Lampson Lumber Co., Inc. v. Chiarelli

• Decision Date: 01 March 1924
• Citation: 100 Conn. 301,123 A. 909
• Court: Connecticut Supreme Court
• Parties: LAMPSON LUMBER CO., INC., v. CHIARELLI ET AL.

123 A. 909

100 Conn. 301

LAMPSON LUMBER CO., INC., v. CHIARELLI ET AL.

Supreme Court of Errors of Connecticut.

March 1, 1924

Appeal from Superior Court, New Haven County; Allyn L. Brown, Judge.

Action by the Lampson Lumber Company against Concetta Chiarelli and others. Judgment for plaintiff, and defendants appeal. No error.

This was action in two counts to foreclose a mortgage and a mechanic's lien, brought to and tried by the superior court for New Haven county.

The first count of the complaint in this action alleges that one Oscar J. Riccio, the owner of certain real property situated in the town of West Haven, on March 28, 1922, mortgaged the same to the plaintiff by a deed containing the following condition:

" The condition of this deed is such that whereas, the said grantee, the Lampson Lumber Company, Incorporated, has agreed to sell and furnish to me lumber and other building materials at current market prices, to be used in the erection and construction of a dwelling house on the land above described, and has agreed to give me credit for the same to the amount of $2,000; and whereas, I have agreed to pay and discharge any indebtedness which may accrue on account of said sales within six months from the date of this instrument, together with interest on the same at the rate of 7 per cent. per annum: Now, therefore, if any and all indebtedness from me to said the Lampson Lumber Company Incorporated, on account of the matters hereinbefore described shall be fully paid and satisfied as aforesaid, then this deed shall be void."

It is further alleged that thereafter and prior to October 11 1922, the plaintiff sold and delivered certain materials to Riccio for use in construction of this house which he had agreed to buy from plaintiff and the plaintiff had agreed to sell to him to the value of $2,000, which sum was wholly unpaid. Further, that Riccio on May 17, 1922, by deed duly recorded, conveyed the mortgaged premises to the defendant Chiarelli. Then follows an allegation of the existence of certain mortgages and mechanic's liens upon the premises and that all accrued after the plaintiff's mortgage. Also that on May 17, 1922, by deed duly recorded, the defendant Chiarelli entered into an agreement with Riccio to reconvey the premises, and that on December 5, 1922, Riccio was adjudicated a bankrupt, and on December 21, 1922, Harry L Edlin was appointed his trustee in bankruptcy and was still acting. Also that defendant Chiarelli was in possession of the premises. The second count of the complaint alleges that plaintiff furnished materials and rendered services of the value of $206.84 in the erection of a building upon the mortgaged premises between May 29, 1922, and October 14 1922, and that on December 13, 1922, within 60 days after ceasing so to do, it filed for record in the land records of the town of West Haven, a certificate of mechanic's lien in due form which was duly recorded, and that the claim for said sum was still owned by the plaintiff and was unpaid. The remaining allegations as to liens, mortgages, the bankruptcy of Riccio, and the contract of Chiarelli to convey to him are the same as corresponding allegations of the first count.

Foreclosure of mortgage and mechanic's lien is claimed.

Certain of the defendants demurred to the first count of the complaint (1) because the condition of the mortgage did not disclose the nature of the transaction with reasonable certainty; (2) because the mortgage was not valid against creditors of the mortgagor; (3) because the condition was too indefinite to give validity to the mortgage against creditors by reason of giving no precise information as to the amount of the indebtedness. The court overruled the demurrer. Thereafter judgment by default for nonappearance against certain of the defendants and against the remainder upon a disclosure of no defense was entered, and on May 14, 1923, the plaintiff and certain of the defendants appeared and were fully heard on the complaint as theretofore amended, to which no plea or answer had been filed. The court found the sum of $2,068.34 due from Riccio to plaintiff on the mortgage debt, and $213.78 on the mechanic's lien, and thereupon rendered judgment of foreclosure in the usual form.

