Atlas Mixed Mortar Co. v. Stein

JAMISON, J.,

pro

tem.

This action was brought by plaintiff to foreclose a mechanic’s lien for material furnished to defendant J. P. Stein. Respondent Progressive Finance Corporation answered, claiming that it was the owner of a deed of trust upon the premises covered by the said mechanic’s lien and that said deed of trust was prior to said lien. Judgment was rendered in favor of appellant against defendants Stein, Peet and Cheroff for the various sums alleged to be owing to it as set forth in the complaint, but adjudged respondent’s deed of trust to be superior in point of time to appellant’s said lien. Appellant does not deny that the deed of trust is a prior lien, but contends that it was executed without consideration and is, therefore, null and void.

Respondent was the owner of the property in controversy and desiring to sell it listed it with one Kalb, a real estate broker. Kalb worked in conjunction with another real estate broker named Gordon and associated with Gordon and occupying the same office was defendant Stein. Stein was engaged in the building business. Stein agreed to purchase the property for the sum of $34,000, $2,000 of which was to be paid to Gordon and Kalb for the commission in making said sale. On July 9th the said Steins and the Progressive Finance Corporation executed escrow instructions by the terms of which the said Steins were to pay $11,250 in cash and deliver a note for $22,750 secured by deed of trust not to exceed $60,000. The Progressive Finance Corporation placed in the hands of the Title Guaranty and Trust Company, the escrow-holder, a deed for said property to be delivered upon - compliance with said terms. On July 27, 1928, the said Steins executed their note, secured by a deed of trust to said Gordon and on the sixth day of August, 1928, the said Gordon assigned the said note and deed of trust to the Progressive Finance Corporation as collateral security for the payment of said sum of $22,750. On the 7th of September, 1928, the said Gordon

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wrote the said escrow-holder, inclosing the $60,000 note and deed of trust, which he stated had been assigned to the Progressive Finance Corporation as collateral security authorizing it to use the same under instructions from the said Steins, and on September 12th, Stein wrote the escrow-holder authorizing the said note and deed of trust to be used in accordance with said escrow. On September 8, 1928, the Progressive Finance Corporation requested said escrow-holder to place the date of said deed of trust as of September 6, 1928. It appears that the said escrow was closed and the deed to the property was delivered to the Steins and the $60,000 note and deed of trust were delivered to the Progressive Finance Corporation.