64 F.2d 257 | 5th Cir. | 1933
The appeal is from a decree of the District Court ordering foreclosure of a bond mortgage upon and sale of an office building in West Palm Beach, Fla., and giving priority to the mortgage over a builder’s lien claimed by appellant, Ley & C‘o., Inc. The claims of error are: First, that the federal court violated comity, in that, before the bill was filed, there was pending in a state court a bill between the same parties to foreclose the same builder’s lien on the same property; and, second, that appellant’s lien is superior to the moidg-age.
On August 19, 1926, Ley. & C’o., Inc., filed in the state court their bill to foreclose their lien for constructing the building, and made the trustee in the mortgage, Adair, a party together with others as having an interest therein. The bill prayed an accounting, the foreclosure of the lien, sale of the property, and a bar of all pght and title of the defendants. No receiver or injunction was asked. The trustee answered, denying much of the bill and setting up his mortgage and asserting its priority, but did not ask any foreclosure or other relief. The mortgage was not then in default. The cause was at issue July 4, 1927, when the appellee Wheat, as a successor trustee, was substituted for Adair. Thereafter, on August 18, 1927, Wheat, trustee, filed the present bill in the federal court to foreclose his mortgage, and made Ley & Co., Inc., and others parties. The prayers were for a foreclosure and a receiver, and that all defendants be required to establish their claims on the property. On August 25th insolvency of the owner of the property was alleged, and on August 26th a receiver was appointed and later took charge. The
The mortgage trustee, although impleaded in the cause, had not been ordered to sot np liis mortgage therein, nor liad he asked foreclosure. Being entitled to federal jurisdiction, lie sought it to establish the amount of his debt and validity of his mortgage, and to obtain a decree of foreclosure.. This much he could do, thereafter taking his decree to the state court for recognition in distribution, if the state court had been in full charge of the property for administration. Ingersoll v. Coram, 211 U. S. 335, 29 S. Ct. 92, 53 L. Ed. 208; Waterman v. Canal Bank, 215 U. S. 33, 30 S. Ct. 10, 54 L. Ed. 80; Byers v. McAuley, 149 U. S. 608, 13 S. Ct. 906, 37 L. Ed. 867. The mortgage also gave a lien on the income from the building, and on foreclosure a contract right to -a receivership. No receivership existing in the state court, but the owner being still in possession, this part of the security could also be enforced in tlie federal court with due recognition of the subordination of the receiver’s possession to the proceeding- in the state court. Had the state court gone forward with its ease, its prior right to sell must have been recognized. But by no officer and in no way has the stal e court itself at any time made any request of the federal court in the premises. Its suitor waited ten months to move for a stay, hut at tlie same time asked affirmative relief of the federal court. He lot his motion in the federal court slumber a year longer, when it was overruled partly because of the inactivity in the state court. Even then nothing was done in the state court for the two years befoi-e tlie federal decree. The justice of the federal court may not be indefinitely delayed. A receivership when long submitted to acquires rights even when in the beginning it was without right. Harkin v. Brundage, 276 U. S. at pages 52, 58, 48 S. Ct. 268, 72 L. Ed. 457. We hold that by acquiescence and long delay the state court’s priority of jurisdiction was waived and abandoned, and the federal court was free to administer full relief and sell the property. We do not pass on the further contention that the bill to foreclose the mortgage was so different from that to foreclose the lien that, since there had been no seizure of the res under the latter, the former might from the first have proceeded independently. Harkin v. Brundage, 276 U. S. 37, 48 S. Ct. 268, 73 L. Ed. 457; Empire Trust Co. v. Brooks (C. C. A.) 232 F. 641.
But the lien of Ley & Co., Inc., ought to have priority. The bond mortgage is a deed to Forrest Adair as trustee from Comean, who owned in fee one lot covered by it and a long term lease on the other, joined in by Mrs. Stowers to bind her reversion in the second lot. It was of no effect until delivery. Its preparation, the several signings, and the stamping, were but its conception — . it was quickened into life only at delivery. Edwards v. Thom, 25 Fla. at page 254, 5 So. 707; 8 R. C. L., Deeds, § 45. Delivery of a deed is the grantor’s surrender of control over it to the grantee, or to some one for him, with intent that it take present effect. The evidence touching delivery is meager. There is no proof of a formal tradition of the deed to Adair. It is dated June 4, 1925. Mrs. Stowers on that date executed it in Colorado before two witnesses, and there acknowledged it. It does not -appear that the grantee or
The lien of Ley & Co., Inc., arose thus. Comeau first arranged with Adair Realty & Trust Company to furnish $578,000 net on $650,000 of his bonds secured by a first mortgage on the finished building, their contract providing that $125,000' in addition would be furnished by another party on second mortgage. Comeau then accepted the bid of Ley & Co., Inc., for the construction of the building, and, on their inquiry how it would be paid for, Comeau showed Ley & Co., Ine., the contract with the trust company. The contract for the secondary financing which was signed by the trust company and Comeau and the second mortgagee stated that the money was to supplement that furnished on the bond mortgage to complete the building, so that the bond mortgage would constitute a valid first lien superior to all other liens on' the building, and that Comeau should, in making all payments for labor and materials, take necessary writings to protect against liens therefor and furnish the trust company satisfactory evidence thereof. While the mortgage to Adair was in course of execution, but before its final delivery and record, Ley & Co., Inc., having examined the records and seen that the title to the premises was clear, took possession of them and began work on June 16th, holding possession until they ceased work, after which in due time they recorded their claim of lien and began its foreclosure for the balance due. By Comp. Gen. Laws of Fla., §§ 5349; 5350, and 5353, Ley & Co., Inc., had for their labor and materials a lien upon the building and the land on which it stood prior to all others accruing thereafter. By section 5380 all persons whose interest, lien, or claim arises while the construction is in progress are to be held as having notice of the lien. As a matter of law, therefore, when Adair, trustee, received final delivery of his mortgage, he took it with constructive notice of and subject to the builder’s lien because the builder was then in possession and had begun work. Booker & Co. v. Watson, 96 Fla. 671, 123 So. 837; Guaranty Title & Trust Co. v. Thompson, 93 Fla. 983, 113 So. 117. The builder’s lien thus attaching secures all sums due for labor and materials thereafter furnished under the same contract. Palm Beach Bank & Trust Co, v. Lainhart, 84 Fla. 662, 95 So. 122. The innocence of bondholders purchasing negotiable bonds does not add anything to the lien of the mortgage securing them. Booker & Co. v. Watson, supra. The builder’s possession is constructive notice to them also. Had the mortgage been in existence when Ley & Co., Inc., began work, they could then have refused to lay out their material and labor until assured against it. The mortgage not having been delivered, it had no effect, though the builder knew it was about to be made. Adair Realty & Trust Company, finding the builder in possession ■with a builder’s lien fixed, could on its part have refused to go forward, the mortgage not being a first lien as agreed; but the contract
Mrs. Stowers contends she has never been so impleaded as to bring in issue her rights as against the builder’s lien. Yo assignment of error raises any question relating peculiarly to her. We leave all such open. Defects of pleading can yet be remedied by amendment.
The judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.