Case Name: New Jersey Steel and Iron Company, Respondent, v. Andrew J. Robinson and Others, Respondents, Impleaded with Francis S. Kinney, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1904-03
Citations: 92 A.D. 436
Docket Number: 
Parties: New Jersey Steel and Iron Company, Respondent, v. Andrew J. Robinson and Others, Respondents, Impleaded with Francis S. Kinney, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 92
Pages: 436–439

Head Matter:
New Jersey Steel and Iron Company, Respondent, v. Andrew J. Robinson and Others, Respondents, Impleaded with Francis S. Kinney, Appellant.
Mechanic’s lien—it attaches, where the contractor fails, and the owner completes the building, to the amount remaining due after deducting the cost of completing the building.
A building contract provided that the contractor should be paid the actual cost of the labor and materials, together with five per cent on such cost, but that the entire sum paid to him should not exceed §317,310; that he should be paid, from time to time during the progress of the work, ninety per cent of the value of the labor and materials, together with two and a half per cent of the cost of such labor and materials, and should be paid the balance of the contract price upon the completion of the Work.
The contractor made a general assignment for the benefit of creditors at a time when he had earned, over and above the payments received by him, §70,761.90. Under the provisions of the contract providing for the retention of ten per cent of the cost of the labor and materials and of two and a half per cent Of such cost until the completion of the work, only §53,967.85 was then due and payable to him. Subsequent to the making of the general assignment, the owner, pursuant to a provision of the contract, completed the work at,such a cost that only §58,398.76 remained due to the contractor.
Held, that liens filed by sub-contractors and by materialmen did not attach to the §70,761.90 which the contractor had earned at the time he made the general assignment, but only to the §58,398.70 remaining due after the completion of the work.
Appeal by the defendant, Francis S. Kinney, from a judgment of - the Supreme Court in favor of the plaintiff and certain of the defendants, entered in the office of the clerk of the county of New York on the 13th day of February, 1902, upon the report of a referee. '
William H. Van Benschoten, for the appellant.
H. B. Olosson, for the plaintiff, respondent.
Richard M. Martin, Henry Be Forest Baldwin, Edward J. Patterson and Frederick H. Man, for the defendants, respondents.

Opinion:
Van Brunt, P. J.':
This action was brought to foreclose a mechanic's lien upon prop- erty owned by the defendant Francis S. Kinney. On or about the 5th of June, 1899, the defendant Kinney made a contract with the defendant Robinson, whereby Robinson was to erect certain buildings upon property of said Kinney situate at the northwest corner of Madison avenue and Fifty-sixth street. The plaintiff and certain of the other defendants having supplied material and performed work upon these buildings, filed- liens against the property. Robinson failed to comply with his contract, and made an assignment for the benefit of creditors, and under the terms of said contract the defendant Kinney completed the buildings himself. At the time of the assignment by Robinson the sum of $70,761.90 had been earned under the contract, but was not payable by its terms; and when the work was completed by Kinney some thirteen months after Robinson's failure,, this unpaid remainder of the contract price exceeded the expense incurred by Kinney in finishing the work by the sum of $58,398.76 ; and the question presented upon this appeal is whether the liens filed attached to the $70,761.90 which had been earned under the contract at the date of Robinson's assignment, or only to the $58,398.76 which remained due after the completion of the1 work.
By reference to the contract it will be seen that but a small part of the $70,761.90 earned under the contract was payable at the time of the assignment to Robinson. The terms of the contract were that the sum to be paid by the owner to the contractor " for said work and materials shall be the actual cost of labor and materials, meaning the actual amount (without addition or discounts of commissions) necessarily paid by the contractor, and in addition thereto five per centum (5%) upon such cost. But the contractor agrees as part of this contract that the total amount to be paid to him for cost of the entire work, including the 5f0 paid him for his services, shall not exceed the sum of Three hundred and seventeen thousand three hundred and ten dollars ($317,310), and that such sum shall be paid in current funds by the .owner to the contractor in installments, as follows : From time to time during the progress of the work, in amounts equal to 90% of the value of materials furnished and labor performed, as may be certified by the architects, and in addition to this amount not to exceed 2%% on the cost of said labor and materials furnished as payment on account of contractor's commission for his services. The final payment to include the balance due the contractor for all labor,and materials furnished and for his commission for services, but in no case is this total amount to exceed the guarantee limiting-cost of the entire work — namely, Three hundred and seventeen thousand three hundred and ten dollars ('$317,810).
" The final payment shall be made within thirty days after this contract is fulfilled:"
The referee has found that the defendant Robinson performed all the conditions of said-contract until the 7th of March, 1900, when he failed in business and thereafter ceased to do any work on the buildings; and that Kinney, as provided in the contract, entered upon the premises and took possession of the , same and completed the work. He also found that on the 7th of March, 1900, the price and value of the materials theretofore, furnished, and the labor theretofore performed by the defendant Robinson upon the property was $134,438.79, and his agreed commission of five per cent thereon was $6,721.94, making a total of $141,160.73. He also found that the total amount of the payments theretofore made by Kinney to and for account of Robinson was $70,398.83, leaving $70,761.90-earned upon :the contract.
It is to be observed that shy the terms of the contract but ninety per cent of the labor performed and materials furnished was to be paid to Robinson from time to time as the work progressed, and two and a half per cent of his commission upon the same. Therefore, under the contract,-at the time of the filing of these liens, there was due from the owner to Robinson only the sum of $53,967.-85, which sum is arrived at as follows: Value of materials and labor, , $134,43:8.79; minety per cent of this is $121,004.91; add two and'a half :per cent on account of commissions, $3,360.97, making the whole amount due and payable, $124,365.88; from which deduct payments, -$70,398.83, leaving $53,967.85, payable under the contract; and no. more money would become- due to him under the contract before its final completion, Kinney having the right to fulfill the contract and charge Robinson with the expense thereof.
Under these-circumstances the liens could only attach to this sum of $53,.967.'85 'and whatever might - become» due over this sum in the completion- of the contract. The amount - which remained unpaid upon the contract, in-excess of the ninety per cent and two and a half per cent payable thereunder as the work progressed, was a security to the owner against any failure on the part of the contractor to complete his contract, and' thé "owner could1 not be deprived of that security which he had provided for in his contract by -the mere fact of the contractor failing to complete his contract and his creditors filing liens against the property. The result of the contrary view would be to deprive the owner of the security which he intended to, and did, take against the failure of the contractor to complete his contract, by providing that but1 á portion of the amount earned under the contradt should become due until its completion. ' The owner had a right to take security" fór the performance' of the contract, and lie cannot be deprived of such security. It would seem, therefore, that1 the only fund to which the liens could apply' would be this sum and such additional sums as became due- and payable "under the contract. . .
It is admitted that all of the money remaining unpaid_ under the contract above said'sum of $53,967.85 "was used in the completion of the, contract except $4,430.91,. leaving due and payable under the whole contract'$58,398:76. 1 1
Ye think, therefore, that the judgment should be modified by limiting the liens to' the füiid of - $58,398.76, remaining due upon the contract after completion. It would seem, in view of the fact that the figures which have been referred to are conceded by both sides, that there is no necessity for a liew trial. - A judgment may, therefore, be framed in accordance with this opinion. Ho costs of appeal to either party. '1' " 1' 11 1 '
Patterson, O'Brien and McLaughlin, JJ., concurred; Láüghlin, J., concurred'in résuit.
Judgment modified and judgment directed as stated in opinion, without costs of appeal to either party.