Omaha Nat. Bank v. Goddard Realty, Inc., 43918

Decision Date19 February 1982
Docket NumberNo. 43918,43918
Citation210 Neb. 604,316 N.W.2d 306
PartiesThe OMAHA NATIONAL BANK, a national banking association, Appellant, v. GODDARD REALTY, INC., et al., Appellees.
CourtNebraska Supreme Court

Syllabus by the Court

1. Contracts: Consideration. In order for there to be consideration for an agreement there must be a benefit to one of the parties or a detriment to the other.

2. Contracts: Consideration. A valuable consideration to support a contract need not be one translatable into dollars and cents; it is sufficient if it consists of the performance or promise thereof which the promisor treats and considers a value to him.

3. Contracts: Consideration. There is a sufficient consideration for a promise if there is any benefit to the promisor or any detriment to the promisee. A benefit need not necessarily accrue to the promisor if a detriment to the promisee is present, and there is a consideration if the promisee does anything legal which he is not bound to do or refrains from doing anything which he has a right to do, whether or not there is any actual loss or detriment to him or actual benefit to the promisor.

4. Contracts. Courts will not permit a party to avoid a contract into which he has entered on the grounds that he did not attend to its terms, that he did not read the document which he signed and supposed it was different from its terms, or that it was a mere form.

Milton A. Katskee and Harry R. Henatsch of Katskee & Henatsch, Omaha, for appellant.

Fitzgerald, Brown, Leahy, Strom, Schorr & Barmettler, Omaha, for appellee Waldinger Corp.

Kutak, Rock & Huie, Omaha, for appellees Bailey Plumbing and Micklin Home Improvement.

Wall, Wintroub & Weiner, Omaha, for appellee Brase Elec.

Abrahams, Kaslow & Cassman, Omaha, for appellee Creative Kitchens.

John J. Fitzgerald, Omaha, for appellee Wemhoff.

Jon Lance Jabenis, Omaha, for appellee Micklin Lumber.

Walsh, Walentine & Miles, Omaha, for appellees Hill Constr. Co. and Chips Supply Co.

Heard before KRIVOSHA, C. J., BRODKEY, WHITE, and HASTINGS, JJ., and WINDRUM, District Judge.

KRIVOSHA, Chief Justice.

The appellant, The Omaha National Bank (ONB), appeals from a judgment entered by the District Court for Douglas County, Nebraska, finding that certain subordination agreements executed by Hill Construction, Inc.; Don Hill, doing business as Chips Supply Co.; Brase Electric Co., Inc.; Bailey Plumbing Co., Inc.; Waldinger Corporation; Francis A. Wemhoff, doing business as Wemhoff Tile Co.; Micklin Home Improvement Co.; Creative Kitchen Interiors, Inc.; and Micklin Lumber Co. (Subcontractors) were invalid and unenforceable due to the fact that they were executed without valid consideration. We believe that the trial court was in error and that there was valid consideration for the subordination agreements. Accordingly, we reverse and remand with directions.

Goddard Realty, Inc., (Goddard) had, sometime before it obtained a construction loan from ONB, undertaken the renovation of a building on certain real estate involved in this action. It was Goddard's plan to renovate an older building and construct apartments and a health club center, as well as racquetball courts, a restaurant, and a lounge. For reasons which are not entirely clear in the record, but obviously were due to Goddard's failure to pay materialmen for work done prior to obtaining the construction loan from ONB, the project was temporarily suspended. At that time there were a number of unpaid materialmen on the project, some of whom had removed themselves from the job. Several of the materialmen who are appellees in this action had money owing to them for the previous work and were paid for that work by reason of ONB's subsequent construction loan to Goddard.

Most of the evidence presented at the trial was by way of a trial stipulation and is without dispute. The stipulation provided that on July 27, 1979, Goddard, for value received, executed and delivered to ONB a certain deed of trust note in the principal amount of $700,000, representing the proceeds of a construction loan by ONB to Goddard. To secure the deed of trust note and the performance by Goddard of all the terms and conditions of a certain building loan agreement, Goddard executed and delivered to ONB a deed of trust, assignment of rents and security agreement covering certain real estate described in the stipulation as Lots 1, 2, 3, 4, 14, 15, 16, and the north 45 feet of Lot 13 in Block 5, John I. Redick's Subdivision, an addition to the City of Omaha, as surveyed, platted, and recorded in Douglas County, Nebraska, together with vacated alley between 29th Street and Park Avenue, from Dewey Avenue to a point 239 feet south of Dewey Avenue, abutting Lots 1, 2, 3, 14, 15, 16, and parts of Lots 4 and 13 (secured property). The parties further stipulated that the deed of trust, assignment of rents and security agreement, dated July 27, 1979, executed by Goddard, was filed for record in the office of the register of deeds of Douglas County, Nebraska, on August 1, 1979. The parties further stipulated that on July 27, 1979, Goddard further executed and delivered to ONB its demand promissory note in the sum of $147,000 which it secured by a second deed of trust covering the same real estate as described in the first deed of trust. As in the case of the first deed of trust, the second deed of trust was likewise filed for record in the office of the register of deeds of Douglas County, Nebraska, on August 1, 1979. The parties further stipulated that on November 5, 1979, ONB made demand upon Goddard pursuant to paragraph 8 of the building loan agreement for an additional cash deposit in the sum of $341,247.85 for the reason that as of said date it then appeared to ONB that the cost of the project would exceed the cost estimates as set forth in the building loan agreement.

Paragraph 8 of the building loan agreement provided as follows: "(8) The Borrower agrees that at any time it appears that costs for the project will exceed the above estimate in Lender's opinion, Lender may make demand for additional cash deposit to cover such anticipated cost over-runs and Borrower will immediately deposit the required additional cash with the Lender for that purpose. No further advances shall be made from loan proceeds until such requirement has been complied with. Failure to make the required cash deposit within 20 days of such demand shall be considered a default under this Agreement."

The parties further stipulated that Goddard failed to make the cash deposit and therefore was in default. By reason of the default, ONB declared the deed of trust notes and deeds of trust held by it due and payable and sought to foreclose pursuant to Neb.Rev.Stat. § 76-1005 (Reissue 1976).

When the Subcontractors were not paid following Goddard's default to ONB, they each filed mechanic's liens which they maintain are superior to the claim of ONB under its deeds of trust.

Each of the Subcontractors who now claim that their liens are superior to that of ONB executed a document presented by ONB to each Subcontractor as each payment was made. The document is the form required by paragraph 4 of the building loan agreement and reads in part as follows: "This order will not be honored by the Bank until the following receipt has been signed by the payee.

"RECEIVED of The Omaha National Bank the sum of ____________ Dollars $______ in payment of the above order. In consideration of the said payment the undersigned hereby acknowledges that the mortgage in favor of The Omaha National Bank on the above property constitutes a prior lien, superior to any lien which the undersigned may now have or hereafter acquire by virtue of furnishing labor or materials for the improvement of said property. Nothing herein contained shall prevent the undersigned from filing a mechanic's lien against the above property but such mechanic's lien shall be junior and subordinate to the lien of The Omaha National Bank." The signatures of the Subcontractors appear on each receipt. Paragraph 4 of the agreement...

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    • United States
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    ...he or she was not otherwise entitled to receive. Buckingham v. Wray, 219 Neb. 807, 366 N.W.2d 753 (1985); Omaha Nat. Bank v. Goddard Realty, Inc., 210 Neb. 604, 316 N.W.2d 306 (1982); Arthur L. Corbin, Corbin on Contracts § 127 (one vol. ed. 1952); 3 Samuel Williston, A Treatise on the Law ......
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