Hubbell v. Schreyer

14 Abb. Pr. 284 | New York Court of Common Pleas | 1873

Lead Opinion

Daly, Ch. J.

Before passing upon the exceptions to the referee’s report, it will be necessary to consider a general objection as to the manner in which the report comes before us as an appellate tribunal.

It is claimed that the reference in actions brought for the enforcement of mechanic liens is, within the meaning of rule 32 of the supreme court, a reference, other than for the trial of the issues of the action, inasmuch as the amendatory lien law of 1863, Laws of 1863, p. 862, § 7, provides that the referee is to report in a summary manner as in case of claims to surplus moneys in mortgage cases. It is apparent that the person who drew the amendatory lien law of 1863, or who framed this particular provision, had no practical acquaintance with the nature of reference of claims to the surplus moneys in mortgage cases as established by the practice of the former court of chancery and regulated by the existing rules of the Supreme Court, or he would have known that a reference of “the whole matter ” in a mechanic’s lien case, so far as the right or liability of the owner may be in question, is an inquiry of a very different nature from that which arises in claims to a surplus fund in a mortgage case, as the former, when it arises, involves the trial of an issue, and the latter does not. A mortgage is foreclosed either by action or by advertisement, of which subsequent incumbrancers, such as mortgagees, judgment creditors, or those having the equity of redemption, are apprised either by being made parties to the foreclosure suit, or by being served with notice, if the foreclosure is by advertisement. If the subsequent incumbrancers have no right or interest in the premises, adverse to that of the mortgagees, they cannot, although parties, litigate in the foreclosure suit, for they are not permitted to contest their respective claims to the surplus, as between themselves, until it is ascertained that there will be a surplus (Union Insurance Co. v. Rensselaer, 4 Paige, 85 ; Farmers’ Loan, &c. Co. v. Seymour, 9 Id., 538, 544.)

Formerly the practice was otherwise, and the rights of the subsequent incumbrancers, with respect to each other, were ascertained and reported upon by the master, previous to decree of sale (Renwick v. Macomb, Hopk., 277) ; but as the effect of this was to delay the mortgagee in the foreclosure of his mortgage, the practice was changed by a rule of the court of chancery in 1830, since which the present practice has prevailed. A reference is ordered to ascertain the amount due under the mortgage to the complainant and to prior incumbrancers if there should be any among the defendants. Upon the coming in of this report, the decree of sale is made, and after the sheriff has sold he applies the proceeds to the payment of the claim of the complainants and any prior incumbrancer’s claim, and if, after the payment of claims and all costs and charges, there is any surplus, it is brought by the sheriff into court, for the benefit of whoever may be entitled to it, and deposited by him with the chamberlain, in this county—and in other counties with the county treasurer,—subject to the order of the court. After the filing of the report of the sale, any one having a claim to the surplus or to any portion of it, may file a notice of his claim, and upon this a reference is ordered to ascertain the validity of the claim, or generally who are entitled o the surplus.

If, however, the validity of the mortgage or the amount due under it, is contested by the mortgagor, or by a subsequent incumbrancer, then an issue is created upon the pleadings and the cause is placed upon the calendar and brought on for trial in the same way as other equity causes, which are tried by the court, unless the parties consent to a reference, or the issue, is one referable under section 371 of the Code, and where the whole issue thus raised by the pleadings is referred, the report of the referee, by section 373, stands as the decision of the court.

I have detailed the course of procedure in mortgage cases, as it will assist in the interpretation of the meaning of the amendatory lien law of 1863, not only from the reference then made to this particular procedure, but because there is a close analogy between the foreclosure of a mortgage and the foreclosure of a lien. Section 7 of this amendatory lien law of 1863 has provided that the court may take the proofs and determine the equities of the parties, the amount due to each, and by whom to be paid, or it may order any question to be tried by a jury, or it may “ refer the whole matter to a referee to examine and pass upon the rights of the respective parties and report upon the same in a summary manner, as in ' case of claim to surplus moneys in mortgage cases.” Where the owner admits, that a certain amount is due under the contract which he made for the erection of the building, and that amount is insufficient to satisfy the claims of all the parties, so that'the question of priority of liens becomes material, and which may also involve questions as to the validity of any of the liens in the event of any lien disputed by the contractor or by subsequent lienors, then “ the whole matter,” in the language of the act, if referred, may be reported upon •“in a summary manner as in case of claims to surplus moneys in mortgage cases,” for the proceeding is of the same nature, there being a fund, as in surplus moneys in mortgage cases, to which there may be many claimants, and the general inquiry being, who are entitled to it; or in what way it is to be distributed, apportioned, and to whom? All the claimants are actors ; that is, each appears the representative of his own interest, asserting his own claim, but not necessarily contesting the claims of others.

