Thе principal question presented for decision in this appeal is whether plaintiffs materialman’s lien is entitled to priority over the deeds to secure debt of certain lenders.
In November, 1971, Accent Development Corporation ("Owner”) borrowed $270,000 from two of its stockholders, First American Investment Corporation and Fidelity Capital Cоrporation ("Seed Lenders”), to acquire nine acres of land in DeKalb County, Georgia. As security for the loan, Owner gave a debt deed to Seed Lenders. This instrument was recorded on November 18, 1971. Thereafter, Cousins Mortgage and Equity Investments, a real estate investment trust, lent Owner $1,900,000 to finance the construction of an apartment complеx on the newly-acquired property.
On November 14, 1972, the plaintiff, New Georgia Plumbing, Inc., entered into a contract with Accent Construction Company, Inc., the general contractor, to install plumbing for the apartments.
Plaintiff fulfilled its obligations under the contract in late October or early November of 1973. Shortly thereafter, Owner borrowed $1,920,000 from Investment Mortgage Company ("Permanent Lender”) to pay off the construction loan obtained from Cousins Mortgage and Equity Investments. A deed to secure debt was given to Permаnent Lender by Owner as security. Before making the loan, Permanent Lender required Seed Lender to subordinate the prior deed to secure debt to Permanent Lender’s security deed. Accordingly, Seed Lender executed a subordination agreement in favor of Permanent Lender. Permanent Lender’s deed to secure debt and the subordinаtion agreement were recorded on *688 November 19, 1973. Thereafter, the deed to secure debt was transferred to Old Stone Mortgage & Realty Trust which, in turn, transferred it to Old Stone Bank.
Prior to closing the permanent loan, Seed Lenders and Permanent Lender had actual knowledge that plaintiff was the plumbing subcontractor for the apartment project and that plaintiff claimed money was due it for work performed and materials furnished. Moreover, Seed Lenders and Permanent Lender knew that Owner had beеn facing large construction cost overruns.
On December 17,1973, plaintiff recorded its claim of lien. Thereafter, on October 18, 1974, plaintiff brought suit against Contractor to recover the amount of its claim and on December 11,1974, obtained judgment thereon by default.
On December 3,1974, Seed Lenders foreclosed on the property in question pursuant to the first security deed. The property was sold to Seed Lenders subject to Permanent Lender’s deed to secure debt to which the foreclosed loan deed had been subordinated by agreement between the two security deed grantees.
On November 27,1974, plaintiff brought this action against Owner, Contractor, Permanent Lender, Seed Lenders, Old Stone Mortgage & Realty Trust, Old Stone Bank, Cousins Mortgage Equity and Investments, Pioneer National Title Insurance Company and William R. Nelson, a principal stockholder in Accеnt Development Corporation. The complaint was couched in five counts. Count 1 demanded the sum of $67,154.73 against defendants, jointly and severally, for work performed аnd material furnished by plaintiff. Counts 2 and 5 pursued remedies for alleged fraudulent conduct. Counts 3 and 4 sought the foreclosure of plaintiffs materialman’s lien and a declaratiоn that its lien is entitled to priority over the deeds to secure debt which had been granted to Seed Lenders and Permanent Lender.
Following discovery, plaintiff moved for summary judgmеnt. Five of the nine defendants, Seed Lenders, Old Stone Mortgage & Realty Trust, Old Stone Bank, and Pioneer National Title Insurance Company also moved for summary judgment. The trial court granted plaintiff’s *689 motion with regard to Counts 3 and 4 of the complaint and denied the motions of defendants. The court ruled that plaintiffs materialman’s lien is entitled to priority over the deeds to secure debt of the lenders. This appeal followed.
1. A contractor’s lien attaches from the time work is commenced or material is furnished under thе contract.
Guaranty Investment &c. Co. v. Athens Engineering Co.,
Was plaintiffs materialman’s lien properly preserved? In ordеr to preserve a materialman’s lien, it is essential to show that (1) the plaintiff completed his contract, (2) the plaintiff filed for record his claim of lien within three months after completion of the contract, and (3) the plaintiff brought suit to recover the amount of his claim within 12 months after the debt became due. Code § 67-2002.
The evidence shows that plaintiff completed the contract in late October or early November of 1973. Plaintiffs president testified that plaintiff was working on the project as of Octobеr 26, 1973. Plaintiff filed for record its claim of lien on December 17, 1973 and commenced suit to recover the amount of its claim on October 18, 1974. Clearly, plaintiff took the necessary *690 steps to preserve and enforce its lien within the time limitations prescribed by the statute.
Defendants point out that plaintiff billed Contractor in August of 1973 for the balancе due under the contract and that plaintiff did not bring this action against Owner until November 27, 1974. Thus, defendants argue, a genuine issue of fact exists as to whether plaintiff timely perfectеd its lien. We disagree.
That plaintiff billed the Contractor in August cannot alter the fact that the debt became due when the last materials were furnished, and labor was performed, under the contract.
Dixie Lime &c. Co. v. Ryder Truck Rental,Inc.,
2. Is plaintiffs materialman’s lien entitled to priority over the security deed which Owner gave to Seed Lenders?
While the issue has not heretofore beеn decided in Georgia, it is the rule in other jurisdictions that "One who subordinates a first lien to a third lien makes his lien inferior to both the second and the third liens.” 51 AmJur2d Lien, § 55; Ladner v. Hogue Lumber &c. Co.,
Permanent Lender’s deed to secure debt is inferi- or to plaintiffs materialman’s lien. In view of the subordination agreement, Seed Lenders’ deed to secure debt is inferior to Permanent Lender’s deed to secure debt. Accordingly, Seed Lenders’ deed to secure debt is necessarily inferior to plaintiffs materialman’s lien.
3. Defendants assert plaintiffs claim of lien was dissolved by an affidavit from owner which stated that outstanding bills for labor and materials had been рaid. This assertion is not meritorious. "There is no provision of law for one who improves real estate while the legal title or its equivalent is in him to relieve another from a lien on the property by the making of an affidavit as is authorized under Code Ann. § 67-2001 (2).”
Builders Supply Co. v. Thomas,
4. Since plaintiffs materialman’s lien is entitled to priority over the deeds to secure debt of Permanent Lender and Seed Lenders, the trial court did not err in granting partial summary judgment to plaintiff and in denying the defendants’ motions for summary judgment.
Judgment affirmed.