#### Nathan J. Packard, Plaintiff, *v.*Barnett Sugarman, William Screiber, George H. McChesney et al., Defendants.

(Supreme Court, Onondaga Special Term,

May, 1900.)

1. Mechanic’s lien — When interest of one who contracts to sell, with building loan, is liable — “ Owner.”

The interest in real estate of one who has contracted to sell it, with a provision for a building loan, is subject under the Lien Law (L. 1897, ch. 418, § 21) to the claim of a lienor, whether or not the latter knew of the existence of the contract of sale, unless the said contract is filed, within ten days after its execution, in the office of the clerk of the county in which any part of the land is situated.

A person who has contracted to sell real estate remains the “owner”, within the meaning of the statute, until the title passes.

*2.*Same — Modification of contract — Notice of lien must name mortgagee as *“*owner.”

Where, before the time contemplated in the contract of sale, the owner delivers a deed and takes back a mortgage, the rights of a lienor are not affected by this modification of the original contract, but he cannot recover his lien out of the mortgage where his notice of lien, filed against other persons, does not name the mortgagee as an “ owner ” against whose interest in the premises a lien is claimed, nor include him at all.

Plaintiee seeks to foreclose a mortgage for $950 and interest. upon premises of which the title and possession is held by the defendant Screiber. The defendant McChesney asks, at this time, in effect, that a mechanic’s lien, for materials sold to Sugarman *624and used in the erection of a house upon said premises, before they were conveyed to Screiber, be held a claim against and payable out of plaintiff’s interest as mortgagee. Mo claim upon or under said mechanic’s lien is made against Screiber, who is conceded to have purchased the premises for value before the lien was Sled, and without notice thereof. Plaintiff’s mortgage was executed and recorded before McChesney’s lien was filed. The claim that the latter should be paid out of the mortgagee’s interest is based on section 21 of the “ act in relation to liens,” etc. (chap. 418, Laws of 1891), in reference to contracts for the sale of lands with building loans.

Samuel Packard, for plaintiff.

David P. Costello, for defendant Screiber.

P. M. White, for defendant McChesney.

Hiscook, J.

August 6, 1899, plaintiff and his brother, who were copartners, made a contract in writing to sell to the defendant Sugarman the premises in question for $800. The contract contained the following clauses: *“*Second party (Sugarman) hereby agrees to build upon said lot aforesaid a house, according to the plans and specifications hereto agreed upon between these parties. * * * Said first parties hereby agree to loan to said second party from time to time in the course of the construction of said building, an amount not to exceed the sum of $1,200, which money is to be used only in the construction of said building. Said second party agrees to pay said first parties the sums so advanced by Oct. 1, 1899, and if not paid on that day the amount so loaned is to bear interest at the rate of six per cent, per annum. Said deed not to be delivered until the amount loaned and purchase price of lot is paid to first party, or sufficient security satisfactory to first party given in lieu thereof.”

This contract was never filed in the clerk’s office of the county where the premises were situated, but the defendant McChesney saw it August thirtieth.

After the execution of this contract Sugarman entered into possession of the premises covered thereby and commenced the erection of a house, as therein provided, and McChesney sold and *625delivered to him materials to be used in the construction thereof on and prior to September twelfth, amounting to $277.04. It is this amount for which he seeks to enforce his lien, waiving, upon the trial, any claim for materials supplied after that date.

Upon the date last mentioned (September twelfth) further proceedings, under the contract for sale were terminated by the Packards executing to Sugarman a deed of the premises in question, and taking back, in the name of the plaintiff, the mortgage involved in this action for $950, of which $800 was purchase price, and $150 moneys advanced under the clause of the contract already quoted.

Upon October second, Sugarman executed the conveyance of said premises already referred to, to defendant Screiber, and it was duly recorded the next day.

October sixth McOhesney filed his lien herein urged. His notice thereof was directed to Screiber and Sugarman “ owners and persons in interest.” It recited, in substance, that he had a lien against Screiber as “ owner of the real property ” therein described for “lumber and building materials furnished by said Geo. H. McOhesney to Barnett Sugarman.” And what is especially urged by plaintiff, it contained no notice of any claim against plaintiff, nor any reference, in any form, to him, or any claim or interest of his in said premises.

