Contractors' Supply Co. v. City of New York

This is an action to foreclose a mechanic’s lien upon the moneys due for a municipal improvement. On or about September 13, 1909, the firm of Paladino & Papa made a contract with the city of New York for the construction of a sewer. Thereafter, and on April 10, 1910, the said firm assigned the contract to Joseph Paladino, who entered upon the performance of the work, and in due course completed it. Between May 21, and June 22, 1910, plaintiff sold and delivered to said Paladino certain sewer pipes and tubing, of the value of $498.22, for which he agreed to pay, but did not. On June 16, 1910, before plaintiff had fully completed its deliveries, and more than a month before plaintiff filed its lien, the said Paladino assigned to one James J. Sullivan all moneys due and to grow due to said Paladino under said contract. The plaintiff on this appeal raises no question of fraud or lack of consideration as to said assignment. Sullivan bonded plaintiff’s lien, and thereupon collected from the city of New York the amount due upon said contract.

[1,2] The appellant questions the sufficiency of both the assignment of the contract by Paladino & Papa to Joseph Paladino and the assignment by the latter to Sullivan of the moneys due and to grow due thereunder. As to the assignment of the contract to Joseph Paladino, the plaintiff is not in a position to question its validity for several reasons: First, in its complaint it alleged that the contract

The objection to the validity of the assignment of the moneys, due or to grow due upon the contract to Sullivan is based upon the fact that neither the assignment nor a copy thereof was filed in the office of the county clerk, although it was found as a fact that the assignment or a copy was filed with the proper municipal officers, to wit, the comptroller and the president of the borough of Brooklyn. The question is whether it is necessary that such an assignment should also be filed in the office of the clerk of the county wherein the property improved was located. To answer this question requires the consideration of two apparently inconsistent or conflicting sections of the present Lien Law, to wit, sections 15 and 16, which read as follows:

“Sec. 15. No assignment of a contract for the performance of labor or the furnishing of materials for the improvement of real property or of the money or any part thereof due or to become due therefor, nor an order drawn by a contractor or subcontractor upon the owner of such real property for the payment of such money shall be valid, until the contract or a statement containing the substance thereof and such assignment or a copy of each or a copy of such order, be filed in the office of the county clerk of the county wherein the real property improved or to be improved is situated, and in case of a contract with a municipal corporation, also mth the comptroller of chief fiscal officer thereof, and such contract, assignment or order shall have effect and be enforceable from the time of such filing. Such clerk shall enter the facts relating to such assignment or order in the lien docket or in another look provided ly him for such purpose.”

“Sec. 16. No. assignment of a contract for the performance of labor or the furnishing of materials' for a public improvement, or of the money, or any part thereof, due, or to become due, therefor, nor an order drawn by the contractor or subcontractor upon the municipal corporation, or the head of the department or bureau having charge of the construction of such public improvement, or the financial officer of the corporation, or other officer or person charged with the custody and disbursement of the corporate funds applicable to the contract for such public improvement, shall be valid until such assignment or order, or a copy thereof, be filed with the head of the department or bureau having charge of such construction, and with the financial officer of the municipal corporation or other officer or person charged with the custody and disbursement of the corporate funds applicable to the contract for such public improvement, and such assignment or order shall have effect and be enforceable from the time of such filing. The financial officer of the municipal corporation, or other officer or person with whom the assignment or order, or copy thereof, is filed, shall enter the facts relating to the same in the lieni book or other book provided for such purpose.”

Section 15 above quoted, without the words I have italicized, was incorporated into the then existing Lien Law (chapter 418, Laws 1897), and wás held by the Court of Appeals to be applicable to public contracts as well as to those between private persons. Brace v. City of Gloversville, 167 N. Y. 452 , 60 N. E. 779 . Subsequently, by chapter 360, Laws 1907, the section was amended by inserting the words quoted above in italics. By a later act of the same Legislature (chapter 692, Laws 1907) a new section, known as section 15a,

[3, 4] It is evident that, upon the subject of filing assignments of contracts for municipal improvements or of the money to grow due thereon, the sections above quoted are inconsistent and repugnant. Section 16 completely covers the whole subject of assignments of municipal contracts and the money to grow, due thereon. Reading these two sections together in the light of their history, it must be held, under well-settled rules of statutory construction that the latter section (16) pro tanto repeals the provisions of the earlier section (15) so far as it relates to municipal contracts (Hockmann v. Pinkney, 81 N. Y. 211 ), and furnishes the only rule as to the necessary filing of assignments of contracts for public improvements and of the money to grow due thereon. We are therefore of the opinion that the assignment from Paladino to Sullivan was, properly and validly filed! and was effectual. That such an assignment takes precedence of a subsequently filed lien is well settled. Lauer v. Dunn, 115 N. Y. 405 , 22 N. E. 270 ; Bates v. Salt Springs Nat. Bank, 157 N. Y. 322 , 51 N. E. 1033 .

[5] The plaintiff insists, however, that, even if his lien is ineffective, he is entitled to a judgment against the sureties upon the bond given by Sullivan for the release of the lien. The bond was in the form prescribed by statute, and was conditioned! that Sullivan would “well and truly pay any judgment which may be recovered in an action to enforce such alleged lien.” It was held by this court in Hawkins v. Mapes-Reeve Construction Co., 82 App. Div. 79 , 81 N. Y. Supp. 799 , that, although the lien was invalid, yet the plaintiff might recover a personal judgment against the contractor and! his sureties. This was affirmed by the Court of Appeals upon the ground that the lien was valid, and that court expressly declined to pass upon the right to a personal judgment, in such a case, against the sureties ( 178 N. Y. 236 , 70 N. E. 783 ), and later in Milliken Bros. v. City of New York, 201 N. Y. 65 , 94 N. E. 196 , Ann. Cas. 1912A, 905, the said court again declined to pass upon the question. The Hawkins Case, however, is not applicable to the' facts here present. There the bond was given by the contractor who owed the debt. Here it is given, not for the contractor, against whom plaintiff has recovered a personal judgment, but for Sullivan, who never owed plaintiff anything, and against whom no personal judgment can be rendered. The sureties’ responsibility is limited by the

The judgment appealed from must be affirmed, with costs to respondent. All concur.