Nashua Trust Co. v. W. S. Edwards Manufacturing Co.

68 N.W. 587, 99 Iowa 109
Supreme Court of Iowa·Decided October 13, 1896·Published·Cited by 3 cases

Opinion

Given, J.

I. There is no dispute as to the facts out of which this contention grows, and they are as follows: On June 11, 1890, the defendants, Marcus C. Patrick and Viola Patrick, executed and delivered this bond and mortgage to the defendant, the KimballChamp Investment Company. The bond is for twenty-five thousand dollars, and payable “to the order of the Kimball-Champ Investment Company.” The mortgage is upon the south one hundred feet of lot 13, block 7, in Bayliss’ first addition to the city of Council Bluffs, Iowa, being fifty feet on First avenue, and running back same width one hundred feet, and was filed for record on the nineteenth day of June, 1890. On the same day — June 19, 1890 — the Kimball-Champ Investment Company, for value received, sold and assigned in writing said mortgage, and the debt secured thereby, to the plaintiff, which assignment was filed for record March 11, 1892. On the nineteenth day of September, 1891, this appellant, as plaintiff, commenced an action against Kimball & Champ, Kimball-Champ Investment Company, and others, as defendants, to recover a judgment on account against Kimball & Champ, and for the establishment and foreclosure of a mechanic’s lien as to said lot 13 and other lots. Said cause was submitted on the eighth day of February, 1892, and on June 2, 1892, judgment was rendered in favor of the plaintiff therein, and a decree entered establishing and foreclosing a mechanic’s lien in its favor as to the said lot 13. The only evidence offered on the submission of this cause below was the bond, mortgage and assignment thereof, on behalf of the plaintiff; and, on behalf of the defendant, the decree in said former action, and [111] evidence which shows quite conclusively that at the commencement of said former action this appellant had no notice, actual or constructive, of said assignment of this bond and mortgage. It will be observed that this mortgage was on record before the commencement of said action, that the mortgagee was made a party to that action, and that appellant, having no notice of said assignment, this plaintiff, though then owning the bond and mortgage under the assignment, was not made a party to said action. It will also be observed that said assignment was not filed for record until after said cause was submitted, but was filed before the decree was rendered; also that this action was commenced after the submission and before decree. Appellant asks in this action that plaintiff, because of said decree, be' denied the relief asked as against appellant; that the amount due appellant upon said judgment be first paid out of the proceeds of the sale of said property, and that the lien of the plaintiff be postponed to that of the defendant.

1 II. By the decree set up by appellant its mechanic’s lien was established and foreclosed, as to said lot 18, “as against qll of the defendants to this action.” As appellee was not a defendant to that action, the question presented on this appeal is whether he is bound by that decree. Appellant insists in argument that its mechanic’s lien- is entitled to priority over plaintiff’s mortgage under the provisions of sub-division 3, section 3317, McClain’s Code, and the facts as assumed in the argument. This question of priority is not before us. Appellee has neither alleged nor proven facts beyond those appearing in the record in the former case, upon which this question of priority must be determined. It rests its defense solely upon said decree. If appellee is bound thereby, then the question of priority is adjudicated; but, if not bound thereby, it can only be determined upon [112] proper allegation and proof of the fact as to whether appellee’s mortgage was made subsequent to the commencement of the building, erection, or improvement on lot 13. Appellant contends correctly that by the foreclosure it did not waive its lien, and that in bringing said action it was not required to look beyond the liens recorded; but the question remains whether appellee is bound by said decree. The written assignment of the bond and mortgage to appellee is an instrument conveying real estate, within the meaning of the recording act. Bank v. Anderson, 14 Iowa, 544; Bowling v. Cook, 39 Iowa, 200; Fletcher v. Kelly, 88 Iowa, 485 (55 N. W. Rep. 474). This assignment, therefore, though unrecorded, is good as against all persons except subsequent purchasers for value without notice. We have seen that appellant acquired its mechanic’s lien and brought said action without notice of this assignment, but we inquire whether, as the holder of such a lien, it was a purchaser within the meaning of the law. That its lien had been foreclosed, did not waive it nor enlarge it, beyond the fact, that appellant was entitled to special execution. Appellant’s interest in lot 13, under its lien, was not greater nor different from that which a judgment lien holder would have, or an attaching creditor, who had prosecuted his claim to judgment and order for special execution. In Fletcher v. Kelly, supra, it is said, as to mechanic’s lien holders: “He is not a purchaser; no more so than a judgment creditor; and hence must, at his peril, take notice of all liens and incumbrances, whether recorded or not. His lien attaches to the real estate, subject to all outstanding equities, whether he had notice of them or not, except, in so far as this' rule may be modified by the mechanic's lien statute.” The modification referred to is as to notice, but not as to whether he is a purchaser or not. The lien holder does not become a purchaser by bringing his action [113] for and obtaining foreclosure of his lien; but, if the property is put to sale under the decree, and bid in by the lien holder, then, and then only, does he become a purchaser. We are clearly of the opinion, that appellant was not a subsequent purchaser, within the meaning of the recording act, and therefore, the written assignment to appellee, though unrecorded, is valid as to appellant.

Free access — add to your briefcase to read the full text and ask questions with AI

Nashua Trust Co. v. W. S. Edwards Manufacturing Co., 68 N.W. 587, 99 Iowa 109 (iowa 1896).

68 N.W. 587 (Nashua Trust Co. v. W. S. Edwards Manufacturing Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

J. W. Squire Co. v. Hedges
205 N.W. 525 (Supreme Court of Iowa, 1925)
Miller v. Fryberg
205 P. 388 (Washington Supreme Court, 1922)
Luther v. Kinion
200 Mo. App. 159 (Missouri Court of Appeals, 1918)