Hyperlawhypertext legal database Russell & Erwin Manufacturing Co. v. City of New York 118 A.D. 88

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Russell & Erwin Manufacturing Co. v. City of New York

118 A.D. 88 Court First Department, Decision date 1907-03-08 English

Delivered by Laughlin, J.:

Contents

Majority

p. 88
Russell and Erwin Manufacturing Company of New York, Appellant, v. The City of New York and Others, Defendants, Impleaded with The Twelfth Ward Bank of the City of New York, Respondent, and Eugene H. Hinkle and Terry Hinkle, Composing the Firm of Hinkle Iron Company, Appellants.
First Department,
March 8, 1907.

Headnote

Mechanic’s lien—discharge thereof on "undertaking by assignee.
Although the statute only expressly authorizes the discharge of a mechanic’s lien upon the application of a contractor who gives an undertaking, an assignee is equally entitled to the discharge, whether he be assignee of the entire contract or a part only of the moneys due thereunder.
p. 89
But the assignee, whether of the whole contract or part thereof, must give an undertaking for the payment "of any judgment which may he recovered in an action to enforce the lien,” even though thereby he becomes responsible for the debts of third parties.
Appeal by the plaintiff, Russell and Erwin Manufacturing Company of New York, and by the defendants, Eugene H. Hinkle and another, composing the firm of Hinkle Iron Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 5th day of December, 1906, authorizing, the discharge, upon giving an undertaking, of certain municipal liens tiled by the appellants against moneys due, or to grow due, the firm of Flood & Ryan, under a contract with the city for the construction of additions to a public school.
Frank W. Hubby, Jr., for the appellants.
Maxwell O. Katz [Otto O. Sommerich with him on the brief], for the respondent.

The motion to discharge the liens upon giving an undertaking was made by the Twelfth Ward Bank, which held an assignment from the contractors of part of the moneys to be paid by the city under the contract. The first claim made by the appellants is that such an assignee has no standing to obtain a discharge of the liens. The statute only expressly authorizes the discharge upon the application of the contractor, but the courts have held that it should be construed as authorizing a discharge upon the application of an assignee of the contractor, who stands in the shoes of the original contractor. (Lien Law [Laws of 1897, chap. 418], § 20 as amd. by Laws of 1902, chap. 37; Id. 22; Matter of Hudson Water Works, 111 App. Div. 860 . See, also, Hawkins v. Mayes-Reeve Construction Co., 82 id. 72.) It is claimed that the decision last cited does not authorize an assignee of part of the fund merely to make the application. We are of opinion, however, that either an assignee of the entire contract or an assignee of part of the moneys due thereunder shoúld be permitted to obtain the funds upon giving tiie undertaking required by the statute. It is not conceivable that

p. 90
any one can be prejudiced by such course, and an assignee of part of the fund is quite as much within the spirit of the statute as an assignee of the contract.. The point is that the person claiming to be entb tied, to the money earned under the contract may obtain it upon giving an undertaking to protect the other claimants. The undertaking, upon the giving of which the court has authorized - a discharge of these liens, however, does not conform to the statute. The order merely requires an undertaking “ conditioned for the payment to each lienor respectively of any sum found due' on account of said lien to the’ extent that the said sum shall be found to have priority bver and above the lien, if any, created by the said assignment of Flood & Ryan to the -Twelfth Ward Bank.” If the assignee of the entire contract or the assignee of part of the moneys due thereunder wishes to obtain the benefit of the statute and have the .liens discharged and receive the money, he must take the same responsibility that the original contractor would have been obligated to assume, which is to give an undertaking for “ the payment of any judgment .which maybe recovered in an action to enforce the lien.” (Lien Law, §. 20," subd. 5, added by Laws of 1898, chap. 169, and re-enacted by-Laws of 1902, chap. 37.) This would, of course, make the bank and its surety responsible for the debts of third parties ; but if it wishes to obtain the moneys, it must assume.' that responsibility, for it is only upon executing such an undertaking that the original contractor, who would have been liable to the lienors, was entitled to obtain the fund. The authority of the. court to discharge such a lien by motion is wholly statutory, and, therefore, the discharge may only be granted on complying with the requirements of the statute.

It follows that the order should be modified by requiring an undertaking in the language of the statute, and as modified affirmed, without costs.

Patterson, P. J., Ingraham, Houghton and Lambert, JJ., concurred.

Order modified as directed in opinion, and as modified affirmed, without costs. Settle order on notice.

Cases cited

Statutes and regulations cited