English v. Sill — 18 N.Y.S. 576

Majority

p. 576

English v. Sill et al.

(Supreme Court, General Term, Fifth Department.

March, 1892.)

Headnote

1. Mechanics’ Liens—Assignment before Piling—Effect.

C., a contractor lor the carpenter work on S.’s house, after performing his contract, verified the required notice of lien for the amount claimed by him to be due, and assigned to plaintiff all his right, title, and interest in the “lien filed by me, * * * said lien being filed by me as contractor, ” and two days thereafter filed, the lien, with a notice of the assignment attached. Meld that, no lien being in existence at the time of the assignment, it passed only the right to acquire a lien.

8. Same—Consideration—Precedent Debt.

Such assignment being made for collection, the avails to be applied in payment, of an antecedent debt due from C. to plaintiff, the court erred in refusing to find that plaintiff did not part with anything of value in consideration of the assignment.

8. Same—Priority.

Defendant, a subcontractor under C., filed his lien for work and materials the-same day plaintiff’s lien and assignment were filed, but several hours thereafter. Meld, that defendant’s lien must take precedence, plaintiff having acquired no. greater rights than those of his assignor; Laws 1885, c. 342, § 20, providing that, “the court, in the judgment, shall direct the amount due subcontractors and workmen to be paid out of the proceeds of sales in their order of priority herein provided before any part of such proceeds are paid,to the contractor;” and this without reference to the time of filing the contractor’s lien.

4. Same—Rights of Assignee.

Where a portion of the indebtedness due from C. to plaintiff was for materials which went into the premises in question, which might have been made the subject, of a subcontractor’s lien, and plaintiff failed to file any such lien, but relied on his assignment, he must stand in the place of his assignor, and is entitled only to what the assignor would have received had no assignment been made.

Appeal from Erie county court.

Action by William M. English against Henry S. Sill and James H. Lee and others. From a judgment in favor of plaintiff, entered on the findings and decision of the court in an action to foreclose a mechanic’s lien, defendants James H. Lee and others, composing the firm of Lee, Holland & Co.,, appeal.

Reversed.

Argued before Dwight, P. J., and Macomber and Lewis, JJ.

J. L. Homer, for appellants. F. O. Peck, for respondent.

The controversy is between a subcontractor and an assigneeof the contractor as to the superiority of their respective liens on a fund paid into court by the owner of the property against which the liens were filed. One Catton was the contractor to do the carpenter work of a house to be-erected by the defendant Sill. The contract was substantially performed, and there was unpaid to the contractor thereon, on the 1st day of February, 1890, the sum of $430.13. On that day Catton made and verified the required notice of lien for the sum of $595, which was the amount claimed by him to-be unpaid on the contract; and on the same day, February 1st, and before thenotiee was filed, or lien acquired, executed, acknowledged, and delivered to-the plaintiff an instrument which purported to assign to the plaintiff “all my [his] right, title, and interest in and to a certain mechanic’s lien filed by me-in Erie county clerk’s office on the 3d day of February, 1890; said lien being filed by me as contractor, for the sum of $595, due from Henry S. Sill, of,” etc. The explanation given of the fact that the assignment anticipated the-filing of the lien by two days is that the 1st day of February was Saturday, and that the clerk’s office was closed from the noon of that day until Monday morning; but the fact remains that no lien existed at the time the assignment was made, and, therefore, all that passed by the assignment was the right of Catton to acquire a lien thereafter. Cation’s notice of lien was-actually filed, with the assignment attached, at 9 o’clock a. m. of February 3d. The assignment purports to have been made in consideration of a present.

p. 577

payment of money, but such was not the case; the claim was in fact assigned to the plaintiff for collection, the avails to be applied only as collected in payment of an antecedent debt due from Catton to the plaintiff. This is the precise effect of the plaintiff’s own testimony, reiterated several times-There is no evidence to the contrary, and the defendant’s exception to the refusal of the court to find in accoidance therewith, viz., that the plaintiff did:' not part with anything of value in consideration of the assignment, was-well taken.

The defendants Lee, Holland & Co. were subcontractors, under a contract with Catton to furnish doors, sash, and other wood work, and did furnish such; work and materials to the amount of $842, which remained unpaid on the 3d> day of February, 1890, and on that day, at 2:15 p. m., they duly filed their notice of lien for that amount. We can have no doubt that the last-mentioned lien was superior to that of the plaintiff. It is impossible that the-plaintiff, as assignee of Catton, should acquire any greater rights than those of his assignor. And the lien of the latter is expressly postponed to that of Lee, Holland & Co. by the terms of the statute, (Laws 1885, c. 342, § 20,) which, after defining who are subcontractors, provides that “the court, in the judgment, shall direct the amount due subcontractors and workmen to-be paid out of the proceeds of sales in their order of priority herein provided», before any part of such proceeds are paid to the contractor;” and this is without reference to the time of filing the contractor’s notice of lien. It seems-that a portion of the indebtedness due from Catton to the plaintiff was for-materials which went into the building on the premises in question; and, so far as that was the case, the plaintiff was probably a subcontractor, and, if he had' filed notice of lien as such, then, as between himself and Lee, Holland & Co.», the question of superiority of lien .would have depended on the priority im filing their respective notices. But he did not 'file a lien as subcontractor,, but relies upon his assignment of Cation’s lien (or right to acquire a lien) as; contractor. Doing so, he must stand in the place of his assignor, and be content to take what the statute would give to the latter if no assignment ha<S been made. He had no claim to the position of a 11 bona fide purchaser for value.” He neither paid nor surrendered anything of value in consideration of the assignment. His own statement is that he took the claim to collect, and apply the avails, as collected, in payment of the debt due to him. No-one questions the good faith, in the general sense, of this transfer; but it is familiar law that a transfer made upon such a consideration is not a transfer “for value” in such sense as to prevail over the equities of third persons against the transferrer. Here the subcontractors, Lee, Holland & Co., were, by the statute, entitled to priority over the contractor Catton, though the notice of lien of the latter was filed some hours before that of the former, and the plaintiff, as assignee of the contractor, was subject to the same equities in favor of the subcontractors as those which affected his assignor. Upon this ground alone, without considering others suggested, we are clearly of the opinion that the learned county court erred in awarding the superiority of lien to the plaintiff. The judgment appealed from should, be reversed, and a new trial granted. Judgment of the county court of Erie county, appealed from, reversed, with costs to the appellants to abide the final award of costs,.

All concur.