Producers Holding Co. v. Hill

WASTE, C. J.

The defendants appeal from a decree of perpetual injunction, granted on final hearing in the court below to the plaintiffs, enjoining the defendants from selling certain real property in the city of Los Angeles hypothecated under a deed of trust given as security for the payment of a promissory note for the balance due for work and labor performed in excavating the lands described in the trust deed and adjoining property. The work and labor was performed by the appellant James A. Hill, pursuant to an agreement in writing with the respondent Catherine I. Powell, under the terms of which Hill agreed to remove 21,000 cubic yards of dirt from the property

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of the respondent for the sum of $11,500. It was provided in the agreement that the compensation for the grading should be due and payable thirty-five days after the completion of the work, and, if not so paid, the appellant was to receive security for the payment.

Appellant James A. Hill entered into the performance of the contract, and having, as he contended, completed the work of excavation, made several unsuccessful attempts to collect the money claimed to be due. He finally filed a mechanic’s lien against the property. While the work was in progress the respondent Powell sold the. property to the respondent Producers Holding Company. Some time after the excavation was finished the Producers Holding Company leased a portion, one-third, of the premises to Arthur B. Mortimer, who desired to erect a hotel thereon. On having the title examined, Mortimer discovered that the appellant Hill held a mechanic’s lien on the property. Through negotiations brought about by Mortimer, a settlement was reached by which Hill released his lien on the premises, accepted $3,800—approximately one-third of the amount of his claim—in cash, which was advanced by Mortimer, and took a six months’ note of the Producers Holding Company for the balance of the payment for the work. The note, executed to Robert J. Hill for the appellant James A. Hill, was secured by a deed of trust on the remaining two-thirds of the property not leased to Mortimer. The note not being paid when due, the trustee, the respondent Title Guarantee and Trust Company, declared its intention to sell the property according to the terms of the deed of trust, and advertised it for sale. Thereupon, the Producers Holding Company and Mrs. Powell, alleging that Hill had failed and refused to complete his contract, and that the defendants were insolvent and incapable of responding in damages, - instituted this action, which resulted in a decree permanently restraining the defendants from selling or attempting to sell the property, with no alternative. After motion for new trial made and denied, the defendants appealed.