In such a proceeding there are no formal pleadings, and consequently there are no issues; for an issue, as defined by Blackstoke, is, “when, in the course of pleading, the parties in a cause come to a point which is affirmed on one side and denied on the other.” They are then said to be at issue; all their debates being at last contracted into a single point, which must be determined either in favor of the plaintiff or the defendant (3 Com., 313); or, as it has been more accurately defined by Chitty, it is “a single, certain and material point arising out of the pleadings of the plaintiff and defendant (1 Chit. on Pleading, page 690, 6 Am. ed.), and is not necessarily confined to a single point, tor there may be in the action several issues arising upon the same pleadings. Nothing of this character arises upon a reference of the description under consideration. It is simply an inquiry, summary in its nature, to enable the court to distribute the fund to the parties entitled to it, in which the report of the referee does not, when it is filed, like the report of the trial of the issues in the action, stand as the decision of the court, for, under rule 39 of the Supreme Court, eight days must elapse after service of the notice of the filing of it, that exceptions may be filed and served; which exception, if taken, must be heard and passed upon by a judge at the special term, before the report is confirmed and becomes absolute.^*

The proceeding to foreclose a mechanic’s lien is, in the statute of 1863, denominated a “suit” and an “action” (sections 6-10) ; and calling it by the name which the statute gives it, there may be in the action, in the language of rule 39, a “trial of the issues.”. If the owner puts in an answer denying that there was anything due by him under the contract when the lien was filed; an issue is created which supersedes and suspends every other inquiry ; for if that is found to be the fact, it puts an end to all further proceeding, and the action must be dismissed.

The foreclosure of a lien, whether it arises under the mechanic’s lien law or otherwise, is a matter of equitable jurisdiction. It is an equitable, as contra-distinguished from a legal remedy; and the course of procedure, whether it relates to the pleadings, the mode of trial, the evidence, or the remedy, is in accordance with the courts of equity, except so far as it has been modified in this State by statute. Issues of fact or of law may arise in courts of equity upon the pleadings, as they do in courts of law (Gresley Eq. Ev.); as, for instance, where the defendant answers an interrogatory in the bill, and the answer is replied to, the matter of the interrogatory is deemed to be at issue (Story Eq. Pl., §§ 36, 885, 886) ; the practice of courts of equity being in most cases to order the issue, whether of fact or of law, to be tried or decided in a court of law ; but in this State, where legal and equitable and legal jurisdiction is exercised by the same tribunal, such issues, when they arise in matter of equitable cognizance, are tried by the court as an issue in the action (Draper v. Day, 11 How. Pr., 439 ; Elmore v. Thomas, 7 Abb. Pr., 70 ; Schacttler v. Gardner, 41 How. Pr., 243).

In the present case issues superseding every other inquiry were created by the owner’s answer. He denied that the claimant, Hubbell, or the lienor, Mul - doon, did or could acquire any lien upon the premises ; that all money due from him, the owner, to the contractor, had been paid in good faith prior to the filing of either lien; that the contractor had paid whatever claim either Hubbell or Muldoon had, to which Schreyer, the owner, further added a general denial of every allegation made by either claimant.

In the notice of lien filed by Hubbell, he sets forth that he has a claim of fourteen hundred and forty-four dollars and eighty-eight cents against the owner, Schreyer, and the contractor, Holt, for building materials furnished by him in pursuance of a verbal agreement had with Schreyer, the owner, and Holt, the contractor ; and in the notice filed by Muldoon he states that he has a claim against Schreyer, the owner, of eight hundred and eighty-three dollars, and against Holt, the contractor, of thirteen hundred and forty-nine dollars, for materials furnished in pursuance of agreement, written and by parol, between Holt, the contractor, and Schreyer, the owner, and him, Muldoon.

Hubbell claims upon a contract made by him with Schreyer, the owner, and Holt, the contractor; but Muldoon claims to have a lien for one amount against the owner, and for a different and larger amount against the contractor; and it is by no means clear, upon his statement, whether he claims as a sub-contractor with Holt, -under the contract between Schreyer and Holt, or upon a contract made by him with Schreyer and Holt upon which they were responsible for different amounts.

But, as the owner, Schreyer, denies each and every allegation in the complaint of Hubbell and in the answer of Muldoon, and as the contractor, Holt, put in no answer, an issue was created, by which Hubbell affirmed and Schreyer denied that the materials were furnished upon a contract made by Hubbell with Schreyer and Holt; which issue, if found in Schreyer’s favor, put an end to all claim' on the part of Hubbell against Schreyer, and to any lien upon the premises of which Schreyer was the owner. For Hubbell did not claim, in his notice, to have a lien upon the premises for materials furnished in pursuance of the contract made between Schreyer and Holt, but upon a contract made by himself with Schreyer and Holt (Hauptman v. Halsey, 1 E. D. Smith, 668 ; Nott N. Y. Lien Law, 10, 11). And as respects Muldoon, whether his claim be regarded as founded upon an alleged contract made by him with Schreyer and Holt, or upon the furnishing of materials by him in pursuance of the con-contract made by Schreyer with Holt, or in part iipon both, an issue was created by Schreyer’s answer, which went to the whole of Muldoon’s claim, upon whatever ground it rested; inasmuch as Schreyer averred that he had paid Holt all that was due to him under his contract, before Muldoon’s lien was filed; and he objected in his answer, to the regularity of the notices of lien filed in each case; and in addition, denied each and every allegation in the answer of Hubbell and Muldoon.

There were, therefore, two issues to be tried in respect to the claimant, Hubbell, and three in the case of Muldoon; the determination of which in the owner’s favor would put an end to the action ; for although Holt had suffered it to go by default, a personal judgment could not be obtained against him ; for to authorize such a judgment, it must be proved, or conceded, that a lien was obtained upon the premises for the work or materials for the amount or value of which a personal judg ment is asked against the contractor (Donelly v. Libby, 1 Sweeny, 259 ; Barton v. Hermann, 3 Daly, 323, 324, and the cases there cited).^*

As the pleadings stood, there were several issues to be tried: 1st. Whether the notices filed by either Schreyer or Muldoon, were notices under which any lien could be acquired; 2d. The personal liability of Schreyer, assuming the notices to be. sufficient under the statute ; 3rd. "Whether anything was due by him upon his contract with Holt, to which the lien of Muldoon could attach.

