W. T. Joyce Co. v. Carroll Light, Heat & Power Co.

133 N.W. 785, 153 Iowa 372
CourtSupreme Court of Iowa
DecidedDecember 18, 1911
StatusPublished

This text of 133 N.W. 785 (W. T. Joyce Co. v. Carroll Light, Heat & Power Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W. T. Joyce Co. v. Carroll Light, Heat & Power Co., 133 N.W. 785, 153 Iowa 372 (iowa 1911).

Opinion

Evans, J.

The question in controversy is one of priority of liens. The common debtor of the contending parties was the Carroll Light, Heat & Power Company. The controversy herein turns upon the question whether [373]*373the plaintiff’s mechanic’s lien can take priority over a trust deed executed by the debtor to the American Trust & Savings Bank. Before proceeding to a statement of the controlling facts in the case, a few preliminary matters should be stated in order to avoid confusion in the use of names. The electric lighting plant at the city of Carroll has been owned successively by three corporations, namely: (1) Carroll Electric Light & Power Company; (2) Carroll Light, Heat & Power Company; (3) Carroll Light & Power Company. The common debtor is the second of the above named. One Brown was the manager of the plant for several years under the ownership of the first two named corporations. The plaintiff is an Illinois corporation doing business in the city of Carroll as a lumber company, under the management of one James Thompson. Prior to the transaction involved in this case, it sold lumber and other materials to the lighting plant, and kept a current account therewith. The second corporation was organized in March or April, 1904. It was so organized for the purpose of taking over the lighting plant from the first-named corporation, and it became the purchaser of the same. On July 29, 1904, it executed a trust deed to the American Trust & Savings Bank to secure an issue of bonds to the amount of $100,000. Such deed was duly recorded in Carroll county on August 4, 1904. In the latter part of the year 1904 this corporation began the erection of an addition to its building, and purchased material therefor from the plaintiff to the amount of nearly $700. On July 6, 1905, the plaintiff duly filed a claim and statement for a meukanie’s lien duly sworn to by the plaintiff’s manager, James Thompson. In the affidavit so filed, it was averred that such material was furnished under a contract entered into August 30, 1904, and that the first item was furnished on the same date and the last on June 20, 1905. The sum total claimed was $683.45. In September, 1905, the plaintiff filed another claim for mechanic’s lien under a contract [374]*374alleged- in the affidavit to háve been made on July 14, 1905, and that the first item thereunder was furnished on July 14, 1905, and the last on September 25, 1905. On September 28, 1905, the plaintiff herein joined as coplaintiff with many other creditors in an action against the Carroll Iieat, Light & Power Company, wherein it was alleged that the company was insolvent, and wherein it was prayed that a receiver be appointed to take over and manage its property, and to sell the same subject to- the trust deed of the American Trust & Savings Bank. In such petition the plaintiff alleged that it held a mechanic’s lien, and asked that the proceeds from the sale of the property be applied to the payment thereof. In pursuance of this petition, one Bobb was appointed receiver. He took possession of all the property, and managed it, and finally sold it under the order of the court to one Collins. While managing the property he paid $1,200 of interest on the bonds which were secured by the trust deed. The property was sold by such receiver subject to the trust deed for $50, plus the expense of the receiver, amounting to about $G00 more. Such sale was approved by the court with the acquiescence of all the plaintiffs in such proceeding, and the formal transfer of the property was made to Collins on June 26, 1906, and the receiver was thereupon discharged. Hp to this point the priority of the trust deed to the American Trust & Savings Bank over the mechanic’s lien of this plaintiff had never been questioned, nor was the American Trust & Savings Bank a party to such receivership proceedings. On July 26, 1906, the American Trust & Savings Bank brought its action in the federal court at Council Bluffs to foreclose the trust deed. In such action the Carroll Light, Heat & Power Company, and Collins, the purchaser at receivership sale, were made parties defendant. In such action a decree was entered on July 15, 1907, establishing the superiority of the trust deed over the claims of the defendants. The plaintiff herein was not a [375]*375party to that suit. In pursuance of this decree the property was sold at master’s sale to defendant Long. Long afterwards conveyed the same to the defendant Carroll Light & Power Company, and this corporation executed a trust deed to the Michigan Trust Company. On March 28, 1907, the plaintiff herein brought this action in the district court of Carroll county. On May 6, 1907, it obtained a decree in said court against the Carroll Light, Heat & Power Company and against Collins, and the cause ■was continued as to other defendants. The cause came on for trial as between the plaintiff, and the appealing defendants in December, 1908.

In its petition in this action the plaintiff claims that its mechanic’s lien is prior and superior to the lien of the trust deed executed to the American Trust & Savings Bank. Such claim presents a change of position by the plaintiff, and is predicated upon a third affidavit filed on March 19, 1907, with the clerk of the district court, claiming a mechanic’s lien as from July 7, 1904, and purporting to amend the former affidavit, which claimed a lien only from August 30, 1904. It is this shifting of dates by this amended claim that makes the controversy. As already indicated, the trust deed of the American Trust & Savings Bank was recorded on August 4, 1904. If the plaintiff’s mechanic’s lien rests upon a contract entered into August 30, 1904, the trust deed has priority. If such mechanic’s lien rests upon a contract begun on July 7, 1904, then such lien takes priority. The appellants deny the claim of plaintiff that its contract was entered into on July 7, 1904. They also contend that the plaintiff elected its remedy in the receivership proceedings, and that Collins, as purchaser at the receivership sale, took the property free from plaintiff’s lien, and that by the terms of the sale he purchased subject to the trust deed. On the other hand, the plaintiff contends that the appellants are not holding any rights under Collins, and are therefore not affected by the terms [376]*376of his purchase. The foregoing is a sufficient statement to show that wo are confronted first with a question of fact, and this we will now proceed to consider.

i. Mechanic’s liens: priority: evidence. I. Can it fairly be said upon this record that plaintiffs contract for material for the addition was made on July 7, 1904? It is urged by plaintiff that the evidence is undisputed to that effect, and that it must, . _ therefore, be accepted. Ihe only witnesses " to the alleged transaction were Thompson as manager for the plaintiff and Brown as manager for the Light & Power Company. Brown died before the trial, and Thompson was the only witness to testify to the transaction. Thompson testified at the trial that Brown contracted with him for the material for an addition on July 7, 1904, and that he furnished a part of the material that day, and that all the material afterwards furnished by him, including that described in the second mechanic’s lien, was furnished under that same contract. As against this, the appellants rely upon the two affidavits of Thompson filed July 6, 1905, and September 28, 1905, respectively.

These affidavits were filed in pursuance of a statutory requirement. They are specific as to dates and arc clearly contradictory to the present claim.

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Bluebook (online)
133 N.W. 785, 153 Iowa 372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/w-t-joyce-co-v-carroll-light-heat-power-co-iowa-1911.