Thorpe Block Saving & Loan Ass'n v. James
| Decision Date | 07 November 1895 |
| Citation | 13 Ind.App. 522,41 N.E. 978 |
| Parties | THORPE BLOCK SAVING & LOAN ASS'N v. JAMES et al. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from superior court, Marion county; P. W. Bartholomew, Judge.
Action by William E. James and others against Charles Conner to foreclose a mechanic's lien. Thorpe Block Saving & Loan Association and others filed cross complaints as mortgagees of the property. From the judgment determining the priority of liens, the loan association appeals. Reversed.
Carter & Brown, for appellant. John Coburn, D. A. Myers, and Harding & Hovey, for appellees.
The appellees, James et al., brought suit to foreclose a mechanic's lien. Appellant and others filed cross complaints. The facts were found specially. Those essential to an understanding of the case in hand are as follows: On April 28, 1892, John and August Wacker sold and conveyed to Charles Conner a certain lot (No. 93) for $350, of which $50 was paid in cash, and for the residue notes were taken, secured by a mortgage on the lot, executed on the same day, and duly recorded. By the terms of this mortgage it was made junior to a mortgage to be executed in favor of appellant for $600. On the Wacker mortgage there was unpaid $315. On or prior to said April 28th, Conner applied to and secured from appellant the promise of a loan of $600 to be used in building a house on the lot, and to be secured by a first mortgage on the lot. On or prior to said April 28th, Conner also made a contract with John Bly to erect said house for $600, on condition of the purchase of the lot. On May 28, 1892, Conner executed to appellant a mortgage on the lot for $600, which was likewise duly recorded, and on which was due $654. The proceeds of this loan were paid to the contractor, Bly, about July 20, 1892, who had then erected and completed the house. Of this sum Bly expended $303 in the construction of the house, and left unpaid to material men and others, who had furnished material or done labor thereon, various sums, aggregating, with attorney's fees, $408, for which notices of mechanics' liens were duly filed. The conclusions of the court were: That appellant's lien was prior to that of the Wacker mortgage, and the mechanics' liens were superior to appellant's. That the property should be sold, and the proceeds applied-First, to the satisfaction of the mechanics' liens; second, upon appellant's claim a sum equal to the whole amount due thereon, less that applied upon the mechanics' liens. Exceptions to the conclusions of law were duly saved and presented to this court. Judgment was rendered ordering sale, and distribution of proceeds as follows: (1) To payment of costs; (2) to payment of mechanics' liens; (3) to payment on the appellant's mortgage of the amount thereof, less the sum paid on the mechanics' liens; (4) to payment of the Wacker mortgage; (5) to payment of balance of appellant's mortgage, with the surplus over to the owner of the fee. There are some facts bearing upon other points involved in the argument which we deem it needless to set out. Of these points we first dispose.
Complaint is made by appellant concerning $50 loaned by Coburn to Conner. Since this $50 was not, so far as the finding shows, ever repaid to him, it may be allowed to pass out of sight. So, also, with the $85, about which there seems to have been some controversy. According to the finding, this sum was in no way involved in the matters with which this case deals.
The appellees' counsel argue that the mechanics' liens were superior to the Wacker mortgage, because the Wackers agreed that Conner should build a house on the lot, and they must therefore be deemed to have waived their lien. No such agreement appears in the finding, and it is to the finding alone that we can look for the facts upon which the conclusions must be based. We are not, therefore, called upon to determine whether the conclusion drawn by appellees' counsel would follow, even if their premise were well founded. The mere fact that the security was thereby benefited would not make the mechanics' liens superior to their mortgage. By the very terms of the statute (section 7258, Rev. St. 1894), the mechanics' liens take priority only over other liens subsequently created. Section 7256 did not change the law relative to the rights of mortgagees, save as to the buildings. Under numerouscases decided prior to its enactment, the rights of existing mortgages are superior to the claims of the mechanics' liens subsequently attaching. Davis v. Elliott, 7 Ind. App. 246, 34 N. E. 591, and cases cited. Appellant's contention concedes that its mortgage is primarily junior to the mechanics' liens, but asserts that the Wacker mortgage, being first in time, is the first lien, and therefore entitled to share first in the fund, but that it is entitled to this money instead of the Wackers, because they have waived their right to it in its favor. Appellant further insists that by waiving its place in its favor the Wacker mortgage...
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