It is not essential in the case to determine whether the court, under the act of 1863, could order these issues to be tried by a referee, as the reference in this case was with consent of all the parties; although if the point were material, I should not hesitate to hold that the authority given by the act to “refer the whole matter to a referee,” is sufficient to authorize such a reference; that the referee’s report would have to be a finding upon the issues, and being a report upon the whole issue would, under section 272 of the Code, stand as the decision of the court; and that a report in a summary manner as in case of claims to surplus moneys is and can be made only when the litigation is between the claimants. The statutes declare that upon the reference “every party shall be at liberty to take proof for or against any claim or lien, and such judgment or decree shall be made thereon as to the rights and equities of the several parties among themselves, and as against any owner, as may be just.” This provision I regard as applying to the reference- generally, whether the contract is exclusively between the claimants themselves or between the claimants and the owner. I do not interpret it as providing in all cases in which the whole matter is referred, that the report is to be as in case of claim to surplus moneys in mortgage cases. ' Such may have been the expectation of the person who framed this provision; as the object aimed at in many of the amendments of the lien law within the past twenty years, has been to do what is impossible ; to make a proceeding exceedingly simple which is in its nature complicated; for to ascertain and adequately adjust the rights of all the parties—the owner, the contractor, and the respective claimants,— where not only a lien uponreal estate is to be enforced, but a personal judgment may be rendered between the proper- parties for the enforcement of a contract, is a proceeding of so complicated a nature, that it can be carried out only by the method, rules and course of procedure, which courts of equity have devised for the due and proper adjustment of the rights of all parties in such cases.

This statute, the last general amendment of the lien law, has now been in existence for more than nine years, and, so far as this court is concerned, which is made by statute the appellate court for the review of these cases when brought in the marine or district courts, and which has had also to adjudicate during that time upon a large number of such cases brought here in the first instance, the practice has been, where the contest'is between the owner and the contractor, or sub-contractor claiming to have a lien upon payments to be made to the contractor, and where the only question is the liability of the owner, or the existence of a fund in his hand to which the lien' will attach, to re-" gard the matter as the trial of an issue between the owner and the claimants ; whether it is passed upon by the court, tried by a jury, or referred ; in the latter of which cases the report of the referee, like the trial by a jury, stands as the decision of the court, to be reviewed only on appeal to the general term brought within ten days after the entry of the judgment upon the referee’s report. And this practice, having been so long acquiesced in and followed, and being, as it is, a mere matter of practice, it ought not now to be disturbed, even if there should be doubt as to the construction of the statute.

The reference being with the consent of all parties, and the referee’s finding being upon the issues in this action, judgment was properly entered upon the filing of the report. And the appeal from the judgment to the general term is correct; and, upon the exceptions filed, it brings under review the referee’s findings upon the questions of fact and law.

Hubbell’s notice of lien was of a claim against Schreyer as owner, and Holt as contractor, for material furnished in pursuance of a verbal agreement made, in the language of the notice, with the contractor and the owner. This is not, as the owner claims, a statement of two agreements, one made by Hubbell with the contractor, and the other with the owner, for the payment for the materials. If such were the construction of the notice, the lien could not be sustained; as the agreement of the owner would in that case be necessarily collateral, and being a promise, not in writing, to answer for the debt of another, it would be void by the statute of frauds. The true construction of the notice is, that it is a statement of a joint agreement on the part of Schreyer and Holt with Hubbell to pay him for the materials furnished. And regarding it in that light, there is nothing in the evidence to show that any such joint obligation was entered into by them. Holt contracted with Schreyer to furnish the materials, but it does not appear from the finding of the referee or from anything that I have been able to discover in the evidence, that Holt contracted with Hubbell to supply them on his (Holt’s) individual responsibility.

On the contrary, it appeared that Hubbell had ceased to furnish materials for the building, giving as his reason that Holt was a stranger to him; that he was not a responsible man ; that he had stated or said that he, Hubbell, had been told that Holt had no means of his own and was not to be trusted. The referee has found that the materials were furnished upon the credit of Schreyer as well as of Holt, but he negatives any such conclusion in respect to Holt. There is evidence that they were supplied upon the credit of Schreyer; that is, upon his express promise to pay for them, made after Schreyer was informed by Hubbell, that he would not send goods to the building any more unless Holt paid for them. The materials appeared to have been ordered by Holt in the presence of Schreyer, after Schreyer had declared that he would pay for them, and the only conclusion warranted by the evidence is that they were furnished upon the exclusive credit of Schreyer, who said expressly before they were ordered, that if Hubbell was afraid of Holt, he (Schreyer) would see every cent’s worth of materials sent to his buildings would be paid for ; that he would pay for them.

