Court Opinion

ID: 5250739
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:12:42.456602+00
Date Added: 2024-06-11T08:27:56.623088
License: Public Domain

Smith, J. (dissenting):
This application was made under section 59 of the Lien Law (Consol. Laws, chap. 33; Laws of 1909, chap. 38), which reads as follows:
“ A mechanic’s lien on real property may be vacated and canceled by an order of a court of record. Before such order shall be granted, a notice shall be served upon the lienor, either personally or by leaving it at his last known place of residence, with a person of suitable age, with directions to deliver it to the lienor. Such notice shall require the lienor to commence an action to enforce the hen, within a time specified in the notice, not less than thirty days from the time of service, or show cause at a Special Term of a court of record, or at a County Court, in a county in which the property is situated, at a time and place specified therein, why the notice of lien filed should not be vacated and canceled of record. Proof of such service and that the lienor has not commenced the action to foreclose such lien, as directed in the notice, shall be made by affidavit, at the time of applying for such order.”
*364Upon the 5th day of February, 1918, there was served upon the Jeromel Realty and Construction Company a notice that they were required to commence their action to enforce an alleged lien for $72,529.02 filed by them on the 10th day of December, 1917, not later than Monday, March 11, 1918, being over thirty days from the time of the service of this notice, or to show cause upon the 12th day of March, 1918, why an order should not issue directing that said lien be vacated and canceled of record. Upon the 12th day of March, 1918, the Selwyn Realty Corporation came into court and made proof that the Jeromel Realty and Construction Company had upon the 10th day of December, 1917, filed a mechanic’s lien upon the said premises in the sum of $72,529.02 and had taken no action to enforce the said lien down to February 5, 1918; that upon that date the Selwyn Realty Corporation caused the aforesaid notice to be served upon the lienor, and since the giving of that notice no further steps in relation to its enforcement of the lien had been taken. It further appears in the affidavit that in April, 1917, the lienor took over by assignment a contract made between the Selwyn Realty Corporation and one Hall for the construction of a theatre and office building on said premises. The contract provided, among other things, that Hall or his assignee was to obtain a mortgage of $300,000 to be placed on said premises. In the summer of 1917 the Jeromel Realty and Construction Company, the assignee of Hall, advised the Selwyn Realty Corporation that it was unable to obtain the mortgage and that it was unable to fulfill its other obligations under the contract. In the autumn of 1917 the said Jeromel Realty and Construction Company totally abandoned the work, although the building was simply in the course of construction and the contractor was in debt to subcontractors in the sum of tens of thousands of dollars. It is further alleged that, owing to the present condition of the money market and of the high cost of labor and material, it has been especially difficult for the Selwyn Realty Corporation to finance this building contract and to make a new contract for the completion of the building, and that a most serious obstacle to the making of a new arrangement has been the filing of these two liens, aggregating over $80,000, by the Jeromel Realty and Construction Company, and that in order *365to bond the liens it would cost the owners upwards of $1,000. The affidavit then reads:
“ That as heretofore indicated, the filing of the notice of lien by the Jeromel Realty & Construction Company was based on no valid claim whatsoever against the Selwyn Realty Corporation, but on the contrary the said Jeromel Realty & Construction Company has broken its agreements in the most vital respects and abandoned the contract to be performed by it, and had thrown on the owners, the debts of the Jeromel Realty & Construction Company and the necessity for re-financing the operation and obtaining a new contractor.”
In answer to this application the Jeromel Realty and Construction Company made no denial of the allegations that it has no valid claim whatever against the Selwyn Realty Corporation, or that it has broken its agreements in the most vital respect, or that it has abandoned the contract to be performed by it, but simply asserts that on March 9, 1918, there were delivered to the sheriff of the county of New York five summonses with direction that the same be served upon the respective defendants therein, and that the service fees of the sheriff were then paid. There is no allegation that service was directed to be made forthwith, or even with reasonable diligence. The sheriff might then hold these summonses, if this case be rightly decided, for sixty days before serving them, and thus commencing the action. The respondent, therefore, has chosen to rest entirely upon its legal rights and .upon the claim that the delivery of these summonses to the sheriff to be served constitutes a commencement of the action under section 399 of the Code of Civil Procedure.
That section is found in the “General provisions” under title 3 of chapter 4 of the Code of Civil Procedure, entitled: “ Limitation of the Time of Enforcing a Civil Remedy,” and known as the “Statute of Limitations.” Section 398 reads: “An-action is commenced against a defendant, within the meaning of any provision of this act, which limits the time for commencing an action, when the summons is served on him; or on a co-defendant who is a joint contractor, or otherwise united in interest with him.” .....
