Mills v. Matthews

Eccleston, J., delivered the opinion of this court. On the 18th of August 1849, Mills and Milburn entered into a written contract under seal, which was recorded the same day, and therein the former agreed to sub-lease to the latter, for ninety-eight years, renewable forever, a lot of ground in the city of Baltimore. Milburn agreeing to erect on the lot, at his own cost and expense, five brick dwelling-houses, and Mills contracting to advance, as a loan to Milburn, to aid him in the erection of the houses, the sum of $300 on each house. Milburn covenanted that the houses should be finished, and that he would repay the money advanced and all interest thereon, on or before the 1st of January 1853.

And in case of default in the payment of the money advanced or interest thereon, or of ground-rent, taxes, or insurance premiums, the contract secured to Mills the right to reenter on the premises, or any part thereof, in the name of the whole, and thereupon the contract was to be in trust, that Mills might enter into bond, as required by the laws of Maryland relating to the sale of property by trustees under deeds of trust, so that the premises, with the improvements, might be sold and the proceeds applied in reimbursing the money advanced, and paying all costs, &c., and the balance, if any, paid over to Milburn. The contract also provided, that upon the completion of the houses and the return of the advances, Milbunr was to receive five sub-leases at the yearly rents agreed upon. It is conceded that on the 15th of August 1849, these parties made a parol contract, similar, in every respect, to the written one above mentioned. They applied to a conveyancer to reduce the contract to writing, but the delay until the 18th was occasioned by his sickness.

On the 15th Milburn commenced the houses. At first Mills-objected to this, but when Milburn said he could not help beginning, and was ready to sign the contract as soon as it was written, Mills made no further objection. On the same day materials for the houses were contracted for by Milburn, and part of them were then delivered. Mills made the advances which he contracted to make, and ³²² they were not returned to him.

The claims for materials furnished were also left unpaid. The property was sold under the decree in this case, and the proceeds not being sufficient to pay the advances made by Mills and the claims on account of materials furnished, a question of preference arose between the parties. The court decided in favor of the material men, and from that decision the present appeal is taken. No question is made in regard to the- amount of any or either of the claims, or in reference to the regularity of the proceedings, on the part of the material men, in filing- and recording their claims under the lien laws.

But it seems to be admitted on both sides, that the decision of the controversy depends very much upon the construction of the 7th section of the act of 1845, ch, 287, as applicable to the facts disclosed in the record. This section enacts: “That when a building shall be erected by a lessee or tenant for life or years of a lot of ground, or by an architect, builder or other person employed by such lessee or tenant, that the lien for work and materials aforesaid, shall apply only to the extent of the interest of the-said lessee or tenant for life or years.” And after providing for the case of a lot belonging to a married woman, the section-then provides: “That the said lien for work and materials shall be preferred to all mortgages, judgments, liens and incumbrances, which attached upon the- said building or ground covered thereby, subsequently to the commencement thereof, provided always, that mortgages, incumbrances and liens, other than leáses which have attached thereto prior to-the commencement of the said building, and which, by the existing laws of this State, are required to be recorded, shall not be preferred, but be postponed, unless the same are-recorded prior to the commencement of the said building.” It is said on the part of the appellees that the claim for advances is in truth a mortgage, and as such, required by the-laws of the State to be recorded; that the written contract having been executed and recorded subsequently to the commencement of the buildings, that claim cannot be preferred to the liens of the appellees. They also insist that the appel ³²³ lant is not entitled to a preference under the parol agreement, whether they are right or not, in supposing his claim is a mortgage and necessary to be recorded, because the written contract merged the one by parol. This last suggestion necessarily