They were entered in Hubbell’s ledger, “Thomas Holt for John Schreyer,” which, it would appear from Hubbell’s evidence, was done to distinguish the mason work from the plastering work, Holt’s name being entered for the one and Fridenburg for the other ; in the same manner, “Orin Fridenburg for John Schreyer.” It further appears that after the materials were furnished, Hubbell asked Holt for money and gave him his (Hubbell’s) bill to give to Schreyer. That there was no joint liability is very clear. There was no promise on the part of Holt, and nothing on Hubbell’s part to show that the goods were furnished on the joint responsibility of. Holt and Schreyer, or that Hub-bell was first to look for payment to Holt, and upon his failure to pay, that Schreyer was to be responsible, which is the test whether the promise is collateral or not (Bunn v. Weber, 38 N. Y., 189, 190).

The only interpretation to be put upon the.evidence is, that it was an original promise on the part of Schreyer, that if the- materials wanted were furnished he would pay for them.

Tbs fact that the notice of lien filed set forth a joint contract, and that no joint contract was proved, but only an individual undertaking on the part of Schreyer, is not a matter of which Schreyer ought to be.allowed to avail himself.^* It was a matter of defense for Holt, but he made no objection, having suffered judgment to go against him by default. The lien law requires that the notice of lien filed shall state the amount claimed and from whom, (L. 1863, p. 862, § 6). This is essential to distinguish the claim of a subcontractor, who has simply a lien upon the building to the extent of the amount which may be due from the owner to the contractor, from the claim of the one contracting directly upon the owner; such -contractor having not only a lien upon the building, but the right also to a personal judgment against' the owner. This distinction is apparent in the present'notice. It is not the claim of a subcontractor, but of a contractor with the owner. The amount is claimed from Schreyer as owner, and it does not, in my judgment, invalidate the notice that the amount is claimed also from Holt, the contractor. It is sufficient for the purposes of the statute that it is claimed from Schreyer; and that the joint responsibility of another is coupled with him in the notice, is, in my judgment, immaterial. A substantial compliance with the statute is all that is requisite in the notice creating the lien (Beals v. Congregation B’nai Jeshurun, 1 E. D. Smith, 654); and where it appears by the notice that it is a claim for a certain .amount against the owner upon a contract made with him, that is, I think, sufficient to create a lien upon the building by the filing of the notice, to the extent of the claim made against the owner, and everything else -in the notice may be rejected' as surplusage. The chief object of the notice is to apprise the owner that his property is sought to be charged, and .to protect others, such as purchasers, or mortgagees, by apprising them of the alleged claim (Beals v. Congregation, &c., supra). And this was substantially complied with in the present case, so far as respects the imposition of a lien upon the building, to the extent of the amount claimed against Schreyer. It did not and could not create any lien upon the building by virtue of a claim also against Holt, for he was not the owner, and it did not purport to be a claim upon funds in the hands of the owner to which the claimant was equitably entitled by statute under a contract made by him with Holt, for materials which were in conformity with the terms of a contract made by Holt with the owner. This portion of the notice therefore may be rejected without affecting the sufficiency of it as a notice of a claim against Schreyer. The whole course of legislation in respect to liens of this meritorious character, has been to facilitate, as far as possible, the means by which the mechanic or material-man may secure himself, by filing notice of his lien; and the court, if it is at all possible to do so, should give full effect to such a notice, declaring it invalid only where there is a plain and absolute want of one of the requirements which the statute has made essential to the creation of the lien.

The materials were furnished between May 25 and December 22, 1870, the notice of lien was filed on December 23 following, the day after the delivery of the last item, and the objection is taken that the lien, by the express terms of the statute, attaches only to so much of the materials as were furnished within three months previous to the filing of the notice, which would reduce Hubbell’s lien to about one hundred and seventy-four dollars.

It was held by the court of appeals, in Spencer v. Barnett, 35 N. Y., 94, that under the Kings county act, the lien did not attach to materials furnished more than sixty days before the filing of the notice,' although furnished under the same contract as the materials which were delivered within the sixty days.

There was a difference between the Kings county act, under which decision was made, and the act applicable to this county; as under the former act the material-man had double the time given to him for the filing of his lien, that was given to the mechanic, which has not been the case in any of the acts applicable to this city; nor is it now under the present Kings county act, this distinction in Kings county between the mechanic and the material-man having been repealed in 1862 (L. 1862, p. 949, § 3.

My colleague, Judge ‘Robihsoit, before whom and myself the argument upon this appeal was heard, is of opinion that this distinction between the provisions in the two acts can make no difference in the application of the decision of the court of appeals; that that decision, as a construction of the lien law, is as applicable to the law enacted for this county as it was to the Kangs county act; and I confess that I am not prepared to hold that the difference between the two acts is such as to warrant us in saying that that decision is to be limited to the Kings county act as it existed prior to 1862, and does not apply to the law as enacted for this county, and, but for this decision, I should certainly have taken the same view as Judge Hott in his treatise, page 89,—that the lien law did not contemplate the amount claimed being from time to time split up by separate liens, nor a repetition of a lien for parts of the same thing, and in the case of an entire contract that the three months begin to run from the completion of the work, or the delivery of the last item of the materials contracted for.

Assuming, as I think we must do, that the decision of the court of appeals is to be received and followed as an interpretation of our own act, then the finding of the referee that Hubbell was entitled to a lien for his whole claim upon the building was erroneous, and the report must be modified so as to limit the lien to the items delivered after September 21,1870, my conclusion being that the notice was properly filed, and that the materials were furnished upon a contract made by Hubbell with Sehreyer.

