Milliken Bros. v. City of New York

135 A.D. 598, 120 N.Y.S. 841, 1909 N.Y. App. Div. LEXIS 4024

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 31, 1909
• Status: Published

Opinions

Ingraham, J.:

This was an action to foreclose a mechanic’s lien upon the. amount due by the city of New York to its contractor, the James D. Murphy Company, who was building under a contract with the city of New York the Sixty-ninth Regiment armory. The defendants appellants interposed answers setting up certain- mechanics’ liens which they claimed to have filed against the amounts due by the city to the Murphy Company. The court dismissed the claims of these defendants appellants upon the ground that their liens were not filed in time, and from the judgment entered thereon these appellants appeal. The facts as' found by the trial judge are as follows : On the 26th day of January, 1904, the defendant James D. Murphy Company entered into a contract with the city of New York by the armory board for the erection and completion of an armory building in the city of New York in pursuance of certain plans and specifications in said contract for. the sum of $619,522.-33. This contract provided that the action of the architect by which the contractors were to be bound and concluded according -to the terms of the contract should be that evidenced by their final certificate; that the Murphy Company entered upon the performance of its contract ; that the time within which the said contract was to be completed was extended to and included the 8th day of October, 1906; that the said contract was substantially completed on the 8th day of October, 1906'; that on said day the architects named in said contract delivered to the city of New York through the armory board their final certificate in connection with the completion of the work mentioned in ■ the said contract, and filed with the armory board a certificate to the effect that the contractor, James D. Murphy Company, was entitled to payment of the amount remaining unpaid on its contract, to wit, $96,091.24, less the sum of $2,000 to be retained as a guaranty under the provisions of the contract and less the further sum of $1,000 to be retained for uncompleted work; that thereafter the board of armory commissioners of the city of New York issued its certificate to the general effect as the certificate of the architects for the payment of $93,091.24 and for the retaining of $1,000 on account of uncompleted work, and the further;sum of $2,000 in accordance with the contract; that on the 8th day of' October, 1906, the armory board adopted a resolution accepting the Sixty-ninth Regiment armory from the .contractors as completed with the reservation named in the resolution ; and the comptroller was authorized to pay to James D. Murphy Company the sum of $93,091.24 for the execution of their contract for the erection of the Sixty-ninth Regiment armory, being the payment in full with a reservation therefrom of $1,000 until the marble tablet was properly installed, and a further reservation of $2,000 as provided in the contract for one year from the date of the issuance of the final certificate as a guaranty for the perfect working and efficiency of the steam heating apparatus; and that the roofs of the buildings should be made tight and any defects which might appear in the entire work remedied, and that these certificates were delivered to the proper official of the city of New York; that subsequently and on November 17, 1906, an assistant - engineer in the comptroller’s, office reported that the work was completed in a satisfactory manner, excepting the electric wiring and connections; that there were several serious defects in this electric work which would take several / weeks to remedy, and the engineer, therefore, recommended that $90,000 be paid the claimants at that time and that $3,091.24 be retained until such time as the defective work should have been made good. Acting upon this report the auditing bureau of the department of finance of the" city of New York refused to audit the claim of the defendant Murphy Company for the sum of $93,091.24 and withheld from the said sum the sum of $3,091.24 on account of the uncompleted and defective electrical wii’ing of the said building and until the same should be completed in accordance with the contract, and audited the claim of the defendant Jamos D. Murphy Company for the sum of $90,000; that on or about the 1st day of March, 1907, the comptroller paid to the Fourteenth Street Bank as assignee of the "Murphy Company on account of said contract the said sum of $90,000 ; that the marble tablet referred to in the resolution of the armory board was properly installed by the Murphy Company shortly, after the 8th day of October, 1906, and immediately thereafter the Sixtv-ninth Regiment of the New York National Guard entered into occupancy of the said building. The court further found that on October 8,1906, certain plumbing work required by the contract between the Murphy Company and the city, of New York to be done upon the said armol-y building was uncompleted, to wit, the installation of certain water lines over the ammunition rooms in said armory, and that subsequent to October 8, 1906, the Murphy Company caused said water lines to be installed in the -building, and that said work was done during the month of November, 1906; that such plumbing work consisted of two or three-inch pipe; that the city of New ' York'still retains the sum of $6,091.24 out of the contract price, being $2,000 retained under the contract, $1,000 to cover the installation of the marble tablet mentioned in the resolution of the armory board of October 8, 1906 ; $3,091.24 to cover the • uncompleted electric work mentioned in the report of the engineer, dated November 17, 1906; that the notices of the alleged liens filed with the comptroller of the city of New York and the board of armory commissioners of the city'of New York by the defendants Jerome A. Jackson and others were not filed within .thirty days next after October 8,1906, the date of the completion by the defendant 'James D. Murphy Company of the work contemplated in its contract with the city of New York; that various sums of money'were deposited by the Fourteenth Street Bank, the assignee of the Murphy Company, with the comptroller of the city of New York to discharge the liens of the appellants Jackson, Koebling Construction Com-, pany and Baker, Smith & Co., and this action was commenced on the 20th day of December, 1906.

