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In re the Contract for Constructing the Hudson Water Works

111 A.D. 860 Court Third Department, Decision date 1906-03-13 English

Delivered by *862 Smith, J.:

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p. 860
In the Matter of the Contract for Constructing the Hudson Water Works, and the Lien Filed Against Such Improvement by John Stackpole, Respondent. The National Commercial Bank of Albany, Appellant.
Third Department,
March 13, 1906.

Headnote

Mechanic’s lien on public improvement — undertaking to discharge lien may be signed by assignee of contractor— Lien Law construed.— when leave to submit new undertaking does not bar appeal from decision holding former bond to be insufficient.
When an application to discharge a mechanic’s lien on a public improvement has been, denied with leave to" renew upon the ground that the bond must, under the statute, be- signed by the contractor and cannot be signed by his assignee, such leave does not bar an appeal from such decision as the right to submit a new bond exists without such leave".
The bond "authorized to be given to procure the discharge of a lien upon a public improvement i by section 20 oi the Lien Law, as amended by Laws, of 1898, chapter Í69, and Laws of 1902, chapters?, maybe signed by the assignee of the contractor, although he is not within the express terms of said section. The section should be liberally construed to secure the beneficial intent, and- purpose, 'thereof. *■ "
Appeal by The Rational Commercial Bank of Albany from an order of the Supreme' Court, made at the Columbia Special Term and entered in the office of .the clerk of the county of Columbia on the 14th day of December, 1905, denying the appellant’s application for the discharge of 4 lien upon moneys due for the construction of water works in the city of Hudson. " ,
Hurd, Sherman & Company, a corporation,, had contracted with the city of Hudson for constructing a part of the system of water works which was authorized by chapter 187 of the Laws of 1904, One John Stackpdle filed with the city treasurer of Hudson a notice of lien oil the said public improvement to the amount of $822. The Rational Commercial Bank of Albany presented to a justice of the Supreme Court an undertaking, which was signed by itself as principal and with the American Surety Company-of Hew York as surety, and asked for a dischárge of the, lien of said Staokpole. By affidavit upon the application it was shown, that this contract of Hurd, Sherman & Company, and all moneys due and to grow due
p. 861
thereon, had been assigned by the said corporation to the said bank. The justice hearing the application made the following order :
“ The National Commercial Bank of Albany having executed an undertaking with the American Surety Company of New York as surety, and having served a copy of the same together with a notice that the said undertaking- would be presented to me at my chambers in the city of Hudson, N. Y., on the 4th day of. November, 1905, at 9 a. m., and that the surety thereunder would justify at such time and place, and said special proceeding having been duly adjourned from time to time to this date;
“ Now, on reading and filing the said undertaking and notice, and due proof of service filed therewith, and the affidavit of J. Murray Downs, verified November 16, 1905, and it appearing to me that the said undertaking is not such an undertaking as is contemplated by the Laws of 1897, chapter 418, section 20, subdivision 5, as amended by Laws of 1898, chapter 169,[1] and for that reason I have decided to decline to pass upon the sufficiency of the said undertaking, or its form, or the sufficiency of the surety, and after hearing ¡Rosendale & Hessberg, attorneys for The National Commercial Bank of Albany, and" Brownell & Tilden, attorneys for the above-named lienor,
“It is ordered, that'the said application to file the said undertaking for the purpose of discharging the said lien be, and the same hereby is, denied, on the ground that the' said undertaking is not such an undertaking as is contemplated by Laws of 1897, chapter 418, section 20, subdivision 5, as amended by Laws of 1898, chapter 169, and without prejudice, however, to a renewal on additional papers.”
From this order the National Commercial Bank of Albany has appealed to this court.
Rosendale & Hessberg [J. Murray Downs of counsel], for the appellant.
Brownell & Tilden [John L. Crandell of counsel], for the respondent.

The right of the appellant to appeal from this order is challenged because of the privilege given therein to renew the motion upon additional papers. The application was denied because a proper bond was not presented. If the right to renew Upon another and proper bond were dependent upon this permission the order w.ould probably not be such a final order as to authorize' an appeal. (See Robbins v. Ferris, 5 Hun, 286 ; Wells, Fargo & Co. v. W., C. & P. C. R. R. Co., 12 App. Div. 49 .) The. bank, however, might' without such permission have presented another bond and might have asked the judge to approve of the same. The permission, therefore, to apply upon additional papers .would seem to .give. no further right to the appellant than it would otherwise, have. Hob withstanding, such privilege, therefore, it may consistently appeal if the approval of its bond was improperly refused. '.