I now pass to the claim of Muldoon. He filed the notice of his lien on January 12,1871. It set forth two claims ; one against Holt for one thousand three hundred and forty-nine dollars, and one against Sehreyer for eight hundred and eighty-three dollars. They were both for brown stone furnished for, cut and set in the building.

The stone in the claim against Holt was alleged to have been furnished, cut and set in pursuance of a contract between Holt and Sehreyer—that is, it was a claim as subcontractor—and the other was a claim for extra work and materials upon a contract made by Muldoon with Sehreyer, for which Sehreyer would be personally liable.

The lien, so far as respects the first claim of one thousand three hundred and forty-nine dollars, is objected to on the ground that Holt’s contract was made with Muldoon, Kenney and Dodnan, and in the notice filed the claim is stated to be simply the claim of Muldoon. The act of 1863 prescribes that the notice shall state to whom the amount claimed is due, and when the notice of lien was filed. Here .the amount was due, not to Muldoon individually, but to the three partners— Muldoon, Kenney and Doonan.

This being an express statutory provision, it cannot be dispensed with. The lien is created by the filing of the notice, and everything which the statute requires to be stated in it is an essential prerequisite to the creation of the lien, and if anything required.by the statute is omitted, nothing is accomplished by the filing of the notice (Beals v. Congregation B’nai Jeshurun, 1 E. D. Smith, 654 ; Nott Tr. on Mech. Lien Laws, p. 10, 11, 12).

If the claim is' due to three persons jointly, the notice should state that the amount claimed is due to them, and stating that it is due to one of them only, is not a compliance with the statute. If that were permitted, each of them might file, a separate notice in the same way, and the anomaly would be presented of three separate liens for the same claim. The parties who made the contract to perform the work and labor, or to furnish the materials, must be stated, because the filing of the notice is the foundation of a proceeding in which a personal judgment may be rendered against the party who ordered or" contracted for the work, or for the materials, and it is his right that any decisión or judgment that may be rendered in his favor upon the contract should be conclusive upon the parties to it; which would not be the case if the notice is filed, and the proceedings under it are instituted, on behalf only of one of the joint contractors.

In this case, the contract of Holt with Muldoon, Kenney and Doonan, to furnish and put up the brown stone, was in writing, so as to leave no question as to the fact; whilst in the notice filed, the agreement is set forth as made with Francis Muldoon, and the notice is to the effect that he has, and claims, a lien upon the building. The only construction that can be put upon such a notice, is, that he alone made the agreement with Holt, and that he individually had a right to claim a lien for the performance of the agreement. The lien under the statute is a personal right given to those who do the work or furnish the materials (Rollin v. Cross, 45 N. Y., 771); and where there are several, no one has the right to create the lien exclusively for himself. It is given by the statute to any person or persons who shall, as contractor, laborer, workmen, merchant or trader, perform any labor or furnish any materials (Laws of 1863, p. 861, § 1); and when the statute declares that the notice shall state to whom the amount claimed is due, it plainly means, if there be more than one, the “persons” to whom it is due, and to whom, by the first section above quoted, the right to a lien is given.

At the hearing before the referee, an assignment in writing of the claim by Doonan and Kenney to Muldoon, was given in evidence by Muldoon. The instrument was dated September 16, 1870, which would be more than three months before Muldoon filed his notice, the notice having been filed on January 12, 1871. The lien being a personal right, the right to create it cannot be transferred or assigned to a nother (Rollin v. Cross, 45 N. Y., 771 ; Daubigney v. Duval, 5 Tenn., 604 ; Caldwell v. Launnier, 10 Wis., 332 ; Parsons v. Tincker, 36 Me., 483).^* It may be that an assignment like this, in which two or three joint contractors relinquish and give up to the co-contractor all their joint interest in the claim, would entitle him to acquire a lien, by filing his notice in the manner in which Muldoon did. But that question cannot arise in this case, for it is proved by the evidence of Muldoon himself, that although the assignment bears date September 16, 1870, it was not executed, in fact, until after the notice was filed, and after the proceedings were instituted to foreclose, that is, some time in the early part of the year 1871. He was examined as a witness on August 17, 1871, before the referee, and testified that the assignment had been executed about a month before the day of his examination. He also testified that his partners ran away on September 15, 1870, and the date of the instrument is the 16th, the day afterwards ; so that at the time when Muldoon filed his notice, Doonan and Kenney were jointly interested in the claim, which, was due to the three, and not, as appeared "by the notice, to him alone. Doonan and Kenney, as he testified, ran away with the money, and under the circumstances, he probably erroneously regarded himself as exclusively entitled to the claim.

The assignment after the filing of the notice, and the institution of proceedings to foreclose "the lien, could not .cure the defect in the notice. If the statute had not provided that the notice should state to whom the amount was due, as in the act of 1851, which had no such provision, we might get over the difficulty by leaving the owner or contractor to plead or-set up the non-joindei, in the action brought to foreclose the lien. But the a.ct of 1863 has made this statement in the notice essential, and no lien can be created where anything is omitted which the statute has expressly required.

When the evidence on the part of Muldoon was closed, a motion was made to dismiss his claim, on the ground that the work was done by the firm ; that no assignment of the claim to him by his copartners was made prior to the filing of the notice to create the lien, and that the notice should have been filed by, or on behalf of the firm.

