Opinion
Decided May 24, 1926.
Court of Appeals — Appellate jurisdiction — Chancery case — Foreclosure of mechanic's lien — Appeal lies from allowance of attorney fees — Award of fees improper where funds insufficient to pay mortgage liens — Section 8323, General Code.
1. Appeal may properly be taken from allowance of attorney fees in chancery case.
2. Foreclosure of mechanic's lien is a chancery case.
3. Order allowing attorney fees in mechanic's lien foreclosure held appealable.
4. Award of attorney fees to plaintiff in mechanic's lien foreclosure under Section 8323, General Code, held improper, where fund realized on judgment and sale was insufficient to pay prior mortgage liens.
APPEAL: Court of Appeals for Hamilton county.
Messrs. Miller Elston, for plaintiffs.
Mr. Powell Crosley, for defendants.
This case is in this court on an appeal from a judgment of the court of common pleas awarding an attorney's fee to counsel for plaintiffs. The plaintiff's petition was for judgment for labor and materials on a building contract and foreclosure of mechanic's lien. The Southwestern Mortgage Company, the Big Four Building Savings Company, and others, were parties defendant. The Big Four Building Savings Company filed its answer and cross-petition, setting up and claiming a first mortgage lien. The Southwestern Mortgage Company did likewise. The petition was filed in February, 1923, and nothing was done under the petition. On June 22, 1925, the cross-petitioners were awarded judgments by the court on their answers and cross-petitions. The court found the claim of the Big Four Building Savings Company to be a first and best lien for the amount claimed, and, in the same judgment, the court found that the Southwestern Mortgage Company should recover the amount claimed in its cross-petition, that its mortgage lien was a second lien, and that the conditions of the mortgages had been broken.
An order of sale was taken by the Big Four Building Savings Company. Sale was had of the property in question, the sale was confirmed by the court, and distribution was ordered. The sum realized from the sale amounted to $19,100.
The claim of the Big Four Building Savings Company amounted to $13,209.13, with interest. The judgment of the Southwestern Mortgage Company was in the sum of $9,345.20, with interest.
Under the order of distribution it appears that the taxes, penalties, and interest assessed against the property amounted to $2,201.20. The judgment and interest of the Big Four Building Savings Company amounted to $13,821.73, so that after payment of this claim and the taxes, penalties, etc., a balance of $3,077.07 remained in the hands of the sheriff to pay the costs, receiver's compensation, and the judgment lien of the Southwestern Mortgage Company, approximating $10,000.
Counsel for the plaintiffs in their foreclosure suit applied to the court for an allowance of attorney fees, for services in bringing the action, to be paid out of the proceeds of the sale. The trial court made an allowance of $1,200, and ordered the same paid from the proceeds. From that part of the judgment, the Southwestern Mortgage Company appeals.
The plaintiff partners move to dismiss the appeal, as not presenting a chancery question, and assert that their action was one for a money judgment and foreclosure of mechanics' liens; that the foreclosure of mechanics' liens is purely statutory, and an action at law, from which no appeal would lie.
The mortgage company contends against the motion, claiming that an action in foreclosure of mechanics' liens is a chancery case, and that an appeal from an allowance of counsel fees is proper.
That an appeal from an allowance of attorney fees in a chancery case is proper is settled in the case of Thompson v. Denton, 95 Ohio St. 333, 116 N.E. 452, in which case it was held that an order fixing compensation of a receiver is a chancery case and appealable.
That a foreclosure of a mechanic's lien is a chancery case is settled by the Supreme Court of Ohio in the case of Hollowell, Ex'x., v. Schraden, 96 Ohio St. 599, 118 N.E. 1083.
In the Hollowell case the Court of Appeals of Butler county held, by majority decision, that the foreclosure of a mechanic's lien was an action at law and not appealable. The Supreme Court, on review, reversed the Court of Appeals, with instructions to overrule the motion. This seems to us decisive of the question. The motion to dismiss the appeal herein will be overruled.
Plaintiffs contend that they are entitled to the award of attorney fees under favor of Section 8323, General Code. This section provides for foreclosure of mechanics' liens, and the pertinent part of the section is as follows: "When judgment shall be rendered in such proceeding, in favor of the parties succeeding therein, the court may at its discretion allow a reasonable attorney's fee, to be paid out of the fund realized for lien claimants."
In the instant case no judgment was rendered in favor of the parties claiming the mechanic's lien. No fund was realized for the mechanic's lien claimants. The judgment was taken and sale had on behalf of the cross-petitioners, the mortgage lienholders. The proceeds of the sale were only sufficient to pay the first mortgage lien and a small portion of the second mortgage lien.
Under the facts there is no basis for the claim of plaintiffs, under the provisions of Section 8323, General Code.
This court holds, in a decision under this date, in a case from the Court of Appeals of Warren county. Columbus Mutual Life Insurance Co. v. Dennull, 21 Ohio App. 363, that counsel in an action brought for partition of real estate, where the mortgage liens were far in excess of the value of the proceeds of sale, could not be awarded fees for services out of the funds produced at the sale.
In a recent case, decided on the 30th day of November, 1925, Swing v. Swing et al., in an action in partition, where a judgment and order of sale were taken on the cross-petition of a mortgage lienholder, and the funds produced were insufficient to pay the mortgage, this court held that counsel for the partitioner was not entitled to compensation.
Under the authorities above referred to and the facts of this case, we hold counsel is not entitled to an award of fees to be paid out of the funds in court, and a decree in favor of the defendants may be presented.
Decree for defendants.
BUCHWALTER, P.J., and CUSHING, J., concur.