Section 20 of the Lien Law (Laws of 1897, chap. 418, as amd. by Laws of 1898, chap. 169, and Laws of 1902,. chap. 37) provides for the discharge of a lien for a public improvement. It is therein provided that a lien against the amount, due or. to become due a' contractor from a municipal corporation for the construction of a - public improvement may be discharged as follows :

sc * * * Either before or after the beginning of an action by a contractor executing an undertaking with two or more sufficient, sureties, who shall be fVeeholders, to the State orthe municipal corporation with which the notice'.of lien is filed,- in- such slims as' thé court or a judge or -justice thereof may direct, not less than the-amount claimed in the notice of lien, conditioned for the payment of any judgment which may be recovered in an action to enforce the lien. * * * The execution of such undertaking by- any fidelity or surety company authorized by the laws of this State to' transact business shall be equivalent to the execution of such. an undertaking by two sureties.” ' ■ "

The holding of the learned judge seems to have been that the bond was insufficient because it was signed, not,by the. contractor, but by the National Commercial Bank, the assignee of the contractor, and that in,'order to procure a discharge of the lien under this provision of the law the bond must be signed by the original contractor with the municipality. -No other criticism ,is. made of

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the bond presented. In section 2 of the Lien. Law the term “ contractor ” is defined as “ a person who - enters into a contract with, the owner of real property for the improvement thereof.” By strict interpretation this would seem to exclude either the personal representatives of a deceased contractor or his assigns. Under the strictest interpretation of the statute an assignee of the contractor might procure a discharge of the lien if only the contractor himself be upon the bond. Ho reason is suggested, however, why the bond of the contractor should be required and the bond of the assignee prohibited, nor can any reason be assigned why the representatives of a deceased contractor should not be allowed to procure this money upon the giving óf a bond with a sufficient surety. The surety must be approved by the court or a judge or justice thereof, which is ample protection to the municipality. It ca'n hardly be conceived that the legislative intent was to bar the representatives of a deceased contractor from this right to procure a discharge of the lien or to bar an assignee of the contract from-recovering the moneys which are his by assignment duly made, providing the contractor refused to join in the undertaking. We are of opinion, therefore, that this provision should not receive the strict construction contended for by the respondent, but that within the permission of the statute an assignee of the contract and of the moneys due thereupon may procure a discharge of the lien by filing an undertaking in which the assignee shall appear as principal and with such surety as is provided by the act - of which the court or a judge or justice thereof may approve.

We are not unmindful of the change in the phraseology of the Lien Law from former lien laws, as found in section 14 of chapter 315 of the Laws of 1818, as amended by chapter 629 of the Laws of 1892. In that act the term “ contractor ” was in part defined as the person with whom the contract with the city is made, his <£ assigns or legal representatives.” In the present act the words ££ assigns or legal representatives ” are omitted from the definition of the term “ contractor.” Prima faoie this would seem to indicate an intent on the part of the Legislature to deprive either the assignee or the legal representatives of a contractor of the benefits of this provision of subdivision 5 of section 20 of the act of 1897, as added by chapter 169 of the Laws of 1898 and re-enacted by

p. 864
chapter .37 of the Laws of 1902. The contention that such an amendment is not conclusive evidence of such intent' finds some support iu our holding in Matter of Cullinan (Maher Certificate) ( 109 App. Div. 816 ). The inconvenience that would arise from the strict com struction of the statute which has been, given by the learned judge', before whom the application was made, and the inability of respondent’s attorney to suggest any conceivable ground for • withholding either from the'representatives of a deceased contractor or from his assignee the right to make this application, lead us to give to the statute a liberal interpretation, and tó hold that the assignee stands in the place of the contractor, and is entitled to the privilege given to the contractor by the provisions of the statute quoted. 'It is provided in the act itself, by section 22, that article 1 thereof, in which all the sections cited are contained, “ is to be construed liberally to secure the beneficial interests and purposeslhereof.” By section 32 of the Statutory Construction Law (Laws of 1892, chap. 677, as amd. by Laws of 1894, chap. 448) it is provided’: “ The provisions" of a law repealing a prior law, which are substantial re-enactments of provisions of the prior law, shall be construed as a continuation of such provisions of such prior law and not as new enactments.”

The order of the justice refusing to approve the undertaking as sufficient should be reversed.

All concurred; Cochrane, J., not sitting.

Order reversed, with ten dollars costs and disbursements, with leave to renew application upon the same or additional papers to "any justice of the Supreme Court.

Cases cited

Statutes and regulations cited