Case ID: ad_113/html/0625-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John B. McDonald, Appellant, v. The Mayor, Aldermen and Commonalty of the City of New York and Others, Respondents.
    First Department,
    May 26, 1906.
    Mechanic’s lien, on municipal improvements — when court can give personal judgment in action originally brought under Consolidation Act of the city of Mew York—effect of repeal of said act.
    In an action by a sub-contractor to foreclose a mechanic’s lien on municipal works in the city of New York, which was originally filed under the Consoli- ■ dation Act, although the evidence shows that no fund was due to the principal contractor to which the lien could attach, if the defendants continue to defend ‘ without suggesting a change of forum though knowing tliat the fund had been released by discharge of the lien by order of court, the court may proceed with the action under its general jurisdiction in equity and render a personal judgment on bringing in the surety on.the undertaking given to discharge the lien.
    Although it was formerly held that the Consolidation Act only .allowed personal judgment in case the lien were established, when,that act was repealed subsequent to the commencement of an action to foreclose a lien thereunder, the effect of such repeal was to make applicable the general provisions of the. ' Code of Civil Procedure which allow a personal judgment although the lien fails. ' -
    When a verification has been held to be good by.the Court of Appeals, it will be presumed that the said court considered all irregularities therein.
    Appeal by the plaintiff, John B. .McDonald, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk off the county of New York on the ,28th day of July, 1904, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing.the complaint upon the merits.
    
      James F. Donnelly, for the appellant.
    
      James Kearney, for the respondent Moran.
    
      Joseph Ullman, for the respondent Collins.
   Laughlin, J.:

This' action was brought to foreclose a . municipal lien. The respondent Collins entered into a contract with the city of New York on the 29th day -of July, 1895, to regulate and grade Jerome avenué, and on the twenty-ninth day of December thereafter he sublet the work.of furnishing material for the filling to the plaintiff ; the plaintiff, pursuant to the provisions of' the- Consolidation Act, so called (Laws of 1882, chap. 410, §§ 1824-1838, as amd. by Laws of 1895, chap. 605), filed the lien on the 6tli day of March, 1897, for- a balance alleged to be due under the sub-contract. Upon a former trial the complaint was dismissed upon the grounds (1) that the lien was void owing to the. fact ' that it was verified, not'by .the party but by his agent, and (2) that in. the absence of a valid lien a .personal judgment could, not. be secured in the action for the amount due and owing. (McDonald v. Mayor, 29 Misc. Rep. 504.) This court affirmed the judgment on the same grounds (58 App. Div. 73), but the Court of Appeals reversed on the first ground without considering the other (170 N. Y. 409). On the last trial the evidence taken on the former trial was read by consent without calling the witnesses, and the only additional testimony was that of the respondent Moran. After the case was submitted, the learned justice presiding handed down an opinion sustaining the lien and the right of the plaintiff to recover (42 Misc. Rep. 131); but before a formal decision was signed the respondents applied to the court for leave to present additional testimony, which was granted. The testimony presented pursuant to such leave showed that at the time the lien was filed there was nothing due the contractor from the city, and that nothing thereafter fell due to which it could attach ; the court thereupon decided that the plaintiff did not hate a valid lien, and that, since there was no demand for personal judgment against Collins, a personal judgment could not be decreed for the balance due and owing to the plaintiff.

The evidence fairly sustains the finding that there was no fund due and owing by the city to the principal contractor to which the lien could attach.. It is still contended that the lien was not properly verified. The claim in this regard is somewhat different from that considered by the Court of Appeals on the former appeal. Section 1825 of the statute requires the notice of lien to be verified by the “ oath or affirmation ” of the claimant. The verification in the cáse at bar, aside from being by a duly authorized agent, which the Court of Appeals held sufficient, is in form that the “statements, therein contained are true to his own knowledge or information and belief.” It is evident that tlfe Court of Appeals had this form of verification before it, and that the decision would have been sustained instead of reversed if that court had deemed the verification insufficient. • -

Subsequent to the commencement of the action the lien was discharged on'the application of the respondent Moran on his giving an undertaking as required by section 1836 of the statute (as amd. by Laws of 1895, chap. 605) — that Collins would pay to' the claimant -on demand the amount of any judgment that may be recovered “ in an action upon the claim or demand specified in said notice of lien,” not exceeding an amount specified; and the respondent Moran set that fact up in his answer as a defense to the foreclosure of the lien. The plaintiff continued the prosecution of the action and the respondents continued to defend, without suggesting a change óf forunq although they had full knowledge of the fact that the fund had been released by.discharge of the lien by order -of the court and that consequently the only.recovery -that could be had in the action, if plaintiff should succeed, was a personal judgment. Without amending the demand for relief, the plaintiff on the first trial demanded a personal judgment against Collins, and he consistently persisted in that' demand on the appeal and on the new tidal and ever since. - .Collins also demanded a personal judgment against the plaintiff on a counterclaim,

