Robbins v. Arendt

W. Hutton; to furnish among other tilings the hardware required in the buildings on this property, and when Hutton made his subcontract with plaintiffs. It also appears that the property was sold under a decree of foreclosure and sale of the above mentioned mortgage on the 31st day of August, 1891, at public auction, and bid in and purchased by the defendant, Arendt, but that the deeds for the same were not acknowledged or delivered to the purchaser until the 20th day of November, 1891, although dated the 31st of August of that year. Under these circumstances, respondents contend that Arendt’s title relates back to the date of the deed, or that at least he became the equitable owner of the property from that date, and as such could and did consent to the improvements made thereon and should be compelled to pay therefor.

This rule has been applied in the case of private contracts between parties when the work was done with the knowledge and consent of the purchaser after the contract and before the delivery of the deed. Rollin v. Cross, 45 N. Y., 766 , 770. But in this case Arendt purchased at a public foreclosure sale by order of the court, and a different rule obtains. In such case the purchaser only acquires title on the delivery to him of a deed duly acknowledged. Strong v. Dollner, 2 Sandf., 444 ; Cluson v. Corley, 5 id., 453 ; Mitchell v. Bartlett, 52 Barb. 319 ; Cheney v. Woodruff, 45 N. Y., 98 . Until that time the owner of the equity if in jjossession will be deemed the owner, Knapp v. Brown, 45 N. Y., 207 ; Reid Y.Bank of Tenn., 1 Sneed, 262 ; Otley v. Haviland, 36 Miss., 19 ; Marston v. Stickney, 60 N. H., 112 , and a mortgagee will not be deemed an owner unless he is in actual possession of the premises under his mortgage. Cox v. Broderick, 4 E. D. Smith, 721; Ombony v. Jones, 19 N. Y., 234 .

In the case at bar, Smith, the owner of the equity of redemption, was in possession at least to the 20th of November, and the mortgagees, Kind & Lipman, were never in possession. It follows, therefore, that none of the appellants could be regarded as owners before Arendt received his deed, and that none of them could object to anything going on about the building, nor could they enforce any rights or obligations nor be bound to pay merely because they knew what work was done or material furnished. They were neither legal nor equitable owners, and it required more than mere knowledge to bind them. No one can be said to impliedly consent to a thing he cannot stop. Nor can his estate be bound without his consent and against his will. Riggs v. Chapin, 27 St. Rep:, 271; Havens v. West Side E. L. & P. Co., 20 N. Y. Suppl., 764; 49 St. Rep., 771 .

The word “ owner ” is carefully defined in paragraph one of the mechanic’s lien act to be the “ owner in fee or of a less estate, a lessee for a term of years or vendee in possession under, a contract existing at the time of the filing of the notice of lien or the owner of any right, title and interest in real estate which may be sold under execution.” Arendt’s bid and right to the deed was a chose in action, if anything, and not subject to levy or sale under execution. Paragraph five of the act expressly provides that in cases when the owner has made an agreement to sell and con

vey the premises to the contractor or other person, such other shall be deemed to be the owner within the intent and meaning of the act until the deed has been actually delivered and recorded conveying the premises pursuant to the agreement.

The court below, however, found that $225 worth of the materials furnished by the respondents under their contract with Hutton was delivered after the 20th day of November,' 1891, that is, after Arendt became the owner by the delivery of the referee’s deed, and they contend that the judgment should be sustained for this amount at least, and so it would under the findings of consent, etc., were it not for the further finding in the case, that Smith (the former owner) had paid Hutton, his contractor for this hardware, the full amount of his contract including the respondents’ claim and obtained his receipt therefor. It has been uniformly held by this court and sustained by the court of appeals, that one who has furnished materials or done work upon a building for a contractor or for a portion of the work cannot acquire a lien therefor against the owner after the latter has in good faith paid the contractor in full for the work done under the contract according to its terms. Hagan v. American Baptist Society, &c., 14 Daly, 131 ; 6 St. Rep., 212 ; French v„ Bauer, 16 Daly, 309 ; 32 St. Rep., 326 ; affirmed 134 N. Y., 548 ; 48 St. Rep., 333 ; Carman v. McIncrow, 13 N. Y., 70 ; Lumbard v. R. R. Co., 55 id., 491; Crane v. Genin, 60 id., 127 ; Larkin v. McMullin, 120 id., 206; 30 St. Rep., 902 ; Post v. Campbell, 83 N. Y.. 282 ; Gibson v. Lenane, 94 id., 183. In French v. Bauer, supra, the principal contractor was given the benefit of his full lien when there was money coming due on subsequent instalments. Had Smith remained the owner there could be no question but that the lien sought to be enforced in this action could not have been sustained as against him, for there is no finding that it was not paid in good faith and without collusion and in accordance with the terms of the contract between Smith and Hutton. This certainly relieved Smith from any obligation to the plaintiffs.

But respondents insist that Smith was a stranger to the property and his payment should not be regarded; in other words, that it was immaterial what took place between Smith and, Hutton. But, as before shown, Smith was not a stranger to the property; on the other hand, he owned the equity of redemption, and was in possession at the time he made the contract with Hutton, and, as stated by the learned judge who tried the case, in his opinion, (although the fact is not included in his findings) that at that time’Arendt had agreed with Smith that he should have until the 20th of November, at least, the opportunity to dispose of the premises, or to obtain a loan on the same, and thus pay the mortgage which he owed to Kind & Li pm an.

The contract by Smith, therefore, appears to have been made in the hope of finishing the building and selling the same and thus retrieve himself. He, therefore, had an interest in making the contract. Then, too, the respondents made their contract with Hutton for the hardware and trusted him. If they did not trust him

entirely, but also looked to the property, it was their duty under numerous decisions to have filed their liens before the payment was made to Hutton according to the terms of their contract It is quite true that, as the event happened, the value of the property to Arendt was enhanced by the hardware furnished by plaintiffs ; but this was only because Smith failed in his endeavor to procure another purchaser or a new loan. And this alone cannot make Arendt or any of the defendants an insurer of the honesty ■and good faith of Hutton to his sub-contractor. There is no rule, either o£ law or equity, which we know of which compels Arendt under these circumstances to pay the plaintiffs the sum which Smith once paid to his contractor, simply because that contractor did not pay over the money to those entitled tp the same.

The judgment should, therefore, be reversed, with costs of the appeal to the appellants.

Bischofe and Pryor, JJ., concur.