Miller v. Mead — 40 N.Y. St. Rep. 177

Majority

p. 177

David Miller, Resp’t, v. Sarah F. Mead, App’lt.^[1]

(Court of Appeals, Second Division,

Filed October 6, 1891.)

Headnote

Mechanics’ lien—Contract to sell—Covenant as to priority op lien.

Defendant entered into a contract with one G., by which the latter was to build certain houses on defendant’s land and she was to make advances therefor and upon completion of the buildings convey the land to G., and by which it was agreed that any mechanic's lien Sled should be subject to defendant’s interest in the premises. Held,, that defendant was the owner within the meaning of the statute; that the contract was proof of her consent to the_ erection of the buildings and rendered her interest subject to such liens as might be filed for labor and materials, and that such liability was not affected by the stipulation as to priority of lien.

Appeal from a judgment of the general term of the supreme court of the first judicial department, affirming a judgment entered on the decision of a special term.

May 25, 1887, the defendant owned in fee land in the city of New York extending from One Hundred and Twenty-seventh to One Hundred and Twenty-eighth street and bounded on the east by Madison avenue, and on the west by a line drawn parallel with and thirty-five feet west of th^e avenue. On the date mentioned, she and one Herman Gierke entered into a written contract by which she covenanted to sell, and he to purchase the premises for $70,000. Gierke also covenanted to complete, on or before October 1, 1887, six dwelling houses, then begun on the south part of the lands, in a style specified in the contract, and costing at least $6,000 each. The defendant covenanted to advance Gierke $21,000, payable by instalments as the work progressed, to aid

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in the erection of the buildings. It was mutually covenanted that, when the houses were completed the defendant would convey the land to Gierke, and that he, concurrently therewith, would give-his bonds to secure the payment of the purchase price $70,000, and the $21,000 to be advanced, secured by mortgages on the. premises. The ■ contract contained the following provision: “And it is agreed that should any mechanics’ lien be filed against the property herein described during the progress of said buildings, or against any part thereof, * * * such mechanics’ lien. * * * shall be subsequent to the liens and claims of the party of the first part, (Sarah E. Mead): but in such eases, or either of them, it is agreed that all payments or advances due or to become-due under this contract may, at the option of the party of the first part (Sarah E. Mead) be withheld until such lien or liens:, shall be removed and discharged of record, or said party of the first part may, at her option, apply such payments or advances to-the payment and discharge thereof, or said party' of the first part, (Sarah E. Mead) may, at her option, in the case of a mechanics’' lien, deposit an amount sufficient to cover said lien or liens, or give security under the statute, and contest the same at the cost, and expense of the party of the second part (Herman Gierke) and deduct the same from -said payments or advances; and the said party of the first part (Sarah F. Mead) expressly reserves the-right to make the said payments or advances, or any part of the said payments or advances, before they or either of them may be due and payable, or out of the order in which they or either of them may become due and payable.”

June 9, 1887, Gierke, with the assent of Sarah F. Mead, assigned the contract to Edward Grippentrog. On the 20th of June, 1887, David Miller (the plaintiff) and Grippentrog, entered into a written contract by which Grippentrog contracted to fur- . nish stone for the completion of the buildings for $9,060, under which, prior to January 24, 1888, the plaintiff furnished stone of’ the value of $1,500, and the price thereof not being paid, a lien was filed on the 24th of January, 1888, pursuant to chapter 342: of the Laws of 1885, to foreclose which this action was brought.. Upon the trial the court found that the plaintiff had furnished,, under the contract, stone used in the buildings of the value of' $1,500, which was adjudged to be due, and a judgment was entered foreclosing the lien, with costs; from which the defendant, appealed to the general term, where it was affirmed, and thereupon the defendant appealed to this court.