The court thus refused to give to these lienors any portion of the money on deposit with the comptroller, but gave to each of the appellants a personal judgment against the Murphy Company for the amount due under their contracts with the Murphy Company; and the appellants appeál from the judgment refusing to enforce their liens on the moneys on deposit with the comptroller. These liens were filed under section 12 of the Lien Law (Gen. Laws, chap. 49 [Laws of 1897, chap. 418], as amd. by Laws of 1902, chap, 37; since amd. by Laws of 1908, chap. 85, and re-enacted in Consol. Laws, chap. 33; Laws of 1909, chap. 38), which provides that “ at any time before the construction of a public' improvement is completed and accepted by the State, or by the. municipal corporation, and within thirty days after such completion and.acceptance, a person performing work for, or furnishing materials to, a contractor, his sub-contractor, assignee or legal representative, may file a notice of lien.” The Lien Law provides for two classes of liens, one a lien in favor of one who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the' owner thereof, or of his agent, contractor or sub-contractor; and one in favor of a person performing labor for or furnishing materials to a contractor, his sub-contractor or legal representative for the construction of a public improvement pursuant to a contract by such contractor with the State or a municipal corporation. (See Gen. Laws, chap. 49, §§ 3, 5, as amd. by Laws of 1902, chap. 31; since' re-enacted in Consol. Laws, chap. 33, §§ 3, 5.) The provision for the filing' of a notice of lien in the first class of cases is contained in section 10 of the Lien Law (Gen. Laws, chap. 49; since re-enacted in Consol. Laws, chap.- 33.) That section provides that the notice of lien may be filed at any time during the progress of the work and the furnishing of the materials, or within ninety days after the completion of the contract or the final performance of the work or the final furnishing of the materials, dating from the last item of work performed or materials furnished. Under this provision the ninety days commenced to run from the last item of work performed or materials furnished, and it subjects the property to improve which the materials or labor are-furnished to a lien in favor of the contractor or subcontractor who furnishes such labor or materials; but a lien in favor of a person performing labor or furnishing materials for the construction of a.public improvement is based upon an entirely different principle. A lien is not given upon the real property upon which the work is done, but upon the amount due or to become due on the contract between the State or the municipal corporation and the contractor ; and section 1,2, which provides for the filing of such lien, requires it to be filed before the construction of the public improvement is completed and accepted by the State or by the municipal corporation, or within thirty days after such completion and acceptance. In one case the period within which the lien may be filed dates from the last item of work performed or materials furnished, in the other at any time before the construction of the public improvement is completed and accepted by the State or municipal corporation, or within thirty days after such completion or acceptance. The provision of section 10 which fixes the commencement of the running of the time from the final performance of the work or final furnishing of the materials and from the last item of work performed or materials furnished is omitted from section 12, affecting a public improvement, and this was in order to.limit the time within which the public authorities are required to hold .the payment to- the contractor so as to protect those who have furnished materials or labor for the improvement. The question is when a public improvement is completed and accepted by the State or municipal corporation. It is quite apparent .that this could not mean that the contract is not completed until the slight repairs or the substitution of defective work which necessarily followed the completion of each large contract have been furnished. , It must be the completion of the contract as a whole which is represented by the acceptance of the public improvement by the State or municipal corporation. If it had been intended to extend to these public improvements the provision in regard to private property the Legislature would have. used the same or equivalent words that were used in relation to such improvements and their failure to do so evidently shows an intention to restrict the right to a sub-contractor beyond that which was allowed to a person furnishing materials or labor on the improvement of private property. Where the work is substantially completed and is accepted by the State or municipal authorities, it seems to me that the fact that some few and unimportant changes have to be made does not extend'" the. time within which the lien is to be'filed. It is of great importance to the State and municipal corporations that there should be a well-defined and clearly ascertained limit during which these liens could be filed so as to avoid liability by the State or municipality for work done under contracts for public improvements, for which the contractors have paid. The time within which a lien- must he filed can be definitely ascertained if the time commences to run from the completion of the contract so that it -is accepted by the State or tjie municipality; but if the State or municipal officers have to ascertain just when the last work was done in relation to unimportant repairs, there .could be no possibility for a definite fixing of a period during which these liens could be filed. The sub-contractors, or persons furnishing . materials or labor, have a right to file a lien at any time after their work is furnished before the actual completion and acceptance of the .work, and after such final completion and acceptance, a definite-time fixed by the public authorities, they have thirty days within which to file the notice of lien. It is not a hardship, therefore, to require them to act with promptness, and it would introduce au element of confusion into the relation between the State or the municipality and its contractors if there were no method by which the public officials could ascertain the period within which a lien could be filed. Here was a contract of over $600,000 which had been completed except that work costing a few hundred dollars was necessary for a full performance of the contract and the architects had certified that the contract was completed. The armory board, charged with the duty of making the contract and attending to its performance and whose certificate entitled the contractor to the money, certified that the contract was completed with the exception of the erection of a tablet which was erected within a few days; and the fact that slight repairs were required or additions like the insertion of a pipe to flood the ammunition room and the repairs to the electrical apparatus, or the insertion of a small tablet would be necessary, would not have been a defense by the city in an action to recover the amount due on the contract. The contract had been ► substantially completed. The architect had so certified. The public authozuties having chaz'ge of the construction of the building and enforceznent of the contract had so certified and had formally accepted the building on behalf of the city of New York. It was occupied by the regiment for which it was erected, and certainly, under those circnznstances, the building was completed and accepted by the municipal corporation, and any lien to be filed must be filed within thirty days after that date. To enforce these liens it was izzcnznbent upon the lienors to pz'ove that the liens were filed within the time requix-ed by the statute.

