Foshay v. Robinson — 43 N.Y. St. Rep. 20

Majority

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John Foshay et al., Resp’ts, v. Frederick Robinson, Def’t, William A. Boyd, App’lt, and John W. Young et al., Resp’ts.

(Supreme Court, General Term, Second. Department,

Filed December 14, 1891.)

Headnote

Mechanic’s lien—Abandonment bt contractor.

A contractor abandoned work on a building and the owner completed it in pursuance of a clause in the contract at a sum exceeding the amount remaining unpaid of the contract price. At the time of the abandonment the contractor had been paid the first two instalments, and the work required to entitle him to the thud was almost finished. Defendants Young et al. had filed a lien for material exceeding the amount of work" done on the third instalment. Held, that as they were the first lienors they were entitled to the amount of such third instalment, less the amount required to complete that portion of the work and to supply defects.

Appeal by William A. Boyd from judgment entered on the report of a referee in an action to foreclose a mechanic’s lien.

The following is the opinion of the referee:

Woodworth, Referee.—The facts in this case are substantially .as follows: On October 19, 1886, the defendant Boyd, who owned a lot of land at Larchmont, entered into a contract with the defendant Robinson, by which the latter agreed to build a house for him for $7,820, payable in instalments as the building progressed, the third instalment of $1,800 being payable- when the plastering was complete, the fourth of $1,000 when the interior trim is complete, and the balance of $1,420 when the entire works were complete. Such payments were to be made subject to the proviso that the work should progress in a satisfactory manner and that the certificate of the architect be first obtained, such certificate, however, not to exempt the contractor from correcting any defects or making good any departures from the.specifications. The contract also contained this article : “Should the contractor at’ any time during the progress of said works refuse or neglect to supply a sufficiency of materials or workmen the owner shall have power to provide materials and workmen after ■three days notice in writing being given to finish the said works,

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and the expense shall be deducted from the amount of the contract.” The house was to be finished on May 1, 1887. The progress of Bobinson with the work he contracted to do was very-unsatisfactory ; the various portions of the building were not completed until long after the periods agreed upon in the contract; there were many defects and deviations from the contract Bobinson did not employ efficient mechanics nor a sufficient number of them, and there was a deficiency in the quantity and quality of materials, so that on the 28th day of May the plastering was not all on, the defects were not remedied, although Bobinson had been frequently requested by the architect to remedy them and the work was very far from completion.

On the 20th day of May, Boyd served the notice stipulated for in the contract, that unless within three days he supplied a •specified number of workmen, he, Boyd, should proceed to finish the work at the contractor’s expense, and the contractor failing "to comply with the' notice, on May 28th Boyd undertook the completion of the work. I am satisfied from the testimony that Boyd was fully warranted in taking this step. At that time Bobinson had received the first two instalments, aggregating $3,600, leaving $4,220 still unpaid, for which amount, together with the value of some extra work, he afterward, on July 6th, filed his lien. The •defendants, Young & Tripp, on May 26th filed a lien for materials furnished amounting to $1,300, and the plaintiff, on June 6th filed a lien for $100. Boyd finished the contract at an expense -of $7,300, or $3,120 more than was remaining unpaid on the ■contract when it was abandoned by Bobinson. Bobinson claims that he. could have finished the work for $500, but these figures are utterly absurd in view of the clear and intelligent testimony •of McDowell. I am satisfied from • all the testimony that the amount paid out by Boyd was fair and reasonable.

It is very evident, then, that Bobinson’s lien cannot be sustained. •

As to the liens of the material men, the counsel for Boyd urges that if the contractor’s claim fails, the liens of the material men fall with it. It has been held by many of the earlier decisions in lien cases, that when it appears that nothing is due the contractor, the sub-contractor can recover nothing, he being simply subrogated to the rights of the contractor. Under these decisions the laborer and furnisher of materials had to bear the burden of the delinquencies and rascality of the contractor. But the statute of 18.85, interpreted by the courts in later cases, shifts this burden from the laborer to the owner, is more remedial in its application, and puts a more intélligent meaning into its title, which is “ An act for the better protection of mechanics and others.”

The statute gives a lien for the principal and interest of the price and value of the materials, with this limitation only: “But in no case shall such owner be liable to pay by reason of all the liens filed a greater sum than the price stipulated and agreed to be paid in such contract and remaining unpaid at the time of filing such lien.”

