Case ID: ad_143/html/0731-01.html
Source: Caselaw Access Project
Author: {"author": "Kruse, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Howard Iron Works, Appellant, v. Irving E. Waters, Respondent, Impleaded with Clark L. Ingham and Edward C. Mason, Defendants.
    Fourth Department,
    March 8, 1911.
    Pleading — suit on bond given to building contractor — agreement that payment shall not be prevented by subsequent liens — failure to state cause of action.
    The complaint in an action on a bond given to secure the payment of notes given to a building contractor under the condition that the bond should be void if the payment of the notes was not prevented by reason of any liens which might be filed, does not state a cause of action where it merely shows that, on the foreclosure of a first mortgage on the premises recorded prior to the execution of the bond, the premises were bid in by a second mortgagee whose mortgage was subsequent to the bond. This, because the bond referred only to liens subsequent to its execution, and the sale which prevented the payment of the plaintiff’s claim, if payment were prevented, was under the prior mortgage, not under that subsequently made.
    Although such complaint alleges that the plaintiff, relying upon the bond, waived its right to file a mechanic’s lien prior to the second mortgage, it does not show any damage in the absence of an allegation that the land sold for more than the first mortgage, or of facts showing how the plaintiff would have been benefited by a lien.
    Appeal by the plaintiff, Howard Iron Works, from an interlocutory judgment of the Supreme Court in favor of the defendant Irving E. Waters, entered in the office of the clerk of the county of Erie on the 29th day of August, 1910, upon the decision of the court, rendered after a trial at the Erie Special Term, sustaining the said defendant’s demurrer to the complaint.
    
      
      Edward O. Randall, for the appellant.
    
      Orson J. Weimert, for the respondent.
   Kruse, J.:

The plaintiff appeals from an interlocutory judgment sustaining the defendant’s demurrer to the complaint, upon the ground that the complaint fails to state facts sufficient to constitute a cause of action.

The action is brought upon a bond, joint and several in form, made by the defendants and others, and conditioned as follows:

“ Now therefore the condition of the obligation is such, that if the payment or satisfaction of the said note or notes, when the same shall become finally due and payable under and pursuant to the said contract between the said Lenox Corporation and the Howard Iron Works, shall not be prevented by reason of any lion or liens which may be filed against the said Lenox Apartment House, now being constructed on North Street near Delaware Avenue in the said City of Buffalo, then this obligation, to be void and of no effect or else to remain in full force or virtue.”

The contract between the plaintiff and the Lenox corporation is for installing certain elevators in the apartment house referred to in the bond. The last payment, aggregating $3,225, was to be made by notes at three months, which the plaintiff agreed to renew four times at least.

It appears by allegations in the complaint that the plaintiff fully performed the contract; that the corporation is in default, and that the plaintiff is entitled to recover of the corporation the amount demanded in the complaint.

The corporation failed to make the notes, but it appears by.the complaint that it was promoted, owned and controlled by the defendants and their co-obligees, and that although the notes were prepared and presented to the defendants, the corporation refused to execute the same.

The bond is dated September 12, 1896. It appears that at that time there was a first mortgage on the premises of $500,000; that after the bond was executed a second mortgage was made, dated March 1, 1897; that on or about March 24, 1899, an action was brought to foreclose the first mortgage, and that the Lenox corporation, the plaintiff and the mortgagee in the second mortgage were made parties. The premises were sold May 23, 1899, hid in by a trustee for the second mortgage bondholders, and the bid assigned to a third person, who received the deed of the property and became the owner thereof.

The complaint further alleges that, relying upon the bond in suit, plaintiff waived its legal right to file a mechanic’s lien against the property when the elevators were installed, prior to the second mortgage.

Assuming that the status of the plaintiff is to be treated and regarded the same as though the notes had been given, I do not see how payment or satisfaction thereof was prevented by reason of any lien or liens which may be filed.” That provision clearly refers to liens subsequent to the execution of the bond. As has been seen, the first mortgage was upon the property before the bond was made. The premises were sold and the payment of tlio plaintiff’s claim, if prevented at all, was under the foreclosure and sale of the premises on that mortgage, and not the subsequent mortgage.

Neither do I see how'the plaintiff was harmed by the failure to file notice of lien. So far as the record discloses the filing of such notice would have been entirely futile. There is no allegation in the complaint that the property sold for more than the first mortgage claim, or any facts alleged showing that the plaintiff would have been benefited in any way by such lien. In short, the complaint does not show that the satisfaction and payment of the plaintiff’s claim was prevented by any lien filed or coming against the property after the execution of the bond.

I think the interlocutory judgment should be affirmed, with costs, with the usual leave to plead over.

All concurred.

Interlocutory judgment affirmed, with costs, with leave to the plaintiff within twenty days to plead over upon payment of the costs of the demurrer and of this appeal.