Mechanic's Lien. Mortgage, Of real estate. Equity Pleading and Practice, Costs.
Under R.L.c. 197, § 5, a mortgage of real estate for an amount named, which was made and recorded before the date of a contract under which a mechanic's lien is claimed, has priority over such lien to the full amount of such mortgage, if the mortgage was given to secure the successive advances that the mortgagee was bound to make under a construction loan contract with the mortgagor; and in such a case it is immaterial that only a very small portion of the money had been advanced when the mechanic claiming the lien made his contract with the owner and that before the whole of the amount of the construction loan had been advanced the mortgagee had received notice of the claim of lien.
In a suit in equity in which the plaintiff seeks unsuccessfully to establish the priority of a mechanic's lien against a certain mortgage, where the mortgagee and two successive assignees of the mortgage are made defendants and the different defendants have filed separate answers, there being only one subject of controversy, it is proper, in making a decree dismissing the bill and awarding costs to the defendants, that only one bill of costs instead of three should be taxed against the plaintiff.
BRALEY, J.
The liens of the plaintiffs for labor have been established as of a date subsequent to the recorded mortgage given by Albertie W. Soutter, the owner of the premises, to the defendant trust company, and, after maturity, assigned by it to the defendant Brown and by him to the defendant Conant. A decree, establishing the liens as the superior incumbrance, is asked for by the bill.
Upon its face the mortgage purports to be security for the payment of the promissory note of the mortgagor for $6,000. But the parol evidence leaves no doubt, and the judge rightly assumed, that the actual consideration was for moneys to be advanced from time to time by the mortgagee in payment for a building to be erected upon the land. Hall v. Tay, 131 Mass. 192, 194. The question of priority under R.L.c. 197, § 5, depends primarily upon the inquiry, whether as the process of construction proceeded advancements to the amount named were obligatory or optional with the mortgagee. Gerrity v. Wareham Savings Bank, 202 Mass. 214. Gray v. McClellan, ante, 92. It is uncontroverted that, after deducting interest on the full amount, the remainder was credited on the books to the "A.W. Soutter Building Account," upon which, as the value of the property was increased by the construction of the building, the mortgagor was permitted to draw and to transfer the amounts so drawn to her own private account kept with the defendant company. The defendant company having been absolutely obligated to pay the loan named in the mortgage, it is immaterial that only a very small portion had been thus transferred before the plaintiffs began work, or that before the entire amount had been disbursed the company received notice of the liens. Gray v. McClellan, ante, 92.
But, if by force of the statute the liens must yield to the mortgage, the plaintiffs ask that only one bill of costs be taxed. The subject of controversy as to each defendant is the same and even if the defendants severed in their answers, the plaintiffs ought not to be trebly mulcted. R.L.c. 203, § 14. Clark v. Reed, 11 Pick. 446. Pratt v. Bacon, 11 Pick. 494. Miller v. Lincoln, 6 Gray, 556.
The decree dismissing the bill when thus modified is affirmed, with costs of the appeal.
Ordered accordingly.