Telsey v. Calvin-Morris Corp.

The defendant Calvin-Morris Corporation was the owner of premises on the northeast corner of Madison avenue and Seventy-sixth street upon which it had erected or was in the course of erecting a building known as the Carlyle Hotel. It was, also, the owner of premises on the southeast corner of Madison avenue and Seventy-seventh street upon which it had erected or was in the course of erecting a large apartment house. On the 6th day of November, 1930, it executed and delivered to the plaintiff its bond for $200,000; on the same day, to secure the bond, it executed and delivered to the plaintiff a mortgage covering the two parcels above mentioned. The mortgage was subject to two prior mortgages, securing, in the aggregate, the sum of approximately $4,300,000. On the very day when the bond and mortgage were delivered, the plaintiff advanced to the defendant Calvin-Morris the sum of $170,000; on the 14th of November he advanced the balance of $30,000. The mortgage was not recorded until the 2nd day of Decern

Although the plaintiff’s mortgage was recorded prior to the filing of appellant’s notice of hen, the appellant claims that it has priority, since the mortgage, as to it was invalid. This claim is grounded upon the provisions of subdivisions 2, 3 and 5 of section 13 of the Lien Law (Cons. Laws, ch. 33). Subdivision 2 provides : Every mortgage recorded subsequent to the commencement of the improvement and before the expiration of four months after the completion thereof shah, to the extent of advances made before the filing of a notice of hen, have priority over hens thereafter filed if it contains the covenant required by subdivision three hereof.” The covenant provided for in subdivision 3 is “a covenant by the mortgagor that he will receive the advances secured thereby as a trust fund to be apphed first for the purpose of paying the cost of improvement, and that he will apply the same first to the payment of the cost of improvement before using any part of the total of the same for any other purpose.” Subdivision 5 provides: “ No instrument of conveyance recorded subsequent to the commencement of the improvement, and before the expiration of four months after the completion thereof, shall be valid as against hens filed during the said period, unless the instrument contains a covenant ” identical with the covenant set forth in subdivision 3. The mortgage did in fact contain a covenant that “ if this mortgage is recorded subsequent to the commencement of any improvements, repairs or alterations to or upon the mortgaged premises and before the expiration of four months after the completion thereof ” the mortgagor will receive the advances as a trust fund, and apply them

The covenant is a requisite only of those mortgages which are recorded during a period between the commencement of the improvement and a date not more remote than four months after its completion. The question here is, Was this mortgage recorded before the expiration of four months after the completion ” of the improvement.

There is no evidence in the case, given by the owner, the contractor, the architect or any other person, as to the date of completion of either building, constituting an integral part of the improvement made, unless certain equipment furnished by Hoegger, Inc., the appellant, who claims a lien, may be regarded as “ materials furnished ” for the “ permanent improvement ” of real property (Lien Law, § 2), in which case there might be proof of completion of the “ improvement ” within the four-month period. No testimony was given to indicate whether the articles in this equipment were ever attached in any wise to either of the buildings; none to show that they ever became an integral part of either structure. They are described in the notice of Hen not otherwise than as foUows: “ The materials furnished were bathroom accessories and closet poles.” Closet poles, as one ordinarily conceives them, are merely furniture, not fixtures, and as such not an “ improvement ” to real estate. “ Bathroom accessories ” bring to mind towels, soap, bath mats, soap dishes, and the Hke, which are clearly furniture. “ A notice of Hen must be sufficient in essentials in and of itself.” (Per Pound, J., in Pascual v. Greenleaf Park Land Co., 245 N. Y. 294 , 298.) It might perhaps be reasoned that a notice of Hen is not sufficient which does

The judgment should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur.

Judgment affirmed.