Wells v. Williams

| N.Y. Sup. Ct. | May 4, 1863

By the Court,

Mullin, J.

Neither the Nassau Water Company, nor Henry 8. Wells & Co. ever entered into any agreement with the plaintiff or the firm of which he was a member, by which they bound themselves to pay to the plaintiff or his firm the moneys demanded in the complaint in this action, or any part thereof.

The right to relief, then, must rest on some lien which the law gives the plaintiff, by which the court is enabled to seize upon the fund in question and apply it in satisfaction and discharge of such lien.

By the contract between the Nassau Water Company and Henry S. Wells & Co. the former reserved 20 per cent from the moneys payable to the latter, for Work done and materials furnished under said contract, which was forfeited if the party of the second part failed to perform their contract; and it was further provided that should the employment of other persons or other neglect to cancel all debts for services to laborers and others increase the cost of the work, such moneys (the 20 per cent) should be applied to or be indorsed on account of that additional cost. It was further provided that none of the moneys received by the party of the second part should be applied to the payment of their debts or obligations until the laborers and men employed by them on this contract should have been paid whatever was owing them; and the parties of the first part might at any time require sufficient security that this obligation would be faithfully performed.

It Was further provided in and by said contract, that if the parties of the second part should neglect or refuse to pay the laborers or mechanics or other persons employed by them, they obligated themselves to the party of the first part for any payment or costs which said party of the first part or the city of Brooklyn might have to pay, or from any payment or costs that they might be legally liable for by the laws of the state to the laborers or men employed, and which sums might be reserved from any moneys due to the party of the second part.

The contract between Welles & Co. and Parkes, and. that between Parkes and the firm of which the plaintiff was a member, contains substantially the same provisions; and by neither is any provision made that any sub-contractor shall have a lien on the moneys due or to become due to his principal.

The ¡Nassau Water Company in their contract with Henry S. Wells & Co., and the latter with Parkes, and Parkes with the plaintiff and Judd, prudently provided that if they, the parties of the first part in each contract, should be made liable to pay the laborers employed by the parties of the second part, the moneys so paid might be deducted from the 20 per cent reserved by each contract.

But we are not referred to any law of the state making any person other than the employer responsible to'laborers. And such liability, if it existed, would not depend on whether a fund was reserved, but would be an absolute liability for wages, without regard to the state of the accounts between the parties.

Such a liability is created by the general rail road act. But the liability in such cases is in favor of the employees and not of sub-contractors. In the absence of legislation or of express agreement, there is no liability of either of the parties of the first part in these contracts to the persons employed by the other. And it seems to me quite obvious that a provision made by such parties that they shall be entitled to retain in their own hands a part of the earnings, as a protection against such liability, gave to the persons employed no rights of action against such parties personally; nor any lien on the fund itself.

There is not a provision in the contract between Parkes and the plaintiff’s firm which can be tortured into the creation of a lien in favor of the latter on the 20 per cent reserved in his contract with Henry S. Welles & Co. or any other party or person. How it is possible under such circumstances, to assert a lien, I am utterly unable to discover.

But again; before the plaintiff’s work under his contract with Parkes was completed, the latter had drawn his draft on this fund in favor of Williams & Co. and such draft had been accepted by Henry S. Wells & Co. in whose hands such fund was. This operated as a valid equitable assignment of the fund to Williams & Co. and entitled them to hold it as against the plaintiff and all other persons not having a prior or a better equity.

[New York General Term, May 4, 1863.

Sutherland, Clerke and Muttin, Justices.]

The plaintiff has never had an assignment of this fund, or an agreement to assign it. The 20 per cent reserved under his contract was in Parkes' hands, and Parkes alone was liable to pay it. The same per centage in the hands of Wells & Co. belonged to Parkes and was recoverable only by him, unless he assigned it to some other party or the law seized it for creditors and compelled its appropriation to them.

In no aspect of the case can I discover any ground on which can be based the relief sought in this case, and I think the judgment should be affirmed with costs.