Decided December 23, 1924.
Court of Appeals — Jurisdiction on appeal — Chancery case — Foreclosure of lien upon realty — Chancery case determined from pleadings and issues.
1. An action to foreclose a lien upon real estate and to subject property pledged to the satisfaction thereof, whether such lien is a mortgage or a mechanic's lien, is a chancery proceeding, and is appealable.
2. Whether a proceeding is an action in chancery or a suit at law is to be determined from the pleadings and from the issue made thereby.
ERROR to the Court of Appeals of Cuyahoga county.
This cause originated in the court of common pleas of Cuyahoga county. The Cleveland Savings Loan Company brought suit to foreclose a mortgage held by it upon certain premises then owned by John A. Parsons and Paula R. Parsons. The Union Mortgage Company, holder of a second mortgage, Alfred J. Hummer, the plaintiff in error here, and various other lien claimants were made parties defendant. Answers and cross-petitions were filed setting up the various liens, praying for the ascertainment of the amount due thereon, marshaling of the liens, the sale of the premises, and distribution of the proceeds according to the respective priorities. The claim of each was denied by the others, and the validity of the mechanic's lien on the premises claimed by Hummer was denied in the answer and cross-petition of the owners, John A. Parsons and Paula R. Parsons. Hummer's alleged mechanic's lien was based upon the claimed performance of a certain contract entered into with the Parsonses, whereby he undertook to furnish labor in constructing, altering and improving buildings on the premises in question, owned by the Parsonses, for which it was alleged the sum of $2,500 was agreed upon. A claim was also made for certain extra labor performed on such premises by agreement of the parties. In their answer and cross-petition the Parsonses further averred that the labor performed by Hummer was under a written contract, whereby it was agreed that for the stipulated services the Parsonses would pay and Hummer would receive $1,800 and a certain Lozier automobile valued at $700; that they had paid the $1,800, and had offered to deliver the particular automobile referred to in accordance with the terms of the agreement, but that Hummer had refused and continued to refuse to accept the same in the discharge of such obligation.
The journal entry in the court of common pleas shows that the matter was heard on the pleadings and the evidence, on consideration whereof the court determined the validity of the mortgages on the premises, found the amounts due thereon, found Hummer's mechanic's lien a valid and subsisting mechanic's lien against the premises in the sum of $810.46, and held that he was entitled to have the premises sold for the satisfaction thereof. The court further determined and fixed the priority of the various liens, whereupon an appeal to the Court of Appeals was duly perfected and the case there heard.
The jurisdiction of the Court of Appeals was challenged by motion upon the ground that the case was not a chancery case, and therefore not appealable. That motion was overruled, and upon hearing the court found Hummer's lien valid in the sum of $92. The entry itself discloses that the Court of Appeals necessarily found against the plaintiff's contention with reference to the automobile. Looking to the opinion of that court we find the statement:
"We think that he made an unwise contract, but he saw the automobile, and, while it was valued at $700, there was no warranty as to its being worth $700. He had an opportunity of seeing the car, and with his eyes open he made this contract, and we do not see that he had been misled in any way, and he is not entitled to recover the money or the value of the services, but he is entitled to recover the automobile, and what is due him above the amount of the automobile."
A petition in error was filed in this court as of right, claiming that the case arises under Section 6, Article IV, of the Constitution.
Mr. Arthur P. Gustafson, for plaintiff in error.
Messrs. White, Hammond, Brewer Curtiss, for defendants in error.
It appearing that there was evidence in the record to support the conclusion of the Court of Appeals, there is but one question presented for the determination of this court, and that is whether this proceeding was a chancery case, appealable to the Court of Appeals. There could have been no prejudice in permitting a new party in the Court of Appeals, who, in effect, waived any claim to the automobile in controversy.
As shown by the foregoing statement, each of the parties, except the owner of the premises, set up a lien which he claimed upon the property in question, and prayed for foreclosure and satisfaction thereof out of the proceeds of the property. None of such claims was admitted by the other claimants. Issues were made as to the validity thereof.