The objection having been taken, it was error on the part of the referee to disregard it. This applied to the claim stated in the notice to be against Holt, thirteen hundred and forty-nine dollars, for which, the referee held, a good and valid lien was created by the filing of the notice.

Though the notice of lien distinguished between the claim which Muldoon stated in the notice he had as a subcontractor against Holt, thirteen hundred and forty-nine dollars, and the claim he had separately against Schreyer, eight hundred and eighty-three dollars, the referee made no such distinction ; blit, putting both claims together, which amounted to the sum of two thousand two hundred and thirty-two dollars, he found that the whole sum was due from Schreyer to Muldoon, with interest, and- reported that Muldoon was entitled to judgment against Schreyer for that amount, with costs.

Judge Nott, in his carefully considered treatise, was of the opinion that under the acts of 1851 and 1855 distinct claims against the owner and the contractor could not be joined in the same lien; that the statutes then existing did not contemplate and would not warrant such a course. The act of 1863 is in this respect, however, more comprehensive, and as it gives the court the power to determine the rights and equities of all parties and the amounts due to each, I see no objection to including a claim against the owner and a claim against the contractor in the same notice, where, as in this case, each claim is separately distinguished ; for the court may enforce one as a lien upon the building to the extent of the payments due by the owner to the contractor, and as respects the other, not only enforce it as a lien upon the building, but render a personal judgment against the owner for the amount of it.

The first» section gives a lien to the person designated, for labor performed or materials furnished in pursuance of the terms of a contract with, or employment by the owner, or in conformity with the terms of such a contract (which embraces the case of a subcontractor), “or by or in accordance with the direction of the owner or his agent.” This is very comprehensive, and includes a subcontractor’s contract, if in confomity with the contract for the building, made with the owner, and also a contract made directly with the owner ; and 1 see no objection to including both in the notice, if they are separately distinguished. But a claim stated in the notice to be against the contractor, must on the foreclosure of the lien, be shown to be a claim of that description, and it will not suffice to show that it is a claim founded upon a contract made with the owner ; because the statute requires that the notice by which the lien is to be created must state by whom, the amount claimed is due, and the notice having stated it to be due by the contractor, when in fact it was due by the owner, the notice is shown to ham been defective, inasmuch as a material and essential statement in it turns out to be untrue.^*

The referee, therefore, erred upon two grounds: 1st, by holding that upon a claim stated in the notice to be against the contractor, a personal judgment could be rendered against the owner; and 2nd, that Muldoon acquired a valid lien, upon a claim due to him jointly with two others, by filing a notice stating that the claim was due to him.

Independent of this joint contract, Muldoon claimed to recover nine hundred and sixty-seven dollars for extra work, upon which claim the referee allowed him the amount stated in his notice, eight hundred and eighty-three dollars. It did not appear that Doanan or Kenney had any thing to do with this extra work, or that any contract express or. implied was made for it with Holt. It would seem that after Muldoon’s partners left, Muldoon finished the work, and that he received a plan from Schreyer out of which this extra work arose; the new plan being different from the previous one. When this plan was presented by Schreyer to Muldoon, he objected to it, unless he should be paid extra for work done according to it. Schreyer insisted that he should do it, as that was to be the finish when the building was completed; and after some discussion, Schreyer said he was willing to, and would, pay for anything extra on the building; upon which Muldoon replied that he would go on with it, and he finished the work according to the new plan. This conversation with Schreyer occurred before Muldoon commenced on the new plan, or did any of the extra work, which extra work he charged upon his books to Schreyer.

It was, under these circumstances, clearly a contract between Muldoon and Schreyer, and the referee was right in holding that Schreyer was individually responsible for the payment of this eight hundred and eighty-' three dollars.

The evidence warranted a decree for the enforcement of a lien upon the building for the materials which had been furnished by Hubbell, within three months prior to the filing of his lien. As the lien never attached to the materials which were furnished before that time, I do not think a personal judgment could be rendered in this action for the enforcement of a lien for the materials anteriorly furnished. If they had been furnished under the same contract as the materials subsequently supplied, and to which the lien attached, there might be some ground /or arguing, that having acquired jurisdiction in respect to the contract, by the action to foreclose, a lien was acquired under the contract, but not for all the materials furnished under it. We might give the relief which the statute contemplates in the rendition of a personal judgment, under the familiar rule that where a court of equity has gained - jurisdiction of a cause for one purpose, the court may determine the whole matter in controversy, to prevent further needless litigation or multiplicity of suits, if it can give further relief without the assistance of a jury (Armstrong v. Gilchrist, 2 Johns. Ch., 430, 431 ; Rathbone v. Warren, 10 Johns., 596 ; King v. Baldwin, 17 Id., 386 ; Russell v. Clark, 7 Cranch, 89 ; Parker v. Dee, 2 Ch. C., 200, 201 ; Story Eq. Jur., § 72).

But Judge Robinson has pointed out that the order given by Schreyer to Hubbell for the furnishing of materials, had not the characteristics of an entire contract,, each item, in his opinion, constituting an independent contract, as to which the statute of limitations would run from the day of the delivery of the items ; and under that view, I do not think that we have jurisdiction, under the act of 1863, to render a personal judgment upon contracts performed three months before the notice of lien was filed, and which, consequently, it did not embrace.

The evidence warranted a judgment against Schreyer for the extra work done by Muldoon. The report will therefore have to be reversed as to Hubbell, except for the materials furnished within- three months, and affirmed as to the extent of these materials.

