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Irwin v. Murphey

Supreme Court of Arizona

October 23, 1956

A. O. IRWIN, Appellant,
v.
John W. MURPHEY and Helen G. Murphey, Appellees.

[81 Ariz. 149] Robert D. Stauffer, Tucson, for appellant.

Boyle, Bilby, Thompson & Shoenhair, William A. Scanland and Wilbert E. Dolph, Jr., Tucson, for appellees.

PHELPS, Justice.

Appellant A. O. Irwin appeals from the judgment foreclosing a mortgage in which (1) his claim for the value of services and materials alleged to support said claim as a third-party beneficiary against the mortgagor Murphey, was rejected by the trial court, and in which (2) his claim of an alleged mechanic's lien against the mortgagor Luke was declared invalid.

On April 1, 1953, the defendants, Fred G. Luke and Victoria Luke, husband and wife, executed and delivered to John W. Murphey and Helen G. Murphey, husband and wife, defendants-appellees herein, a note in the face amount of $13,600, with

Page 535

interest at the rate of eight per cent per annum. As part of the same transaction the Lukes executed and delivered to the Murpheys a mortgage as security for the said note, mortgaging Lot 325, Catalina Foothills Addition, Pima County, Arizona, which was duly recorded on April 14, 1953. This mortgage and note were executed by the Lukes and delivered for the purpose of constructing a dwelling on said lot and, pursuant to the terms of an agreement reading as follows:

'Agreement

'This building loan agreement, made this 1st day of April, 1953, by and between John W. Murphey, party of the first part, and Fred G. Luke and Victoria M. Luke, his wife, parties of the second part, Witnesseth:

[81 Ariz. 150] 'The party of the first part hereby agrees to loan, for the purpose of constructing a dwelling house on Lot 325 of Catalina Foothills Estates No. 3, Pima County, Arizona, the sum of Thirteen Thousand Six Hundred Dollars ($13,600.00), to the parties of the second part; the said sum to be paid out according to the following schedule:

'The sum of $3,600.00 to be applied to the balance of the purchase price of the above mentioned lot;

'Ten percent (10%) of $10,000.00 when foundations of said dwelling are completed;

'Fifteen percent (15%) of $10,000.00 when the walls are up;

'Twenty percent (20%) of $10,000.00 when the house is framed and roofed and the windows are in place;

'Twenty percent (20%) of $10,000.00 when the plastering and sheetrock is completed;

'Thirty five percent (35%) of $10,000.00 when the house is completed and the loan agent (Leo B. Keith) has been paid his commission of $300.00.

'The above listed payments are to be made only upon certification by the Architect for this job, Mr. Jos. Th. Joesler, and provided the note and mortgage securing the said loan are not in default.

'Witness our hands the day and year first above written.

'(s) John W. Murphey

'(s) Fred G. Luke

'(s) Victoria M. Luke.'

Shortly after April 14, 1953, construction was started on the mortgaged property. Murphey then paid out certain sums which he claims were made according to a payment schedule in the above agreement.

The mortgage note her involved provided for interest at eight per cent annually, payable monthly. The Lukes failed to make any interest payment whatever on the note. Consequently, Murphey brought this action to foreclose his mortgage, and to determine the rights of party defendants claiming mechanics' liens on the mortgaged property. Appellant Irwin among others, in his capacity a one of ...


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