Orr v. Nagle — 67 N.Y. St. Rep. 495

Majority

p. 495

John C. Orr et al., App’lts, v. Charles Nagle et al., Resp’ts.

(Supreme Court, General Term, Second Department,

Filed May 13, 1895.)

Headnote

Payment — Application—Mechanic’s lien.

Where money, received by a contractor from the owner of a building, is paid to a material man who has filed a mechanic’s lien, and to whom the contractor is also indebted on another account, on which such money is applied, a subsequent lienor cannot have the payment applied on materials furnished to that building.

Appeal from a judgment in favor of plaintiff for part of his claim.

Cannon & Atwater, for app’lts; A. T. Payne, for resp’t Muller; S. B. & D. Noble, for resp’t Willert; Matthew Marx, for resp’t Marx ; Arthur M. Sanders, for resp’t Sherwood.

This action is brought for the foreclosure of a mechanic’s lien. The defendants Nagle & Sons were contractors

p. 496

for the building of a house for the defendant Willert. The plaintiffs furnished materials to the contractors for the construction of the, same to Eagle & Sons, in the general account which they had against them for lumber furnished for this house and for other buildings. The plaintiffs filed a mechanic’s lien against the land and building of Willert for $725.28, the full amount of their claim, and the defendant Muller filed a second lien upon the same premises for $441. The amount due from the owner to the contractors was $1,031.36. The cause was tried before the county judge of Queens county and he found that the plaintiffs had furnished materials to the amount of $725.28 in value, but that $350 had been paid on account thereof. The plaintiffs have appealed from the judgment entered upon that decision.

The case turns here, as it did below, upon the application of payments. While the plaintiffs were delivering the materials for the building in question to Eagle & Sons, they paid them $100 at one time, and $250 at another, and the plaintiffs credited and applied those payments to another, and older account which they had against Eagle & Sons. The defendant Muller now claims that the sum so credited upon the old account should have been applied to the account for the material used in the building of Willert, and the county judge so found and decided. There is no proof that Eagle gave any direction for the application of the pay-i ments to any particular account. On the contrary, there is proof that no such direction was given. The payments were made to Biela, an agent of the plaintiffs, and he testified positively that no such direction was received. The defendant Clause Eagle was called as a witness for the defendant, and said this, among other things : “Q. Did you tell Mr. Biela that you got this money from Willert? A. Yes. Q. That this was to be applied on the Willert job? A. Eo; not that exactly, but I told him that that was money of Mr. Willert, and ‘I give it to you on account.’ ”

Eeither Eagle nor Willert raised any objection to the application made by the plaintiff of the'payment of the $350, but, the county judge seems to have assumed and decided that it was the right of Muller, as a subsequent lienor, to have the payment applied to the payment of the material furnished for the building of Willert, because the money came from him. The theory is faulty and erroneous. The money was paid by Willert to Eagle on account of his indebtedness, and when it was delivered to the latter it became his absolute property; and the former ceased to have any interest or equity in it, or any right to control over it. Eagle was under no obligation to appropriate the money in any particular manner. Although he obtained it from Willert for the purpose of paying it to Biela, yet he was not obliged to pay it to him. He had the power and the right to appropriate it as he pleased. It was his right, when he paid the money to Biela, to direct its application to the payment of the account for materials furnished for the Willert building, but he did not do so. He told Biela, he gave it to him on account, but he did not specify any particular account upon which he so paid it. That left the plaintiffs at liberty, and conferred upon them the right, to apply the payment at once to either

p. 497

one of their accounts or claims against Nagle. They accordingly applied it at the time to an account that they had against Nagle which was older than that for the material for the Willert building. Sheppard v. Steel, 43 N. Y. 60 ; Mack v. Colleran, 136 N.Y. 618 ; 49 St. Rep. 24 .

There being no dispute about the facts, we can do justice to all the parties without reversing the judgment The judgment should be modified by awarding to the plaintiffs the full amount of their claim, $725.28, with interest from December 2,1892, with the costs of this court to be paid from the fund.

Brown, P. J., concurs; Cullen, J., votes for a new trial.