Stevens v. Reynolds — 27 N.Y. St. Rep. 497

Majority

p. 497

Chauncy Stevens, App’lt, v. Bridget M. Reynolds et al., Resp’ts.

(Supreme Court, General Term, First Department,

Filed November 7, 1889.)

Headnote

Mechanics’ lien—Equitable assignment.

The defendant A. having made a contract with the defendant R, through the latter’s husband, to do certain carpenter work on her premises, and having earned a sufficient sum under it, gave to defendants, O. & B., co-partners, an order on said husband, as follows: “New York, November 15,1886, H. M. Reynolds, Esq., please pay to the order of E. H. Ogden & Co., $909.94, and charge to account of my contract with you for the carpenter work at 1154 Waverly Place, itj being (for lumber materials used in construction of same, the amount to be paid of the last payment of $1,900. Alexander Anderson. Held, that this was_ an _ equitable assignment, pro tanto, of a specific fund, and was not violative of the Mechanics' Lien Act, ch. 342, Laws of 1885, but it appearing that O. & Co. had furnished to this particular house lumber to the value of only about $400, the assignment could only be held good to the latter amount.

This was an action to enforce a mechanic’s lien. Upon the trial of the issues the parties affected by the appeal agreed upon the following state of facts.

First. The defendant Bridget M. Reynolds, was, September 1, 1886, and still is, the owner in fee of the premises described in the complaint, known as No. 115-1- Waverly Place in the city of New York,

Second. The defendant Hugh M. Reynolds was, and is the husband of said Bridget M. Reynolds, and was her duly authorized agent to make contracts affecting said property.

Third. The defendant Anderson, on or about September 21, 1886, made a contract with the defendant, Hugh M. Reynolds, as agent of said Bridget M. Reynolds, to do certain carpenter work on the building erected on said premises, and to furnish certain materials therefor.

The contract called for the completion of the work on or before October 20, 1886, and the payments to be as follows:

When all the trimmings should be done, except the

basement...................................... $1,000

When all the doors and sash should be hung, vestibule

set up and hardware on.......................... 1,000

Thirty-five days after the completion of all the work... 1,900

Making a total of............................... $8,900

Fourth. That said Anderson entered on the performance of said contract, and received payments on account amounting to $1,950. That he failed to complete the work by October 20, 1886, and continued, with Reynold’s consent, to work on the building until about the 22d day of December, 1886, at or about which time the work was completed.

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That certain portions of the work called for by the contract ■were omitted by Anderson and completed by Reynolds.

That the trial court has allowed $404.52 therefor. That certain other portions of the work were either waived by the owner or offset by other work furnished. That the amount adjudged to-be due said Anderson on said contract, after making said deductions, is $1,545.48.

Fifth. That the plaintiff, between September 13th and December 4, 1886, furnished for and delivered to defendant, Anderson, lumber to the value of $1,097.93, which lumber was used in the-construction of said building; that no part of said claim has been paid.

Sixth. That on the 15th day of February, 1887, and after the said lumber had been fully furnished, and within ninety days after the final furnishing thereof, the plaintiff duly filed in the office of the clerk of the city and county of New York a notice of lien, duly verified, against the said premises for the value of said lumber materials, as above set forth, under and in pursuance of the provisions of chapter 342 of the laws of New York, passed May 27, 1885.

Seventh. That between October 7th and November 5, 1886, the defendants, Ogden & Bigelow, furnished to the defendant, Anderson, lumber of the value of $900.94, a portion of which, to the-value of about $400.00, was used in said building. No part of said $909.94 has been paid.

Fhghth. That on or about November 15th, 1886, defendant Anderson executed aud delivered to the defendants, Ogden & Bigelow, who were copartners in business under the firm name of Ogden & Co., an instrument in writing as follows:

“New York, November 15, 1886.

“ H. M. Reynolds, Esq.—Please pay to the order-of E. H. Ogden & Co. $909.94 and charge to account of my contract with you for-the carpenter work at 115J Waverley Place, it being for lumber materials used in construction of same, the amount to be paid of the last payment of nineteen hundred dollars.

“Alexander Anderson.”

This paper writing was given and accepted as payment for the lumber furnished as aforesaid. That said writing was presented to said Hugh M. Reynolds, in the presence and at the request of said Anderson, on the 15th day of November, 1886, and due-notice thereof was given to said Reynolds, but no acceptance in writing was given.

