Cooke v. Odd Fellows' Fraternal Union — 17 N.Y. St. Rep. 490

Majority

p. 490

Cyrus T. Cooke, Resp’t, v. The Odd Fellows’ Fraternal Union et al., App’lts.

(Supreme Court, General Term, Fifth Department,

Filed June 23, 1888.)

Headnote

1. Mechanic’s lien—Action to foreclose—Lien of sub-contractor—

Arbitration—Effect of the award—What will not affect.One of the defendants entered into an agreement with another to erect and furnish aH the carpenter, joiner and other work, in accordance with drawings, details, etc., of a certain building, for a stated sum, the building to be completed on or before a certain date set. It was stipulated in the contract that the party for whom the building was erected should have the right and privilege, at any time during the progress of its erection, to make any alterations, deviations, additions or omissions in the work or materials contracted for without making void the contract; but that their true value should be added or deducted from the amount specified in the contract, and that if any dispute should arise as to their true value, it should be settled by arbitration. Further stipulation was made regarding damages to be paid by the contractor for delay arising through his act or default. Dispute arose between the parties, and they thereafter entered ' into a written agreement to submit all matters of difference between them to arbitrators, and abide by their decision as final and conclusive. Notice of the submission, and the time and place at which the arbitrators would proceed with the hearing, was served upon the plaintiff, and he was notified to be present and submit evidence. He did not appear, and the .arbitrators proceeded and made an award whereby they included a certain sum as damages to be paid by the contractor for delay. The plaintiff, a surety on the building contract, and a sub-contractor, brought this action to foreclose a mechanic’s lien upon the building. Held, that the question of damages for delay was not one by which the terms of the original contract were to be settled by the arbitrators, and that the plaintiff having, by the filing of his claim, perfected a lien on the amount due, or to become due the contractor under the contract, the latter could not by subsequent act impair or defeat the lien so acquired.

2. Contract—Damages for delay in performance—Waiver of.

Certain of the delay in completing the work was caused by the party for whom the building was erected, and payments were made by the said party to the contractor after the time limited for the completion of the building. He'd, that this constituted a waiver of the damages for the delay in performance by the contractor.

Appeal by the Odd Fellows’ Fraternal Union from a judgment entered upon the report of a referee, in Monroe county.

J. W. Stebbins, for app’lts ; Henry W. Conklin, for resp’t.

This was a proceeding instituted by the plaintiff to foreclose a mechanic’s lien, filed on December 19, 1884, against the property of the appellant. It appears that on the 31 st day of March, 1884, the defendant, Florus F. Dieffenbacher, entered into an agreement with the defendant, the Odd Fellows’ Fraternal Union, of the city of Rochester, to erect and furnish all the carpenter, joiner and other work, in accordance with drawings, details, etc., of a five story annex to the building known as the “ Odd Fellows’ Fraternal Union,” on the corner of Clinton and Division streets, in the city of Rochester, for the sum of

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:$3,653, the building to be completed on or before the 15th day of November, 1884. It was stipulated in the contract that the appellant, the Odd Fellows’ Fraternal Union, should have the right and privilege at any time during the progress of the building, to make any alterations, deviations, additions or omissions in the work or materials contracted for, without making void the contract; but the true value of such alterations, deviations, additions or omissions should be added or deducted from the amount specified in the contract; and that if any dispute should arise as to the true value of the alterations, deviations, additions or omissions in the work or materials contracted for, the value in dis • pute shall be determined by two competent persons, one employed by the party of the first part and the other by the party of the second part, and they shall have power to name an umpire, whose decision shall be binding upon all parties. It was further stipulated in the contract that for each and every days’ delay in performance of the agreement after the time specified for the completion of the same, there shall be allowed and paid by Dieffenbacher to the Odd Fellows’ Fraternal Union, or its representatives, the sum of twenty dollars as damages for such delay, if the same shall arise from any act or default on the part of Dieffenbacher.

A dispute did arise between the parties, and they thereafter and on the 8th day of April, 1885, entered into a written agreement to submit to the arbitrators named therein, all matters in difference between them and agreed to abide by the decision of the arbitrators as final and conclusive, according to the true intent, meaning and spirit of the contract. Notice of this submission to arbitrators, with the time and place that the arbitrators would proceed with the hearing, was served upon the plaintiff, and he notified to be present, and submit such evidence as he wished to have considered. He did not appear, however, and the arbitrators so selected, proceeded with the hearing, and made an award, in which they found that the defendant Dieffenbacher should be allowed for extra work on the contract, the sum of $188.60, and that the defendant, the Odd Fellows Fraternal Union, as owner, should be allowed as damages the sum of $2,252,33; that included in the latter sum was an item of $1,520, for seventy-six days delay on the part of the contractor in completing the work, at twenty ■dollars per day. This allowance more than paid the contractor, and left a balance due from him to the appellant of Si, 270.10. A copy of the award was served upon the plaintiff, who thereafter instituted these0 proceedings. The appellant set up the arbitration and award as a defense. The

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referee has held that the award was binding upon the plaintiff as to all matters, except the said item of $1,520.

The plaintiff was surety for Dieff enbacher upon the building contract, and undertook that he would faithfully fulfill all the conditions and stipulations contained in the details and general drawings mentioned in the carpenter’s specifications, and if not so done, he would pay all damages caused thereby. He thus had full notice of all the provisions of the contract and was bound by it, and in so far as the building contract provided for the determination of disputes by arbitration between the parties, he having notice, was bound by the determination made.

