Early v. Smallwood , 302 Mo. 92 ( 1923 )


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This is a suit in equity to foreclose a mechanic's lien on four lots of land and buildings thereon in Kansas City.

The petition of plaintiff was filed October 12, 1918. It alleged that defendant Yewell G. Smallwood was the owner of the property and had purchased lumber and building material from plaintiff of the value of $2913.58, which was used in the construction of the buildings, and not paid for, and for which plaintiff had filed his mechanic's lien. It was further alleged that the defendant Peoples Trust Company held deeds of trust upon the property, and defendant Palermo claimed some interest in the property. That numerous other parties, naming them, also claimed mechanic's liens on said property. The prayer is for the foreclosure of plaintiff's mechanic's *Page 102 lien, and that the real estate and buildings be sold and the proceeds distributed according to the rights of all the parties interested, as determined by the decree of the court.

October 22, 1918, defendant Smallwood appeared in person and by his attorney, Henry L. Jost, and by consent of all parties J.M. Johnson and D.V. Howell were appointed receivers, who took charge of and completed and rented the buildings, under the orders of the court, and issued certain receivers' certificates in order to complete such buildings.

Defendant Palermo filed an intervening petition, claiming a lien on said property amounting to $6000 and interest, as due for purchase money thereof from defendant Smallwood, and for foreclosure of his vendor's lien, subject to the lien of the Peoples Trust Company. To this intervening petition defendant Smallwood filed answer by his attorney, W.E. Orndorff, to which said Palermo filed reply.

Defendant Coen Building Material Company also filed an intervening petition to enforce its mechanic's lien against said property for materials supplied to contractors used in the construction of said buildings. To this petition defendant Smallwood filed a joint answer (a general denial) with the receivers, by their attorneys, J.M. Johnson, D.V. Howell and J.D. Hill.

Defendant Peoples Trust Company also filed an intervening petition to foreclose its deeds of trust, to which it does not appear any answer was filed.

At the close of all the testimony said defendant trust company filed an amended intervening petition "to conform to the proof," to which defendant Smallwood asked to file an answer, but was refused by the court.

At the trial of the case, December 29, 1919, the following stipulation was read in evidence:

"STIPULATION.
"It is hereby stipulated and agreed between the parties to the above entitled cause that judgments shall be *Page 103 entered in favor of the mechanic's-lien defendants and interveners whose names are signed hereto in the amounts set opposite their respective names, and that such judgments shall bear interest at the rate of six per cent per annum.

"It is further stipulated that judgments shall be recorded sustaining and foreclosing the mechanic's liens filed by said respective parties, such judgments to be in the usual form and to contain the usual provisions, and to be rendered either upon the signing of this agreement by all the mechanic's-lien claimants or upon an adjudication by the court of liens of those claimants who do not sign.

"It is further stipulated and agreed that the various mechanic's-lien claimants whose names are signed hereto will accept in full payment of their respective judgments the respective amounts set forth in the column headed `satisfaction' provided such payment be made within thirty days from the date hereof. Said respective lien-claimants further agree to waive all costs heretofore paid or advanced by them upon the satisfaction of their judgments, as above specified. Said liens are to be adjudged inferior to the receivers' certificates, and superior to the liens of the deed of trust of defendant Peoples Trust Company.

"This stipulation is to become effective when signed by all mechanic's-lien claimants who sign the same and the defendants, Frank Palermo, Yewell G. Smallwood and Peoples Trust Company.

