Court Opinion

ID: 5328644
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:04:15.731846+00
Date Added: 2024-06-11T08:29:25.366078
License: Public Domain

Finch, P. J.
A contractor and subcontractors who had filed mechanics’ hens against certain premises at Rockefeller Center appeal from an order granting a motion of the owner to cancel and discharge said hens upon the filing of a bond pursuant to section 37 of the Lien Law, and for an order approving the bond so filed.
The issue presented is whether section 37 of the Lien Law supersedes section 19 thereof, so as to permit the discharge of hens already filed in a manner other than that provided by section 19.
Section 37 of the Lien Law was enacted in 1929. In so far as material, it reads as follows: “ The owner or contractor between whom a contract exists for the improvement of real property may, either before or after the commencement of the improvement, execute as a principal, a bond to the county clerk of the county where the premises are situated in such amount as the Supreme Court of this State, or any justice thereof, or the County Court or the county judge of such county may direct, which shah not be less than the amount then unpaid under such contract, conditioned for the payment of any judgment or judgments which may be recovered in any action brought for the enforcement of any and all claims, notices of which may be filed as in this section provided, arising by virtue of labor performed or materials furnished in or about the performance of any such contract. As many such bonds may be executed as there are contractors employed upon the improvement. * * *
“ The claimant in order to perfect his claim shall within the time prescribed in this chapter for the filing of a notice of hen, file a notice of claim in the office of the clerk of the county where such bond is filed. Any such claimant who has so perfected his claim may bring an action on the bond for the enforcement thereof in any court *738where an action might have been brought if such claim were a lien filed against such real property.” (Law of 1929, chap. 515.)
It is evident that the section above quoted provides a means whereby an owner may prevent real property from being incumbered by mechanics’ liens by filing an adequate bond in advance. Contractors thereafter become claimants against the bond instead of lienors against the property. Said section in no way purports to affect the rights of lienors under liens filed prior to the giving of the bond. Such liens may only be discharged in the manner provided by section 19 of the Lien Law. Section 37 clearly differentiates between claims filed thereunder and hens filed under section 19. No intention is evident in section 37 to displace section 19. Upon the contrary, the Legislature at the same session whereat section 37 was enacted, amended the procedure provided by section 19 of the Lien Law, thereby showing its vitality. Such amendment provided a means of discharging a hen by payment of moneys into court, by the insertion of the words “ after notice of hen is filed,” thus indicating that section 37 was not intended to provide a method of discharging hens filed prior to giving a bond under section 37. In order to obtain the discharge of such hens as are already filed, it is necessary stiff to proceed under section 19. This result arrived at is not only in keeping with the express wording of the two sections but also with the different factual situations presented when one is dealing with a case where hens are already filed and one where hens may be filed in the future.
The bond in the case at bar is in an amount substantially less than the aggregate of the hens aheady filed and takes no account of those which may yet be filed. Section 37 provides that the bond shall not be less than the amount remaining unpaid under the contract. This distinction further corroborates the contention that sections 37 and 19 of the Lien Law were enacted to cover different factual situations. Before hens are filed, the measure of the liability of the owner is naturally the amount due remaining on the contract, as provided in section 37. After a hen is filed, the measure by which the amount of the bond is fixed is the amount of the hen and interest •and costs. Costs and interest have-always been items entering into the amount for which the bond is fixed after the lien has been filed, except in those exceptional cases where the plaintiff is not entitled to interest. Section 3 of the Lien Law expressly provides for the inclusion of interest in the hen. In General Supply & Const. Co. v. Goelet (241 N. Y. 28, 38) it is said: “ The courts below have refused to allow the plaintiff interest upon its claim. The Lien Law (Coils. Laws, ch. 33, section 3) provides that a contractor has a hen for the ‘ principal and interest of the value or the agreed price’ of labor or *739materials furnished. The contractor has the right to expect prompt payment for work and materials; the statute contemplates that if payment is withheld he is entitled to interest until payment is made.”
Costs are provided for by section 53 of the Lien Law.
The order appealed from should be reversed, with twenty dollars costs and disbursements, and the motion denied, with ten dollars costs.
Merrell and O’Malley, JJ., concur; Martin and Townley, JJ., dissent.