Fredericks v. Goodman Street Homestead Ass'n — 29 N.Y.S. 1041

Majority

p. 1041

FREDERICKS v. GOODMAN ST. HOMESTEAD ASS’N et al.

(Supreme Court, General Term, Fifth Department.

January 18, 1894.)

Headnote

1. Mechanics’ Liens—Land Intended for Building Lots.

Grading and laying out roadways and sidewalks on a tract intended for building lots is within Laws 1885, c. 342, providing for mechanics’ liens, though there is no building on the tract.

3. Same—Assignment by Contractor—Rights of Subcontractor.

An assignment by a contractor of money to become due under the contract, made before liens are filed by a subcontractor, will defeat the right of the subcontractor to a mechanic’s lien.

3. Estoppel—Statement not Acted on.

Where the owner of property, after the contractor for work thereon has sublet his contract, tolls the subcontractor that he will get his pay, the owner is not estopped afterwards, in an action by the subcontractor to foreclose an alleged Ken, to assert as a defense an assignment by the contractor of his claim.

Appeal from special term, Monroe county.

Action by John H. Fredericks against Goodman Street Homestead Association and others to foreclose an alleged lien on certain premises situated in the city of Rochester for the balance due plaintiff as subcontractor for work performed on the premises. The complaint was dismissed, and plaintiff appeals.

Affirmed.

The opinion of Mr. Justice BRADLEY at special term is as follows:

The facts that a contract was made with Weider & McMahon to do the work at a certain price, and that they sublet the work to the plaintiff at a certain lower price, are undisputed, but beyond that the facts are mainly the subject of controversy. The premises in question, consisting of upwards of 50 acres, were prior to November 21, 1889, owned by Henry 0. Brewster, who on that day conveyed them to the defendant association, and, by provision to that effect in the deed, the grantor covenanted to make the improvements which Weider & McMahon undertook by their contract to make. The contract with them was made prior to August, or thereabouts, of 1890. It is ■.insisted on the part of the defense that the contract with Weider & McMahon was made with Brewster, while on the part of the plaintiff it is claimed that it was made with- the Goodman Street Homestead Association. The fact that Brewster assumed the obligation to make the improvements does not. necessarily establish the fact that the contract may not have been made with the defendant association. There was no written contract made,- otherwise than by the verbal adoption of the proposal made in writing by those contractors. The proposal was addressed by Weider & McMahon to the Goodman Street Homestead Association alone. The acceptance of it would seem presumptively to make the contract between them; and there is no other evidence tending in the like direction. The proposal was handed to Mr. Palmer, the president of the association. The plaintiff, who was also a bidder for the work, says that Palmer furnished to him a bidding sheet containing the specifications, and that Palmer afterwards said to him that if he had known the contractors were going to sublet to him they would have let the work to him in the first place. The evidence tending to show that the contract was made with Brewster is not very clear or satisfactory. Mr. Brown, the engineer and surveyor who made the estimate of the work done, etc., and who was employed by Mr. Brewster, made such estimates-and addressed them to the association, and his final statement of the work done, etc., he headed with the Homestead Association as “Dr.” to the contractors. I am inclined, in view of all of the evidence, to think that the contract may be treated as having been made by it with Weider & McMahon. The work to be done was mainly grading roadways, grading for sidewalks, and laying them. The tract was intended for building lots, and was treated as such, although there was

p. 1042

no building upon it belonging to the association. By the articles of association of the defendant, its object was stated to be “to provide homesteads and building lots for its members;” and it was there provided that the capital stock should consist of 390 shares of $250 each, and that the land should be divided into 390 lots. And by a map produced it was represented that the tract was divided into that number of lots, of which the lines were also described. Further provision in the articles of the association is made for weekly payments by the members, with leave to pay the full amount unpaid at any time after the allotment to them respectively.

The question of the applicability to the present case of the statute providing for liens is raised. The view here taken is that the work came within the contemplation of that statute. Laws 1885, c. 342. The land was intended for building lots, and was wholly owned by the same party. As has been observed in reference made to the articles of association of the defendant, the premises were treated as building lots. The statute includes within its pur-. pose not only buildings, but lots and appurtenances. Section 1. And it is entitled to a reasonably liberal construction to effectuate the object had in view by it. Kenney v. Apgar, 93 N. Y. 539 . The "evidence tends to prove that the work was not entirely completed as required by the contract. But, in view of what does appear, the conclusion is justified that the plaintiff has proceeded in good faith, and that, within the meaning of the rule upon the subject, the contract was substantially performed, and the expense of supplying the deficiencies is ascertainable, and its amount may be deducted from the contract price for the work. From time to time, as the work progressed, payments of estimates of work done were made to the original contractor, less 10 per cent, reserved, and they in like manner made payments to the plaintiff. The last estimate upon which payment was made bore date May 21, 1891. The engineer made his final estimate and statement bearing date August 1, 1891, by which he represents the amount due the contractors as $1,125.54, provided the work is accepted as complete; but the engineer annexed to it the statement that he could not accept the work, as he did not consider it completed according to the contract. In that amount was included the sum of LO per cent, so reserved. The plaintiff has received nothing since that statement was made and upon the merits he is entitled to relief in this action, unless it is defeated by a written assignment made April 19, 1890, by the original contractors to the Traders’ National Bank, of “any and all claims, accounts, or moneys to grow due under” the contract for any work that might be done upon the Goodman Street Homestead tract; and the said Weider & McMahon thereby authorized the bank to give a receipt for the same, and it was further provided by the assignment that any money collected under the contract was to be used to pay any indebtedness of Weider & McMahon to the bank, whether then existing or thereafter incurred. This assignment was-made a few days before the plaintiff commenced work upon the premises. And it appears that those contractors afterwards, by discount of their notes, borrowed money of the bank, and that on June 10, 1891, at the time the plaintiff’s notice of lien was filed, they owed the bank, on account of such loans, the sum of $1,963. This was in excess of the amount due or to become due upon the contract. And on February 6, 1892, Mr. Brewster paid to the bank, on account of the work, and to apply upon such indebtedness, the sum of $1,169.19, which did not fully pay the indebtedness of Weider & McMahon to it. As has been observed, the obligation to pay for the work of improvements was with Brewster, who was also cashier of the bank. As between the parties to the assignment, it was effectual to transfer to the bank such claims as should arise for the work done under the contract as security for future loans by the bank to the assignors and their indebtedness to it. The question arises whether or not the plaintiff, as against the association combination, can be relieved from the effect of the assignment. The original contract was with Weider & McMahon, and the personal liability to the plaintiff for his work was theirs only. The plaintiff had no contractual relation with the association, nor was any assumed between them. The payments were made to Weider & McMahon, and the plaintiff received what was paid him from them. His remedy against the defendant association was one in rem, by force of the statute upon which it was wholly dependent. The original contractors could, before liens filed, by transfer vest the right in another to