The referee’s finding upon Muldoon’s claim will have to be reversed, unless Muldoon. consents to reduce the judgment entered in his favor to eight hundred and eighty-three dollars, and interest, in which event it will be affirmed for that amount.

There were several objections taken by Schreyer to the admission and exclusion of evidence. These exceptions, or very many of them, would scarcely be available in an action at law, and in equitable proceeding or action, errors of this description are not regarded, if, taking the whole evidence together, the court is satisfied that no injustice has been done by the errors complained of (Clark v. Brooks, 2 Daly, 164, 165) ; and such, we are satisfied, is the case here.

* The distinction between references of the issues and of collateral questions is further illustrated in the following cases:

In Riley against Bnown (New York Superior Court, Special Term, June, 1872), it was held that the court have power to refer a disputed question of fact, arising on a motion, and not founded on the pleadings, for determination by the referee, instead of referring merely the taking of testimony; and that a motion, founded on a report of such referee, cannot be made until the report has been filed.

Motion to vacate judgment and to discharge the defendant.

Charles S. Spencer, for the motion.

Samuel S. Randall, in opposition.

Freedman, J.—The motion, founded upon the order to show cause of June 7, to vacate the judgment and execution, and to discharge the defendant from custody, is premature.

The order of reference heretofore made by the court directed the referee not merely to take proof, but to determine the question referred to him, which question is one not arising upon the pleadings. Even upon the assumption, therefore, of the regularity of defendant’s proceedings up to the time of the rendition of the referee’s report, the said report, before the making of this motion, should have been filed, as required by rule 39 of the general rules, and notice of such filing given. That not having been done, the motion must be dismissed, but without costs.

I will add, that whenever the report shall have been filed, the plaintiff will have eight days after the service of notice of such filing, within which to file exceptions. I can find no warrant in the law to abridge that time. But if exceptions are filed, plaintiff’s motion to set aside the report upon such exceptions, and defendant’s motion for a confirmation of the report and for final relief thereon, may be heard together at special term, at the same time and place, and, upon a proper application, may be required to be thus argued on short notice.

The report having been filed, and the plaintiff having excepted thereto, a final hearing was subsequently had, and the court rendered the following decision:

Freedman, J.—The order of reference made upon the argument of the motion, when originally brought on, directed the referee not merely to take proof and to report the same with his opinions thereon, but to determine a disputed question of fact arising upon such motion, namely, whether or not there has been a service of the summons in this action upon the defendant John Brown. Although it is not the usual practice to order a reference in that form, yet the power of directing the determination of a material and controverted question of fact, arising upon a motion in the manner herein pursued, has, as 1 am informed, been exercised by the judges of this court on prior occasions, and has never before this time been seriously questioned. Indeed, the power seems to have been conferred in express terms by the third subdivision of section 271 of the Code.

The testimony taken by the referee and submitted upon the present motion appears, on examination, to be amply sufficient to sustain his findings upon the question of fact referred to him for his decision, and there being but a single question referred, and no issues of law, the report is unobjectionable in point of form.

Plaintiff’s exceptions to the referee’s report must be overruled, and the report confirmed.

Upon the whole case, as brought on for final hearing, the defendant is entitled to have the judgment entered against him, and all proceedings founded thereon, vacated and set aside, and to be discharged from imprisonment.

In the matter of the Harmony Fire and Marine Insurance Co. (Supreme Court, First District, Special Term, Map, 1872), it was held, that referees appointed by the supreme court, under the provision of Laws of 1862, p. 743, ch. 412,—which authorizes justices of the supreme court to refer controversies arising between receivers and members of mutual insurance companies,—must, in their reports, state their findings of fact and. their conclusions of law separately; and that if they do not, the court will direct them to do so.

Brady, J.—The referee appointed in a proceeding like this shall have the same powers, and be subject to the like duties, and shall receive the same compensation as referees appointed by the supreme court in personal actions pending therein (Laws of 1862, p. 744, ch. 412, § 2. Same statute, 3 R. S. (5 ed.), 119, § 26). It is one of the duties of a referee appointed by this court to report the facts found and the conclusions of law which govern them; and the propriety of enforcing the observance of that formula, in matters kindred to this, is apparent, inasmuch as the referee’s report is conclusive upon the rights of the parties, if not set aside by the court (3 JR. 8., supra, § 27). Such is the effect of a report in a personal action in the supreme court. It is conclusive of the rights'of the parties unless set aside. The review of a report'is much facilitated by the presentation of facts and conclusions of law, and this court has the inherent power to direct such a course of procedure. Under the old system the court would, in a proper ease, require referees to report their decision in admitting or rejecting a witness, in allowing or overruling a question, and to report other proceedings (Graham Pr. (2 ed.), 577), and would send back a case for a further report where the referee did not pass upon all the issues (Hulbert v. Young, 13 How. Pr., 411). The provision of the statute imposing a like duty upon referees appointed in these proceedings placed them in the same relation to the court as that occupied by referees in actions; and the change that has taken place by the Code, in regard to referees in actions, must be considered in connection with the provision referred to.

I am of the opinion, therefore, that-the facts should be found and conclusions of law stated, if required; and if that view be erroneous, then that the court has the power to direct such a report, and should do so in a case like this.

Ordered accordingly.

