Security Mortgage & Trust Co. v. Caruthers

• Decision Date: 12 October 1895
• Citation: 32 S.W. 837
• Parties: SECURITY MORTGAGE & TRUST CO. v. CARUTHERS et al.
• Court: Texas Court of Appeals

32 S.W. 837

SECURITY MORTGAGE & TRUST CO. v. CARUTHERS et al.

Court of Civil Appeals of Texas.

October 12, 1895.

Appeal from district court, Dallas county; R. E. Burke, Judge.

Action by Samuel Caruthers against the Security Mortgage & Trust Company and others. Gary & Smith intervened. There was a judgment for plaintiff, and the defendant trust company appeals. Reversed.

The statement of the case as made by appellant is not objected to by appellees, and will be accepted by us as a correct statement. It is as follows:

This is a suit brought by Samuel Caruthers to enforce a mechanic's lien on a two-story brick store, fronting 43½ feet on Commerce street, and running back to Jackson street 200 feet. Plaintiff's petition alleged, in substance, that on September 15, 1891, he made a contract in writing with one J. B. Cowan, by which he agreed to build and complete, in accordance with the plans and specifications made a part thereof, a two-story brick building on said lot, and to furnish all the brick, stone, and wood work necessary for its completion; that thereupon he entered upon the construction of said building, and completed the same on December 21, 1891; that Cowan was to pay him for said building $11,850 when the same was completed, according to the certificate of the architect; that he was paid $2,660, leaving a balance due him of $9,189—, and that on January 22, 1892, he filed in the office of the county clerk of Dallas county his contract, with statement of the amount due thereon, and the property upon which he sought to fix his mechanic's lien, and that the same was duly recorded, and thereby he secured a mechanic's lien upon said lot of land and the two-story brick building thereon, and that the same constituted a first and prior lien upon said building and land; that said Cowan was the owner of said land at the date of the contract; that Cowan died April 20, 1892, insolvent, leaving his wife, Mrs. J. B. Cowan, his widow and survivor; that Cowan's estate was hopelessly insolvent; that no administration had been opened; and that none was necessary. Petitioner made S. B. Hopkins, W. J. Betterton, and the Security Mortgage & Trust Company (a private corporation organized under the laws of Texas, having its domicile in the city of Dallas, Tex.) defendants, alleging that they claimed some sort of an interest in said building and land, which he alleged was inferior to his lien, and prayed that his debt be established, and his mechanic's lien foreclosed upon the building and land, and that the building be sold separate from the land, and the purchaser placed in possession thereof, with right to remove it within a reasonable time.

After the institution of this suit, Gary & Smith intervened therein, and by their plea alleged substantially as follows, viz.: That September 15, 1891, they, being partners, made a contract with J. B. Cowan, the owner of said lot of land, by which they agreed to furnish the material to do the brick and stone work necessary to complete a two-story brick building on said lot, in accordance with the plans and specifications made a part thereof, for which Cowan agreed to pay them $3,110 upon completion of the work, under instruction of the architect, A. J. Armstrong. That they completed their work, and finished the building, and fully performed their part of the contract, to the satisfaction of the architect, on or about December 10, 1891, and the same was accepted by the architect and Cowan on that date, said Cowan then being the owner of said land. That the contract provided that payment should be made every two weeks for account of pay rolls and material only, the balance to be retained until final completion of contract and work. That on January 23, 1892, he had an accounting with Cowan for the work, and, after allowing him credit for all payments, he was found to be then indebted in the sum of $1,476.34, and afterwards, on February 2, 1892, signed a written statement to that effect. That on April 9, 1892, and within four months from the time said indebtedness accrued, they filed in the office of the county clerk of Dallas county their contract, with the sworn statement of the amount due thereon, a description of the property upon which they sought to fix their lien, and thereby secured a lien on the land and said two-story brick building, which they alleged was a first and prior lien on said land and the two-story brick building thereon; a copy of the contract being attached to their plea of intervention, and made a part thereof. That about April 20, 1892, said Cowan died, leaving his survivor in the community, Mrs. J. B. Cowan. That said Cowan died insolvent, and no administration was had or necessary on his estate. That the plaintiff, Samuel Caruthers, and the Security Mortgage & Trust Company, S. B. Hopkins, and W. J. Betterton, have some sort of pretended claim or lien or interest in or upon said lot or improvements, which is inferior to interveners' lien; and prayed that they have judgment establishing their debt and lien on said lot and building, and that same be foreclosed, and that the building be sold separate from the lot, and purchaser placed in possession thereof, with right to remove it within a reasonable time.

