Dockrey v. Gray

SCHOTTKY, J.

This is an appeal from a judgment in favor of plaintiff in an action by the holder of a mechanic’s lien to reach the surplus after sale of the property to which the lien attached, such sale having been made pursuant to a power of sale under a prior deed of trust. After the action was filed the controversy was submitted to the trial court on an agreed statement of facts. With the permission of the court, another mechanic’s lien holder filed a complaint in intervention, but such interveners have not appealed from the judgment in which it was held that they take nothing by their complaint.

On or about October 17, 1955, M. D. Lowery and Wanda Mae Lowery (hereinafter referred to as trustors) applied for and were granted a loan of $8,000 by the appellant Midvalley Savings and Loan Association (which will be referred to as the association) to finance the construction of two dwellings. A first deed of trust on the property upon which the dwellings were to be constructed was executed contemporaneously with the note evidencing the loan. "Under the deed of trust the Lowerys were trustors, the association was beneficiary, and appellants E. L. Gray and N. J. Laughlin were trustees. It is apparent from the answer of appellants that appellant Mid-valley Auxiliary Corporation was a substituted trustee, and it is stipulated that Midvalley Auxiliary Corporation was trustee under all outstanding deeds of trust of the association.

The deed of trust was recorded on October 27, 1955. At the time of said recording no materials had been delivered nor had work commenced on the construction of the dwellings. It is therefore not disputed that the deed of trust constituted a first lien on the property insofar as it secured the original loan of $8,000, plus interest thereon and costs amounting to $497.61.

It should be noted that while it was provided that the deed of trust was to secure future advancements as made by the

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association, it is stipulated that it was not mandatory upon the association to make such advancements.

On November 10, 1955, respondent, a plumbing contractor, entered into an oral contract with trustors for certain plumbing work on the buildings. In December, 1955, the buildings suffered flood damage. On March 3,1956, respondent received $800 from appellant association in part payment for work in progress.