Court Opinion

ID: 5187096
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:30:17.267639+00
Date Added: 2024-06-11T08:26:47.358592
License: Public Domain

Ingraham, J. (dissenting):
T am unable to concur in the reversal of this judgment. The •assignment under which the appellant claims was executed by one David F. Gibbs, and grants, assigns and conveys “ unto The Eleventh Ward Bank, New York City, $7,500 of the moneys due and to become due for and on contract No. 77 of 1897, made and entered into by and between the Board of Education of the City of New York by and through its committee on buildings and myself, as principal, and Thomas Bailey and George A. Haggerty, as sureties, on *586June 24th, 1897, for erecting an annex building to Grammar. School No. 2, * * * to have and to hold the same unto the said The
Eleventh Ward Bank,. N. Y., its successors and assigns forever, to and for the use of said Eleventh Ward Bank.” This assignment was dated October 29, 1898. It does not appear that there was then any money due to the assignor under his contract with the city, and this assignment was, therefore, simply a transfer of $7,500 of the money that the assignor as contractor would be entitled at a future time to receive from the city under the contract. The assignor created the Eleventh Ward Bank his attorney to receive from the city the sum of $7,500, when that sum became due to the contractor from the city, and simply transferred to the assignee the right of the assignor to receive that sum of money out of the moneys which the city subsequently became under a legal obligation to pay to him: No specific payment is assigned. The assignee was substituted for the assignor in his right to obtain from the city this sum of money under the contract, and this right was subject to all of the obligations or liabilities of the assignor created prior to that time either by transfers or agreements of his own, or by operation of law, which would tend to affect the obligation of the city to pay to Mm any sum of money upon the completion of his contract. If the assignment had been a transfer of all the money which was to grow due to the contractor upon the final completion of his contract, it does not seem to me that such an assignment would result in a transfer of the money when it should' become due so as to render inoperative the statute passed for the protection of mechanics and laborers who had furnished labor or material for the completion of a contract of a municipal corporation, and the assignment of the portion of the money which became due could have no greater effect.
I do not concur with Mr. Justice O’Brien in his conclusion that the provisions of the General Lien Law of 1897 (Chap: 418) are not applicable to the city of New York. The provisions of the act are sufficiently broad to include that city, and there is nothing in -the act that would show that it was. intended to make it inapplicable to any city where there was a special statute upon the subject. If the provisions of the General Lien Law are broader than the provisions of the Consolidation Act there is no reason why both acts should not' apply, and certainly none that would justify the court in refusing to apply *587the provisions of the General Lien Law to municipal contracts made by the city of New York, because at the same, time there were special provisions relating to said city in the Consolidation Act. If necessary the provisions of both statutes could be enforced without any confusion or inconsistency; but it does not seem to me that this is material, as under the provisions of the Consolidation Act, in force at the time this transfer was made and the payment became due, the lien of a person who had performed labor or furnished materials towards the performance or completion of a contract made with the city, was superior to that of the contractor or any person to whom the contractor had by a general assignment transferred his claim or the right to receive the money to be paid by the city upon the completion of the contract. By the provisions of section 1824 of the Consolidation Act (Chap. 410, Laws of 1882) it is-.provided that “Any person or persons who shall * * * perform any labor or furnish any material toward the performance or completion of any contract made with the city, on complying with the next section, shall have a lien for the value of such labor or materials, or either, upon the moneys in the control of the city, due or to grow due under said contract with said city to the full value of such claim or demand.” The lien thus given is upon the moneys in the control of the city, due to or to grow due under the contract with said city. It seems to me that the Legislature intended to protect those who have furnished labor and materials for the completion of the contract against any disposition, by the contractor of the moneys due or to grow due from the city ; so that the contractor could not, by assignment or transfer of the money to grow due, prevent those who have furnished the labor and materials for the building from receiving payment out of the moneys realized by the work which they had enabled the contractor to perform. To hold that a transfer by the contractor of the moneys which became due to him under the contract would be superior to liens filed by those who had furnished the labor and materials to perform the contract would open a ready way of evading the statute and rendering nugatory the protection which it was clearly the intention of the Legislature to give to those supplying the contractor with the labor and materials necessary for him to complete his work.
