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TRUSTEES C. I. MORTGAGE GROUP v. STAGG HUNTINGTON (03/16/79)

decided: March 16, 1979.

TRUSTEES OF C. I. MORTGAGE GROUP, APPELLANT,
v.
STAGG OF HUNTINGTON, INC. (D. C. GOODMAN & SONS, INC.), APPELLEE



No. 528 January Term, 1977, Appeal from the Order of the Superior Court of Pennsylvania, Filed April 19, 1977 at No. 1307 October Term, 1975 Affirming the Order dated April 23, 1975 of the Court of Common Pleas Civil Action, Law, of Huntingdon County at Nos. 47 and 89 J.D. April Term 1974, No. 2 E.D. September Term 1974 (Mortgage Foreclosure).

COUNSEL

James E. Himes, Huntingdon, for appellant.

William J. Myers, Huntingdon, for appellee.

Eagen, C. J., and Roberts, Nix, Manderino and Larsen, JJ. O'Brien, J., did not participate in the consideration or decision of this case.

Author: Larsen

[ 484 Pa. Page 466]

OPINION

D. C. Goodman & Sons, Inc., appellee, is a subcontractor which in January of 1973, contracted with the Stagg Contracting Corporation to do certain work on a food supermarket building in Smithfield Township, Huntingdon County. On December 17, 1973, appellee filed a mechanic's lien covering this work. The questions presented in this appeal are (1) is the lien valid, and (2) if the lien is valid, does it have priority over appellant's mortgage lien. The facts of the case are as follows.

Stagg of Huntington, Inc. (hereinafter Stagg) was the owner of a parcel of land in Smithfield Township which it

[ 484 Pa. Page 467]

    desired to develop for use as a shopping center. Appellant, Trustees of C. I. Mortgage Group, committed itself to lend $1.6 million dollars to finance the venture, secured by an advance money mortgage, which mortgage was recorded on September 24, 1971. Seven separate advances totaling one million dollars were to be made upon completion of seven stages of construction (i. e., foundations completed, steel erected, partitions completed, etc.). Further, appellant agreed to advance an additional $600,000 upon proof by Stagg that they (Stagg) had entered into a lease with a "national food chain."

On September 24, 1971, Stagg and the general contractor for the shopping center, Stagg Contracting (hereinafter Contractor), executed and filed with the Huntingdon County prothonotary a stipulation against mechanic's liens, pursuant to the Mechanic's Lien Law, Act of August 24, 1963, P.L. 1175, No. 497, Art. IV, § 402, 49 P.S. § 1402 (1965). The stipulation provided:

[ 484 Pa. Page ]

WHEREAS, STAGG CONTRACTING CORPORATION, 499 North Broadway, North White Plains, New York, Contractor, entered into a contract with STAGG OF HUNTINGTON, INC., Owner, to provide materials and perform labor necessary for the erection and construction of a shopping center upon a certain lot of ground situate in Smithfield Township, Huntingdon County, Pennsylvania at the corner of Sycamore Lane and relocated channel of Crooked Creek, the same being more particularly described in the Deed of Kevmar Properties, Inc. dated August 31st, ...


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