I think upon this evidence the finding of the court that the woz’k was completed and accepted was sustained by the evidence and the liens in question were, therefore, filed after the time allowed by the statute and were not effective. It is the completion and acceptance as certified to by the public authorities that fixes the time within which the lien must be filed.

The cases cited by the appellants relating to liens upon private property are not applicable because of the difference in the phraseology used in relation to the two classes of liens. - Nor do I think that the deposit of the money with the comptroller to enable the assignee of the contractor to obtain payxnent of the amount due on the contract is an admission that the liens were filed within the time limited by the statute. Subdivision 4 of section 20 -of the Lien Law (Grén. Laws, chap. 49 [Laws of 1897, chap. 418], as amd. by Laws of 1902, chap. 37), wliich,has been since re-enacted in subdivision 4 of section 21 of the present Lien Law/ (Consol. Laws, chap'. 33; Laws of 1909, chap. 38), -provides that a lien against the amount.due or' to be.come due a contractor from the State or a municipal corporation for the construction of a public improvement may be discharged “ By the contractor depositing wifh the comptroller of the State 'or the financial officer of the municipal corporation, or the officer or person with whom the notice of lien is filed, such a sum of money as -is directed by a justice of the Supreme Court. ' * * * The amount so deposited shall remain with the comptroller or, such financial officer or other officer or person until the lien is discharged as prescribed in subdivision one, two or three of this section.” Such a deposit necessarily takes the place of the money with the Comptroller payable under the contract to which a lien would attach. If no lien ever attaches to the balance due the contractor by reason of the failure of a subcontractor to .file a notice within the time fixed by the statute, no action can be maintained to enforce a lion where none was created, and a party who has made an ineffectual' attempt to create a lien can have no interest in the amount so deposited. Whatever happened to the money deposited is of no concern to the-plaintiff, as it had no lien upon anything. The cases which have to do With undertakings-given to discharge a lien have no bearing upon this question, as in that case the undertaking that was required was to pay any judgment obtained against the contractor with the city and not merely to discharge a lien.

I think this judgment was right and should be affirmed, with costs to the respondents- against the appellants.

Pattebson, E. J., Claeke and Scott, JJ., concurred-;' Laugbxin, J., dissented, in part.