The defendant Hopkins disclaimed all interest in the land. Mrs. J. B. Cowan, the widow of J. B. Cowan, disclaimed, and also filed general demurrer and general denial. The defendant W. J. Betterton filed general demurrer and denial, and specially that he owned the property described in plaintiff's petition, and further he adopted the answer of the Security Mortgage & Trust Company. The Security Mortgage & Trust Company, by its first amended original answer, demurred generally to plaintiff's petition, and specially thereto, because: (1) The petition does not show that plaintiff took the several proceedings and performed the several acts necessary to be done in order to acquire a mechanic's lien. (2) The petition does not show that there is no necessity for administration on the estate of J. B. Cowan. Said defendant further filed a general denial, and specially denied that plaintiff had, or ever had, any mechanic's lien on the property described in his petition, and filed a special answer to plaintiff's petition, substantially as follows: "That on or about July 7, 1890, the lot of land in question was the property of one W. J. Betterton, and at that time there stood thereupon a two-story brick store, and about that time Betterton and wife sold the same to one H. C. Burlew for $40,000; $20,000 of the consideration of the purchase being two notes of $10,000 each, payable to the order of the Security Mortgage & Trust Company, with 8 per cent. interest, due July 1, 1895, and July 1, 1898. That the deed from Betterton and wife to H. C. Burlew for this property retained an express lien on the property in favor of the Security Mortgage & Trust Company to secure the payment of these two notes; and at the same time said Burlew executed a deed of trust on said premises to J. T. Dargan, trustee, to secure the payment of said notes, and it was stipulated therein, if any of the interest installments on said notes should mature, and remain unpaid for more than five days, then, at the option of the legal holder of said notes, the whole indebtedness should at once become due, which deed of trust was duly recorded on or about the date of its execution. That thereafter, to wit, July 14, 1890, said Burlew sold and deeded said premises to W. J. and C. L. Betterton, for the consideration of $20,000 cash, and the said W. J. and C. L. Betterton assuming the payment of said notes executed by Burlew to said Security Mortgage & Trust Company, the deed of the said Burlew to the said W. J. and C. L. Betterton reserving an express lien upon said lot and premises, in the following terms, viz.: `It is expressly agreed and stipulated that a vendor's lien is retained against the above-described property, premises, and improvements until the above-described notes and interest thereon are fully paid, according to their face, tenor, and effect, when this deed shall become absolute.' That thereafter, on May 11, 1891, W. J. and C. L. Betterton sold and deeded said land and premises to S. B. Hopkins for the cash consideration of $20,000 and the said Hopkins' assumption of the payment of Burlew's said two notes, said assumption being expressly stated in the deed made to Hopkins by the said Bettertons. That on June 22, 1891, Hopkins sold and deeded the said land and premises to J. B. Cowan for the consideration of $22,500 cash, and the assumption by the said Cowan of Burlew's said notes above described, the assumption of the payment being expressed in the face of the deed made by Burlew to Cowan. That, upon Cowan's purchasing said property and being liable for the payment of said notes, he took out four policies of insurance on the storehouse situated on said land, each for the sum of $2,500, and there was attached to and made a part of each policy the written provision to the effect that, if any loss or damage should occur under the policy, the same should be payable to J. T. Dargan, trustee, for the Security Mortgage & Trust Company, as its interest might appear, and that the insurance under the policy, so far as it affected the interest of this defendant, should not be invalidated by any act or neglect of the said Cowan. That on or about July __, 1891, the storehouse on said lot was practically destroyed by fire, and by reason thereof this defendant had a valid, incontestable claim against each of said insurance companies for the sum of $2,500, and against the collection of which the insurance companies could interpose no defense. That, shortly after the destruction of said building the agents of the insurance companies claimed that they could reinstate the building for a sum less than $10,000, the amount of insurance on the old building. That said J. B. Cowan was desirous of having a new...