The court found all of the allegations of the complaint true. In addition to the facts above recited appearing in the complaint the court found that Riccio had used the materials furnished in the erection of a house upon the mortgaged premises, and that all claims made by any defendants were subsequent to the plaintiff's mortgage and lien; that on October 11, 1922, the value of the material so furnished reached a total of $2,000; that the lien of defendants Burack and Greenhouse was for materials and services furnished and rendered between August 30, 1922, and November 30, 1922, for which a certificate was filed December 26, 1922; that the lien of the defendant Ugucioni was for materials and services rendered and furnished between September 4, 1922, and October 4, 1922, for which a certificate was filed December 30, 1922.

Certain of the defendants whose appearances are noted below appealed from the judgment, and now assign error of the trial court in holding that plaintiff's mortgage had priority over the interest of these defendants, in finding that plaintiff had a valid mechanic's lien as against appealing defendants, in overruling the demurrer to the first count of the complaint, and in holding that recovery could be had on both the mortgage and the mechanic's lien.

Benjamin F. Goldman and Harry L. Edlin, both of New Haven, for appellants Smith and others.

John Elliott, of New Haven, for appellee.

KEELER, J. (after stating the facts as above).

The defendants in their brief attack the validity of the mortgage in question by reason of the fact that although the mortgage is dated March 28, 1922, plaintiff did not commence to furnish materials until May 28, 1922, prior to which last date, on May 17, 1922, Riccio had conveyed the mortgaged property to Chiarelli, and had taken back a contract to reconvey. They claim that, at the time Chiarelli became the owner of the premises, nothing had been advanced by way of furnishing materials, and any advances thereafter made were made to Chiarelli or the building contractor. The record does not disclose the date of recording the conveyance from Riccio to Chiarelli and of the contract to reconvey, but assuming that these instruments were recorded on or somewhere near the date of their execution, any one examining the record would have found a mortgage made by Riccio while owning the legal title to the land and the other two instruments which taken together would have revealed an equitable ownership in Riccio which would have been held under the mortgage as after- acquired estate. If, after such an examination, such a person should have discovered, as he might have done, that, from May 28th onward, materials were being delivered to Riccio and used on the job as found by the court, there is nothing in the record to show that any one including the junior lienors delivered any materials or performed any services on the credit of Chiarelli. If that was the case and the record dates of the deed from Riccio to Chiarelli and of the latter's contract to reconvey were of importance, such matters should have been set up in an answer, and doubtless would have been. In the hearing had by the court in the nature of a hearing after default, such matters are not cognizable. This point was not specially pressed in argument, and is not meritorious.

The principal claim of defendants is that the condition of the plaintiff's mortgage is so vague, indefinite, and uncertain as to be invalid as against subsequent incumbrancers.

The rule uniformly held in this jurisdiction and elsewhere is that the mortgage deed should show by its record the real nature of the debt or transaction involved so far as it can be disclosed and enable a creditor or other person interested to determine the real facts, or at least suggest some means of determination. This is the doctrine of the leading case of North v. Belden, 13 Conn. 376, 35 Am.Dec. 83. This court had occasion shortly after to apply and illustrate this doctrine in Hart v. Chalker, 14 Conn. 77, 79, and the opinion says:

" Our recording system, in its spirit, requires that the record should disclose, with as much certainty as the nature of the case will admit of, the real state of the incumbrance upon the property. And all the authorities concur in this result, that reasonable notice of the incumbrance should be given by the record. What is reasonable notice, in certain cases, has been a question. Certain points, however, we think are settled: That if the mortgage is given to secure an ascertained debt, the amount of that debt ought to be stated; that if it is intended to secure a debt not ascertained, such data must be given respecting that debt as will put any one interested in the inquiry, upon the track leading to a discovery; and if given to secure an existing or a future liability, the foundation of such liability must be set forth."

In commenting upon the passage last quoted, this court says in its opinion in Merrills v. Swift, 18 Conn. 257, 265 (46 Am.Dec. 315):

" But whatever this [reasonable notice] may be, the record should, as expressed by Ch. J. Williams, in Hart v. Chalker, 14 Conn. R. 79, disclose, with as much certainty as the nature of the case will admit, the real state of the incumbrance. By this is intended, not that a description, or a more certain one, of the incumbrance, is dispensed with, because it happens, from the accidental situation of the parties at the time, not be in their power to furnish it; but that the character of the debt

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