Case ID: nys_31/html/1101-01.html
Source: Caselaw Access Project
Author: {"author": "CULLEN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LOWRY v. WOOLSEY.
    (Supreme Court, General Term, Second Department.
    December 10, 1894.)
    Mechanics’ Liens—Contract with Trespasser.
    An agreement for the lease of land by defendant to one H. provided that H. might enter on the premises forthwith; that he should expend a certain sum in improvements; and that, in default in payment of rent, defendant might re-enter. H. entered under the agreement, but failed to pay the rent, and refused to execute the lease; whereupon defendant rescinded the agreement, and notified plaintiff, with whom H., after his default, had contracted for the improvements mentioned in the agreement. Held, that plaintiff was not entitled to a lien for work done under such contract, as H., when he made it, was a mere trespasser; and it was immaterial that defendant did not forcibly oust H., or prevent the entry of plaintiff’s workmen.
    Appeal from judgment on report of referee.
    Action by James L. Lowry, as executor, against Edward J. Woolsey, impleaded, to enforce a mechanic’s lien. The complaint was. dismissed on the merits as to defendant Woolsey, and plaintiff appeals.
    Affirmed.
    The following is the opinion of Thomas A. Allison, Esq., to whom the cause was referred to hear and determine:
    In the opinion rendered upon the motion for a nonsuit, made at the close of plaintiff’s case, a statement was made, so far as material, of the terms-of the contract between the defendant Woolsey, the owner, and Henderson, the prospective tenant and purchaser, with whom plaintiff’s testator, Gibbons, contracted to do the work for which a mechanic’s lien is sought to be foreclosed in this action; and then the opinion said: “But this does not say that if Henderson shall not receive a lease on May 1, 1888, or shall not pay the rent thereunder, his rights under the contract of March 20, 1888, shall ipso facto cease, nor, which is more to the point, does it say that he may •go on after May 1, 1888. with the improvements only provided, or upon condition that he receives the lease and pays the rent. There is very material difference between a mere covenant and a condition precedent. A breach of -a covenant and a breach of a condition precedent are very different in their •consequences. In an action upon contract, the only performance which a plaintiff need prove is that of such conditions precedent to the right which •he seeks to enforce as are contained therein. Any defaults by him in other respects which are material to the rights of the parties are to be proven by the defendant. There being no conditions precedent in this case to the right which plaintiff seeks to enforce other than such as he has proven,—to wit, that the labor and materials for which he claims a lien were done and •furnished under a contract with Henderson for and used in an improvement on the lands in question, with the consent of Woolsey, the owner of such 'lands, and that the formal statutory requirements as to filing and foreclosing such lien have been complied with,—plaintiff has made out a prima facie case, and the motion to nonsuit must be denied.” Upon such decision ■having been made, defendant Woolsey entered upon the proof of his defense, and, both sides having rested, the action is now submitted for final decision •and judgment The question thus presented is very different from that upon the motion to nonsuit. On that motion the question was one of the burden •of proof, and whether a prima facie case was made out. Now the question is whether the burden then adjudged to be on the defendant has been sus- ■ tained, and a defense established.
