This is an action to foreclose a mechanics’ lien, under the provision of chapter 342 of the Laws of 1885. The first section of that law provides that any person who shall perform labor or furnish materials in the erection of a house may, upon filing the notice of lien prescribed in the fourth section, have a lien for the price and value of the same upon the house and premises, to the extent of the right, title and'interest of the owner existing at that time.
Under that law, therefore, a person furnishing labor and materials for the erection of any structure specified therein becomes a creditor-at-large, with a claim which may ripen into a lien, but he acquires no lien upon the premises until he files the requisite notice pre*467scribed for that purpose. If previous to the time of filing such notice of lien the title to the premises has become vested in another, he can acquire no lien, and his rights in that respect are cut off and lost. So if the premises are incumbered by a mortgage to a Iona fide creditor, his claim is subordinate to the lien created thereby.. These principles have always been recognized, and they seem to control this case.
The mortgage to the Mechanics’ Savings Bank was honest, and although all the parties assumed that the money procured thereon would be appropriated to the payment of the claim of the plaintiff, yet the bank in no way undertook to make such application, and the law imposed no obligation upon it to do so. Section 2 of the Laws of 1885 has no application to such a case as this, and affords the plaintiff no relief. The equities of the parties are equal, and the plaintiff can secure only the relief afforded him by the provisions of the law, and that furnishes him no rights prior or superior to the lien of the bank mortgage.
The judgment should be reversed and a new trial granted, without costs.
JPratt, J.:It does not seem to me that section 2 of chapter 342 of the Laws of 1885 has any application to the facts disclosed in this case. No fraud on the part of the defendant, the Mechanics’ Savings Bank, is shown. It is not necessary to construe that section, as no part of it was intended to cover a case like the one in hand. That section only applies to cases where the money is paid, or the incumbrance is put on by collusion with the owner for the purpose of defrauding the contractor or sub-contractor.
It is the settled law that a mechanics’ lien only attaches to the extent of the interest of the owner at the time the notice of lien is filed.
The mortgage to the savings bank was executed on the 19th of June, 1886, and the notice of lien was not filed until June twenty-first thereafter, hence the lien only attached to the equity o.f redemption then held by Curtis. (Payne v. Wilson, 11 Hun, 305 ; S. C., 74 N. Y., 355.)
The latter case holds, that a person entitled to a mechanics’ lien *468acquires no specific lien until lie files his notice; up to that time he is a general creditor, with no greater equities than other general creditors, and he is affected by all equities in favor of those dealing with his debtor.
A lien will not cut off or affect a prior unrecorded mortgage made in good faith, and hence the struggle here over the question of priority of recording the mortgage and filing the notice of lien was unnecessary. The mortgage was executed and delivered, and the money paid prior to filing the notice of lien, and the equity of the mortgagee attached prior to the lien without reference to the recording act.
In the absence of proof that the bank colluded with Curtis to defeat the claim and lien of the plaintiff, and that its mortgage consequently was fraudulent and void, the mortgage is entitled to priority.
The fact that the bank knew the plaintiff had not been paid was immaterial. Any person has a light, in good faith, to loan money and take security from a party who is indebted to others, and a general creditor has a right to obtain security for his debt in preference to other general creditors.
The good faith of the bank here, cannot be questioned. The money raised upon the mortgage was stated by Curtis to be applied to pay off his debt to the plaintiff. The bank has as good a right to trust Curtis as the plaintiff had; the fact that he turned out to be dishonest is not the fault of the bank. The plaintiff knew that Curtis was to get the money from the savings bank, and he must have known that he could only get it by giving a mortgage. It is clear to my mind that this case falls within the principle stated in the case of Payne v. Wilson (74 N. A. 355).
The judgment should be reversed and new trial granted, without costs.
Present — Dykman and Pratt, J.; Barnard, P. J., not sitting.Judgment reversed and new trial granted, without costs.