Court Opinion

ID: 5182084
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:43:30.811229+00
Date Added: 2024-06-11T08:26:36.421202
License: Public Domain

Ingraham, J. (dissenting):
I am unable to concur with Mr. Justice O’Brien in the conclusion at which he has arrived. A contract was executed between one Taylor and the defendants whereby Taylor was to erect and finish some new buildings on Morris avenue in the city of New York, and whereby the defendants agreed to pay Taylor the sum of $4,665 in three payments, the third of which payments was $2,000, and was to be paid “ when all work is completely finished according to plans and specifications and to the entire satisfaction of the architect.” This contract was dated August 6,1895. On January 3,1896, Taylor gave to the plaintiff an order for $1,472, drawn upon the defendants “ for materials furnished and to be furnished to your houses on Morris Av. and 161st St., and deduct the same out of my third payment on contract when due.” The plaintiff caused this order to be presented to th e defendan ts and asked Mr. Ward to accept it. To that Mr. Ward replied that there was no necessity of accepting the order, but when the person who presented the order to Ward was asked whether he did not remember that Ward said that he would not accept the order, the witness said that he did not remember. Ward testified that he refused to accept the order, and that he did not recognize the order from the fact that there were so many things to be done, but that he thought he was safe in giving him $1,000 on account at that time. This $1,000 was paid on the 14th of January, 1896, for which the plaintiff gave receipt for $1,000 “ on account of Taylor’s carpenter contract on houses on Morris avenue.” LTothing is said in the receipt given for that $1,000 about this order, nor did Ward in any way accept it. When this order was given, and when *392it was presented to Ward, the contract had not been completed and the third payment was not due. On the 2d of June, 1896, nearly five months after the order was given, the contract was completed, the architect’s certificates given, and Taylor became entitled to his third payment. Prior, however, to this time, but subsequent to the delivery of the order, two mechanics’ liens had been filed aggregating $687.68. The question presented on the trial was whether or not these mechanics’ liens were entitled to precedence over this unaccepted order given by Taylor to the plaintiff about five months "before the third payment to which the order referred became payable. There is no evidence as to the amount of work that had been done by Taylor at the time this order was presented, nor when the work was actually completed by Taylor. The contract, how-ever, provides that the third payment should be due when all the work is completely finished; and as it does not appear that such work was finished prior to the date of the architect’s certificate, which was June 2, 1896, and as the defendant testified that he refused to accept the order because the carpenters were very slow in getting the work done, I think it clear that at the time the order was granted the work itself, which would entitle Taylor to the money, had not been completed. We have thus an order to pay for work to be done in the future, a sum of money to be paid for the doing of the work not accepted by the person who was bound to pay the money when the work was completed, and where no obligation existed on the part of the owners of the property to pay. Its effect, as an equitable assignment of such an amount when due, is to be considered as between such equitable assignees and lienors who filed mechanics’ liens which were also filed prior to the completion of the work.
By the Mechanics’ Lien Law, in force at the time this order was given (§ 1, chap. 342, Laws of 1885), it is provided that any person who shall hereafter perform any labor or services, or furnish any materials which have been used or which are to be used in the erection of any house, with the consent of the owner or his agent, or any contractor or sub-contractor, or any other person contracting with such owner to erect any building, may, upon filing the notice of lien prescribed in the 4th section of the act, have a lien for the principal and interest of the price and value of such labor and materials upon such house, and upon the lot, premises, parcel or farm of *393land upon which the same may stand, with the proviso that in no case shall such owner be liable to pay by reason of all the liens filed pursuant to the act, a greater sum than the price stipulated and agreed to be paid in such contract, and remaining unpaid at the time of the filing of such lien. The statute thus provides for a lien upon the land to the extent of the price stipulated and agreed to be paid in such contract, and remaining unpaid at the time of the filing of such lien. When these mechanics’ liens were filed, therefore, they became liens upon the land to the extent of the amount agreed to be paid in the contract, and remaining unpaid at the time of the filing of the liens; and to overrule these exceptions we must hold that an order upon the owner prior to the time that the work had been done which would entitle the contractor to a payment, can take precedence over the liens of a mechanic who had filed his lien subsequent to the delivery of the order, but prior to the time that the work had been’done for which the payment was to be made, and prior to the time that the payment became due.