    The defendant’s position is that Henderson, upon demand duly" made upon •him, failed and refused to execute the lease provided for in the contract, and also to pay the rent therein provided for, and that thereupon he, the •defendant Woolsey, the owner, by reason of such breach of the contract by Henderson, became entitled to and did rescind the contract, and refused to permit Henderson to retain possession of the lands, or proceed with the improvements under the contract, and duly notified Gibbons, plaintiff’s testator, and forbade him proceeding with the work he had contracted with Henderson to do." Woolsey testifies that on or about "May i, 1888, on which •day the contract provided that the lease should be made and delivered by him to Henderson, he presented a lease to Henderson, and demanded the payment of the rent, and Henderson said, “I have no money. I cannot sign it;” that he (Woolsey) then said, “I won’t accept any lease, and I debar you from going on iny property.” He also testifies that, at the same time, he told Henderson that the latter had broken his contract, and had not fulfilled his lease, and that it was canceled, and that he notified Henderson to get off the property, and that he had no claim on it of any kind, and that subsequently, at various times, he in substance repeated these declarations to Henderson, and told him he was a trespasser, and that he had been theretofore forbidden by Woolsey to do any more work on the lands. He also testified that he never received any rent whatever from Henderson. And Woolsey and his witnesses testify that they repeatedly ■notified Gibbons, •or his foreman and workmen, that they must cease working on these lands, and that they were trespassers thereon. The contract between Henderson and the plaintiff’s testator, Gibbons, for the doing of the work for which a lien is claimed herein, is dated May 14, 1888, and therefore is subsequent to the breach of the contract by Henderson by refusing to execute the lease, and failing and refusing to pay the rent on May 1, 1888, and also subsequent to the rescission of the contract on that day by Woolsey, on the ■ground of such breach. Woolsey had the right to so rescind under such •circumstances. It was at his option whether to rescind or to enforce the •contract, to treat Henderson thereafter as a trespasser or a tenant. Had he .chosen to enforce the contract or to treat Henderson as a tenant under the agreement of March 20, 1888, then plaintiff’s lien would have been valid, the actual execution of the lease not having been made by that contract a condition precedent to the right to make the improvements. In the contract •of March 20, 1888, by which it is claimed by plaintiff that Woolsey consented to the doing of the work in question, and thereby made his lands subject to a mechanic’s lien therefor, it was provided that said lease should be ■executed and delivered by Woolsey on May 1, 1888, and that the rent should be $6,000, to be paid in equal quarterly payments in advance. It was also covenanted therein by Henderson that he would “pay the rent for the said lands and premises at the times and in the manner and amounts set forth,” as aforesaid. And the eleventh clause of the contract provided “that if any rent shall be due and unpaid, or if default shall be made in any of the covenants herein contained, or in the lease to be made, then it shall be lawful for the said party of the first part to re-enter the said premises, and the same to have again, repossess, and enjoy.” Woolsey was in possession of these lands all the time from the making of the contract of March onward, and Henderson had the right of entry, and entered, up to May 1, 1888, to the extent necessary to make the improvements as provided in the contract. When, therefore, on May 1, 1888, and thereafter, he forbade Henderson and his contractor, Gibbons, to continue with the improvements, and canceled the contract, and notified them that they were trespassers, he thereby made the re-entry provided for by the contract, and terminated the rights under the contract of entry and possession by Henderson and those claiming under him. The fact that, by the contract between Woolsey and Henderson, the former consented that the latter might make certain improvements on the former’s land, and that, therefore, any person doing work or furnishing materials towards such improvements might acquire a mechanic’s lien on such land, did not make such contract irrevocable. It might be rescinded by consent, or either party might rescind it by reason of a sufficient breach by the other. When so rescinded, the consent by Woolsey therein involved terminated with the termination of the contract, and any work done or materials furnished thereafter towards the improvement of the land would be done and furnished without the consent of the owner so far as such consent was solely dependent on such contract. Had Henderson owned the land and made the contract for this work with Gibbons, the testator of plaintiff, he could have rescinded his contract, and Gibbons could not thereafter have continued the work, and filed a valid lien therefor against the land, nor even held Henderson personally liable therefor. In such event, all Gibbons could have done would have been to recover damages for the rescission, if wrongful. So, if Woolsey, as owner, had contracted with Gibbons, a like situation and rights and remedies would have existed; and in either case, if the rescission was rightful, neither could a lien have been acquired nor damages been recovered by Gibbons.
