Mut. Life Ins. Co. v. Walling

• Decision Date: 25 February 1893
• Parties: MUTUAL LIFE INS. CO. v. WALLING et al.
• Court: New Jersey Court of Chancery

26 A. 453

51 N.J.E. 99

MUTUAL LIFE INS. CO.

v. WALLING et al.

Court of Chancery of New Jersey.

Feb. 25, 1893.

(Syllabus by the Court.)

Bill for a mortgage foreclosure by the Mutual Life Insurance Company against Thomas Walling, mortgagor, and others, holders of mechanics' liens. Decree declaring the mechanics' liens superior to a portion of the mortgage debt.

Fred W. Burn ham and H. V. Condict, for complainant.

L. H. Schenck and J. L. Griggs, for defendants.

PITNEY, V. C. This is a bill to foreclose, founded upon a mortgage dated the 3d of December, 1891, given to secure a bond conditioned to pay $1,500, with interest, in one year. Seven hundred and fifty dollars only is claimed to be due upon it. Two hundred and fifty dollars of this sum was consideration money for the premises conveyed on the same day by complainant to the mortgagor. The $500 additional was money loaned on that day, making in all $750. So far there is no dispute. The litigated questions arise out of certain lien claims filed against the property, which claim to have priority over $500 of the amount due upon the mortgage by virtue of the act of March 4, 1879, (P. L. p. 77; Supp. Revision, p. 456,) which provides that mechanics' liens shall have priority over what are called "advance mortgages." The facts are that the particular premises covered by this mortgage, being a lot 50 by 200 feet, and part of a larger tract, were owned by the complainant, and on the 24th of September, 1891,— a little over two months before the date of the mortgage and the conveyance,—it entered into a written agreement with Walling, the defendant, in which it agreed, in consideration of $3,000, to sell and convey to him the whole tract. Three hundred dollars of purchase money was paid down, and the balance was to be paid at the time of the delivery of deeds, at the rate of $250 for each of nine lots of 50 by 200 feet, and $200 for another of the lots. It was provided that Walling should, in the mean time, enter into possession, and at once commence the erection of at least three houses, according to certain specified plans and sketches, which should cost $2,400 each; and, when either of the houses should have arrived at a certain stage of their construction, then the complainant was to deliver a deed of the lot on which it stood, and accept in return a mortgage for $1,500; that the sum of $500 should be, at the delivery, advanced by the party of the first part, and the balance of $750 when the building should be fully completed. Under that agreement several houses were commenced by Walling, and the one on the lot covered by the mortgage here in question was so far advanced that on the 3d of December a deed of conveyance was made, and the mortgage in question received back, and $500 in cash advanced upon it. Subsequently a lien claim was filed by one Craig, one of the defendants herein, and an action brought upon it against Walling as owner and the complainant as mortgagee, a plea filed thereto, and afterwards a consent by the attorney of the complainant was filed to the effect that judgment might be entered that the mechanic's lien was subsequent to $250 of complainant's mortgage and prior to the balance of $500,—such a judgment as should have been entered if the complainant's mortgage were strictly an advance-money mortgage, within the meaning of the act above mentioned. The complainant's bill asks that the complainant may be relieved from that admission, and the effect of it in the judgment, on the ground that it was made under a misapprehension of the facts of the case; that at the time of making it the attorney had been informed and was under the impression...