French v. Bauer — 48 N.Y. St. Rep. 333

Majority

p. 333

James C. French et al., App’lts, v. John George Bauer et al., Resp’ts.^[1]

(Court of Appeals, Second Division,

Filed October 1, 1892.)

Headnote

1. Mechanic’s lien.

A lien cannot be perfected by a person furnishing material and doing: work for a sub-contractor as against the owner after he has in good faith paid the contractor, and the contractor has paid the sub-contractor in full for such work and material.

2. Same.

B. contracted with S., to build a house, and to be paid therefor in sis: instalments, the fifth due when the cellar was concreted and the sidewalk and estertor iron and stone work was completed. F. & B. contracted with S. for the iron work and they sublet a portion thereof to plaintiff. This-work being completed, B. paid S.", the-fifth instalment and the latter paid. F. & B., both acting in good faith. F. & B. made an assignment, and plaintiffs subsequently filed a lien for their work. Held,, that there was-nothing to which the lien could attach, as the fifth instalment had been paid, in good faith, and no claim could be made under the terms of the contract to the sixth instalment.

Appeal from a judgment of the general term of the court of common pleas of the city and county of New York, affirming a judgment rendered in the district court of that city;

Edward D. McCarthy, for app’lts; James R. Angel, for resp’ts.

This action was brought for the foreclosure of a mechanic’s lien.

The defendant Bauer was the owner of premises known as No-3467 Third avenue in the city of New York, and as such entered into a contract with the defendant Peter Spoonheimer to erect- and complete a building thereon, for which he was to pay in six instalments. The fifth instalment was to become due when the-cellar was concreted and the sidewalk and exterior iron and stonework was completed.

Spoonheimer contracted with the firm of Findlay & Bowman to do the iron work and the sidewalk.

The plaintiffs, on or about the 13th day of October, 1888, contracted with Findlay & Bowman to furnish certain materials and do certain work as required by their contract They completed the performance of their contract on or about the 24th day of October, 1888.

The work called for by the contract, which entitled the contractor to the payment of the fifth instalment, was completed on or about the 29 th day of October thereafter, and on that date the architect gave his certificate to that effect to the contractor, and the defendant Bauer thereupon paid to Spoonheimer the fifth instalment, due according to its terms.

On November 2d, thereafter, Spoonheimer paid Findlay & Bowman the amount due them as sub-contractors by giving a. check dated November 5th, which check was on that or the following day paid. ;

On November 3d, Findlay & Bowman made an assignment for

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the benefit of creditors, and on the 7th day of November, thereafter, the plaintiffs demanded payment of their claim from the defendants Bauer and Spoonheimer, which they refused, at the same time notifying them that they had paid Findlay & Bowman in full. On November 9th, the plaintiffs filed the lien upon which this action was brought. At that'time the last instalment under the contract had not become due and payable.

It appears that the fifth' instalment was due and payable at the time of payment by Bauer to Spoonheimer ; that Findlay .& Bowman had performed their part of the contract with Spoonheimer, and the amount going to them was due and payable at the time of the payment to them.

The question of the good faith of the payments by Bauer to Spoonheimer, and by Spoonheimer to Findlay & Bowman, was submitted to the jury, and was by the verdict determined in favor of the defendants.

The question is thus presented as to whether a lien can be perfected by a person furnishing material and - doing work for a subcontractor, as against the owner, after he has in good faith paid the contractor, and the contractor lias paid the sub-contractor in full for such woi’k and material.

We regard the case of Lumbard v. The Syracuse, Binghamton & New York Railroad Company, 55 N. Y., 491 , as controlling upon this question.

In that case it was held that one who has furnished materials ■or done work upon a building under a contract with a sub-con■tractor for a portion of the work can acquire no lien therefor against the owner after the contractor has paid the sub-contractor for the work done under the sub-contract according to its terms, although the owner is indebted to the contractor upon the contract for the whole work after the completion of the building to an amount sufficient to satisfy such a demand. It is true that the court in that case had under consideration chapter 366 of the Laws of 1864, as amended by chapter 788 of the Laws of 1866, known as the Onondaga Lien Law; and that the act under which *the plaintiffs seek to establish their lien in this action is chapter •342 of the Laws of 1885, as amended by chapter 420 of the Laws of 1887, and that the two statutes are in many respects different; but as to the question under consideration, it appears to us that they are in substance the same, and that the same rule should prevail in reference to the latter that has been declared in reference to the former statute.

Under the former, it was provided that: “Any person who shall, in pursuance of any contract, express or implied, either with the owner of the property, or any contractor, perform any labor or furnish any material in building, altering, or repairing any house or other building or appurtenance to any house or other building in the county of Onondaga, to the amount of twenty dollars or over, or any person who has made a contract for the same, shall, until the end of three months after the performance of such labor or furnishing of materials, be deemed to have an equitable lien for the same upon such house or building or appurtenances, and

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the land upon which the same may be situated. * * * When such labor or material is performed or furnished to the contractor or sub-contractor, all payments made by the owner to either, in good faith, to apply upon his contract, shall operate to extinguish-the lien aforesaid, unless written notice of the lien is served on the owner of the premises before such payment.”

Under the latter, it is provided that: “Any person or persons, firm or firms, corporation or association, who shall hereafter perform any labor or service, or furnish any material which have been used or which are to be used in erecting, altering or repairing any house * * * with the consent of the owner as hereinafter defined, or his agent, or any contractor or sub-contractor,, or any other person contracting with such owner * * * may,, upon filing .the notice of lien prescribed in the fourth section of this act, have a lien for the principal and interest of the price and value of such labor and material, etc. * * * But in no case-shall such owner be liable to pay by reason of all the liens filed pursuant to this act a greater sum than the price stipulated and agreed to be paid in such contract, and remaining unpaid at the time of the filing of such lien, or in case there is no contract then the amount of the value of such labor and material then remaining unpaid, except as hereinafter provided.”

The provision “ hereinafter provided ” is to the effect that if the owner shall, for the purpose of avoiding the provisions of the act, pay by collusion the contractor in advance of the terms of the contract for the purpose of defeating persons who have furnished materials or done work upon thp building, he shall, notwithstanding such payment, be liable, etc.

It will be observed upon reading the two acts that whilst they differ in phraseology, they are the same in substance. The policy, as disclosed in both, is to the effect that except in cases of fraud and collusion the owner cannot be compelled to pay any greater sum for the completion of his building than that which by his-contract he had agreed to pay, and the same is true of a contractor who has in turn in good faith paid the sub-contractor the amount due him after the same has become due and payable. The effect of the statute is to take from the owner the money owing by him on his contract and to apply it in payment for the labor and materials furnished by others in the performance of the contract, and the same rule should be applied to the case of a. contractor who has paid to a sub-contractor all that he is entitled to.

The case of Lumbard v. The Syracuse, Binghamton & New York Railroad Company followed the case of Carman v. Mclncrow, 13 N. Y., 70 , and has been followed by Crane v. Genin, 60 N. Y., 127 Hagan v. The American Baptist Home Mission Society, 14 Daly, 131 , and Larkin v. McMullin, 120 N. Y., 206 ; 30 St. Rep., 902 .

The judgment should be affirmed, with costs.

All concur.