"Mechanic's Lien. Amount Satisfaction Claimants Judgment

LYLE ROCK CO. By Geo. B. Smith $189.00 $160.00

JOHN PANNETTERE By Geo. B. Smith 263.25 233.75

GEO. B. POTVIN WALL PAPER CO., By W.W. Green, Atty. 53.13 45.20

FORRESTER BROS. STOVE CO., By Wilkinson Wilkinson, Attys. 108.00 91.00

ROSSNER LIGHTING COMPANY. By Clyde Wilcox, his Atty., 52.00 44.20

*Page 104

H.N. DUCK. By Strother Campbell 252.60 214.71

SECURITY STOVE MFG. CO., By Hutton, Davis, Nourse Bell 462.70 393.30

T.R. EARLY. By Mertsheimer O'Donnell, 2913.52 2476.49

FRED SCHMELTZ, HWD. CO., By Jay L. Oldham L.D. Tolle, 566.44 368.25

W.L. VAN BIBBER. By Joseph Johnson. 216.00 183.60

LETTON PAINT VARNISH CO., By Joseph Johnson, its atty., 149.79 112.34

W.F. COEN AND A.S. COEN, co-partners as Coen Building Material Co., By Davis Woodruff, attys. 846.71 719.90

U.S. ENGINEERING COMPANY, By Guthrie, Conrad Durham, 425.00 361.25

CHARLES W. BARTLETT C.S. TODD, partners as Kaw River Sand Co. By Bellemere Langsdale. 78.50 66.73

CHARLES W. BARTLETT C.S. TODD, partners as Kaw River Sand Co. By Bellemere Langsdale, attys. 80.75 68.64

JAMES P. MARCY, By John M. Linger, his atty. 50.00 42.50

BADGER LUMBER CO., By H.L. Hassler 193.75 143.31

FRANK PALERMO By J.M. Johnson, his attorney.

WM. J. COLEMAN, By J.M. Johnson, his attorney.

PEOPLES TRUST COMPANY. By Daniel V. Howell, its Attorney of Record.

WILSON D. WOOD. By Daniel V. Howell, its Attorney of Record.

"The foregoing liens will not be contested in this court by defendant Yewell G. Smallwood, except the Coen Building Material Company's account.

"W. EDGAR ORNDORFF, "Atty. for YEWELL G. SMALLWOOD and W.H. SMALLWOOD."

There was also evidence introduced tending to support the cross-bills or intervening petitions of defendants Peoples Trust Company, Frank Palermo and Coen Building Material Company. *Page 105

There was judgment for the plaintiff and for all mechanic's-lien claimants for the sum stated in said stipulation; also foreclosing the deeds of trust and liens of defendants Peoples Trust Company, and Frank Palermo, as prayed in their intervening petitions, also in their favor for certain receivers' certificates held by them. Also judgment foreclosing mechanic's lien in favor of the Coen Company, as claimed by it. Other pertinent facts will be noticed in the course of the opinion. After unsuccessfully filing motion for a new trial, defendant Smallwood appealed to this court.

I. The only questions raised by appellant relate to the judgments in favor of the plaintiff and defendants Coen Building Material Company, Frank Palermo and Peoples Trust Company, which we will consider in the order named.

II. As to plaintiff's claim: It is contended, that the petition of plaintiff, Early, does not state facts sufficient to constitute a cause of action, because it does not state that the plaintiff filed with the clerk of the circuit court within six months after the "indebtedness" claimed accrued aPleading: just and true account of the demand due him afterIndebtedness. all just credits were given. It is said that the petition simply states that such account was filed "within six months from the date said account accrued," and not within six months from the date the "indebtedness" accrued, as required by the statute. We think this criticism is unsound. The allegations of the petition are that the "last delivery" of lumber and material was on the 21st day of May, 1918, when "the amount claimed accrued and become due," and that on October 10, 1918, and within six months from the date said "account" accrued a just and true account of "the indebtedness" etc., was filed with the clerk of the circuit court. We hold, the petition not subject to the objection made thereto.