This construction is emphasized by section 1828 of the Consolida*588tion Act, which provides that “ The lien shall attach from the time of filing thereof to the extent of the liability of the contractor for the claim preferred upon any funds which may be due or to grow due to the said contractor from the city, under the contract against which the lien is filed.” There can be no doubt that this money claimed by the appellant was money due to the contractor from the city under the contract. JBy the assignment under which the appellant claims the contractor had assigned to it his right to receive a certain portion of the money which was to become due to.him under the contract; but it was only as his transferee that the appellant was entitled to any money from the city. This sum of money, therefore, was money due to the contractor when the lien was'filed; and the mere fact of his transferring to the appellant the right to receive a portion of the money due to him does not, under the statute, prevent a person who has furnished labor and materials used in completing the contract from obtaining a lien upon the moneys due to the contractor. ‘
It seems to me that this construction of the statute is justified by the case of Merchants & Traders' Bank v. The Mayor (97 N. Y. 362). That was under an ordinance of the common council which provided that “In all contracts for work done by-or for the corporation, the head of the department having charge thereof shall cause to be inserted a provision that the payment of the last installment dub in pursuance thereof shall be retained until such head of department shall have satisfactory evidence that all persons who have done work, or furnished materials under any such contract, and who may have given written notice to such head of department any time within ten days after the completion of said work, that any balance for such work or materials is still due and unpaid, have been fully paid or secured such balance. And if any person so having done work or furnished materials, and given such notice as aforesaid, shall furnish satisfactory evidence to the department that money is due .to him by the contractor under stick contract, such head of department shall retain such last installment,-or such portion thereof as may be necessary, until such liability shall be discharged or secured.” In considering this ordinance, the court say: “ We think the purpose of the ordinance was to secure to persons furnishing labor and materials to contractors with the city some of the advantages which’the lien laws *589of the State give to mechanics and materialmen; and this result was sought to be accomplished by making the city a trustee of the unpaid balance due upon the contracts with it for the benefit of such persons. ■» *■ qqle orclinance and the clauses inserted in the contract in pursuance thereof were intended for the benefit of the laborers and materialmen dealing with the contractor, and they should not be so construed as to make them illusory, misleading and nugatory.” This same ordinance was again before the court in the case of Mechanics & Traders' Nat. Bank v. Winant (123 N. Y. 266), where the •court say But here we have a case where the plaintiff, appears to have advanced moneys to the contractor to perform a contract undertaken by him, and to have taken as its security for repayment an assignment of the moneys which were or might become due by virtue of the contract.. As I understand the import of such language, it is that the assignee should be entitled to be paid whatever moneys and whenever the contractor could legally demand to be paid by the city under the contract. So that, unless the city could legally refuse to pay a claimant under the contractor, the plaintiff is not in any position to object to the payment. Its whole concern is that it recovers the net amount which is earned by the performance of the contract. As to claims against the contractor by those employed in the work under him, I do not see why the city is not authorized to pay any such of which it has notice.”
It certainly seems to me that by the provisions of the Consolidation Act and the Mechanics’ Lien Law before cited, the Legislature sought to accomplish just what the common council did in passing the ordinance referred to in the cases just cited ; and to hold that a contractor by simply transferring to another the moneys which are to grow due under the contract, and that such assignment is superior to the right of those to whom the statute gives a lien for the labor or materials actually furnished in completing the contract, would be to render the protection which the statute intended to give nugatory.' The subsequent case of Bates v. Salt Springs Nat. Bank (157 N. Y. 328) does not, it seems to me, at all affect the cases before cited. That case related entirely to a contract between private individuals, and it was held that the provisions of that contract were solely for the benefit of the parties to it, and would not be extended so as to protect materialmen not parties.
*590' I think, therefore, the Judgment should be affirmed. . But even assuming the position taken by Mr. Justice O’Brien to be correct, the appellant makes no objection to the four liens which were filed prior to the date of the filing of the assignment to the appellant; and there is no reason why these lienors should be kept out of their money. As to them, certainly the judgment should be affirmed.
Judgment reversed, new trial ordered, costs to appellant, payable. out of the fund, to abide event.