Mow by the terms of this contract Bobinson was to be paid

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$1,800 when the plastering is complete.” The testimony shows that when Boyd took up the contract the plastering was not complete. Robinson says it would have cost thirty-nine dollars to complete it. The evidence is that it actually cost $284. Whenever, therefore, the work arrived at that stage, the third instalment of $1,800 became due. And it makes no difference to the lienor whether Robinson completed the plastering or whether Boyd did it, except that the expense of completing would, by the provisions of the contract, have to be deducted. Boyd is bound by the contract after he takes it up precisely as Robinson was. He cannot alter its terms; he cannot charge the contractor with any greater sum than he expends, and if the expense is less than the amount due by the contract, the lien attaches to the difference. He is liable for $1,800 when the plastering is complete, less what it cost to complete it, just as much after he has assumed the contract himself as before Robinson abandoned it.

In Foley v. Gough, 4 E. D. Smith, 724, the contract provided that if the contractor failed to finish, the owner on fifteen days’ notice might finish and pay out of any moneys due the contractor.. Held, that a fair interpretation of the contract was that the owner was to deduct what was necessary to complete the work out of-moneys unpaid, and that by failing to fulfil the contract the contractor forfeited only so much as the owner might be obliged to pay to complete.

It is true that it eventually cost Boyd to complete the whole work far more than was payable under the whole contract, but that cost cannot be offset against the moneys due for completing the plastering. Besides, at the time these liens were filed no such expense had been incurred ; the third instalment was then earned, with the exception of $284, and the cost of remedying some defects, which I will refer to hereafter. All that can be deducted is the expense of reaching this third instalment, whatever that proves to be. The true question which determines the lienor’s rights is, what was earned by the contractor on this third instalment at the time of filing the liens.

In Wright v. Roberts, 43 Hun, 415 ; 6 St. Rep., 769 (1887), the contractor did work to the extent of $4,000 and then abandoned his contract. Held, the present lien law limits the liability of the owner to the stipulated price of the contract, and remaining unpaid at the time of filing the lien. The evidence shows that a sum of money had been earned according to the agreed price in-excess of all payments and more than sufficient to pay the.lienors. There is no provision in the act of 1885 which directly or inferentially requires the contract to be performed fully as against a lien-for work and materials by a contractor; if the lienors have put their property into the Paige house, and if at the agreed price, deducting all payments at the time of the lien, there is enough to-pay, the act gives a lien.

This case was affirmed by the court of appeals in 118 N. Y., 672 ; 28 St. Rep., 980 .

■ In Van Clief v. Van Vechten, 48 Hun, 304 ; 15 St. Rep., 896 (1888), the court says: “ It is not the intention of the lien law to

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limit the" owner’s liability to such portion of the contract price as happens to be payable according to the terms of the contract at •the time of filing the lien; the true question is what was earned under the contract at that time; there is proof tending to show that a very considerable sum had been earned over and above the payments, and this sum, whatever it may be, is the fund to which the plaintiff has an equitable right under the lien law.”

Larkin v. McMullen, 27 N. Y. Weekly Digest, 352 (1887): “ The contractor abandoned his work. He had earned and was paid $550, the contract price being $900. The amount paid by the owner to complete was less than $900. Held, that to the extent •of the difference between the contract price and the amount actually expended by the owner to complete the contract work the lien should attach. It was not the intention of the legislature to limit the owner’s liability to such amount of the contract price as liappens to be payable under the express terms of the contract at .the time of filing the lien.”

After a careful perusal of the cases cited, and others, it is clear to me that the true question to be applied here is, what was earned •on this third instalment ? In other words, how much, after deducting the cost of the third instalment, was left unpaid. If .there was any balance, then to this balance the liens attach. The ■cost of finishing the rest of the work cannot be deducted from this payment, but only from the later instalments. For, supposing Bobinson himself completed the plastering and remedied the defects complained of so as to become entitled to the third instalment, and Boyd had then assumed the contract, it cannot be ■claimed under the cases cited that the expense of completion, be it many times greater than the balance of the contract price, can be offset against the lienor’s lien on this third instalment, however much it might extinguish the contractor’s claim. The lienor’s right becomes vested on the completion of the plastering to the extent of the balance unpaid after deducting the expenses.