Section 399 then reads: “An attempt to commence an *366action, in a court of record, is equivalent to the commencement thereof against each defendant, within the meaning of each provision of this act, which limits the time for commencing an action, when the summons is delivered, with the intent that it shall be actually served, to the sheriff. * * * But in order to entitle a plaintiff to the benefit of this section, the delivery of the summons to an officer must be followed, within sixty days after the expiration of the time limited for the actual commencement of the action, by personal service thereof upon the defendant sought to be charged, or by the first publication of the summons, as against that defendant, pursuant to an order for service upon him in that manner.” Section 399 provides that an attempt to commence an action as therein specified is equivalent to the commencement thereof “ within the meaning of each provision of this act, which limits the time for commencing an action.” In Throop’s note to this section it is stated: “ The provision has been extended to all cases where a limitation is fixed by statute.” The question here presented is not whether this section applies to the limitation of one year placed by the Lien Law (§§ 17, 19, as amd. by Laws of 1916, chap. 507) upon an action to foreclose a lien; nor is it whether this section applies to contracts similar to insurance policies which provide that action must be brought within a certain time, in default of which the right of action is forfeited. The opinion of the presiding justice herein satisfactorily demonstrates that the provision of section 399 of the Code will be liberally applied to statutes of limitation wherever found. This liberality is justified by the hardship to a party who when his time to commence his action, is about to expire is unable to find the defendant in order to make service. The restrictions imposed by a statute of limitations are inexorable. The courts are denied the power to give relief therefrom whatever hardship may follow. To prevent such inequity, section 399 of the Code was passed to give opportunity to a creditor to save his cause of action, even though personal service of the summons cannot be made. The distinguishing fact, however, between the cases relied upon and the case at bar is that section 59 of the Lien Law is in no sense a statute of limitations. It gives permission to the court to cancel *367a lien in case the lienor does not proceed to enforce his lien as therein provided. That permission need not be availed of, even though the action be not commenced as is required by the notice which the owner of the property may have served upon the lienor under the statute, provided the lienor presents to the court any equities in excuse of his failure to cominence his action within the time specified. The hardships imposed by the application of the Statute of Limitations and sought to be relieved by section 399 of the Code are entirely absent. No forfeiture of the cause of action necessarily follows the neglect to so commence the action. The court may deny the motion to cancel the lien if equitable reasons appear, though the lienor has made no attempt to commence his action. This case is neither within the spirit of section 399 of the Code, nor is it within the letter of the act, because it is not a provision of any act limiting the time for the commencement of an action.
On the other hand, to hold that section 399 of the Code applies to an action commenced under section 59 of the Lien Law well nigh emasculates the section. Its object is to enable a property owner to have canceled a lien filed for ulterior purposes. The filing of liens of necessity causes much embarrassment to the owners of property in their financial management of the property thereafter. Where a contract has been abandoned a new contract must be made. Generally it becomes necessary to bond that hen, sometimes at large cost, before the new contract can be made. When the lien filed is without merit and is filed to enforce a settlement or for other ulterior purposes, the hardship is greater. To protect an owner of property against such “ hold up ” liens, this provision was inserted in the Lien Law. The Statute of Limitations for the foreclosure of a hen is only a year. This statute permits an owner to serve notice upon the lienor to proceed to enforce his hen within a time named, not less than thirty days, or show cause why his hen shall not be canceled. If section 399 of the Code applies to an action thus commenced, the lienor is in effect given ninety days instead of thirty days in which to prosecute, his lien. The purpose of the section is then practically thwarted. When the purpose of the section is considered, and when the purpose *368of section 399 is also considered the court should not, save by imperative necessity, hold that an action commenced pursuant to a notice under section 59 of the Lien Law, is commenced by the mere delivery of the summons to the sheriff. I find no such necessity.
This motion was denied by the Special Term, not upon the ground that the action had been properly commenced under section 399 of the Code, but upon the authority of Jackson Co. v. Haven (87 App. Div. 236). In that case the lienor was ordered to show cause why his lien should not be discharged. He had within the thirty days prepared his summons and complaint, which were served upon one of the defendants. Efforts were made to serve it upon the owner (appellant), but in consequence of the failure to the process server to find him, service was not made. Failure to make that service was sufficiently excused, and in that case it appeared that the summons was actually served upon the owner before the application to discharge the lien. These facts are all absent from the instant case, for no attempt whatever seems to have been made to commence this action, other than the single act to put the summons in the hands of the sheriff for service. There is nothing in the record to show that service of the summons has yet been made. There is no claim that the defendant was not accessible at any time, and there was no attempt whatever on the part of the lienor to show any equities which could give the court any basis whatever for denying the relief upon equitable considerations.
For these reasons, I think the order should be reversed and the motion granted.
Order affirmed with ten dollars costs and disbursements.