    In the case at bar Gibbons’ rights as against Woolsey arose from the contract between Woolsey and Henderson, and were dependent thereon. When the rights of Henderson under that contract with Woolsey were rightfully terminated, then the subordinate rights of Gibbons, dependent thereon, also ended. Henderson could not confer on Gibbons any right to enter upon and work upon Woolsey’s land, which should survive the rights of Henderson as to that land under his contract with Woolsey. There is no question here arising from any consent or acquiescence by Woolsey to the performance by Gibbons of any work on this land after Woolsey had rescinded his contract with Henderson. The evidence established that Gibbons’ contract was not made until May 14, 1888; and that the rescission of the Woolsey-Henderson contract was on or about May 1, 1888; and that as soon as Woolsey knew of any work being done, and frequently thereafter, he forbade its continuance by personal orders given to Gibbons and his foreman and workmen and subcontractor on the premises. Henderson was not an agent of Woolsey. He had a contract with W’oolsey, whereby he became a prospective tenant and purchaser, with a right of possession and to improve the land in the meantime; but such contract did not constitute the relation of principal and agent between them. Had it done so, yet no lien would have been acquired for work done by Gibbons after Woolsey had forbidden him to continue it, nor could Woolsey be held personally liable for any work so done. The letter of December 2d, to Mulhall, does not establish a waiver by Woolsey of his prior rescission of his contract with Henderson, nor of his notice thereof to Gibbons. The defendant Woolsey is entitled to judgment dismissing the complaint upon the merits, with costs; but plaintiff is entitled to judgment against defendant Henderson personally for ten thousand dollars and interest and costs.
    
      Argued before BROWN, P. J., and DYKMAN and CULLEN, JJ.
    Alex. Thain, for appellant.
    Weeks W. Culver, for respondent.
   CULLEN, J.

This is an appeal from a judgment in favor of the defendant Woolsey entered upon the report of a referee. The action was brought to enforce a mechanic’s lien. The defendant Woolsey was the owner of certain lands in Long Island City. On March 20, 1888, he entered into an agreement with the defendant Henderson by which, on May 1st following, a lease was to be executed by the parties for the demise of the land to Henderson for the period of 17 months, at a specified rental, payable quarterly in advance, which lease should contain certain specified provisions for the purchase and sale of the property, at the option of either party. The agreement further provided that Henderson might enter upon the premises forthwith, and also contained a covenant on Ms part to expend before February, 1889, the sum of $25,000, in improving and preparing the lands for a race course. It was further provided that, in case of default in the payment of the rent or in any of the covenants of the agreement or the lease to be made thereunder, Woolsey might re-enter the land and hold the same as before. Henderson entered under-tMs agreement. On May 1st he failed to pay the rent due in advance, and refused to execute the lease, and neither rent has been paid nor lease executed since. On May 18th the plaintiff’s testator made a contract with Henderson for the erection of racetrack structures. For work done by Mm he filed a mechanic’s lien, the subject of this action. As to the questions of law involved on this appeal there is but little that can be added to the very clear opinion delivered by the referee. That, if the original agreement had remained in force, the plaintiff would have acquired a valid lien on the interest of the defendant Woolsey in the lands, is unquestionable, for the improvements were not only made with his consent, but in express compliance with the terms of the agreement. Schmalz v. Mead, 125 N. Y. 188, 26 N. E. 251; Otis v. Dodd, 90 N. Y. 341. The case cited by the counsel for the defendants (Cornell v. Barney, 94 N. Y. 394) arose under the old statute as to the city of New York, and has no application to the present laws. But it is equally clear that on Henderson’s default, and his refusal to execute the lease or pay the rent, Woolsey had the right to rescind the agreement, and from that time Henderson, if in possession of the land, would be but a trespasser. Graves v. White, 87 N. Y. 463. The referee has found, not only that the contract was rescinded by Woolsey, but that Woolsey notified the plaintiff’s testator that Henderson had lost his right in the land. The evidence, we think, justified these findings. While the original plaintiff is dead, and cannot contradict the statement of the witnesses as to the notice given him, Woolsey testified to notice given to Lowry, the foreman of the workmen. It is significant that Lowry is not produced to contradict this evidence, nór is his absence accounted for. The only criticism on the rescission that can be made is that Woolsey did not forcibly oust Henderson or prevent the entry of the plaintiff’s workmen. This, we think, he is not compelled to do. The case in that respect is like that of Cowen v. Paddock, 137 N. Y. 188, 33 N. E. 154, where it was held that the failure of the owner to eject the contractor as an intruder did not subject her to liability as for a consent, it being shown that she had forbidden a continuance of the work. At the time,- therefore, that plaintiff’s testator made his contract with Henderson and performed the work, Henderson was a trespasser without title, and his contract could not bind Woolsey, the owner. Spruck v. McRoberts, 139 N. Y. 193, 34 N. E. 896. The judgment appealed from should be affirmed, with costs. All concur.