ill.App. 491

26 N.E.2d 709

MOULDING-BROWNELL CORPORATION

v.E. C. DELFOSSE CONST. CO. ET AL.

NATIONAL FRATERNAL SOC. OF THE DEAF

v.TRUMBULL ET AL.

Gen. No. 40952.

Appellate Court of Illinois, First District, Third Division.

April 10, 1940.

Appeal from Circuit Court, Cook County; Stanley H. Klarkowski, Judge.

Suit by the Moulding-Brownell Corporation against E. C. Delfosse Construction Company and others, to foreclose mechanic's liens, consolidated with suit by the National Fraternal Society of the Deaf against Grace Sherwood Trumbull, to foreclose mortgage. From a supplemental decree directing distribution of proceeds of sale, John A. Scribbins, surviving partner of Graves & Scribbins, appeals.

Affirmed. H. C. Rumery and Edwin W. Burch, both of Chicago, for appellant.

Joseph S. Grant and Henry W. Kenoe, both of Chicago, for appellee.

BURKE, Justice.

During the early part of 1933 Charles W. Trumbull and Grace Sherwood Trumbull, husband and wife, were the owners of certain real estate located at 2257 Silverton Drive. This property was situated just west of the Illinois Central tracks at the 23rd Street entrance of A Century of Progress. The property was subject to a first mortgage, held by the National Fraternal Society of the Deaf, a corporation. The owners entered into an agreement with the Fridstein Engineering Company for the construction of a restaurant building. After the completion of the building, the property was operated at a loss. In August, 1933, a bill to foreclose certain mechanics' liens upon the real estate and improvements was filed. In October, 1933, a separate bill to foreclose the first mortgage was filed. The cases were consolidated. A decree was entered. On appeal, in the case of Moulding-Brownell Corp. v. E. C. Delfosse Const. Co. reported in 291 Ill.App. 343, 9 N.E.2d 459, this court decided that all the lien claimants had agreed to waive their liens, except John A. Scribbins, surviving partner of Graves & Scribbins, who contracted for and provided the architectural work on the property. The opinion pointed out that the right to a lien by Scribbins was not contested, and the court affirmed that part of the decree which found that he was entitled to a lien for $5,200, together with interest at the rate of 5% per annum from August 29, 1933, for the work which he had done. Accordingly, the decree was affirmed as to the foreclosure of the mortgage and as to the lien of Scribbins, and reversed as to the other lien claimants. When the case was redocketed in the Circuit Court a new decree was entered, which disallowed all of the lien claims except that of Scribbins; found that he had a mechanic's lien for $5,200, and that the plaintiff, mortgagee, had a lien for its mortgage indebtedness of approximately $36,000 and interest. A sale was directed, which resulted in a bid of $40,000. The proceeds of the sale, after deductions for master's fees and other costs in excess of $3,000, being insufficient to satisfy both liens, the cause was re-referred to a master for the purpose of determining the priorities of the parties in the proceeds of the sale and the proper distribution to be made. Defendant offered testimony before the master to establish the relative value of the land and of the improvements, and to determine the enhancement in value of the property caused by his services. The master determined that three-quarters of the proceeds of the sale was realized from the property as it was before the improvement, and that one-quarter was realized from the enhanced value of the property contributed by the improvement. Defendant testified that his lien was based upon a claim for architectural services, and that his fee was 6% of the construction cost. Accordingly, the master determined that 6% of the enhancement in value of the property was contributed by the services of the defendant, and the remaining 94% was contributed by the other lien claimants. The master also determined that the other lien claimants were paid in the manner they contracted for payment, and that “therefore, payment in such manner has the same effect for the purposes of the pending question as if payment in cash had been made by the equity owner; namely, to enhance the security of the mortgagee.” The master found that as to the enhancement in value traceable to the material and services of other claimants, plaintiff, as mortgagee, was entitled to be subrogated, and that the defendant could establish priority only in that portion of the total enhancement in value contributed by his services alone, of 6% of the entire enhancement, which is $600. Defendant Scribbins filed objections to the master's report. He did not object to the finding of the master that “the other lien claimants were paid in the manner they contracted for payment, therefore, payment in such manner has the same effect as if payment in cash had been made by the equity owner, namely, to enhance the security of the mortgagee.” An order was entered by the Chancellor that the objections stand as exceptions. The court overruled the exceptions, and on June 15, 1939, entered a supplemental decree. Clauses 4 and 5 read:

“That all of the other lien claimants comprising approximately 94% of the lienable services rendered and materials furnished have been paid in accordance with their contract with Charles W. Trumbull and Grace Sherwood Trumbull, owners of the said real estate; that the claim for lien of John A. Scribbins constitutes 6% of the total improvement and that his service has therefore enhanced the value of the said property in the sum of $600.00; that as to the enhancement of value in the said premises caused by the services rendered and materials furnished of all other contractors and sub-contractors whose claims are, by this decree, found to have been paid in accordance with their contract, the plaintiff, National Fraternal Society of the Deaf, is entitled to be subrogated; and such increase in the value of the property has been caused by the said enhancement caused by the services and materials furnished by all the other contractors and subcontractors, should be held to enhance the security of the National Fraternal Society of the Deaf, a corporation, plaintiff herein, as mortgagee;

“That since the total enhancement of the value of the said property is in the sum of $10,000.00, $9,400.00 of the said enhancement became additional security for the payment of the mortgage held by the plaintiff, National Fraternal Society of the Deaf, a corporation; that the balance of $600.00 constitutes the only fund and portion of the proceeds of the foreclosure sale upon which the lien of the said John H. Scribbins, defendant and intervening petitioner, is entitled to priority.”

The supplemental decree directed the distribution of the fund. The defendant Scribbins prosecutes this appeal from the supplemental decree.

The first criticism leveled at the supplemental decree is that the rights of the mortgagee and the lien claimant Scribbins were fixed by the original decree, which was affirmed as to them, and that the Chancellor had no right, as to them, to do more than re-enter the decree with all the provisions as to their respective rights unchanged. Plaintiff agrees that when a decree is affirmed, it should be followed by the trial court. It, however, insists...