This is a substantial right; but the remedy is by motion to refer back the report, not to set it aside (Van Slyke v. Hyatt, 46 N. Y., 259 ; 10 Abb Pr. N. S., 58).

* Compare, however, 47 N. Y., 404.

* Such a joint proceeding under the lien law would not prevent-a separate action against either on a separate contract made by him (Cremin v. Byrnes, 4 E. D. Smith, 756)

* To similar effect, Roberts v. Fowler, 4 Abb. Pr., 263 ; S. C., 3 E. D. Smith, 632 ; and see Kerby v. Daly, 45 N. Y., 84.

* See note on page 285. And see Guernsey's N. Y. Mech. Lien L., 159, note.

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Concurrence Opinion

H. W. Robinson, J.

I concur fully in all the conclusions to which the chief justice has arrived in his opinion, and without entertaining doubt on the question suggested by him, that the lien of the plaintiff Hubbell is limited to the items of his account supplied within three months prior to the filing of his notice of lien (December 28, .1870), amounting to one hundred and seventy three dollars and forty-seven cents. The subsisting mechanics’ lien law, applicable to this city (Laws of 1863, ch. 500), by section 6, only authorized the filing of a notice and creation of a hen “within three months after the work is - done, or materials furnished.” Had all the materials of Hubbell’s claim been furnished under an entire contract, for certain materials or all such as were required by their plans and specifications for the erection of the building, it would probably have deferred the plaintiff’s compensation therefor, until his contract was completed, and have attached the right of -lien to articles that he had supplied on such contract, more- than three months prior to the filing of the notice of lien ; but I find nothing in the evidence warranting the conclusion that Hubbell furnished the materials for which his claim is made, upon an account running for seven months, upon any such entire agreement. Prior to May 23, he had been selling materials to Holt, the contractor, and being dissatisfied by reason of the difficulty in obtaining payment, refused to sell him any more, and so stated to Schreyer, the owner, who thereupon, as the testimony warrants the finding of the referee, agreed with plaintiff “to pay for such material as should thereafter be furnished by plaintiff in and about the erection of buildings.” There is no suggestion, however, in the testimony, of any agreement, express pr implied, between plaintiff and the defendant Schreyer, that the former should furnish any specific kind, quality , or quantity of building materials, or at any specific prices, or on any credit which prevented Hubbell from demanding immediate payment for the materials he furnished, or which prevented either party from declining to deal with the other in reference to the matter. It was but the opening of a running account which either might discontinue at pleasure, and possessed none of the characteristics of an entire contract for all materials necessary to the completion of the building, according to the plans and specifications. In the absence of any agreement of this precise character, each item of the account constituted the subject of an independent contract, against which the statute of limitations would run from the day of delivery of each article ordered and delivered (Ang. on Lim., § 148). The rule of law against the splitting up of demands, growing out of matter of account accruing from time to time on credits as applied for, into separate suits, is one to prevent the oppression of the debtor by his being subject to a needless mutiplicity of suits (Guernsey v. Carver, 8 Wend. 493 ; Corvin v. Corvin, 15 Id. 557, as explained in Secor v. Sturges, 16 N. Y. 548). It in no way segregates the items into an entire cause of action so as to debar the operation of the statute of limitations against the earlier items, against which the prescription ran.

The mechanics’ lien law, being in derogation of common law rights, must be strictly construed, as to all essentials necessary to the creation of the lien.^* The operation of section 6, allowing the filing of the lien “within three months after the work is done or the materials furnished,” is not, as in ordinary statutes of limitation, the imposition of forfeiture of the remedy or right of recovery, by cutting the items of account, against which the proscription runs (Kimble v. Brown, 7 Wend., 222 ; Palmer v. Mayor, &c. of N. Y., 2 Sandf. 222, and cases cited), but is permissive, and affords a right through compliance with a condition precedent by which the lien may be acquired. While regarding the .provision as only affording the remedy for work done or materials furnished within three months prior to the filing of the notice.of lien, I can perceive no difficulty in the workman or material-man, whose claim rests in a current account, filing successive notices of lien, as each successive period of three months is about elapsing, for the claims that have accrued during those times. Even this would be in no respect a splitting up of a claim on a current account, nor obnoxious to any recognized principle condemning such a proceeding, but would be merely ensuring the collateral security for the current credits, as the act assumes to provide (§ 3), by successive liens afforded either contractor, sub-contractor, workman, or material-man, according to their respective rights, or to either, for current or separate claims, the liens as to which may be successive, and become the subject of adjustment in the action contemplated by the act for foreclosure and adjustment as to the rights of all the parties.

While such a construction requires a prompt assertion of claim by way of lien, it also protects the owner and others interested in the property from stale claims and latent liens. Besides, the decision of the court of appeals in Spencer v. Barrett, 35 N. Y. 94, in my opinion is controlling upon the point. Except in the difference of time fixed by the Kings county act, then under review, requiring the notice of lien to be filed within sixty days after the materials are furnished, I can discover nothing in principle to distinguish from this.

The limitation of Hubbell’s lien to articles furnished, as per his account, within three months of the filing of Ms notice of lien, to wit, after September 23, 1870, is upon principle and authority.

Judgment as to Muldoon reversed.

Judgment as to Hubbell reduced to one hundred and seventy-three dollars and interest.

* See also Roberts v. Fowler, 4 Abb. Pr., 263 ; S. C., 3 E. D. Smith, 632.