140 N.Y. 356 | NY | 1893
The claim of the plaintiff, Ogden, to enforce a mechanic's lien against the property of the owner, Alexander, is resisted upon two principal grounds. The latter had made a contract with Hill for the erection of a house. By its terms Hill was to furnish all necessary labor and materials, and receive as compensation $3,425, payable in specified installments at agreed stages of the work. Hill contracted with the firm of Oliver Ogden to do the plumbing of the house, and supply and set a furnace therein, and they entered upon the performance of the work. While so engaged, and before its completion, Ogden bought out the interest of Oliver, so that the partnership became dissolved, and ceased to exist, and then Ogden continued the performance of the contract with Hill. When the work was substantially finished, Ogden filed a notice of lien which he now seeks to foreclose, and is met by the objection that he stands in the attitude of an assignee of the firm of Oliver Ogden, and so is not authorized by the statute to file and enforce a lien.
It is conceded to be the general rule that such liens are lost when the debts upon which they rest are sold and transferred to others. (Rollin v. Cross,
It is very clear that a mere purchase of the debt from a sub-contractor would not carry with it the right to a lien. The purchaser could not be described as a "person furnishing" labor or materials, for he did not, and simply bought from one who did. He could buy or not as he pleased, and might be a mere speculator for whose safety the statute has no concern, and the mechanic who sold would get protection through the proceeds of his sale. But the situation here is wholly different. Technically, the material and labor were furnished by the firm, by the legal entity which describes the partnership, but really and substantially the labor and materials were furnished by the individuals composing the firm. Neither can be said to have furnished merely a specific or aliquot part, for the interest of each extended to and permeated the whole, and each could fairly be described as a person, or one of the persons, who had furnished the work. Ogden was not a mere assignee. He had personally encountered the risk involved in trusting Hill; his personal interest extended to every hour of the labor done, and every dollar of the value furnished; he stood entirely within the scope and purview of the statutory purpose; he was not a mere stranger buying a claim, but a mechanic who had actually and substantially furnished the labor and material, and had simply, by his purchase, become the sole person interested, instead of remaining the one of *361 two. We may grant that Oliver lost all ownership of the claim and retained no equity against, or interest in, the partnership assets, at least, after all its debts had been paid, but that fact does not make Ogden a mere assignee, or put him outside of the intended purpose and scope of the statute. I think he was fairly within it, for back of the technical description of his interest lies the substantial fact that, as one of the firm while it existed, he did in reality aid in furnishing the labor and materials, bore in part the cost of so doing, and was entitled in the end to a share of the compensation. Doubtless, if the firm had continued to exist, the lien filed would properly have been claimed in the partnership name, but its dissolution upon the transfer of all its assets to one member ought not to strip him severally of a right which he before held jointly, or compel us to assert the technical truth, but substantial untruth, that Ogden at no time and in no manner became a person who had furnished labor and materials. So that I think a just and reasonable construction will, when it is needed, look beneath the legal fiction, and rest upon the substantial truth so far as to include within the protection of the statute one who has joined as a partner in furnishing labor and material, but thereafter has bought out his associate and become the several owner of the claim.
The appellants raise a second objection which does not seem to have been appreciated, or at least is not satisfactorily answered by the referee and the General Term. If we assume, as the plaintiff claims, that Hill's statement of payment made to him in full is untrue, and that when the lien was filed, the last contract payment of $925 remained wholly unpaid, it does not follow that the plaintiff acquired a lien upon that sum, unless in some manner and to some extent it became due and payable to Hill. There is no finding that Hill ever earned any part of it so as to be entitled to its payment, and, therefore, it is said there is no proof of any fund due from Alexander to Hill to which the plaintiff's lien could attach. *362
The facts are that Hill abandoned the contract and never performed it. He made an assignment and discontinued work entirely. He thereby forfeited all right to the final payment at the option of the owner, and with that forfeiture fell any possible right of the lienor, unless the owner waived the forfeiture, as by the terms of the agreement he was at liberty to do, and elected to complete the work under the contract at Hill's expense. If he made that election and so completed the work and the cost proved to be less than the payment due at the end, the difference would be Hill's profit and payable to him, and upon that the lien could rest.
If, on the other hand, there was no such waiver, and no such election, but Alexander chose to insist upon the forfeiture, and went on, not under the contract, but in his own way and at his own expense, then the final payment never at all, or to any extent, became due to Hill, and there was nothing upon which plaintiff could have a lien. It does not answer this difficulty to say, as did both the referee and the General Term, that after appropriating from the last stipulated payment all that it actually cost to complete the house there still remained a balance unappropriated and representing Hill's profit. The materiality of that fact depends wholly on the question whether the owner stood upon the forfeiture, or completed the house under the contract, and in behalf and at the risk of the contractor. (Wheeler v. Scofield,
There are some other objections to the form and regularity of the notice of lien, but which we deem sufficiently answered in the opinion of the referee.
The judgment should be affirmed, with costs.
All concur.
Judgment affirmed. *364