The first question which it becomes necessary to determine is whether or not the stipulated damages for the non-performances of the contract, within the time stipulated, was embraced in the contract as one of the subjects to be determined by the arbitrators. The language, as we have seen, is that in case dispute arises as to the true value of the alterations, deviations, additions or omissions in the work or material contracted for, it shall be determined by the arbitrators, etc. The language used in this clause is identical with that used in the former paragraph of the agreement in which it is provided that the Odd Fellows’ Fraternal Union shall have the right and privilege at any time during the progress of the building “to make any alterations, deviations, additions or omissions in the work or materials.” The matter thus agreed to be submitted to arbitrators was evidently intended, and must, therefore, pertain to the alterations, deviations, additions or omissions in the work or materials which the appellant had the right to make under the contract. It does not include the damages which was agreed to be paid in case of non-performance of the contract; but the agreement between the appellant and the defendant Diffenbacher, subsequently made, submitting their matters in controversy to arbitrators, did embrace the claim for damages in not performing the contract within the time stipulated, and, consequently, the award that was made was binding upon the appellant as well as the defendant Diffenbacher. But was it binding upon the plaintiff ?' He, as surety or as sub-contractor and lienor, was not a-party to the agreement submitting the matter in controversy to arbitrators. He, as surety, was bound by the building contract and to the submission in so far as it was authorized and required by the building contract; but could he be further bound ? It is true that as sub-contractor and lienor his rights are dependent upon the rights of the contractor, that he was merely subrogated to the extent of his claim to any claim that the contractor had against the owner, and could recover nothing further of the owner; that his lien attached only to the amount due, or to become due, on tho contract, and if there is nothing due, or to become due*

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from the owner to the original contractor, there is nothing upon which the hen would attach. But is the award evidence against the plaintiff, or is the plaintiff estopped because of the award F There are a class of authorities which hold that in the sale of property the seller is bound to defend his title thereto against the claims of third parties, and where action is brought by such parties against the purchaser, the seller, if he has notice of the action, will be bound by the adjudication. Blasdale v. Babcock, 1 John., 516 ; The Village of Seneca Falls v. Zalinski. 8 Hun, 571 .

But the general rule is that judgments bind only parties, and their privies, unless there is express covenant that the person shall be bound by the judgment, as in case of undertakings given under the provisions of the Code, wherein the •surety stipulates to pay the damages awarded by judgment, etc. The distinction between such cases is sufficiently pointed out in the case of Thompson v. MacGregor ( 81 N. Y., 593 -597); see, also, Jackson v. Griswold ( 4 Hill, 522 ); Tuthill v. Russell ( 35 Hun, 534 ); Thomas v. Hubbell ( 15 N. Y., 405 ).

True, the plaintiff is not seeking to maintain his action as ■surety; he is seeking to establish his lien instead. But if a surety is not bound by the determination, we fail to see why a lienor should be. Upon the filing of his claim, the statute gives him a lien to the extent of the amount due, or to become due, upon the contract. It in effect operates as an assignment of so much of the contractor’s claim, and the contractor, as such, cannot, after the filing of such claim, ■enter into any agreement, make any admissions, or do any act that will impair or defeat the lien so acquired. We therefore conclude that the plaintiff was not bound by the award in so far as it determined the damages for the delay, it not being stipulated in the building contract that that matter should be submitted to arbitrators.

A large mass of evidence was taken upon the subject of delays in completing the work. The referee has found as a fact that there were ninety days’ delay in the entire completion of the work, fifty which arose from the acts, or default, of Dieffenbacher or the plaintiff. This finding is severely criticised by the appellant, and it is claimed that the delay was greater than that found.

But this finding cannot be very material if the referee is correct in his conclusion that the appellant had waived any claim for damages by reason of the non-completion of the work within the time specified in the contract. This conclusion is based upon the facts which were also found by the referee to the effect that the delay was occasioned in part by the plaintiff not furnishing the materials needed as the work progressed, in part by alterations and additions made by the owner and contractor, and in part by delay on the part of other contractors having in charge work other

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than carpenter work; that exclusive ot the delay occasioned by the plaintiff, the complete performance of the work contracted to be done by Dieffenbacher within the time fixed by the written contract, was rendered impossible by the-acts of the owner and of other contractors and employes;, that certain- parts of the work required to be done by Dieffenbacher, was to such an extent dependent upon work to be done by other contractors and the owner, the delay in the latter work caused delay m the former, and that there was delay in the latter work; that payments were made after the time had expired for the completion of the work, under date of December 18, 1884, $528.25, and December 20, 1884, $81.12; that subsequent to the making :f the building contract, and during the progress of the work, the owner made alterations therein and additions thereto, which involved additional expense and labor on the part of Dieffenbacher, to the amount of $ll8.60. Under these findings-the referee properly concluded that the appellant waived its claim for damages for non-completion of the work. Stewart v. Howell, 36 N Y , 388 , Weeks v Little, 89 N. Y., 566 ; Doyle v. Halpin, 33 N Y Supr Ct, 352 , 365;, Gallagher v. Nichols, 60 N Y , 438 .

It is claimed that these findings are not supported by the evidence,, We have carefully read the evidence appearing in the appeal book, and have reached the conclusion that the finding is not so clearly against the weight of evidence as to justify this court in interfering. It consequently follows, that the judgment must be affirmed with costs.

Barker, P. J., Bradley and Dwight, JJ., concur.