Opinion
March 1, 1927.
Vere H. Multer, for the plaintiffs.
Howard E. Taylor, for the defendant Ray A. Hancock.
The allegations of the complaint for the purpose of this motion must be deemed to be true. It alleges in substance that plaintiffs entered into a contract with the defendant Hancock by which plaintiffs were to construct certain houses upon certain lots of said defendant; that plaintiffs have partly performed their contract and partially constructed said houses; that they have been prevented from completing their contract by the wrongful acts of the defendants who have conspired to cheat and defraud them by preventing them from performing; that in pursuance of such conspiracy the defendants other than Hancock have filed mechanics' liens against the premises. The complaint demands damages for the amount accrued for the work already performed and for the prospective profits, and seeks to impress an equitable lien upon the premises therefor. The complaint also alleges that the plaintiffs have no adequate remedy at law. There are no facts alleged to show that plaintiffs will be unable to enforce their claim in an action at law under the contract or that they will be unable to recover therein the amounts due them. For this reason defendant insists that plaintiffs cannot maintain the action as an action in equity, citing the case of Pritchard v. Pritchard ( 134 A.D. 301). I do not think that the case cited is necessarily controlling as to this motion. That decision was rendered after a trial of the whole issues and upon a consideration of the facts established at the trial.
In the case at bar it appears that plaintiffs have, pursuant to an agreement between them and defendant Hancock, furnished labor and materials toward the construction of buildings upon the real property in question and which, therefore, have tended to improve said defendant's property. I think plaintiffs are entitled to demand an equitable lien upon the premises. ( Fowler v. Mutual Life Ins. Co. of New York, 28 Hun, 195; Perry v. Board of Missions, 102 N.Y. 99.) In the case last cited the court, speaking of the plaintiff, said: "It is true he did not sell the estate, but he added to it, and by his expenditures upon it fitted it for the purpose for which it was intended." Further the court said: "The plaintiff's case is within the general doctrine of equity, which gives a right equivalent to a lien, when in no other way the rights of parties can be secured. The advances were directly for the benefit of the real estate; they were approved by the convention by whose directions the title was conveyed to the defendant, but neither the convention nor the defendant have incurred any corporate liability, and while it may be said that the advances were made on the promise of, or in the just and natural expectation that, a mortgage would be given, it is also true that they were made on the credit of the property, for the improvement of which they were expended. The repairs and improvements were permanently beneficial to it, made in good faith, with the knowledge and approbation of the parties interested, and accepted by them, not as a gratuity, but as services for which compensation should be given." It is stated in Story's Equity Jurisprudence (§ 1223) that a vendor's lien ceases where a personal credit was given to the vendee excluding any notion of a lien, but that whenever it is doubtful whether such credit was given or not, it is not to be presumed unless made certain by the vendee. So in the instant case the question whether or not plaintiffs intended to rely solely upon the personal credit of the defendant Hancock should not be determined from an examination of the pleadings in this motion, but should await determination of the facts after trial.
If the plaintiffs are entitled to an equitable lien upon the premises then they are entitled to file a notice of pendency of the action under section 120 of the Civil Practice Act which permits the filing of such notice in an action brought to recover a judgment affecting the title to, or the possession, use or enjoyment of real property. In Mills v. Bliss ( 55 N.Y. 139) an order was granted by Special Term directing the cancellation of a notice of lis pendens. Such order was affirmed at General Term and reversed by the Court of Appeals, which said: "Whether the action can be sustained is not a question to be passed upon on this appeal. The plaintiff may fail to prove the facts alleged, or the court may hold that the action is untenable upon the facts stated; although the defendant, by taking issue upon the facts, has impliedly conceded that they are sufficient, if proved, to maintain an action." An answer has been interposed in the case at bar so that it appears that the defendants have taken issue upon the facts and have impliedly conceded that such facts are sufficient, if proved, to maintain the present action.
The rule governing applications to cancel notices of pendency of actions is concisely stated in Jones v. Armenia Ins. Co. ( 136 A.D. 453, 456) as follows: "The question that must always be presented in an action of this kind is whether the complaint states a cause of action affecting the title to real property or the use, possession or enjoyment thereof. If it does and the complaint demands a judgment affecting the title to or the use, possession or enjoyment of real property, then the court cannot look to see whether the cause of action set forth in the complaint is one in which such a judgment can be granted — it is sufficient if such a judgment is asked for. ( Schomacker v. Michaels, 189 N.Y. 65.)" (For a discussion of the rule and cases where the question has arisen see, also, Kauffman v. Simis, 156 A.D. 208; Marpret Construction Corporation v. Hargust Land Corporation, 214 id. 792; Brox v. Riker, 56 id. 388; Mount Vernon Co. Silversmiths, Inc., v. Mount Vernon Metal Products Co., Inc., 202 id. 753; Kings-Bright Construction Co. v. Loizeaux Lumber Co., 140 id. 147; Beman v. Todd, 124 N.Y. 114; St. Regis Paper Co. v. Santa Clara Co., 62 A.D. 538; Lindheim Co. v. Central National Realty Construction Co., 111 id. 275; Shandley v. Levine, 44 Misc. 23; Behrens v. Sturges, 121 A.D. 746.)
In the case at bar the complaint alleges facts sufficient to justify an equitable lien in favor of plaintiffs, at least to the extent of the labor and materials furnished, and demands a judgment in consonance therewith. This being so, the court has no power to deprive plaintiffs of their statutory right to file a lis pendens.
The motion is, therefore, denied, with ten dollars costs to plaintiffs against defendant Hancock in such action.