
    Altieri v. Lyon.
    
      (Superior Court of New York City, General Term.
    
    March 2, 1891.)
    1. Mechanics’ Liens—Conveyance in Fraud oe Liens.
    The owner of lots upon which was a building loan mortgage, deeded them to another under an agreement whereby the latter promised to erect buildings thereon, and to give a mortgage to secure payment of the consideration, and the grantor promised to advance the balance due on the building loan mortgage. The grantor was on the property after the deed was made; and after the grantee had contracted with plaintiff to do part of the work in erecting the buildings, the grantor took a deed back from the grantee through a third person, on default in the payment of the mortgage given to him by the grantee, and in consideration of the release by the grantor of a note given as liquidated damages. Held, that the transaction was valid, and did not show fraud as to mechanics and material-men.
    3. Same—Failure to Establish Lien—Personal Judgment.
    Mechanics’ Lien Act N. Y. 1885, § 15, (Laws 1885, c. 343,) providing that, whenever in any action brought under the provisions of the act the claimant shall fail for any reason to establish a valid lien, he may recover judgment against the party or parties to the action for such sum as may appear to be due, and which he might recover in an action upon a contract against the said party, was intended to allow the mechanic or material-man to recover a money judgment if his action to foreclose a lien was defeated by reason of informality in the lien, or neglect to enforce it in time. It does not allow a recovery against others than the person with whom the contract to furnish labor or materials was made.
    Appeal from special term.
    Action by Pietro Altieri against Dorr Lyon to foreclose a mechanic’s lien. The premises were originally owned by Lyon, who gave a building loan mortgage thereon to secure a loan by the Equitable Life Insurance Company. Subsequently Lyon sold the premises to Smith under an agreement whereby Smith assumed the mortgage and agreed to erect buildings on the premises, and gave a purchase-money mortgage and a note to secure the performance of his agreement to build. Lyon agreed to advance Smith the unpaid balance of the building loan. Before the buildings were completed, Smith conveyed the premises to one Hayden, who conveyed to Lyon. Further facts appear from the opinion.
    Argued before Sedgwick, O. J„ and Tritax and Dugro, JJ.
    
      Bartow S. Weeks, for appellant. Thornall, Squiers & Constant, for respondent.
   Truax, J.

The complaint alleges that at a certain time the defendant, Lyon, was the owner of certain premises; that thereafter he transferred the said premises to one Smith upon the understanding and agreement that said Smith should immediately erect 16 dwelling-houses thereon for the said defendant Lyon; that such conveyance was made without legal consideration, and as a cover, and with the fraudulent purpose and intent on the part of the defendant, Lyon, to escape any personal liability on his part for the expense incurred for the improvement by said buildings of said premises for his benefit, and to hinder, delay, and defraud the mechanics and laborers doing work and furnishing materials for said buildings; that thereupon and thereafter said Smith entered into a contract with the plaintiff to build the stone foundation wall of the said houses tó be erected on said property, and that the defendant, Lyon, informed the plaintiff that he, said Lyon, had the money to build the houses, and that, if he,' the plaintiff, would enter into a contract with said Smith to build said stone foundation walls, he, Lyon, would pay or cause to be paid to the plaintiff every two weeks the amount then due him for building the walls; that in pursuance of said agreements the plaintiff did certain work, and that there is now.due him the sum of $910.68, under said agreements; that, after the plaintiff had done said work, Smith conveyed the premises to one Hayden, who conveyed them to the defendant, Lyon; that such transfers were made without consideration, and were made for the purpose of hindering, delaying, and defrauding the mechanics, laborers, and material-men who had furnished work.and materials on said property, and to prevent the property being subject to any possible judgment liens against said Smith. The answer was a general denial, except that the conveyances from Lyon to Smith, from Smith to Hayden, and from Hayden to Lyon, were admitted. The court at special term found as matter of fact that, after the recording of the deed from Lyon to Smith, Lyon remained in actual possession of the property, and as matter of law, that, notwithstanding the making and recording of the said deed, the defendant, Lyon, remained the equitable and true owner of the premises therein described. It also-found that the deeds from Smith to Hayden and from Hayden to Lyon were made without consideration, and that the transfers of the property by Smith to Hayden and Hayden to Lyon was a legal fraud upon the plaintiff and the other mechanics and material-men who had performed work upon and furnished material for the buildings upon said property; and as matter of law that said conveyance from Smith to Hayden and from Hayden to the defendant, Lyon, was a legal fraud upon the plaintiff and the other mechanics and material-men who had performed work upon and furnished material for the buildings upon the said property.