Tested by the rule laid down in the case of Wagner v. Armstrong, 93 Ohio St. 443, 113 N.E. 397, this was a chancery case. Probably no contention would be made but for the fact that subsequent to the joinder of the issue by the pleadings some claims were adjusted by admissions or stipulations of the conflicting claimants, so that the only lien in dispute, as to validity or amount, was that of Hummer, whose cross-petition was based upon a mechanic's lien upon the premises in question. Hence the direct question is submitted in this case as to whether an action to foreclose a mechanic's lien is a suit in chancery and appealable. Although such lien is purely a creature of statute, yet, as said in 27 Cyc., page 17, it is of an equitable character, being somewhat analogous in its aims to the equitable lien of a vendor for unpaid purchase money on lands sold.
As a basis for the conclusion reached in the case of Wagner v. Armstrong, supra, it was there said in the opinion, at page 450 (113 N.E. 399):
"Appealable cases, therefore, must be such cases as are now recognized as equitable in their nature; and perhaps the better way to express it would be, cases that were recognized as equitable actions before the adoption of the Code of Civil Procedure."
The first mechanic's lien law passed in Ohio was in 1823. When such act was amended in 1851, one of the amendments thereto was styled "Remedy of lienholder in chancery," and it was there enacted, in substance, that any person then or thereafter holding a lien under the above-recited act, in addition to the remedy therein provided for, might proceed by petition in chancery, as in other cases of liens, against the owner or owners and all other persons interested. The language of Section 8323, General Code, is almost precisely the same as the amendment above referred to, and provides that the holder of such lien may proceed by petition, as in other cases of liens, and obtain judgment thereon for the rent or sale thereof, "as justice and equity require."
In a consideration of the matter of equitable remedies and a classification thereof it is stated in 1 Pomeroy on Equity Jurisprudence (4th Ed.), Section 167, page 205, that:
"In addition to the liens above mentioned, which belong to the general equitable jurisprudence, the legislation of many states has created or allowed other liens, which often come within the equity jurisdiction, in respect, at least, to their means of enforcement. 'The so-called mechanics' liens' may be taken as the type of illustration of this class."
We are therefore persuaded that the foreclosure of a mechanic's lien falls within the broad meaning of chancery cases, it being one which, according to the usages and practice in courts of chancery, prior to and at the time of the adoption of the act of civil procedure remedies, was awarded in accordance with the principles of equity, but not in accordance with the rules of law.
This precise question was previously before this court. The Court of Appeals of Hamilton county, in the case of Hollowell v. Schraden, 26 C. C., N.S., 97, had refused to take jurisdiction of an action to foreclose a mechanic's lien, holding that it was not cognizable in equity and therefore not appealable; but this court, by journal entry, as appears in 96 Ohio St. 599, 118 N.E. 1083, reversed that court upon the authority of Wagner v. Armstrong, supra.
It is contended, however, that because when it came to the hearing of the issues between Hummer on his mechanic's lien and the Parsonses, the owners of the property, no contention was longer made as to the validity of the lien, but only as to the agreement, and particularly as to the manner of payment, the case was no longer a chancery case and became a suit at law, and no appeal to the Court of Appeals would lie. Whether a proceeding is an action in chancery or a suit at law is to be determined from the pleadings and from the issue made thereby. It is elementary that, where a court of equity obtains jurisdiction of an action, it will retain it and administer full relief, legal or equitable, so far as it pertains to the transaction or the subject-matter involved therein. The fact that subsequent to the joinder of issue by the pleadings in an action to foreclose and marshal liens, deter mine priorities, and subject the property to the satisfaction of the liens according to their priority, some claims and some matters in dispute were disposed of by admissions and stipulations of the parties, would not serve to change the character of the proceeding from an action in chancery to a suit at law. Jurisdiction was fixed when the issues were made. Gantz v. Gease, Guardian, 82 Ohio St. 34, 91 N.E. 872.
MARSHALL, C.J., ROBINSON, JONES, DAY, ALLEN, and CONN, JJ., concur.