English v. Sill — 45 N.Y. St. Rep. 462

Majority

p. 462

William M. English, Resp’t, v. Henry S. Sill et al. Def’ts.

(Supreme Court, General Term, Fifth Department,

Filed April 13, 1892.)

Headnote

1. Mechanics’ lien—Assignment.

A contractor executed to plaintiff an assignment of all his right, title ' and interest to a mechanics’ lien, which was not filed until two days later by reason of the clerk’s office being closed. Held, that no lien existed at the time the assignment was made, and that all that passed under it was the contractor’s right to acquire a lien thereafter.

2. Same—Consideration.

The evidence showing that the assignment was made for the purpose of collection, the avails to be applied as collected in payment of an antecedent debt, it was error for the court to refuse to find that plaintiff did not part with anything of value in consideration of the assignment.

3. Same—Priority.

Defendants were sub-contractors, whose lien was filed on the same day, but later than the contractor’s lien. Held, that their lien was superior to that held by plaintiff by virtue of the assignment, notwithstanding the fact that a portion of the indebtedness due plaintiff from the contractor was for materials which went into the building, as he did not file a lien as sub-contractor.

Appeal by the defendant James H. Lee and others, composing the firm of Lee, Holland & Co., from a judgment of the county court of Erie county in favor of the plaintiff, entered on the findings and decision of the court in an action to foreclose a mechanic’s lien.

J. L. Homer, for app’lts; F. G. Pede, for resp’t.

The controversy is between a sub-contractor and an assignee of 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 1), and before the notice was filed or lien acquired, executed, ae

p. 463

knowledged 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 .11 'iiry 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 Oatton to acquire a lien thereafter. Catton’s nqtic© of lien was actually filed, with the assignment attached, at nine o’clock A." M. of February 3.

The assignment purports to have been made in consideration of a present 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 accordance 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 sub-contractors under a contract with Oatton to furnish doors, sash and other woodwork, 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 of 1885, chap. 342, § 20), which, after defining who are sub-contractors, provides that “ the court, in the judgment, shall direct the amount due sub-contractors 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 sub-contractor, 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 in filing their respective notices. But he did not file a lien as subcontractor, but relics upon his assignment of Catton’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

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statute would give to the latter if no assignment had been made. He had no claim to the position of a “ 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 transferor. Here the sub-contractors, 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 sub-contractors 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.

Macomber and Lewis, JJ., concur.