Case Name: Herrmann & Grace, Plaintiff, v. The City of New York , and Others, Defendants, Impleaded with John Williams and Others, Appellants. Heine Safety Boiler Company, Respondent, Appellant, and Oliver C. Semple, as Receiver of John Williams and Ralph J. Gerstle, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-12-30
Citations: 136 A.D. 28
Docket Number: 
Parties: Herrmann & Grace, Plaintiff, v. The City of New York and Others, Defendants, Impleaded with John Williams and Others, Appellants. Heine Safety Boiler Company, Respondent, Appellant, and Oliver C. Semple, as Receiver of John Williams and Ralph J. Gerstle, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 136
Pages: 28–31

Head Matter:
Herrmann & Grace, Plaintiff, v. The City of New York and Others, Defendants, Impleaded with John Williams and Others, Appellants. Heine Safety Boiler Company, Respondent, Appellant, and Oliver C. Semple, as Receiver of John Williams and Ralph J. Gerstle, Respondent.
Second Department,
December 30, 1909.
•Mechanic’s lien — attaching creditor — priority—when lien not postponed to sums which may subsequently become due. :
A mechanic’s lien is subordinate to the rights of other creditors which have attached prior to the filing of the lien, but the lien of an attachment is subordinate to a prior mechanic’s lien upon the particular fund attached.
Where a mechanic’s lien can be satisfied out of a fund due when the notice was filed, a creditor who subsequently attaches that fund has no equitable right to have the prior lien postponed to sums which may thereafter- become due so as to affect the rights of subsequent lienors.
It seems, however, that, as between the lienor and the attaching creditor, equity would compel the satisfaction of the lien out of the fund which the attaching creditor could not reach.
Appeal by the defendants John Williams and others from a judgment of the Supreme Court, and cross-appeals by the defendants American Radiator. Company and others from parts of said judgment, entered in the office of 'the clerk of the county of Kings on the 6th day of December, 1907, upon the decision of the court rendered after a trial at the Kings County Special .Term.
John P. Duff, for the appellant American Radiator Company.
J. Power Donellan, for the appellant Johnson Service Company.
George W. Wingate \T. EUett 'Hodgskin with him on the brief], for the respondent, appellant, Heine Safety Boiler Company.
Oliver G. Semffle, for the respondent.

Opinion:
Miller, J.:
Cross-appeals by the defendants in this mechanic's lien stiit present their conflicting claims .to a fund amounting to $6,345.25 in the hands of the comptroller of the city of Hew York, due on a building contract entered into between the board of education of the city of Hew York and the firm of Williams & Gerstle, contractors, on the 29th of July, 1903, and completed on the 25th of February, 1905. On April 9, 1904, the plaintiff filed a notice of lien for $2,050. On the first'of June the defendant Heine Safety Boiler Company caused to be levied a warrant of attachment in an action against Williams & Gerstle to recover the sum of $6,650. At that time there was due the contractor the sum of $2,125, being eighty-five per cent of $2,831.25, the amount of work certified as completed by the certificate of the officials of the board of education. On June twenty-seventh the defendant the Johnson Service Company filed a notice of lien for $2,237.25, and on July 9, 1904, the defendant the American Radiator Company filed a notice of lien for. $777.88. There are other parties to the action, but it is only necessary to consider the priority of liens of the aforesaid defendants. The plaintiff's lien is not disputed. The appellant the Heine Safety Boiler Company claims a lien on the sum of $2,831.25, the entire amount of work certified as done when its attachment was levied. The trial court, however, held that only $2,125 was then due the contractor; that, though the plaintiff's prior lien had attached to that sum, there arose an equity upon the levy of the attachment in favor of the attaching creditor by reason of the fact that the plaintiff might resort to moneys subsequently becoming due, wherefore it was decided that the sum of $2,125 should be held to abide the event of the action in which the attachment was issued, and that the plaintiff's lien should be satisfied out of the moneys which became due after the levy of the attachment, thus practically cutting off the lien of the appellants the Johnson Service Company and the American Radiator Company, both of whom appeal and contend that, at most the levy of the attachment only created a lien on the sum of $'2,125,. subordinate to the lien.of the plaintiff which must first be satisfied from that fund.
I am unable to see hów this case can be distinguished from the case, of Herrmann & Grace v. City of New York (130 App. Div. 531), an action between the same parties on almost precisely the same facts,' the only distinction being that in. that case the contractor abandoned the work, while in this case the contract was completed. At the time of the levy of the attachment and the filing of the notice of lien, the situation in that case was precisely the same as it was in this. The payment of the fifteen per cent was then contingent upon the completion of the contract. In that case the contingency did not happen, in this it did. It was there decided that the attaching creditor only obtained a lien upon the eighty-five per cent certified as due at the time of the levying of the attachment, and that the plaintiff's lien should first be satisfied out of that fund. We might well rest, the decision of this case upon the opinion of Hr. Justice Scott in that case, were it not for the fact that the learned trial justice has-accomplished, a different result in this case by the application of an equitable rule which was not considered in that case.
There can be no question that a mechanic's lien is subject to the rights of other creditors which have attached prior to the filing of the lien. That was decided in McCorkle v. Herrman (117 N. Y. 297). But the lien of the attachment is subordinate to the plaintiff's lien, which had attached to the particular fund upon which the attachment was . levied. So far as the Lien Law (Gen. Laws, chap. 49; Laws of 1897, chap. 418, as amd.) is concerned, as the plaintiff's lien could be satisfied out of a fnnd due when notice was filed, there is no reason why it should attach to a fund subsequently coming due. (See Van Clief v. Van Vechten, 130 N. Y. 571.) Certainly, when the attachment was levied no equity arose in favor of the attaching creditor to have a prior lien attach to a fund that might never come into existence. Before further monéys came due other notices of lien were filed, and it requires no extension of the Lien Law, as the learned justice at Special Term seemed to think, to hold that those liens attached to the moneys subsequently coming due, subject to the prior lien, which, however, had to be satisfied, if possible, out of the fund to which it attached immediately upon filing. The legal rights of the subsequent lienors have in fact been defeated by the application of an equitable principle never intended to apply to such a situation. Fío doubt, as between the jfiaintiff and the attaching creditor, equity would compel satisfaction of the plaintiff's lien out of the fund which the attaching creditor could not reach. If the equities are to be considered, they should be as of the time of the trial, and the men whose material and labor have created a fund would seem to have a superior equity in that fund to that of an attaching creditor; at any rate, it is the policy of the law to favor the former. (Kane Co. v. Kinney, 174 N. Y. 69.) The mechanic's lienors in this case stand on their legal rights; they do not ask a preference over a prior attaching creditor, but only that such creditor shall seek satisfaction out of the fund levied upon, subject to such liens as were then upon it, and that there shall be no shifting of liens to help out such creditor at their expense.
The judgment should be modified accordingly.
Hirschberg, P. J., Jenks, Burr and Bich, JJ., concurred.
Judgment modified in accordance with opinion, and as modified affirmed, without costs.