Pierce v. Blair
| Decision Date | 19 November 1925 |
| Docket Number | No. 24968.,24968. |
| Citation | 149 N.E. 560,196 Ind. 710 |
| Parties | PIERCE et al. v. BLAIR et al. |
| Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Superior Court, Vanderburgh County; Edgar Durre, Judge.
Action by George Pierce against John Blair and others, wherein other parties were made defendants and filed cross-complaint. From an adverse judgment, plaintiff and certain defendants appeal. Transferred from the Appellate Court under Burns' Ann. St. § 1394 (Acts 1901, c. 247, § 10). Affirmed in part and reversed, with directions, in part. Superseding opinion of Appellate Court in 144 N. E. 842, and 148 N. E. 414.
Marshall R. Tweedy, of Evansville, and Union W. Youngblood, of Boonville, for appellants.
John D. Welman, Phelps F. Darby, and Daniel H. Ortmeyer, all of Evansville, for appellees.
This was an action by the appellant George Pierce to foreclose an alleged lien on a coal mine for wages due him for labor performed in digging coal. Others claiming liens on the same property were made defendants, and filed cross-complaints asking the foreclosure of their alleged liens, some for wages earned while working as miners, others for materials furnished, a judgment creditor of a former owner of the mine to enforce the lien of his judgment for compensation awarded by the Industrial Board, and appellee City National Bank of Evansville, as trustee for certain bondholders, to foreclose a mortgage executed five years before the Possum Ridge Coal Company, which then owned the mine, but has since conveyed it, and no longer has any interest in it.
The court appointed a receiver, and ordered him to sell the property free from all liens, the decree providing that the liens held by all parties to the action, if any such should be finally established, should attach to the funds derived from the sale.
The trial court found for each of the miners and materialmen as against Louis E. Fricke and John H. Blair, who had incurred the debts sued for while engaged in operating the coal mine under a contract to purchase it by paying the agreed price in monthly installments, which they had entered into with the grantees of the Possum Ridge Coal Company; and it rendered personal judgments against Fricke and Blair for the several amounts found to be due. But it refused to declare a lien in their favor as against any interest in the coal mine except the interest of Fricke and Blair as purchasers under their sale contract, which had been forfeited,and was conceded to be without value.
The lien asserted by the judgment creditor was adjudged to be the first and superior lien for $1,185.20, which holding is not challenged here. And the court found that there was due the City National Bank, as trustee, under said mortgage, the sum of $34,407.66, for which amount it was held to have a lien superior to the rights of all other parties to the action. As it is shown without dispute that the owners who executed the sale contract under which Fricke and Blair held possession of the mine and operated it at the time the debts for wages and materials were incurred, had taken title subject to the mortgage held by the bank, and that the mine property was sold by the receiver for only $16,450, which is not sufficient to pay the mortgage after having discharged the costs of suit and satisfied the judgment lien, the question of prime importance is whether or not the lien of the miners for labor performed in digging coal is prior to the lien of the mortgage.
The several appellants claiming to hold liens for work done in digging coal from the mine filed motions for a new trial for the alleged reasons that the decision is not sustained by sufficient evidence, and is contrary to law, and overruling each of these motions is assigned as error. The parties stipulated most of the facts, and as to many of the others there was no conflict in the evidence. And adopting the evidence tending most strongly to sustain the finding on all points as to which there was any conflict, it fairly proved the following facts: That on September 25, 1917, the Possum Ridge Coal Company, a corporation, was the owner of coal leases on certain tracts of land comprising about 400 acres, on which were a mine shaft, tipple, engine house, and other buildings, machinery, fixtures, equipment and personal property, which together constituted a coal mine. That on said date it executed a mortgage on said mine, including all of such property, to the appellee City National Bank, as trustee, to secure an issue of 750 bonds for $100 each in the total amount of $75,000, by which the mortgagor covenanted to set aside and deposit with the trustee each year, as a sinking fund for the redemption of the bonds, a sum equal to 10 per centum of the bonds that should remain outstanding, and to pay all rents and royalties, taxes, and assessments that might accrue, and not to suffer any mechanics' liens to attach to said premises-a right to redeem the bonds before maturity at 105 being reserved. That a preamble to this mortgage recited that the mortgagor was a corporation owning certain leases on coal lands from which it was authorized to dig coal and sell it, and that it was borrowing money to pay for the leases, make improvements, and provide working capital. That in 1920 said mortgagor, the Possum Ridge Coal Company, entered into a contract with appellees Louis E. Fricke and John H. Blair by which they were given possession and control of the coal leases, mine, and mining property, in consideration of their indorsement of certain promissory notes and assumption of said mortgage debt, and their further agreement to pay $35,100, with interest at 8 per cent. per annum, in monthly payments in proportion to the amount of coal mined and sold. That Fricke and Blair operated the mine as partners until March 1, 1921, when they transferred their interest to the Fricke & Blair Company, a corporation, which operated the mine for a year; but in March, 1922, the mine was shut down, and soon afterward a receiver was appointed for the Fricke & Blair Company, by whom its assets were sold on September 16, 1922, to Jeppe Bertelsen and Lowry Bertelsen, appellees herein, who were father and son. That prior to said latter date the Possum Ridge Coal Company had declared the Fricke and Blair sale contract forfeited for conditions broken. That on September 16, 1922, said coal company conveyed and assigned to Jeppe Bertelsen and Lowry Bertelsen the said mine, with all of said leases and mining property, the receiver of the Fricke & Blair Company sold and conveyed to them all of its interest therein, and Louis E. Fricke and John H. Blair each conveyed all of their interest to the same purchasers, and that said Jeppe Bertelsen and Lowry Bertelsen thereupon, the same day, put said Fricke and Blair in possession of the mine and mining property under a contract hereinafter set out, and they proceeded to operate it, digging and marketing coal therefrom. That there were liens against the interest of the Fricke & Blair company for labor amounting to $15,000, which had to be paid to induce the local miners to go back to work, and Fricke and Blair borrowed the money and paid these liens as part consideration for the contract under which they took possession, borrowing $8,000 from Jeppe Bertelsen, and most of the remainder from a corporation which marketed the coal for them. That the contract recited that Jeppe Bertelsen and Lowry Bertelsen agreed to sell said leases, mine, and mining property, as specifically described, to Louis E. Fricke and John H. Blair (subject to liens for $28,585, as hereinafter stated), for $62,730, of which $15,000 had been paid in cash and used to pay outstanding obligations that had to be met to clear the title, and that the remaining $47,730 was to be paid in monthly installments equal to 50 per cent. of the gross sales of coal, after deducting $2.25 per ton as the cost of production, with selling commissions not exceeding 10 per cent.; the guaranteed minimum payment on the principal of such indebtedness to be not less than $2,500 each month, except as prevented by fire, strikes, or shortage of cars, and also interest at the rate of 7 per cent. per annum on the unpaid balance, payable monthly, the total purchase price to be all paid within two years, and the purchasers to pay all taxes, royalties, rents, and insurance; the buyers should make only such repairs as were approved by the sellers, and should not expend more than $1,000 in any calendar month for that purpose, and were each to draw from the business a salary of $300 per month out of the $2.25 per ton allowed as cost of production. The buyers agreed they would keep the property free from all liens for labor, and from incumbrances of all kinds. The title to all the property and assets was to remain in the sellers until the purchase price, with interest, and all indebtedness arising out of...
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