87 N.J. Eq. 127 | New York Court of Chancery | 1916
The object of these bills is to enforce municipal liens under the act entitled "An act to secure the payment of laborers, mechanics, merchants, traders and persons employed upon or furnishing materials toward the performing of any work in public improvements in: cities, towms, .townships and other municipalities in this state.” Comp. Stat. p. 3315. Motion is now made by
“furnish all labor and materials to complete section ‘A’ of your contract with the city of East Orange to lay water mains, bids for which were opened on August 26th, 1915, in accordance with plans and specifications for ninety-four per cent, of the unit prices bid by you.”
Gregory’s proposition was
“to furnish all labor and materials necessary to complete divisions B and O of your contract with the city of East Orange, New Jersey, for laying water mains, all in accordance with the plans and specifications for the unit prices bid by you and accepted by the city, and named in yonr contract.”
Gregory was to receive all of the payments to be made by the city for performing the contract under divisions B and C, and out of the final payment was to pay Lewis $500. The complainants allege that they performed their respective contracts, and that there is due to Knight & De Micco, Inc., $6,937.62, and to Gregory $10,236.68, as per itemized statements annexed to the bills, after allowing all credits and set-offs; that the labor and materials were exclusively used for the laying of said water pipes in the city of East Orange, and that the amounts so due became due and payable on or about the 2-lth day of December, 1915'. On May 4th, 1916, before the work was accepted by the city of East Orange, the complainants filed their notices of claim with
The bills are attacked on the grounds that the notices of lien (1) fail to state the terms, time given and conditions of his contract; (2) were not verified; (3) were for sums grossly in excess of the amount due and owing; and also (4) that notices of the suit were not served upon the city. In order to entitle the complainants to the benefit of the security afforded by the statute, there must be a substantial compliance with its requirements. Somers Brick Co. v. Souder, 70 N. J. Eq. 388.
(1) As to the first point: The notices are sufficient. Copies of the correspondence between the complainants and Lewis are incorporated in and made a part of the notices. The proposals and acceptances disclose that the complainants agreed to execute the respective parts of the contract which Lewis had with the city, upon the same terms, time given and conditions as stipulated by Lewis—in one instance upon a percentage basis, and in the other upon the payment of a lump sum. A reference to the city’s contract with Lewis, and notice to it that the complainants agreed with Lewis to perform it upon the basis just stated, was the information to which the city was entitled by the statute. Of its contract with Lewis, of course the city was fully informed, and to incorporate it in the notices of lien would have been useless and was not required. National Fire Proofing Co. v. Daly, 76 N. J. Eq. 35.
(2) The Knight & De Miceo, Inc.’s notice was verified by its secretary and the other by Gregory himself. The verifications are appended to the notices in which the affiants aver "that the facts and circumstances, matters and things set forth' in the foregoing claim are true to the best of his knowledge,, information and belief.” The objection to the verification is-, that it should have been as specific of facts as the notice itself,, and, in support. I am referred to that part of the opinion of Camden Iron Works v. Camden, 64 N. J. Eq. 723, in which
(3) The next objection is more troublesome. Each of the complainants included in their notice a large sum for consequential damages arising out of a breach of their respective contracts with Lewis. To Knight & De Micco, Inc., there'is due, under the contract, $1,781.60, to which it added $5,156.02 for damages; and to Gregory there is owing $1,916.25, to which he added $8,320.43 for damages. The statute gives a lien only for labor and materials actually performed or furnished towards the performance or completion of the contract. The lien does not extend to damages for a breach of the contract. Rock. Mech. Liens § 25; Dennistoun v. McAllister, 4 E. D. Smith 729; Morgan v. Taylor, 5 N. Y. Supp. 920. The question, therefore, is whether by the inclusion „of the items of unliquidated damages the complainants have forfeited their liens, and the answer is to be found in the motives actuating them in overstating their claim, for if this was done in good faith, they ought not to be
An analysis of these observations applied to the rule adopted in that case, makes it plain that in order to justify a dismissal of the bills, it must , appear that the complainants consciously inserted in their notices the items for unliquidated damages, knowing them to be false, as claims under the statute. In the notices complainants claim a lien upon all the moneys due, or to grow due, to Lewis from the city, to the amount of the gross sums. These they allege are due and owing, after deducting all just credits and set-offs, and further, that the work was actually performed and the materials were actually furnished to Lewis, and that the same were actually used in the completion of the contract with the city. -The notices, however, contain an explanation, somewhat obscure, it is, true, of the claim for unliquidated damages. From it may be gathered that the city was to furnish the water mains, or some of them, to Lewis, and that Lewis in turn was to supply them to the complainants within a reasonable time, in order to properly prosecute the contract and to complete it before freezing time; that,Lewis failed in this, and due to his neglect the complainants kept skilled men on the job awaiting deliveries, and were obliged to use this labor for
Now, although the complainants were not entitled to liens for the consequential damages, and they ought not to have been included in the notices, it does not follow that the demands were knowingly and consciously untrue, i. e., false. That the complainants were subjected to the extra outlay by reason of the breach of the contract by Lewis, and that the expenses were actually incurred in' completing the contract, is admitted. The inclusion of the offending items may have been the result of a misconception of the law, or due to faulty advice of counsel. If the matter is reduced to inference, that of innocence must prevail. The fact that the notices frankly assert that part of the claim, and how much was made up of damages, refutes the charge of deception. The “unfair, unjust and oppressive” conduct which characterized the Camden Case is not to be attributed to them. Whatever may have been the motive, the complainants are entitled to their day in court to explain. On the face of the pleadings it does not appear that they came into court with unclean hands, and their claims should not be summarily rejected on a motion of this kind.
(4) The fourth section of the act provides that suit to enforce the claim must be commenced within ninety days, notice whereof must be given to the municipality. The bills were filed August 2d, 1916, and it is stated by counsel that the notices were served the day before. If this be true, it cannot be taken notice of on this motion, which is in the nature of a demurrer to the bills. Notice of suit may be given 'contemporaneously or subsequent to the commencement of the suit, and, manifestly, it need not and cannot be pleaded. A failure must be given by way of defence.
The motion is denied, with costs.