III. It is also urged that the stipulation signed by the parties does not provide that the plaintiff Early's *Page 106 claim for a mechanic's lien shall be sustained, butStipulation. only that the lien of defendants or interveners claiming mechanics liens may be sustained. This contention is erroneous. It is true, the first paragraph of the stipulation simply states that judgments, for mechanic's liens of defendants and interveners shall be entered for the amount set opposite their names. But the two subsequent paragraphs are not limited to the liens claimed by defendants and interveners, but refer to the mechanic's liens filed by "said respective parties" and "the various mechanic's-lien claimants" whose names are signed to the stipulation, and the plaintiff's name, T R. Early, is signed to the stipulation, and the amount of the judgment set opposite his name is $2913.52, and the amount he will take in satisfaction, if the judgment is paid in thirty days, is $2476.49. After the names of plaintiff and other lien claimants are signed to the stipulation, there is the following recital: "The foregoing liens will not be contested in this court by defendant, Yewell G. Smallwood, except the Coen Building Material Company's account. W. Edgar Orndorff, Atty. for Yewell G. Smallwood and W.H. Smallwood."

We must, therefore, deny appellant's contention that the stipulation did not provide for judgment in favor of plaintiff on his mechanic's lien, or at least, we must hold, that appellant is estopped by the stipulation from contesting the same, which in substance is a waiver of all error in the establishment thereof. We rule this point against appellant.

IV. As to the claim of the Coen Building Material Company: It is claimed, the cross-bill of the Coen Building Material Company is fatally defective, because it did not state the name of the owner or contractor. Said intervening petition alleges that said Smallwood was the owner of said lots and that saidNaming materials were sold and furnished to defendant, StanleyOwner. Hill, or defendant, Albert v. Hubbs, or defendant, J.H. Hubbs, or to some one or more of said defendants, *Page 107 and that the purchaser of said materials was the contractor with defendant Yewell G. Smallwood for the erection of said buildings. We think this sufficiently names the owner of the property and the contractor for the erection of the buildings.

V. It is also claimed that the evidence fails to show that the materials for which defendant Coen Building Material Company claims and filed a lien, went into the building.Material Used The materials furnished by the Coen Company werein Building. for the foundation and plaster and stucco work. It is true, that Mr. Coen simply testified that, while the material was sold to the parties or contractors putting up these buildings, for the purpose of their erection, he could not say that all of it actually went into their construction; that he saw his material being used therein, and that the size of the buildings would require the amount of materials he furnished for the plaster and stucco work; that he was never notified, until the morning of the trial, that there was any question that any part of his materials sued for were not used in the construction of the buildings. But Henry A. Thoma, a witness on behalf of defendant Smallwood, testified: That he was a partner of W.H. Smallwood; that he was employed on the work of building these houses; that he checked up the materials delivered with the bills of the Coen Company therefor, and that he found no discrepancy; that the only material of the Coen Company that was not used in the buildings, that he knew of, was one bucket of mixed plaster, removed by John Hubbs one Sunday afternoon, and except some that was suspected of being stolen, but as to that he could not testify, as he had no knowledge. Sawyer Buchanan furnished similar material, but it may have been used for sidewalks.

Alexander Johnson testified for defendant Smallwood: That he saw Hubbs put some sacks of plaster material in a small truck. The material was in a shed on the property. Did not know how many sacks there were. The witness had charge of building the foundation and *Page 108 all of the material came from Coen that went into the foundations of the buildings. That Hubbs broke the lock to the material shed to get the plaster he removed.

H.H. McQuade testified for defendant Coen Company: That he worked on the houses from the time they were commenced until the plastering was nearly finished. That he ordered all of the materials for the plastering from the Coen Company, and it was all used on the work. When he quit work there was enough material left, about eight sacks of grit and four of white portland, to finish the job. No other company delivered any plastering material for the job while he was there. He never knew of any materials being taken away from the job by Mr. Hubbs, or the lock to the material shed being broken. The above is the substance of the testimony.