It does not seem to me that either of the cases relied on by the plaintiff determines this question. The case of McCorkle v. Herrman (117 N. Y. 304) was upon a demurrer to an answer which alleged that liens were filed prior to the commencement of the action; and the court held that such an allegation in the answer was not a « defense to an action to recover, by a receiver in supplementary proceedings, moneys which were due at the time "of the commencement of the proceedings, the court expressly limiting its decision by saying : “ Our decision relates to a case of money due or earned at the time those proceedings were instituted.” In Lauer v. Dunn (115 N. Y. 405) the order was delivered after the completion of the buildings for a portion of a sum remaining then due; and in determining that case the court said: “ The question, therefore, here is whether the order which the contractor gave to these plaintiffs amounted in law to an assignment pro tanto of the fund in the owner’s hands. We think that it did. When the building was completed the contractor had earned his moneys, though he might not be able to enforce payment thereof until thirty days had expired. That provision, for time, we look upon as one of grace to the owner. He was not bound to wait, but he had the right to elect to do so. *394During the running of that time other parties than the contractor might, through the filing of their notices of lien, acquire the right to be paid from the fund, but that consideration is not one which influences the determination of the case. If, before any liens were filed, the contractor had been paid, or had assigned his interest in the fund, in good faith and for a valuable consideration, in payment of a claim of the sub-contractor, and the owner is notified, no subsequent liens could operate to affect the owner with any further liability. * * * The effect of the giving of the order in question was to substitute the plaintiffs as the recipients jiro tanto of the balance payable to the contractor. Concededly, it was earned under the contract, and the postponement of its payment, by the exercise of the owner’s option, did not make it any the less a debt to the contractor, however possible for other legal claims to it to arise meanwhile.”
In the case of Brill v. Tuttle (81 N. Y. 458) the order was to pay to the plaintiff $300 “ and charge the same to our account for labor and materials performed and furnished in the repairs and alterations of the house.” There was a dispute in the evidence as to the amount due at the time of the date of the order, and the question was submitted to the jury with the instruction that the plaintiff was entitled to recover any money in arrears on the 1st of September, 1816, the day of the presentation of the order to him, and at any time thereafter before the commencement of the suit, on the account mentioned in the order on the first of September. The evidence showed that the job was nearly completed at the time the order was drawn, and the amount due from the defendant to the drawers at or after the time of the presentation of the order, on the designated account, was established by the verdict of the jury at $243. For that sum the plaintiff had judgment, and that judgment was sustained. There was no question as to the rights of others who had intervened, and who would be entitled to the sum because of any lien which had attached to the premises upon which the house was built, either prior or subsequent to the granting of the order.
In the case of Stevens v. Ogden (130 N. Y. 185) it appeared that on January 26, 1887, one Anderson was entitled to receive the sum of $1,545 under a contract with one Reynolds, the owner in fee *395of certain property for repairs to the building upon such property. On the 15th of November, 1887, Anderson executed and delivered to Ogden & Co. an order on Reynolds, whereby Reynolds was requested to pay to Ogden & Co. $909, and to “ charge to account of my contract with you for the carpenter work at 115£ Waverly place,” and it was held by the Second Division of the Court of Appeals that this order drawn by the contractor on the owner in fee, by its terms payable out of a sum due, or to become due, from the owner under his contract, when such order is given and accepted in payment of the debt, operates as an assignment pro tanto of that fund; and the court, then citing a portion of the opinion of the Court of Appeals in McCorkle v. Herrman (supra), held that that case was decisive of the question presented. The appeal was from a judgment of the General Term reducing the amount allowed to Ogden & Co. to $400, it appearing in the evidence that that sum was the value of the lumber sold by Ogden & Co. and -used in the repairs to the building owned by the drawee named in the order. The only question presented to the court was whether Ogden & Co. were entitled to the whole $900, or only to the $400, which represented materials used in the building. The court held that the judgment of the Special Term awarding the whole $900 was correct. No point was made upon the appeal that the order was given before the work was done, and that a mechanics’ lien was filed after the completion of the work, and when the contractor was entitled to receive the money which he had by the order directed the owner to pay to Ogden & Co. The Second Division of the Court of Appeals in the case there cited does not notice the express limitation in the McCorkle case as relating to a case of money due or earned at the time the proceedings were instituted.
