Barton v. Clough

SPENCE, J.

Plaintiff brought this action seeking to set aside a sale under deed of trust or, in the event that he was not entitled to have said sale set aside, then for damages in the sum of $1304.99. The cause was tried by the court

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sitting without a jury and from a judgment entered in favor of defendants, plaintiff appeals.

This controversy arose out of the difficulties encountered 'by a builder in attempting, without sufficient capital, to purchase and develop 23 lots in a tract of land known as the Oak Hill tract, the entire tract consisting of 26 lots. The main parties to this litigation are the plaintiff, who held a lien for work done for the builder in boring a well on lot 2; the defendant George P. Clough, who paid the builder several thousand dollars in a transaction for the purchase of lots 24, 25 and 26 and the construction of a dwelling house thereon without obtaining a deed to said premises; and the defendant George A. Clough, who was a cousin of the last-named defendant and who purchased the first deed of trust upon the premises to protect his cousin’s interest therein and thereafter foreclosed under said first deed of trust.

There is practically no conflict in the evidence on the material facts. The original owners executed a first deed of trust upon the premises in 1931 to secure their note for $12,000. Thereafter these owners sold the tract, with the exception of lots, 13, 14 and 15, to the builder, who executed a second deed of trust upon the premises to secure his note for $2,500 in favor of the original owners. The builder then started developing the tract and building certain houses, including the house for defendant George P. Clough on lots 24, 25 and 26. The builder became involved in financial difficulties, many liens were filed and default was made in the payment on both the first and second deeds of trust. In December, 1933, the original owners caused lots 24, 25 and 26 to be reconveyed to the builder and thereafter foreclosed on their second deed of trust. Plaintiff had obtained a judgment establishing his lien on the premises subject only to the priority of the first and second deeds of trust, but it does not appear that there had been a sale pursuant to the order found in the decree in that action. It was stipulated at the trial that the foreclosure of the second deed of trust extinguished. all mechanics’ liens in so far as the lots other than lots 24, 25 and 26 were concerned and that these last-mentioned lots .thereafter remained subject to plaintiff’s lien as well as the first deed of trust.