Scherrer v. Isaac A. Hopper & Co.

This is an action in the nature of a foreclosure of a mechanics’ lien, filed by the plaintiff who performed work and labor for Charles Block & Company, sub-contractors under Isaac A. Hopper & Company, who were contractors' with, the owners, The Music Hall Company, for the erection of a building in the city of Hew York. Before the commencement of the action the plaintiff’s lien was discharged by the filing of a bond under the provisions of the mechanics’ lien act, Laws 1885, chap. 842, § 24, subd. 6, and the action is brought to obtain a judgment which shall be enforceable against the sureties of the bond. The plaintiff having made parties defendant all the other lienors and incumbrancers upon the property, some of whose liens had been discharged by a deposit of money as provided in the lien act (id"., subd. 2), the defendants contractors made a motion to have the summons and complaint amended by striking the names of such parties therefrom. The motion was denied, and from the order entered thereon this appeal is taken.

Where premises against which a mechanics’ lien is filed have

'l'lie lienor must establish the existence of a valid lien upon the premises at the time of the filing of the bond ; and this requires a sub-contractor to show that there is a sum due from the owner to the contractor sufficient after the payment of prior liens to satisfy the claim in suit. Act, § 1; Lauer v. Dunn, 117 N. Y., 405 -408; 26 St. Rep., 412 .

In the ordinary action in a court of record to foreclose a mechanics’ lien, this is determined when all the parties are before the court, and to that end the statute requires that all parties who have filed liens, as well as subsequent incumbrancers, shall be made parties defendant, in order that the court may settle and determine the equities of all the parties, and decide the extent, justice and priority of the claims of all parties. Id., § 17 and § 21.

It is for the interest of the owner, if his premises are still subject to the lien, to have all the lienors made parties to the action, and the extent and priority of all the liens determined in one litigation ; and it is equally for his interest to do so if he has given a bond to discharge the premises and his sureties are liable in place of his property ; although where the bond has been filed by the contractor or any third party, and the premises are discharged, the owner would seem to have no further interest in the litigation even as a party himself. Copley v. Hay, above ; Schaettler v. Gardiner, 4 Daly, 56 . This of course not being ;the case where the owner is personally liable to the lienor for the debt. Lawson v. Reilly, 13 Civ. Pro., 290.

But after the filing, of a bond to discharge a particular lien are -other lienors necessary parties to an action by the particular lienor the ultimate object of which is to establish a right to an action upon the bond given for his special security?

It is contended by the appellants that they are not, and particularly,. as in this case, where the liens of such parties have also been discharged by the deposit of the amount claimed in each lien.

But is not the question of the priority of the several liens and the amount due upon each involved in the claim of each lienor upon his particular bond? Whether the liens have been discharged by bond or by deposit, the right of recourse to those securities depends upon proof of the same facts which give the right of recourse to the property. The bond and the deposit take place of the property and the liens are imposed upon them instead of upon the property. People v. Butler, 61 How., 274 .

The claimant in order to establish a lien upon the property must show his right, as against all other claimants, to payment from the fund subject to the liens, viz.: the moneys due from the owner to the contractor; and must show that after the satisfaction of all such claims as are entitled to priority there is sufficient to

The inquiry therefore necessary in the case of each lienor is the same whether his lien has been discharged by bond or deposit or aot discharged, and the judgment in his action must determine the ¡equities and priorities of all the liens upon the fund. This cannot be done in separate actions brought by the several lienors against the owner and contractor alone.. The action to establish the lien and the right to a participation in the fund out of which it is to be satisfied is of equitable cognizance, Field v. The Mayor, 6 N. Y., 179 —187,, and even in the absence of statutory provisions all the lienors subsequent as well as prior are proper, if not necessary parties to an action to foreclose a mechanics’ lien, according to the general practice in equity. Kenney v. Apgar, 93 N.Y., 539 —545.

The plaintiff was right therefore in making all the other parties who had filed liens upon the premises defendants in his action and the motion to strike them out as parties was properly denied.

Order appealed from affirmed, with costs.

Bischoff and Pryor, JJ., concur.