Case ID: ad_112/html/0347-01.html
Source: Caselaw Access Project
Author: {"author": "Gaynor, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James G. Martin, Respondent, v. Patrick J. Flahive and Edgar E. Krowl, Appellants, Impleaded with John A. Lovely and Others.
    Second Department,
    April 27, 1906.
    Mechanic's lien— when lien of materialman preserved after default of sub-contractor "by agreement that others complete the sub-contract — when lien against such sub-contractor good against contractor and owner — amendment of complaint — evidence — burden to show cost of completing work.
    When a materialman has furnished material to a sub-contractor, who thereafter defaulted, and all parties concerned havé agreed-that the original contractors continue the work and usé such material; the right of lien by such, material-man is continued on the money to become due on the sub-contract, as if the same had been completed.
    That the original contractors thereafter defaulted and the work was completed by the owners does not affect the lien of such materialman upon any surplus in the owner’s hands after tlie completion of' the building.
    The notice of. such lien may in terms be against the subcontractor and nevertheless be good against the original contractor and the owner who have completed the building. ,
    Although the complaint does not allege that the contractor and owner completed the work, it may be amended at trial to conform it to the prqof in that respect.
    But such contractors in completing the work of a defaulting sub-contractor do not assume any personal liability to a materialman who has furnished material to the sub-contractor, and an agreement to do so would be without consideration. The-only effect of such an agreement'made by the original contractor is to preserve the lien of the materialman against the sub-contractor, and thus he is only entitled to recover any unexpended balance found to exist as a matter ' óf fact. In order to. warrant a recovery, the burden is on the lienor to show the actual cost of completing the contract, and the existence of an actual unexpended balance sufficient to pay him. ' .
    Appeal by the defendants, Patrick J. Flahive and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Orange on the 8th day of March, 1905, upon the decision of the court rendered after a trial at the Orange Special Term in a suit- to foreclose a mechanic’s lien filed under chapter .37 of the Laws of 1902 (amdg. Lien Law [Laws of 1897, chap. 418], §§ 5, 12, 17, 20, as amd.) for work done under a sub-contract oh a public work of the State, and also from an order made after the evidence Was in to conform the complaint to the' proof, and entered in Said clerk’s office on the 9th day of March, 1905.
    The appellants contracted with the State Commission in Lunacy ;to do building work) at ■ the State hospital at Middletown for $14,190. ' , '•
    - Lovely sub-contracted with the appellants to furnish part oí the materials and do part of the work called for by their contract for $4,200. He entered upon the exepution of .his contract and purchased material therefor of the plaintiff of the value of $1,893.4'5, and it was all delivered at the work. ITe defaulted on his contract. He had then used about one-half of the material furnished by the plaintiff and the other half lay at the'work. '
    .'Thereupon the - State Architect in charge, the appellants, the" plaintiff, and - Ketch am, whom Lovely also owed $374 for material, met, and it was figured Up by the architect that after deducting the indebtedness of Lovely for material, "and the amount he Lad been paid on his contract, there yet remained an unexpended balance thereunder of $500.' The appellants were then/asked by the architect if they would complete the said contract. They said they would and proceeded with the work. It was stated at such meeting that they were to use the material of Lovely on. the ground, including'that of the plaintiff, arid they, did so. The arrangement Was assented to all round.
    The appellants afterwards defaulted on their' contract, arid the said commission completed it, there being at the end a balance in their favor of $4,428.59, now in the hands of the treasurer of the said hospital, who is a defendant here as stakeholder. Lovely is also a defendant, but these appellants alone answered, except another defendant who did not litigate.
    The respondent filed a lien for his claim after the work was all completed by the commission, and this suit is to foreclose such lien.
    Other facts are in the opinion.
    
      Michael Danaher, for the appellants.
    
      George H. Decker, for the respondent.
   Gaynor, J.:

The appellants by undertaking with the consent of all concerned to complete Lovely’s defaulted contract with them on his account, continued the right of lien which the plaintiff had on the money to come due under such contract the same as if Lovely' had continued and completed it. They thereby kept their contract price with Lovely a separate fund and subject to the plaintiff’s lien against it, to the extent of any unexpended balance of it remaining after the work to be done by Lovely had been completed by them. The legal effect was the same as if there were a clause in.the contract, giving them a right to complete, and they acted under it. Their position was tfie same as that of an .assignee of Lovely’s contract, or of his bondsman for the performance 'of his contract if he had stepped in to complete it (Harley v. Mapes Reeves Construction Co., 33 Misc. Rep. 626; Smith v. Lange, 81 App. Div. 192; Wheeler v. Scofield, 67 N. Y. 311; Van Clief v. Van Vechten, 130 id. 571). The fact that they afterwards defaulted 'on their contract with the State Commission in Lunacy does not change the case, for the latter under a provision in the said contract- also elected to and did complete such contract on their (the appellants’) account, including the work they left undone on Lovely’s contract, and has in its hands an overplus for the appellants or any intervening lienor who is entitled to it of $4,428.59.