We do not think that the evidence warrants the findings of fact made at the special term. The transactions between Lyon and Smith were valid transactions. Under them Smith became the owner of the property, subject, however, to certain mortgages to Lyon and to others. As such owner he had the-right to dispose of the property. There is no evidence to show that Lyon remained in the actual possession of the property. The evidence rather shows that Smith was in the possession of the property. If Lyon was on the property after the conveyance to Smith lie was there for the purpose of protecting his own interest as mortgagee, who was under a contract to advance money to Smith, the builder. The evidence shows that Smith became unable to carry out his contract with Lyon to erect certain buildings on said premises, and that, because of his said inability, the mortgages to Lyon became due, and Lyon had the right to foreclose these mortgages. By an agreement between Smith and Lyon, and for a valuable consideration, namely, the giving up of a note of $1,500, made by Smith’s wife to Lyon, and also the giving up of the right to foreclose the said mortgages, Smith conveyed to Lyon, through Hayden, the said property. There is no evidence to show that the property was worth any more than the amount that Lyon paid for it, and the judgment in favor of the plaintiff cannot stand unless it may be sustained upon a point which will be hereafter considered. It was alleged in the complaint that Smith and Lyon, to protect and relieve the defendant Smith from any personal liability by reason of his having made any agreement about any work upon the said premises or materials therefor, entered into a written agreement whereby the defendant, Lyon, for a good and valuable consideration, promised and agreed to and with the said Smith that he would pay and hold said Smith harmless .from the.amount then due to the plaintiff. This was denied by the defendant. The trial court found, in substance, as alleged in the complaint in this particular. It also found that by reason of the facts stated in the findings of fact and the filing of a notice the plaintiff acquired a good and valid and sufficient lien against the said buildings and premises above described under the laws of the state of Hew York. It may be that the agreement above referred to would authorize the court in holding that the defendant, Lyon, had agreed with Smith to pay the amount due the plaintiff, but we are of the opinion that such finding of fact did not, with the other findings of fact in reference to the filing of lien and so forth, warrant the conclusion of law that the plaintiff had acquired a lien. The plaintiff contends that section 15, c. 342, of the Laws of 1885, which is to the effect that, when-' ever"in any action brought under the provisions of the said act any claimant shall fail for any reason to establish a valid lien, he may nevertheless recover therein judgment against the'party or parties' to the action for such sum or sums as may appear to be due to him, and which he might recover in an action upon a contract against the said party or parties. We are of the opinion that the phrase “judgment for such sum or sums as may appear to be due to him” refers to the sum or sums that may- appear to be due to him from the person with whom he made the contract to perform labor orfurnish materials.. This person was not the defendant, Lyon. Whether or not he has a cause of action against Lyon upon his promise contained in Exhibit C, is not necessary for us to determine. Certainly it would not be right, and we are of the opinion that it was not the intention of the legislature, to allow a person to bring an action to foreclose a mechanic’s lien, and then, if he be defeated in that action, to recover a money judgment for any sum that may be due on any contract between him and the defendant. It was rather the intention of the legislature to allow' the mechanic or the furnisher of materials to recover a money judgment if his action to foreclose his lien was defeated by reason of any informality in the lien, or by reason of any neglect to enforce his lien within the time required by law. The judgment is reversed, and new trial ordered, with costs to the appellant to abide the event. All concur.  