American Trust Co. v. Coryell

LANGDON, J.

This is an action for declaratory relief with respect to a trust agreement.

[152]

Defendant Mabel L. Coryell owned a tract of land which she desired to subdivide, improve and sell. Defendant Ralph R. Strange advanced certain sums of money to her for this purpose. George A. Kneese, an engineer, was employed by defendant Coryell to prepare plans and specifications for the .development, including construction of streets, sidewalks, sewers, etc. Kneese then took bids for the work and on March 21, 1928, the defendant Peninsula Paving Company entered into a contract with defendant Coryell to do the work. On the same day the trust agreement involved herein was made. By its terms title to the land was conveyed to plaintiff as trustee; work was to be performed in accordance with the plans and specifications of Kneese; all sums due under the construction contract were to be payable within two years after completion of the work; upon completion, Kneese was to certify to the trustee the amount payable to the construction company, and Kneese’s certificate was to be binding on all parties; proceeds of the sale of lots were to be applied to payment for the work, but in any event defendant Coryell agreed to make full payment on or before two years after completion; in case of default by said defendant for ten days after notice thereof by registered mail, the trustee had power to foreclose all her right, title and interest 'in the property. This agreement was executed by defendant Coryell, plaintiff, defendant Peninsula Paving Company, and defendant Strange.

Performance was commenced, and the work completed in September, 1930. Notice thereof was given to the plaintiff in May, 1931, and in June of that year the paving company served notice on the trustee to proceed to sell the property for nonpayment. Defendant Coryell objected, claiming that she was not in default. Defendant Ralph Strange claimed preferential rights under the agreement, and defendant Edith Strange claimed certain rights by assignment from Ralph Strange. The trustee then brought this proceeding, seeking to determine whether foreclosure should be had, and in such event, what were the interests of the respective parties. The cause was tried in April, 1933, and the court decreed that the sum of $107,217.90 was djie the paving company from defendant Coryell; that the property should be sold by the trustee; that the claim of the paving company should first be paid, then that of Ralph R. Strange, and