The lower court saw and heard the witnesses, and from their testimony and the circumstances, found that all the materials claimed by the Coen Company were supplied by said company and actually went into the construction of the buildings. The testimony of the witnesses satisfies us that all of the materials which the Coen Company claims to have furnished were delivered on the premises, and all was used in the buildings, except an insignificant amount — a bucket of plaster, testified to by Thoma, and perhaps a sack or two, testified to by Johnson, as having been taken away by Hubbs. But of this we are not satisfied, because neither Thoma nor McQuade knew anything of such an occurrence, and they were on the job from the beginning. In any event, Johnson refused to state how many sacks were removed, although repeatedly requested to do so. It may not have been more than one sack of plaster and a sack of sand. The lower court heard his testimony and refused to make any deduction on the Coen Company's bill on account of it. This being an equity case, it is our rule to follow the finding of the chancellor below unless we believe it to be against the weight of the evidence, which we do not in this case. *Page 109

VI. Appellant also complains that a personal judgment was rendered against the appellant Smallwood for the Coen Company's claim, as well as enforcing its mechanic's lienJudgment. against the property. But this is not reversible error, because the judgment in favor of the Coen Company was paid in full from the proceeds of the sale of the property under the judgment rendered, and said personal judgment, as well as its lien, fully satisfied thereby.

VII. It is also complained that a separate judgment and award of execution was rendered for the amount found due each party. We see no error in this, because the judgment providesSeveral that the proceeds of the sale under any execution inJudgments. favor of any of the parties shall be distributed and paid out on all the judgments as directed in the decree. Furthermore, the record shows that the property was sold out under one execution only, to-wit, that in favor of the intervener Frank Palermo, and that the mechanic's liens holders and holders of the receivers' certificates were all paid off out of the proceeds of the sale and the residue, $2355.74, was credited on the judgment of the Peoples Trust Company upon its mortgage lien.

VIII. As to the claim of defendant Palermo: It is said that defendant Palermo could not intervene and set up his deed or vendor's lien against his co-defendant Smallwood,Vendor's because such relief was not responsive nor in any way aLien. defense to the petition of the plaintiff, T.R. Early. This is no doubt the general rule, as announced in the case of Joyce v. Growney, 154 Mo. 253. But the case before us is an equitable mechanic's lien suit brought under the statute, Section 7240, Revised Statutes 1919, which provides as follows:

"Liens May Be Adjudicated, How. — Any and all liens in this article provided for may be adjudicated and determined and the rights of all parties interested in the same and in the property and any of the property against *Page 110 which the same is claimed may be adjudicated, determined and enforced in one action which may be brought by any such lien claimant after the statement for such lien is filed in the office of the clerk of court, as herein provided, or such action may be brought by any owner or lessee of the property or any of it to be affected, or mortgagee or holder of any other encumbrance thereon. Such action shall be an equitable action for the purpose of determining the various rights, interests and liens of the various mechanic's lien claimants and claimants of other liens and owner of any interest in or leasehold upon said property and for enforcing the rights of any and all such persons in, to or against the property, being the lands and buildings and either of the same and for sale of such property, land and buildings or either of the same and for marshaling and distribution of the proceeds thereof among the parties according to their respective legal and equitable rights therein. Such action shall be an equitable action for the purpose of determining, establishing and enforcing the various and respective rights of the parties thereto and for the purpose of marshaling, applying and distributing the proceeds of the sale of such property that may be ordered and decreed in said action. [Laws 1911, p. 314.]"

Under this statute it was proper for defendant Palermo to set up and foreclose his lien by an intervening petition in the case. [Brick Co. v. Lane, 198 Mo. App. 438; Redlon v. Badger Lumber Co., 194 Mo. App. 658; Iron Works v. Mining and Development Co.,198 Mo. App. 562.] In Hurst Automatic Switch Signal Co. v. Trust Co., 291 Mo. 54, 236 S.W. l.c. 62, this court says: "A court of equity once in possession of the res and having jurisdiction of the parties will not relinquish its hold until it has done complete and adequate justice to all the parties. It has a long arm for so doing."

We rule this contention against appellant.