The notice of lien is in terms under the Lovely contract, and against him as sub-contractor. It does not allege that he defaulted and that the appellants undertook to complete his contract on his account, or that they defaulted and the Commission in Lunacy completed their contract on their account. Nevertheless it sufficés. If it had been filed before Lovely defaulted and the appellants had undertaken to complete his defaulted contract on his account it would'have been good as against any and all successors to Lovely, and I do not see how the filing of it after the work had all been completed by the appellants and the commission makes a different case. It is good evidence against Lovely’s successors; they stand in his shoes. It is in terms under Lovely’s contract with the appellants, and it does not matter who carried that contract out.

The amended complaint alleges the default of Lovely, and that the appellants agreed to and did complete his contract. It does not allége that they also defaulted and that the commission completed" on their account, but that was not necessary. It matters not whether he or his immediate or remote successor completed it; the essential fact to be alleged was that it was completed.

The appeal from the order amending the complaint at the end of the trial to conform to the evidence by making it allege the agreement by which the appellants completed Lovely’s defaulted contract is without foundation. The trial judge had power to do it, and if he had not done it, it could have been done here if necessary to .uphold the judgment, as is too well known among us to. call for the citation of authority.

There is. a trouble with this judgment, however. It is for the plaintiff’s full claim of $1,-893.45. This is based on a finding of fact that the appellants agreed to pay to the plaintiff the amount-due to him from Lovely, and a conclusion of law that that sum is due from the appellants to the plaintiff. There is no evidence to support such finding. JBy stepping in and completing Lovely’s defaulted contract on his account the appellants did not make themselves liable personally for the claims against him for material or work; the only effect in law was to preserve the right of lienors in •respect of such claims to the extent of any overplus remaining of Lovely’s contract price'after deducting the cost of completion. If in agreeing to complete such contract they had told the plaintiff, as is ■ claimed, that they would pay his claim, that would not have been a binding promise, for there was no consideration for it, The only evidence on that head is by the plaintiff and Lovely at the very end, as if by afterthought. That of Lovely is that after the appellants had agreed to complete his contract, at the interview of all of them with the State Architect where that arrangement was.made, one of the appellants said to the plaintiff, “ You' may not feel uneasy because we will pay you in full,” and the plaintiff says the statement was that I could rest assured 1 would get my money, and that he would pay me.” This was no contract to pay, but only a naked promise, if it was made at all. The three disinterested witnesses-present make no mention of it.

The judgment can, therefore, be justified only if after the completion of Lovely’s contract by the appellants there was an unexpended balance of the contract price of $4,200 sufficient to pay the plaintiff in full. But there is no finding of the actual cost of completion, or of any such balance.

When the appellants, and after them the commission, undertook to complete, they became the trustees therein of all concerned,- and had to render an account of all expenditures under their trust on demand, which account would bind all unless excepted to and, impeached. The burden of proof was on the plaintiff to show the actual cost of completion (Beecher v. Schuback, 1 App. Div. 359). The plaintiff gave no evidence of such cost. The appellants rendered no account, but proved by two witnesses that they paid $1,699.30 for labor, $324.87 for material, $111.78 for board for workmen, and that the commission paid $131.03 for work. If these items be added to the sum of $1,874.45, paid by the appellants to Lovely before he defaulted, we have a total of $4,141.43, and if this be taken from the contract price of $4,200, there remains a balance of only $58.57. The plaintiff in no way impeached these items. Lovely téstified that in his judgment the contract could have been completed for $500, but this evidence was not permissible and is of mo probative force. It was not a question for opinion evidence, but of the actual amounts necessarily expended by the trustees to complete the contract. Lovely had already sworn that when he defaulted about three-fourths of my work was not done.” The finding of fact that his contract was nearly completed when he defaulted rests on no evidence whatever.

Unless the plaintiff consents to reduce the amount of his judgment to $58.57, the judgment will have to be reversed and the case sent back. - If it go back it is by no means meant that. the' parties are obliged to rub all- of the evidence out and take it over again, and pay a stenographer for it,- and also for the printing of it, a second time. On the contrary, only additional evidence is needed,,if there beany, to show what the actual cost of completion was, and the parties may consent to that course.

.The judgment is reversed and a new trial granted, unless the' plaintiff consents to reduce it to $58.57; the order is affirmed.

Hirschberg, P. J., Woodward, Rich, and Miller, JJ., concurred.

Judgment reversed and new trial granted, costs to abide the-final award of costs, Unless the plaintiff stipulates within, twenty days to-reduce the recovery to $58.57,-- in which event the judgment is, affirmed as so reduced, without costs. Order affirmed, without costs.