Bradley Currier Co. v. Bernz

55 N.J. Eq. 10 | New York Court of Chancery | 1896

The Chancellor.

The complainant grounds its right of action upon two claims, one in virtue of the order of October 1st, 1892, which directs the defendant Bernz to pay it $515 which is due to it for materials furnished to Bernz’ buildings, and the other in virtue of demand and notice under the third section of the Mechanics’ Lien law. Rev. p. 668.

First. It is observed that the order does not expressly direct payment of the $515 out of a particular fund. It states that the money is due to the complainant for materials furnished for Bernz’ buildings; but does that statement imply that the order is intended to be paid out of a particular fund, arising from the erection of those buildings, or is it merely a specification of the consideration which supports the order ?

There can be no doubt that if the order, being founded on a valuable consideration from the payee, is drawn upon a particular fund due at the date of the order or thereafter tó become due from Bernz to the drawers, it operatéd as an equitable assignment, pro tanto, of the fund, and upon its presentation to Bernz (although he did not accept it) fixed the portion- of the fund assigned, in his hands, subject to the appropriation directed, and that upon the funds being or bécoihing available, it will be enforceable in a court of equity. Bank of Harlem, v. Bayonne, 3 Dick. Ch. Rep. 246; S. C. affirmed on appeal, 3 Dick. Ch. Rep. 646, and cases cited. But if the order was drawn generally upon the drawee, to be paid by him on the credit of the drawers and without regard to the source from which the money to be used for its payment was to be obtained, it did not operate as an assignment, and the payee of the draft cannot have an action against the drawee unless the latter duly accepts the order (Brill v. Tuttle, 81 N. Y. 457; 3 Pom. Eq. Jur. § 1284), which cases the action will be at law.

To support an action in equity, for the purpose of enforcing payment of the money mentioned in the order, it must appear not only that the order was drawn upon a particular fund, but also that when the bill was filed such fund had become available, so that, in absence of the assignment, it would be recoverable in an action by the assignors. The assignee takes their place and right, as to the portion of the fund assigned, and cannot enforce the assignment before the assignors could have sued for the fund. As presently stated, I conclude that when the bill in this suit was filed, there did not exist a fund available either to the contractors or to their assignee. It is manifest, then, that it is not necessary to the disposition of this demurrer that I shall decide whether the order considered is an equitable assignment or a mere money draft which must be accepted before it can be sued upon.

Second. Where the statutory requisites exist, notice given according to the statute works an assignment pro tanto to the workman or materialman of the rights of the contractor against the owner. Wightman v. Brenner, 11 C. E. Gr. 489; Kirtland v. Moore, 13 Stew. Eq. 110; Reeve v. Elmendorf, 9 Vr. 125. But if when the notice is served on the owner, there be nothing owing to the contractor, and he is without right against the owner, the notice is without legal effect. Craig v. Smith, 8 Vr. 549 ; Kirtland v. Moore, supra. “ The test,” said Vice-Chancellor Van Fleet in the last-cited case, “is whether a suit for the money demand will lie by the contractor against the owner; if it will not, the owner is not liable to a suit by the workman or materialman.”

Third,. The bill admits that the buildings here involved were not completely finished. Its allegation is that they were “substantially finished,” and that that which remains undone “ is of very trifling amount, and in no way detracts from the full use of the said premises or from the income received by the said Otto Bernz therefor.” It seemingly relies upon possession and use of the buildings by Bernz as a waiver of the completion of the “ very trifling ” remaining work. Its allegation is, that the contractors “ delivered up to the said Otto Bernz possession of said buildings, and the said Bernz entered into possession thereof,” and since taking that possession, has leased the buildings to various tenants, and has taken the profits and rents therefrom, but further on, it adds the allegation that when the complainant demanded of Bernz its $515, he refused to pay upon the ground that the contractors had not yet completed their work, and that some work yet remained to be done.

In Bozarth v. Dudley, 15 Vr. 312, Mr. Justice Magie said: “ When a contract for erecting a building has not been so performed that a recovery can be. had thereon, a recovery in assumpsit upon the common counts for work and materials furnished in the erection, will only be permitted when the owner has actually accepted the building erected. * * * Such acceptance by the owner may be express or implied from his conduct. It seems well settled that mere occupancy of the building by the owner, while appropriate, is neither presumptive nor conclusive evidence of acceptance. The reason is obvious. The building belongs to the owner of the land on which it stands. As was said by Lord Campbell, in Munro v. Butt, supra (8 El. & Bl. 738), ‘ the owner cannot be appropriately said to take possession of that which is thus affixed to his own land.’ In the case to which Mr. Justice Magie thus refers, Lord Campbell added this: ‘ If, indeed, the defendant had done anything, coupled with the taking possession, which had prevented the performance of the special contract, as if he had forbidden the surveyor from entering to inspect the work, or if the failure in complete performance being very slight, the defendant had used any language or done any act from which acquiescence on his part might have been reasonably inferred, the case would have been very different.’ ”

Here the only allegation is that the contractors delivered up possession and that Bernz entered. He entered upon his own property. It is not alleged that he obstructed the completion of the buildings, nor that he took possession without expecting that completion in the future. On the contrary, it is a significant circumstance that soon after, when the complainant demanded its money, he refused to pay, protesting that the work was not complete. It may be.that the completion of the work was unduly delayed and that possession pending completion was taken so that income should become available and some return be had for the cost of the land and expenditures on the buildings, without any intention to waive the completion contracted for. .As Lord Campbell intimates, something more than mere entry into possession by the owner is necessary to show the waiver contended for. Here, instead of having an additional circumstance in proof of waiver, we have the owner’s protest that his buildings áre not finished, and that consequently the last payment upon them is not due. I do not think that waiver of the completion has been shown.

Fourth. The point made by the complainant that the defendant Bernz should be compelled to proceed under a clause of his contract which permits him to do so, and notify the contractors to complete their contract work, and, in the event of their failure, to do it himself, and after deducting from the contract price remaining unpaid, its cost, account for the balance, to the end that its demand may be paid, has been dealt with adversely to this insistence in Bernz v. Marcus Sayre Co., 7 Dick. Ch. Rep. 275, 284, by the court of errors and appeals, upon the ground that such a clause in a contract similar to the one here involved conferred upon Bernz a privilege available to him if he wished to exercise it, which did not supersede or qualify the other provisions of the contract, and did not impose upon him any obligation or duty. And so, also, the same case deals with the duty of producing the architect’s certificate as a condition precedent to the maintenance of an action for money under the contract, unless it is waived by the owner. It does not appear that such a certificate was waived in this case. The facts that the first payments were made without it and that the architect did not in fact superintend the building, may be attributable to dereliction upon his part or to the fault of the contractors. They do not prove the owner’s waiver of the certificate.

The bill does not charge fraud, nor does. it allege facts upon which a charge of fraud could properly be predicated.

. If there be no fraud available for claimants, there is nothing to raise question as to priorities among them and show the necessity of the discovery asked for.

No case for the interference of equity is presented.

The demurrer will be sustained and the bill will be dismissed, with costs.