We have here a case, of an equitable assignment of money to grow due for work to be thereafter performed or materials thereafter funished, which sum never became due to the contractor until after the mechanics’ liens were filed, and until after the amendment of the law of 1885, hereafter noted. By chapter 915 of the Laws of 1896, taking effect May 27, 1896, it is provided that the liens provided for by the act “ shall be preferred as prior liens to any conveyance, judgment or other claim which was not docketed or recorded at the time of filing the notice prescribed in the fourth *396section of this act,” and that “ no assignment of any contract for the performance of any labor or services or the furnishing of any mate-rials for any of the purposes specified in the first section of this act, nor of the moneys due or to become due therefor, nor of any part thereof, nor any order drawn by any contractor or sub-contractor for the payment of such moneys, shall have any force or validity until the contract, or a statement containing the substance thereof, and such assignment, or copies thereof, or a copy of snch order, shall be filed in the office of the clerk of the county wherein the premises are situated upon which such labor or services have been or are to be performed, or such materials have been or are to be furnished, and may then take effect and be enforced as of the time of snch filing.” Now, at the time of the passage of the act no sum of money had been earned by this contractor, or was then due or payable to him. He had an order which would operate as an equitable assignment of such sum of money as should subsequently become due and payable under the contract, but no money was earned, or was due and payable to the plaintiff under that order, or to the drawer of the order. This statute then took effect, and it is there expressly provided that any order drawn by any contractor or subcontractor, for the payment of this money, should not have any force or validity until a copy of such order should be filed in the office of the clerk of the county wherein the premises are situated, upon which work is to be done or materials furnished. When this act took effect no right had accrued to the drawer of the order as against the defendant, the owner. He had not agreed to pay the order, and whether or not anything would become due to the plaintiff, would depend upon the completion of the contract by the contractor, or his last payment becoming due. Under the provisions of this statute, a filing of a copy of this order was made a condition precedent to its obtaining a priority over liens filed in pursuance of the statute, which, by such filing, became liens upon the property to the extent of the amount due, or to grow due to the contractor under the contract.
It is quite clear that if the right of the plaintiff had become fixed prior to the passage of this act, if he had prior to that time become entitled to any sum of money from the defendant under his order, or if the contractor had become entitled to any sum of money from *397the owner upon which this order could operate as a pro tanto assignment, the provisions of this act would not have affected the right of the plaintiff to receive what was then due to him; but when this statute was passed nothing was due to either the contractor or the plaintiff as an assignee of the contractor. His right to receive anything depended upon the completion of the building by the contractor, and as there was nothing then due to either the contractor or the plaintiff, and as it does not appear that at that time there had been any money either earned or payable to the contractor upon which this order could operate, I think the provisions of the statute affected it; and as between liens filed under the provisions of the act, and such an order for the payment of a sum of money to grow due for work to be thereafter performed, that to entitle the order to priority over the liens, such order must be filed in accordance with the provisions of the act.
I think, therefore, that, upon the evidence as it stood upon the trial, the direction of a verdict in favor of the plaintiff was error, and that the exceptions should be sustained and a new trial ordered, with costs to the appellant to abide the event.
Exceptions overruled, and judgment ordered for plaintiff, with costs.