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money due upon their contract, and thus defeat the remedy o£ the plaintiff under the statute. McCorlcle v. Herman, 117 N. Y. 297 , 22 N. E. 948 ; Stevens v. Ogden, 130 N. Y. 182 , 29 N. E. 229 . It follows that unless for some reason the effect of the assignment can be obviated in the plaintiff’s behalf he cannot recover. It appeared that Mr. Palmer, the president of the association, knew of the assignment at the time it was made. The plaintiff testified that after he commenced the work, in October, 1890, about the time and after the second estimate was made, he met Mr. Palmer, and said to him he had heard that Weider was “slippery,” and that he should look to him and the association for pay, and that Palmer said to him there was enough money to pay the plaintiff, and that he would get his pay; that he need not be afraid. Upon this it is insisted on the part of the plaintiff that the defendant association is estopped from asserting the assignment as a defense. Notwithstanding this evidence of the plaintiff was contradicted, it will be here assumed that the fact was as testified to by the plaintiff. The question then arises, was that effectual for the purpose so urged in behalf of the plaintiff? Palmer, as the president of the defendant association, represented it.

It may be that a different question would have been presented if the representation had preceded the making the contract by the plaintiff with Weider & McMahon. It is not only essential to an estoppel in pais that the party asserting it has acted or proceeded in reliance upon the truth of the statement, but that the denial of the truth would result in some injury or loss to him. Winegar v. Fowler, 82 N. Y. 315 . In the present case the plaintiff had, before the alleged statement was made by Palmer, bound himself by contract to perform the work, and had entered upon and proceeded in its performance. And if he had then refused to proceed, he would have been liable to the original contractors for damages, which would have been the difference between the price for which they had agreed to do the work and that for which he had undertaken to perform it. So far as appears, Weider & McMahon were responsible until some time later. They afterwards became insolvent, and made a general assignment for the benefit of their creditors in July, 1891. The plaintiff must be deemed to have proceeded with the work by force of and pursuant to his contract to do It as he had undertaken. It is unnecessary to consider that subject further. - There seems to be no support for estoppel. It is, however, urged that the defendant association is precluded by the statute from availing itself of the assignment to the Traders’ National Bank as a defense. It provides that a person performing work, etc., for any one other than the owner, may at any time demand of such owner the terms of the contract, and the amount due or unpaid, etc., and if the owner shall neglect or refuse to comply with such demand, or shall, intentionally, falsely state the terms of the contract, or the amount so due or unpaid, and if the person so making the demand shall sustain loss by reason of such refusal, neglect, or false statements, the owner shall be liable in an action therefor; and such person may, by filing notice thereof within due time, have a lien upon the premises on which the work has been performed. Laws 1885, c. 342, § 3. Assuming that it sufficiently appears that the plaintiff could not collect his claim of Weider & McMahon, the case does not seem to be brought within the meaning of the statute. There was no demand made by the plaintiff of the association of the amount due or unpaid to the original contractors, nor did that defendant, by its president, refuse to state or falsely state the amount then due upon the contract And it may be added that, at the time of the alleged interview of the plaintiff with Palmer, the advances, which it appeared exhausted the balance due Weider & McMahon upon the contract, had not been made by the bank. Nor is there any evidence of collusive payment within the meaning of the statute. Section 2. In the ca"se of Stevens v. Reynolds, 54 Hun, 419 , 7 N. Y. Supp. 771 , cited by the plaintiff’s counsel, the court of appeals disagreed with the general term, and reversed the determination there made, and affirmed the judgment of the special term. 130 N. Y. 182 , 29 N. E. 229 . In the view taken, the plaintiff acquired no lien upon the premises. But in view of the circumstances, to which it is unnecessary further to refer, the plaintiff should not be charged with costs. The complaint is therefore dismissed, without costs.

Argued before DWIGHT, P. J., and LEWIS and HAIGHT, JJ.

p. 1044

Sullivan, Morris & Jerome, for appellant.

David Hayes, for respondents.

Judgment appealed from affirmed, with costs, ■on the opinion of BRADLEY, J., at special term.

Cases cited

Kenney v. Apgar 93 N. Y. 539 N.Y. 1883-10-23 p. 1042
McCorkle v. Herrman 117 N. Y. 297 N.Y. 1889-11-26 p. 1043
Stevens v. Ogden 130 N. Y. 182 N.Y. 1891-12-01 p. 1043
Winegar v. Fowler 82 N. Y. 315 N.Y. 1880-10-12 p. 1043