Tommasi v. Archibald

114 A.D. 838, 100 N.Y.S. 367, 1906 N.Y. App. Div. LEXIS 2207
Appellate Division of the Supreme Court of the State of New York·Decided July 24, 1906·Published·Cited by 9 cases

Opinion

Jenks, J.:

This is the foreclosure of mechanics’ liens. The judgment against the defendant rests upon the finding that he, the owner, made payments to the contractor prior to the time when, by the terms of the contract such payments became due, for the purpose of avoiding the provisions of the Lien Law (Laws of 1897, chap. 418, § 7), and, therefore, these payments were not effective against the lien of the plaintiff and the defendant sub-contractors. The contract called for five payments tobe made on two houses at successive stages of the work thereon. The section sajara, invoked by the plaintiff, in the part germane to this case, reads as follows: “ Any payment by the owner to a contractor upon a contract for the improvement of real property, made prior to the time when, by the terms of the contract, such payment becomes due, for the purpose of avoiding the provisions of this article,* shall be of no effect as against the lien of a sub-contractor, laborer or material man under such contract, created before such payment actually becomes due.”

The expression in section 1 of chapter 47S of the Laws of 1802, construed in Post v. Campbell(83 N. Y. 279), reads, payments made “by collusion for the purpose of avoiding the provisions of this act, -or in advance of the terms of any contract.” The court in that case [840] held that payments in advance of the terms of any contract, aside from any questions of collusion or of avoidance of the provisions of the act, were prescribed. The provision in section 2 of chapter 342 of the Laws of 1885, as amended by chapter 673 of the Laws of 1895, disallows against lienors payments made “ for the purpose of avoiding the provisions of this act or in advance of the terms of any contract * * * by collusion.” In Miller v. Smith (20 App. Div. 511), Herrick, J., for the court, points out that the expression in Hilton Bridge Construction Co. v. N. Y. C. & H. R. R. R. Co. (145 N. Y. 390) as follows: “ Under the Lien Act of 1885 (Chap. 342), it has been held in this court that where the owner has made payments to his contractor, although without fraud, or collusion, before they are due under the terms of the contract, such payments cannot be allowed to the owner. (Post v. Campbell, 83 N. Y. 279, 283.) ” must be inadvertent, inasmuch as Post v. Campbell (supra) did not arise upon the said law of 1885, but the said law of 1862. Inasmuch as the statement in Hilton Bridge Construction Co. v. N. Y. C. & H. R. R. R. Co. (supra) was based entirely on authority of Post v. Campbell (supra), and was not necessary to the judgment, I think that the view taken by the court in Miller v. Smith (supra) is correct.

As I read the present statute, it does not prohibit payments made before they became due, but only such payments when made' for thqpurpose of avoiding the provisions of the act. It is not enough that such payments may impair the effect of the statute, and thus pro tanto avoid it, but they must also have been made with the purpose to avoid it.

The evidence is sufficient to establish the premature payment to the contractors on account of the fourth installment. The conclusion of the purpose of such payments depends upon findings which are essentially as follows: At or before the time when the plaintiff filed -his lien the defendant Bolger told and represented to the plaintiff that if he should file such lien ” he would be sure to get his money, as there was plenty of money to complete the work and materials to be done under the contract between him and Archibald Brothers. Within a day or two before Forsyth & Suydam filed their notice of lien the defendant represented to them that if they would proceed with the work and protect themselves, by which they [841] understood to file such lien, there would be sufficient money left on his contract with Archibald Brothers to complete the work and pay them for their work and materials. Before they completed this work the defendant told them there was a payment of $1,400 on each house still to be made. When the defendant made these statements, he knew that he had exercised his option to do the plumbing work and heating whereby $1,200 was to be deducted, and he concealed that fact. He made the aforesaid statements about six weeks after he had made the payments on account of said fourth payment, and after he had accepted two orders of Lawrence Bros, for $644.99 in cancellation of their lien, and he concealed that fact.

The contract price of the house was $9,976. The fourth payment was $2,000 and the fifth and final payment $2,976. The lien filed by the plaintiff was $340, that of Forsyth & Suydam $201 and that of the defendant Butterworth $550. The record is somewhat involved, and I may be misled, but it seems to me that the sum total of the liens was not so large that the defendant may not have honestly believed that there would be forthcoming, in spite of his advances and payments in depletion of the fourth payment, out of the payments yet to be made, a sum sufficient to pay for the labor done and the materials furnished, as indicated by the liens filed. The finding of “ concealments” is based upon the fact that the defendant did not communicate such circumstance to these sub-contractors. But these payments were made months prior to the times that the liens under consideration were filed ; there is evidence that they were made in order that the work might go forward, and there was at least no legal reason why he should have stated the transactions to these subsequent lienors. (Harvey v. Brewer, 178 N. Y. 5.) If the defendant made these payments with the purpose to avoid the statute, it seems strange that thereafter he should, at his own instance, as the lienors all testify, have urged them to protect themselves by filing liens. Advance payments are not prohibited, and it may well be that the purpose of them in this case was to accommodate the contractors and to incite them to more diligence in their work which had lagged and was behindhand. I think that the lienors did not establish their right to the finding that these payments were made for the purpose of avoiding the statute. The court also found as follows: The said Bolger gave such orders to [842] Lawrence for the cancellation of the lien of said Lawrence Brothers, and the cancellation thereof and the substitution therefor of such orders were calculated to deceive the plaintiff and the defendants Forsyth & Suydamaud Buttenvorth, the said orders not being tiled as specified in section 15 of the Lien Law, at that time, or until March 26, 1902, after said notices of lien were filed by the plaintiff and by Forsyth & Snydam as aforesaid.” I think that this is based upon an erroneous proposition. (See Harvey v. Brewer, supra)

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Tommasi v. Archibald, 114 A.D. 838, 100 N.Y.S. 367, 1906 N.Y. App. Div. LEXIS 2207 (N.Y. Ct. App. 1906).

114 A.D. 838 (Tommasi v. Archibald) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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