E. N. Taft, for app’lt; William E. Stewart, for resp’t.

It is provided by chap. 342 of the Laws of' 1885, the general Mechanic’s Lien law of this state, as follows: •

“ Sec. 1. Any person * * * who shall hereafter perform any labor or service, or furnish any materials which have been used, or which are to be used in erecting, altering or repairing any house * * * with the consent of the owner, as hereinafter defined, or his agent, or any contractor or subcontractor, or any other person contracting with such owner, to erect, alter or im

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prove, as aforesaid, within, any of the cities or counties of this .state, may * * * have a lien for the principal and interest ■of the price and value of such * * * material upon such house * * * and upon the lot * * * upon which the same may stand or be intended to stand, to the extent of the right, title and interest at that time existing of such owner, whether owner in fee, or of a less estate * * * or of the owner of any right, title or interest in such estate, which may be sold under an execution.”

“ In cases in which the owner has made an agreement to sell and convey the premises to the contractor or other person, such owner shall be deemed to be owner within the intent and meaning of this act until the deed has been actually delivered and recorded conveying said premises pursuant to such agreement.” Sec. 5.

The parts of the statute above quoted have been recently construed by the court of appeals Schmalz v. Mead, 125 N. Y., 188 ; 34 N. Y. State Rep., 779 ; which affirms 15 Daly, 223 ; 23 N. Y. State Rep., 117, the facts of which were as follows: The defendant, the owner in fee of the land involved in the case at bar, contracted in November, 1885, to sell and convey it to George Kuhn for an agreed price, and to advance to the vendee a certain sum in instalments to enable him to erect buildings of a kind agreed to thereon. The vendor covenanted that when the buildings were completed he would convey the land and take the grantee’s bond, secured by a mortgage on the land, for the payment of the purchase price and the sum to be advanced for building purposes. Under this contract the vendee entered into possession and began the erection of the buildings, but soon failed, and abandoned his purchase. The vendor had performed her part of the contract, and no advances were due from her when the lien for materials furnished the vendee was filed or foreclosed.

The vendor defended the action to foreclose the lien on the grounds: (1) That the contract of sale and for the erection of buildings was not sufficient evidence of the owner’s, vendor’s, consent within the statutory meaning of “the consent of the owner ” that the buildings be erected: (2) That only the interest of George Kuhn, vendee and contractor, could be subjected to lien: (3) That the lien could attach only to advances due from her, if any, and not to her interest as vendor in the real estate. These defenses were overruled and the lien was held to attach and bind the vendor’s interest in the realty. Schmalz v. Mead differs from the case at bar only in the fact that the contract of sale and for building did not contain the stipulation contained in the agreement under consideration and quoted in the .statement of facts, that if any mechanics lien was filed it should be subject to the lien and claim of the vendor. The defendant’s relation to and interest in the land constituted her the owner thereof within the meaning of the word “ owner ” as defined in the fifth section of the mechanics lien law, Schmalz v. Mead, svpra, and her estate could be subjected to the liens of persons

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furnishing labor or materials for the construction of buildings erected thereon with her consent. By the contract entered into-May 25, 1887, between Mrs. Mead, then the owner of the fee, and Gierke, and by him assigned to Grippentrog with her consent, she not only agreed to sell and thereafter convey the land,, but bound the vendee to build within a specified time six houses according to plans which had been agreed on, to cost not. less than $6,000 each, she agreeing to advance $21,000 for the purpose of partly paying the cost of their erection; which contract was proof of her (the owner’s) consent that the buildings-be erected, and rendered her interest in the premises subject to such liens as might be filed for labor and materials furnished for the construction of the houses, unless in some way relieved from liability by the stipulation that any mechanic’s lien should be subject to her interest in the property. Schmalz v. Mead, supra; Rollin v. Cross, 45 N. Y., 766 ; Husted v. Mathes, 77 id., 388; Burkitt v. Harper, 79 id., 273 ; Otis v. Dodd, 90 id., 336.

The stipulation in respect to the priority of liens did not destroy the owner’s consent that the houses should be built, nor diminish its effect, nor did it lessen the absolute obligation resting upon “the vendee to build them. It was not the design of the parties to accomplish any such results, hut simply" to circumvent the statute and defeat the rights given by it to persons furnishing labor and materials for the work, which design could not be accomplished by such a stipulation as against-persons not in privity with either of the parties to it who should, without notice of the stipulation, furnish labor or materials for the work.

The judgment should he affirmed, with costs.

All concur.

Statutes and regulations cited

Lien Law p. 178