IX. But it is contended that Palermo's intervening petition and the evidence do not show that he had any *Page 111 lien for the purchase price of saidVendor's Lien: lots. It is alleged, in said petition, inCause of substance, that on October 2, 1917, defendantAction. Frank Palermo, being the owner of the four lots in question, entered into a contract in writing with defendant Smallwood, to convey said property and other lots to him and he agreed to execute to said Palermo his notes for $1500 secured by deed of trust thereon, and that $1000 of each note was to be paid within four months after conveyance was made, and $500 as soon as the lot was sold by said Smallwood. That said Smallwood agreed in said contract to negotiate building loans for not less than $3000 and not more than $3500 on each lot, $1000 of which was to be paid to said Palermo on each of his $1500 notes, when he was to release his $1500 deed of trust, so that the building loan would be a first lien, and then take a second deed of trust for $500, and the balance of the building loan was to be used in the erection of buildings on said lots by said Smallwood, which were to be completed and ready for sale January 20, 1918. That said contract further provided that said Smallwood should keep all buildings free from all liens and pay all labor and material bills before the completion of each building. That pursuant to said contract said lots were conveyed to said Smallwood, and he delivered to Palermo his deed of trust and $1500 note on each lot as thereby required. It was further alleged that on or about December 5, 1917, defendant Smallwood obtained a loan from defendant Peoples Trust Company for $3000 on each of said lots, for which he executed and delivered his notes and deeds of trust on said lots to said trust company, which were recorded December 7th. That on said December 7th, pursuant to said contract, said Palermo released and satisfied his deeds of trust securing his said $1500 notes in order that said notes of the Peoples Trust Company might have priority of lien. But that no part of said loans received from said trust company was ever paid to said intervener on his said $1500 notes. But the whole of said building loans was used in the construction of the buildings on said property by defendant *Page 112 Smallwood. That by reason thereof, said intervener is entitled in equity to a lien for $1500 and interest on each of said lots, which lien he prayed to have foreclosed, and for judgment against defendant Smallwood for $6000, the amount of the purchase price of said four lots, and for interest thereon and for general relief. The answer of defendant Smallwood to said intervening petition admitted the execution of the contract pleaded substantially as therein set forth, and the making of the four $1500 notes and deeds of trust to the intervener, and the procurement from the Peoples Trust Company of a loan of $3000 on each of said lots, but alleged that defendant Palermo refused to convey other lots, as required by said contract to said Smallwood, and had brought suit to cancel said contract, by reason of which the development of said property, as contemplated by said contract, was prevented, and said defendant Smallwood suffered irreparable damages. The prayer of said answer was that said intervening petition be dismissed, that appellant be allowed damages, and that intervener Palermo be required to perform said contract for the remaining lots mentioned therein. The said contract was introduced in evidence, and the terms and conditions thereof were as set forth in the intervening petition. The evidence further showed that all the other matters and things alleged in said intervening petition were true and that mechanic's liens were allowed to accumulate on said property, contrary to the terms of said contract. That the whole scheme and plan of the contract failed, because defendant Smallwood could not obtain sufficient money to complete the buildings, and the intervener Palermo, having released his original deeds of trust to secure his purchase money notes, was refused and failed to obtain payment of $1000, or any sum, on his said notes, out of the building loans obtained from the Peoples Trust Company, as provided by said contract, and had nothing remaining except his unsecured purchase money notes.

We hold, therefore, that the intervening petition of said Palermo, and the evidence, including the answer of *Page 113 appellant Smallwood, showed that he was entitled both to a personal judgment for the purchase price of said lots against said Smallwood and for foreclosure of a vendor's lien thereon, subject to the deeds of trust of the Peoples Trust Company and the mechanic's liens established thereon by the decree of the court.

X. But, it is said that the judgment on the Palermo notes was for a lump sum and for foreclosure of a lien on all of said lots therefor, whereas the lien claimed by him was for $1500 and interest on each lot. However this may be, weVendor's Lien: find no material error in that regard: First,Judgment. because said Palermo was entitled to and secured a personal judgment for the whole sum due him against appellant. This, of itself, was a lien on all of the lots for the full amount of the judgment. Second, the decree also awarded said Palermo judgment and execution for $2783.31, as the holder of a receivers' certificate, which was declared by the court to be a first lien on all of said property, prior to any other lien. The sale was made under both the judgment on the notes and the receivers' certificate, but the proceeds of the sale were not sufficient to entitle Palermo to anything on the judgment on his notes. So that, the sale can stand as made under the judgment on Palermo's receivers' certificate, which was properly against all of the lots, or upon his personal judgment against Smallwood, which was also a lien on all said lots.

