Wakefield v. Connor

66 N.W. 286, 47 Neb. 225, 1896 Neb. LEXIS 581

• Court: Nebraska Supreme Court
• Decided: February 18, 1896
• Docket: No. 6077
• Status: Published

Opinion

Ryan, C.

This action was brought by John A. Wakefield, in the district court of Douglas county on March 24, 1890, for the foreclosure of a mechanic’s lien on lots 21, 23, 25, 27, and 29, block 4, in Campbell’s Addition to the city of Omaha. On March 18, 1892, this lien was paid by a party representing Mr. Schroeder, one of the defendants. A decree was entered October 20, 1892, in which there was •determined in favor of Bates, Smith & Co. against Louis Schroeder the sole matter of controversy then in issue. In his answer to the petition of John A. Wakefield, and by way of an affirmative cause of action against the firm of Bates, Smith & Co.,' his co-defendant, Louis Schroeder, alleged that previous to December 13, 1889, he had been the owner of the lots against which the mechanic’s lien was claimed by Wakefield; that about December 13,1889, he conveyed said real property to-his co-defendant, Michael Donnelly, for the consideration of $16,500; that at the time said deed was: executed Bates, Smith & Co. verbally agreed that,, in consideration of said Scbroeder waiving his-right to tbe first mortgage and taking a second mortgage to secure payment of tbe above $10,500,. tbe said firm of Bates, Smith & Co. would lend said. Donnelly tbe sum of $16,800, for tbe sole and only purpose of erecting and completing buildings-on tbe aforesaid lots, taking, to secure payment, of said sum of $16,800, a first mortgage on tbe property. It was further alleged by Louis: Scbroeder that Bates, Smith & Co. further covenanted and agreed with him to bold and use all of tbe said first mortgage loan of $16,800 in making payments for tbe erection of said buildings, and that Bates, Smith & Co. covenanted to and did become trustees of that fund for said purpose, the-said Donnelly assenting and agreeing thereto. In reliance upon said covenants and agreements-of said Bates, Smith & Co. tbe said Scbroeder averred that be was induced to and did accept Donnelly’s second mortgage for tbe purchase-price of tbe lots sold to him, and that, notwithstanding tbe said covenants and agreements, said, firm bad wrongfully and fraudulently withheld out of tbe said $16,800 tbe sum of $9,000, and bad diverted said last named sum to its own use. Louis Scbroeder further alleged that on May 1,. 1890, tbe contractor, who bad undertaken for Donnelly tbe erection of eight buildings ..on tbe above-described lots, ceased work because be could not get bis pay from Donnelly, who was utterly insolvent, or from tbe firm of Bates, Smith & Co., and that said Scbroeder, to preserve bis security and save said buildings from destruction, was compelled to and did, at his own expense, complete said buildings; that in completing said buildings he had paid $7,632.75, exclusive of the claim of Wakefield (of $1,792.57); and that, if all the money in the hands of Bates, Smith & Co. had been rightly and justly used in the erection of said buildings, defendant Schroeder would not have been compelled to pay said sum, or any other amount, for said buildings could have been erected and completed for said sum of $16,800, the amount of Bates, Smith & Co.’s mortgage. It was further averred that Bates, Smith & Co. had transferred the aforesaid first mortgage to innocent-purchasers. The prayer of Louis Schroeder was as follows: “Wherefore defendant prays that an accounting may be had of the amount of money paid by said Bates, Smith & Co. in the erection of said buildings, and that said defendant be decreed to pay to said Schroeder so much of said. $16,800 as was in fact not paid out in the improvement of said property, as said Bates, Smith & Co. agreed to do,- and for such other and further relief as in equity and justice he may be entitled to.” In the reply of Bates, Smith & Co. there was a denial that such firm.had agreed with Schroeder that it would see that the proceeds of the $16,800 loan would be applied to the payment of any particular-class of indebtedness of Donnelly, or upon the construction of the buildings to be erected, and there was a' further denial that any sum had been improperly paid or withheld by said firm. The judgment of the district court was, upon conflicting evidence, favorable to Bates, Smith & Co., and as there is presented no other question, its judgment is

Affirmed.