Mutual Benefit Life Insurance v. Rowand

26 N.J. Eq. 389
CourtNew Jersey Court of Chancery
DecidedOctober 15, 1875
StatusPublished
Cited by2 cases

This text of 26 N.J. Eq. 389 (Mutual Benefit Life Insurance v. Rowand) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mutual Benefit Life Insurance v. Rowand, 26 N.J. Eq. 389 (N.J. Ct. App. 1875).

Opinion

The Chancellor.

The questions in this case arise between the holder of the second and third mortgages on the property and the lien [391]*391claimants, as to the priority of these mortgages, or either of them, over the lien claims, and as to the allowance of the lien claims of Thompson, the architect and superintendent, and Warner, who furnished and put in the heating apparatus. The premises are what is known as Disnock’s brown stone house” and lot in Elizabeth. The land was owned, when the building was begun, (which was in 1870,) by Mrs. Dimock. She and her husband conveyed it, in 1873, to the defendant, Rowand. The complainants’ mortgage is the first encumbrance on the property, and is in no wise questioned. The defendant, Lyman A. Jacobus, holds two mortgages on the premises; one for $60,000, dated May 2d, 1870, acknowledged the 4th, and recorded on the 13th of the same month ; the other, for $20,000, dated the 18th of March, 1871, acknowledged on the 20th, and recorded on the 21st of that month. The lien claimants insist that their claims are entitled to priority over the Jacobus mortgages, because those mortgages were, in fact, both taken, as they insist, after the commencement of the building. The building was begun in 1870. The mortgage for $20,000 was not taken until 1871. The mortgage for $60,000 is, as before stated, dated May 2d, 1870, rvas acknowledged on the 4th, and recorded on the 13th of that month. The proof is, that the excavation for the foundation of the house was begun on the 28th of that month, and that the wmrk of building the foundation was commenced on the 16th of Jnne following. It appears, however, that that mortgage was not delivered until the 7th of June, 1870. The mortgagee insists that the commencement of the building should be held to be the beginning of the erection, strictly speaking, and therefore that the excavation for the foundation ought not to be so considered. The legislature intended to make the actual and visible commencement of the building, notice to all who might propose either to purchase or acquire liens upon the property. The commencement of actual operations on the ground for the erection of a building, is constructive notice to all such persons of the claims which those who may contribute work or materials for the building, may thereafter make against the property by virtue [392]*392of the mechanics’ lien law. The excavation for the foundation is such notice, and it makes no difference that the excavation is made by the owner himself, or under his direction, and not under a contract. The excavation for the foundation is the commencement of the building,” within the meaning of the law. Pennock v. Hoover, 5 Rawle 291 ; Brooks v. Lester, 36 Maryland 65. In the former of these cases, the court say, that it may safely be considered the universal understanding as to what constitutes the commencement of the building of a house, that it is the first labor done on the ground which is made the foundation of the building, and to form part of the work suitable and necessary for its construction. In the latter case, the court say, that what the law means by the term, “commencement of the building,” is some work and labor on the ground, the effects of which are apparent, such as, beginning to dig the foundation, or work of like description, which every one can readily see and recognize as the commencement of a building. Where, as in this instance, the whole work of building was done “ by the day,” by persons employed by the owner for the various parts of the work; there is no foundation for the discrimination sought to be made in this case between the excavation for the foundation and the building of the foundation. Had any workman or materialman, looking, as he had a right to look, at the security to be afforded him by law, ascertained that the excavation for the foundation was commenced on the 28th of May, and that the mortgage for $60,000 had not been recorded (if such had been the fact) until the 7th of June following, he would have been justified in regarding the mortgage as having been recorded subsequently to the commencement of the building. That mortgage was not delivered until the 7th of June, the day on which the mortgagee gave his check for the money. It must be considered as not having been recorded before that day. Freeman v. Schrœder, 43 Barb. 618. The lien claims are therefore entitled to precedence over those mortgages, unless one of the following propositions of the counsel of the mortgagee be [393]*393■true: first, that the advancing of the money on the 7th of June will have relation back to either the date of the mortgage, or to the time of the acknowledgment, or to the •time of recording the mortgage; second, that the mechanics5 lien law does not authorize a judgment against the land in any case where actual service, as contradistinguished in •the act from “legal55 service, of the summons in the suit on •the lien claim is obtained; and therefore, inasmuch as in the suits by the lien claimants who have appeared in the cause, they all obtained actual service of summons, judgment against the land could not lawfully have been entered in ■those suits, and consequently no special fieri facias could lawfully be issued on any of them; and third, that the statute, as it stood when these claims were contracted, limited the lien to the estate which the owner had within one year before the filing of the claim in the clerk’s office ; and therefore, inasmuch as the lieu claims of those claimants who have appeared in the suit were not filed until more than a year after the recording of either of the mortgages in question, the encumbrance of those mortgages is superior to that of those claims.

As to the first of these propositions: the mortgage of $60,000 was not delivered until the 7th of June, when the money was advanced. Mr. Jacobus says that when it was handed to him, he gave his check for the money. Up to ■that time it was no lien as against any one. It had no validity. It had been executed and put on record, not only in the absence of any agreement between the mortgagor and mortgagee for the loan, but without the knowledge of the latter. The considerations which would give the mortgage relation back to its date as between mortgagor and mortgagee, are not applicable to the question between the present parties litigant. They are all encumbrancers. The mortgagee claims priority by virtue of the constructive notice of the record of his mortgage; the lien claimants, by virtue of the constructive notice of the commencement of the building; and the latter are entitled to all the protection and advantages [394]*394to which they would have been entitled if they had been mortgagees under a mortgage recorded simultaneously with the commencement of the building.

The making of the loan was not, in any wise, dependent on the fact that the mortgage had been recorded on the 13th of May, nor does there appear to have been any reference made to the circumstance. The transaction in which these two-mortgages, held by Mr. Jacobus, originated, was a purchase of stock and bonds by Mr. Dimock, of Frederick Butterfield, the lending of the money being dependent on the purchase by Dimock of the stock and bonds. Mr. Dimock says, on this head : “ Mr. Frederick Butterfield said he could obtain the money for me, or could lend it to me, I forget which, provided I purchased of him certain securities; which I did, and received from Mr. Butterfield a cheek for $80,000 ; by whom drawn I do not recollect; my simple impression would be that it was Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
26 N.J. Eq. 389, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mutual-benefit-life-insurance-v-rowand-njch-1875.