We can find no reversible error affecting the merits of the case in the form of the judgment in favor of Palermo.

XI. As to the claim of the Peoples Trust Company: It is objected that the evidence was not sufficient to support the judgment in favor of the Peoples Trust Company.Deed of Appellant concedes that said trust company had deeds ofTrust. trust upon said lots for the amount claimed by it, and does not deny that it was entitled to have both the amount and priority thereof determined in this case, but contends that the evidence does not show that the deeds of trust were in default, and that *Page 114 said company was entitled to have them foreclosed. In this, we think, appellant is in error. The evidence abundantly shows that the loans were made to said Smallwood by said trust company, and he gave said company his notes and deeds of trust to secure said notes, amounting in all to $12,000, as contended by it. It is true, the original notes were not introduced in evidence, but the original deeds of trust were, and they described the notes and showed that some of them were past due. Copies of the notes were also introduced in evidence, which showed the same thing. There was a provision in the deeds of trust to the effect that, if said notes, or any of them, or the interest thereon, or any liens should become due on the property and remain unpaid, all of the notes should become due, and the property could be sold by the trustee to pay the whole indebtedness. It was thus shown, that there was a default in the performance of the covenants of the deeds of trust, which made them subject to foreclosure, and all the notes due, and that there was no error in the action of the court in rendering judgment for said trust company upon its notes against the defendant Smallwood, and foreclosing its deeds of trust on said lots.

XII. It is also contended that the decree below should be reversed, because the court refused to allow appellant to answer the amended petition filed by the intervenerAmended Peoples Trust Company, at the close of thePetition: testimony; that such action was in directRefusal to violation of Section 1285, Revised Statutes 1919,Permit Answer. which is as follows: "If any amendment be made to any pleading, the adverse party shall be allowed an opportunity, according to the course and practice of the court, to answer or reply to the pleading amended."

In the case before us, the original petition does not appear in the record, nor is it shown that the amended petition contained any material allegations not found in the original petition, or that appellant had filed any answer to the original petition. Besides, the evidence shows, that the Peoples Trust Company was entitled to *Page 115 the judgment rendered in its favor, and he evidence being closed, no answer which appellant could have filed would have been of any avail. The error complained of is not material or reversible error.

We rule this contention against appellant.

XIII. It is also objected that the decree should be reversed because the receivers were attorneys for two of the parties to the suit, and part of the time, attorneys for appellant. It is true, that the receivers joined with and filed answerReceivers. for appellant to plaintiff's petition. But they did not act as his attorneys thereafter. Their action in filing answer for him appears to have been a simple gratuity to keep him from being in default. The record shows he afterwards had other attorneys who represented him at the final hearing and trial of the case. The fact that the receivers were also attorneys for other parties does not in any manner appear to have affected the merits of the case adversely to the appellant. The sale of the property was made by the sheriff and not by the receivers.

Furthermore, the plaintiff, by his attorney, Henry L. Jost, and in person, according to the record, was present and consented to the appointment of the receivers, and appellant never thereafter, by motion or in any pleading, objected in any manner in the court below to such receivers or their actions, although they made full reports of their doings from time to time. So that the maxim, "Volenti fit non injuria," is applicable and would bar appellant from now complaining of the qualification or disqualification or any action of the receivers herein as a ground for reversing the decree of the court below.

Finding no reversible error in the record, the judgment appealed from must be affirmed. It is so ordered. Lindsay, C., concurs.

The foregoing opinion by SMALL, C., is adopted as the opinion of the court. All of the judges concur. *Page 116