■ If a jury trial were desired by respondents,' it should have been demanded. In these circumstances it is not very material whether the complaint, which was drawn and served before the lien was discharged,-is susceptible of the construction, that it gave notice to Collins that a personal judgment would be demanded against him. .The complaint did demand judgment establishing plaintiff’s claim against Collins for a-specified balance "and interest, but it did not expressly demand judgment against him therefor. He had- notice that a personal judgment was the Only judgment that could be recov-; ered by the plaintiff againsf him. That was sufficient notice that the plaintiff was seeking'and would demand such personal, judgment.^ In this case we have a lien duly filed and valid in form. -, There was money due the sub-contractor who filed it for material delivered-in the performance of the' work with the municipality; - and there-was also money due and to g-ro'W due from the city to the principal contractor. The plaintiff’s right to reach the fund was "defeated only by the assignment thereof by Collins to Moran before the lien was filed. The courts have, with a view to protecting defendants in their-right to a. jury trial, provided that a personal judgment may not be had in- an action _to foreclose a mechanic’s lien when the validity of the lien is litigated, unless personal judgment is demanded which would give the defendant notice and an opportunity to,demand a jury trial in the event tlie lien should be declared invalid. (Kane v. Hutkoff, 81 App. Div. 105 ; Terwilliger v. Wheeler, Id. 460 ; Hawkins v. Mapes-Reeve Construction Co., 82 id. 72 ; Deane Steam Pump Co. v. Clark, 84 id. 450 ; Steuerwald v. Gill, .85 id. 606 ; Bradley & Currier Co. v. Pacheteau, 175 N. Y. 492 ; Ryan v. Train, 95 App. Div. 13. See, also, Kervan v. Hellman, 110 id. 655.)

It is to be borne in mind that this -lien had not been discharged when the action to foreclose the same was commenced. The court thus having acquired jurisdiction could proceed and render such judgment as the facts warranted, even though añ action to foreclose a municipal, lien will not lie after the lien has been discharged. But it is claimed that the recovery of a personal judgment in an action to foreclose a municipal lien was not authorized. Aside from any other question equitable relief upon which plaintiff reliéd which doubtless led him to refrain from demanding personal judgment was rendered impossible on account of the discharge of the lien at the instance of one of the defendants pending the action. I fail to see why that fact alone did not authorize the court to proceed with the action and render personal judgment against Collins on bringing in the surety on the undertaking, proceed against both under the general jurisdiction in equity to retain the action and grant such relief as a substitute for the equitable relief as the facts warranted. ( Valentine v. Richardt, 126 N. Y. 272 ; Dammert v. Osborn, 140 id. 30 ; Koehler v. N. Y. El. R. R. Co., 159 id. 218, 223.) Where a lien filed under the General Lien Law (Laws of 1885, chap. 342) was discharged by order of the court on the application of a' party in interest and the giving of a bondj it was necessary to 'establish the validity of the lien before a recovery could be had on the bond, which, unlike that given under the Consolidation Act, was conditioned for the payment of any judgment which may be rendered against, the property,” but the sureties could be brought into the foreclosure action. (Ringle v. Matthiessen, 10 App. Div. 274 ; affd., 158 N. Y. 740 ; Morton v. Tucker, 145 id. 248 ; Mertz v. Press, 99 App. Div. 443.) The Legislature, however, saw fit to prescribe differently in the case of municipal liens, and, by analogy to the provisions inserted in contracts for public works binding the contractors to pay employees, it required as a condition of a release of a fund against which a lien was filed that an undertaking be given to pay the amount found to be due on the claim under which the lien was filed, and a recovery could be had on such bond without establishing the validity of the lieu or sliowing.that anything was due and owing from the city to the municipal contractor. (Consol. Act [Laws of 1882, chap. 410], § 1836, as amd. by Laws of 1895, chap. 605 ; Pierson v. Jackman, 27 Misc. Rep. 425 ; affd., 47 App. Div. 625.)

It seems to have been' held that as to liens tiled under the Consolidation Act," as distinguished from the General Lien Law of 1885, which made provision therefor, and was succeeded by'tlie Code, that there could not be a personal judgment unless a valid lien was established. (Scerbo v. Smith, 16 Misc. Rep. 102 ; Terwilliger v. Wheeler, 81 App. Div. 460 ; Weyer v. Beach, 79 N. Y. 409.) It is claimed that this case is removed from that doctrine by the fact that the Consolidation Act was repealed by chapter 195 of-the Laws of 1899, which enactment took effect nine days before the first trial of this action, which was on April 10,1899, and that this foreclosure must, therefore, be governed by the provisions of section 3412 of the Code of Civil Procedure. The only statute then remaining, regulating the procedure in pending or future actions brought to enforce liens.filed under the repealed provisions of law, were the provisions of the Code of Civil Procedure, embracing, among other sections, sections 3403 and 3412, which had been enacted by chapter 419 of the Laws of 1897, and took effect on the 1st day of September, 1897. It was competent for the Legislature to make the provisions of the Code of Civil Procedure with respect to the recovery of a personal judgment in an action to foreclose a lien applicable to pending actions; and since pending actions were not excepted from their operation and since the old statute was not retained as to pending actions, the governing rule of construction requires that they be considered as applicable to pending actions as well as to actions subsequently brought: (Matter of Davis, 149 N. Y. 539.) If a personal judgment could not be recovered in this action I am unable to understand why the judgment dismissing the complaint was reversed by the Court of Appeals. The facts upon which the claim that no personal judgment can be recovered appeared on the former appeal quite as clearly as now. It is now well settled that in an action governed by section 3412 of the Code of Civil Procedure a personal judgment may be recovered even though the lien fails. (Bradley & Currier Co. v. Pacheteau, 175 N. Y. 492.) The defendant Moran did not recover on his counterclaim, but he had judgment dismissing the complaint, with costs, which was right.

It may be that the provisions of the Consolidation Act had been previously repealed by implication (see Terwilliger v. Wheeler, surpra), but if so, the only effect, so far as this action is concerned, was that the practice herein was regulated- by the Code of Civil Procedure for a longer period than herein specified.

It follows that the judgment should be reversed as to defendant Collins and a new trial granted, with costs to appellant to abide the event, and affirmed with costs as to the defendant Moran.

O’Brien, P. J., Patterson, Ingraham and Clarke, JJ., concurred.

As to defendant Moran judgment affirmed, with costs. As to defendant Collins judgment reversed, new trial ordered, costs to appellant to abide event. Settle order on notice.