Bloom v. Thirtysix Berwyn St. Corp.

• Decision Date: 04 April 1927
• Citation: 136 A. 803
• Parties: BLOOM v. THIRTYSIX BERWYN STREET CORPORATION et al.
• Court: New Jersey Court of Chancery

136 A. 803

BLOOM

v. THIRTYSIX BERWYN STREET CORPORATION et al.

Court of Chancery of New Jersey.

April 4, 1927.

Suit by Abram Bloom against the Thirty-Six Berwyn Street Corporation and others. On motion to strike out answer and counterclaim. Motion granted, and decree advised in accordance with conclusions stated.

Osborne, Cornish & Scheck, of Newark, for the motion.

Saul & Joseph E. Cohn, of Newark, opposed.

BERRY, Vice Chancellor. This is a motion to strike out an answer and counterclaim, on the ground that they are sham in part and frivolous in part. The bill was filed to foreclose a purchase-money mortgage for $15,000 held by the complainant, the lien of which was, by agreement, postponed to the lien of a building and loan association mortgage in the sum of $100,000. The answering defendants are mechanic's lien claimants. They allege that their lien is entitled to priority over the complainant's mortgage because of the postponement of that mortgage to the building and loan mortgage, and also because their lien relates back to the date of commencement of the building, which was prior to the recording of the building and loan association mortgage. This motion was argued before me on January 18, 1927, and I advised an order striking out the answer and counterclaim. The defendants then applied for leave to reargue the matter, and additional briefs have been submitted. A careful examination of these briefs and the authorities therein cited and a consideration of the arguments of counsel but confirm my first impression, and convince me that my former decision was correct. The order striking out the answer and counterclaim will therefore be permitted to stand.

The exact point here in controversy was decided in New Jersey Building, Loan & Investment Co. v. Bachelor, 54 N. J. Eq. 600, 35 A. 745. Under the ruling in that case the building and loan mortgage, which was a construction mortgage, is on a par with a purchase-money mortgage, because, according to the affidavits used on this motion, it conclusively appears that all of the moneys secured by the mortgage were used in the construction of the building erected on the premises. Both the building and loan mortgage and the mortgage which is the subject of this foreclosure suit may therefore, for the purposes of this motion, be considered as purchase-money mortgages. See, also, Hoag v. Sayre, 33 N. J. Eq. 552; Andrus v. Burke, 61 N. J. Eq. 297, 48 A. 228; Meeker v. Warren, 66 N. J. Eq. 146, 57 A. 421; and Lippincott v. Smith, 69 N. J. Eq. 243, 60 A. 330; Id., 69 N. J. Eq. 787, 64 A. 141....