C. H. Machin, for app’lt; C. A. Decker, for resp’ts.

The learned justice held in the court below that the order given to Ogden & Co. for $909.94 was an equitable assignment pro tanto of the amount of the last payment due by Reynolds to Anderson the contractor and that there was nothing in the Mechanics’ lien act of 1885, Chap. 342, which in any way affected their right to be paid the amount mentioned in the assignment, and this is really the only question which requires consider

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ation, for the reason that the conclusion of the learned justice that the order given to Ogden & Co. was an equitable assignment pro tanto is clearly established by the case of Brill v. Tuttle, 81 N. Y., 457 , inasmuch as the sum mentioned in it was made payable out of a particular fund, which was clearly a distinguishing characteristic of the order referred to. There is nothing in the case of Gunther v. Darmstadt, Daily Reg., March 20, 1888; 13 N. Y. State Rep., 145, which conflicts with this view. There it was held that the paper in question was a mere draft and that the circumstances attending the drawing and delivery did not indicate an intention to assign any part of the fund.

The act of 1885, chap. 342, declares that if the owner or person in interest shall, for the purpose of avoiding the provisions of the act or in advance of the terms of any contract, pay, by collusion, any money or any other valuable thing on such contract, he shall be liable for the amount that would have been unpaid to the contractor, sub-contractor or assignee, had the owner or other person in interest made no such payment or given no such mortgage or effected no lien or incumbrance at the time of filing the notice of lien prescribed in the fourth section of the act.

The appellant’s contention seems to rest upon the misunderstanding of the provisions just referred to and illustrated by his dependence upon decisions relating to the mechanic’s lien law, of 1862, for Kings county, chap. 478, and the case of Post v. Campbell, 83 N. Y., 279 , in which the court of appeals construed that act and held that payments in advance of the terms of the contract although without fraud or collusion could not be allowed against a lienor.

It is conceded by the appellant’s counsel that in that act the word collusion did not appear in the. precise connection that it does in the act of 1885. An examination of the different sections will show that by the act of- 1862 two classes of payment were provided against; first, a payment by collusion for the purpose of evading the provisions of the act, and second, in advance of the terms of any contract, which is entirely different from the language employed by the legislature in the act of 1885, which applies the word collusion to both classes of payment referred to in the act of 1862, the language being “ shall for the purpose of avoiding the provisions of this act or in advance of the terms of any contract pay by collusion any money,” etc.

The reasoning, therefore, of Justice Rapallo in the case mentioned does not apply. Indeed, the learned judge said: '“But when provision is made against payment in advance I find none which requires that such payment in advance be made by collusion or fraudulently.”

It should be observed that Post v. Campbell was decided in 1881,several years, therefore, before the passage of the act of 1885.

In Munger v. Curtis, 42 Hun, 466 ; 4 N. Y. State Rep., 847, .in discussing § 2 of the act of 1885, Justice Pratt said that section only applies to cases where the money is paid or the incumbrance put on by the owner for the purpose of defrauding the contractor or sub-contractor.

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There being no evidence in the case establishing collusion as to the entire sum covered by the assignment it was proper that the assignees should recover of that amount a sum equal to the value of the lumber furnished by them towards the construction of the building, and nothing more.

It is true that the learned justice in the court below proceeded upon the doctrine affecting equitable assignments declaring the assignee to be entitled to the whole sum embraced in the assignment ; but this view cannot be sustained in view of the provisions of the act of 1885, and which were in existence prior to the assignment, and indeed prior to the contract between the owner and the builder herein.

The fund which was provided for by the contract in payment of materials to be furnished and services to be rendered was by the act appropriated upon certain conditions being applied to the payment of claims for services rendered and materials furnished to the building, and although payments in advance by collusion were prohibited, nevertheless the spirit of the act breathing in every section is that the sum to be paid shall be secured to the labor and material men. It was not in the power, therefore, of the contractor to pay in advance by assignment or otherwise out of that fund a sum in excess of the amount due for' materials furnished for the work done upon the building except subject to the operation of the lien law, the provisions of which were equally binding upon him and his assignee. There does not seem to be any room for doubt that it was the intention of the legislature to secure the amount of the contract .for the payment of material men and laborers giving to them a lien upon it, on their compliance with the necessary requirements.

For these reasons it is thought that the assignees should be limited to the amount of the material actually furnished for the building to which the lien relates, and the judgment should be so modified as to secure that result.

Ordered accordingly, without costs to either party.

Van Brunt, P. J., and Daniels, J. concur.