How, what expense had the owner a right to deduct from this instalment? First, of course, the expense of completing the plastering, which was $284. Second, the expense of remedying the defects in previous work which was necessary to make the work satisfactory to the architect and to get his certificate. One ■of these defects were sagging due to imperfect framing and insecure support of beams in the cellar; the cost of jacking up the building appears to have been about sixty dollars. This necessitated the pulling down and rebuilding the dining room chimney at an expense of $100. The back stairs were improperly constructed and cost $100 to rebuild. The mason work in the tower bulged, and was worth $100 to correct The cistern was not built deep enough, and had to be taken down, excavated deeper, and rebuilt at an expense of $125. There were other defects the expense of which does not appear by the testimony. This makes •a total of $769.

Deducting this amount from $1,800, leaves $1,031, the amount earned on this payment to which the liens attach.

The counsel for the material men claims that Robinson was also

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entitled to the fourth payment which became due when the trim was complete. Eobinson testifies that considerable trim was on, but it appears that it could not have been properly put on until the plastering was complete, and there is no. evidence showing how much it was worth or how much it cost to complete it. Besides, it appears that it was put on before the building was-jacked up, and consequently was not true when the building was levelled, and had to be taken off to a great extent and replaced by new trim; that it was only partially stained and oiled, and that improperly; that the front stairs were not built or trimmed ; that many of the windows and door frames had to be reconstructed that absolutely nothing had been done in the basement. I do not see how it is possible to decide that anything whatever was earned on the fourth payment, and the presumption is that it cost fully the amount of the fourth instalment to arrive at that stage of the-building when the interior trim was complete.

My decision, therefore, is that the defendants, Young & Tripp, are entitled to judgment on their lien against Boyd, the owner, for $1,031 and interest from May 26, 1887, with costs, and against. Eobinson for the balance, $269, with interest. That the plaintiff is entitled to judgment against Eobinson for $100 with costs and interest, and that the defendant, Boyd, is entitled to a judgment against Eobinson for his costs only, no counterclaim against. Eobinson having been set up in his answer.

A. G. Frcmsioli, forapp’lt; A. T. Hoffman, forresp’ts; Jas. 0. De La Mare, for deft.

The appellant Boyd is the owner of a piece of land at Larchmont in Westchester county. He made a contract, with Frederic Eobinson to build a house thereon for $7,820. The payments were provided for by instalments. The two first instalments were earned and paid. The third instalment was $1,800' when the plastering was complete. The contractor failed to complete the work which entitled him to this payment and the owner, under a power contained in the agreement, took possession of the-work and completed the plastering. This cost the owner $284. There was some defective work done by the contractor amounting to $769. The contractor when he failed to complete the work had done some work towards earning the fourth payment which was $1,000, when the interior trim was complete. The owner' completed the house. The referee has found that at the time the contractor left the work he had earned more than he had received pay for, the sum of $1,031, after allowing for bad work which had to be repaired and which was deducted before this balance of $1,031 was reached.

The defendants Young & Tripp were the first lienors for material furnished for the work and their claim was greater than this balance; and to that firm was awarded the entire balance.

The case falls within the case of Van Clief v. Van Vechten, 48 Hun, 306 ; 15 St. Rep., 896 ; and Wright v. Roberts, 43 Hun, 413 ; 6 St. Rep., 769 ; affirmed, 118 N. Y., 672 ; 28 St. Rep., 980 .

The case of Larkin v. McMullin, 120 N. Y., 206 ; 30 St. Rep.,

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902 , holds only that under a contract which was not completed and where the referee found that nothing was due under it, no lien could exist in favor of a person who sold materials to the contractor. The questions of fact presented are supported by the evidence. The witness Tripp positively states that the articles for which the lien is claimed went into the house in question. The controversy was one-involving great doubt as to the omission of the contractor and the value of the work actually done when he abandoned the performance of the contract. The trial court was the best judge of the credibility of the witnesses and no case is presented on question of fact upon appeal unless the evidence is of such preponderating weight that a reversal is called for for that reason.

Ho such case is presented and the judgment should be affirmed, with costs.

Dykman and Pratt, JJ., concur.