Upon these principal facts the question is raised, whether, in effect, McOhesney can have his mechanic’s lien paid out of plaintiff’s mortgage interest in said premises, under section 21 of the Lien Law already referred to.

Ho good reason is called to my attention why the contract of sale between Packard and Sugarman should not be treated as a contract for the sale of land, with a building loan, within the provisions of said section. Assuming that it is to be so regarded, the interest of said plaintiff thereunder, as against the mechanic’s lien, became subject to the liabilities therein prescribed by reason of the failure to file such contract in the clerk’s office. It does not avoid such liability to say that the materialman knew of its provisions, although not filed. The statute absolutely and unconditionally prescribes the penalty which shall follow the failure to file such a' paper. It does not prescribe, for instance, that the liability shall follow, in case of nonfiling, in favor of a materialman who shall deliver materials in good faith, and without notice of it.

It is next urged, in behalf of the lienor, that the execution by *626the vendor under the contract of sale to the vendee of a deed of said premises, and the execution by the latter back to the former of the mortgage in question, all before the date contemplated in the contract, but amounted to a modification of the latter within the terms of section 21; and that, therefore, such acts do not affect or impair his rights to have a lien against plaintiff. I will assume herein that this is so; that any right which McChesney had to file a lien against plaintiff’s interest in said premises, upon September twelfth, would not be cut off by the execution of said deed and mortgage.

Accepting a view in favor of the lien, upon these questions, I come now, however, to a point which, in my judgment, stands in the way of its enforcement against plaintiff. Section 21 contemplates the enforcement of a lien, under the contingencies therein prescribed, against the interest, which a person has under his contract of sale. It prescribes that *“*the interest of each pairty to such contract in the real property affected thereby is subject to the lien, etc.” And, again, in providing that a modification of such a contract shall not impair the rights of a person who has furnished materials, it says that such rights or interest *“*shall be determined by the original contract.”

The interest of plaintiff, under said contract, against which Mc-Ohesney could have enforced his lien, was that of an owner of real estate which he had contracted to sell to another. He was, undoubtedly, an “ owner ” within the definition of that term laid down in section 2 of the Lien Law.

The legal title to real estate does not pass, under a contract for the sale thereof, to the vendee thereunder, so as to be subject to levy and sale under execution. It must, therefore, remain in the vendor. Code, § 1253; Higgins v. McConnell, 130 N. Y. 482.

Independent of this statutory ride, however, the definition of the word “ owner ” given in the statute under review is ,so broad as to leave no doubt that it was intended to cover thereby a person like plaintiff, holding the legal record title to real estate, although a contract for the sale thereof had been given.

This being so, if McChesney desired to enforce a lien, by virtue ■ of section 21, against plaintiff’s interest in said premises, the interest against which he must have proceeded was that held by plaintiff as *“*owner ” under the contract of sale. And, if he desired to do this, it was his duty in his notice to state plaintiff’s *627name as the owner of real property, against whose interest therein a lien was claimed. Lien Law, § 9.

This he did not do, and because of such failure his notice was fatally defective and he cannot have any lien. De Klyn v. Simpson, 34 App. Div. 436, 447.

The apparent theory of the defendant, McChesney, by his notice and answer, was that his lien was a lien upon the interest in said premises of Sugarman and S'creiber which was prior to the plaintiffs mortgage. This theory, however, became untenable, and it was admitted by him that, before notice of his lien was filed, Sugar-man conveyed all of his title in the premises to Screiber for value, and without notice of, and not subject to, defendant’s claim. It then became necessary that defendant’s lien should be collected, if at all, out of the sum which Screiber was bound to pay upon plaintiffs mortgage, and hence the claim of a lien upon plaintiffs mort- . gage interest in said premises already discussed.

Findings and judgment may be prepared, directing a foreclosure of plaintiffs mortgage, with costs. Such costs down to and. including defendant McOhesney’s answer to be collected out of the property, and from that point on, from said defendant. Defendant Screiber to have taxable costs up to $50 against said defendant McChesney.

Ordered accordingly.