Van Etten v. Sphinx Holding Corp.

114 Misc. 436
CourtNew York Supreme Court
DecidedFebruary 15, 1921
StatusPublished
Cited by3 cases

This text of 114 Misc. 436 (Van Etten v. Sphinx Holding Corp.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Van Etten v. Sphinx Holding Corp., 114 Misc. 436 (N.Y. Super. Ct. 1921).

Opinion

Stephens, J.

This action was commenced in January, 1918, for the purpose of foreclosing the plaintiffs’ mechanics lien upon premises owned by the defendant Sphinx Holding Corporation; the other defendants were also lienors; the action was tried March 17 and 18, 1919, and the questions involved were afterwards submitted upon written briefs; [438]*438memorandum of decision in favor of the plaintiffs was filed in August, 1919, which detailed all of the essential facts found and directed formal findings to be prepared as indicated in the memorandum; the findings were presented for signature on May 25,1920, and the final decree was entered on that day, establishing the lien of the plaintiffs and the liens of some of the defendants and containing the usual directions to sell the premises to satisfy the liens; no appeal has been taken from that judgment and the premises have been advertised for sale.

It is the situation thus briefly summarized that the defendant corporation and the proposed interveners seek to disturb by reason of other facts which it is now necessary to consider.

The plaintiffs in this action and the Sphinx Holding Corporation entered into a contract April 14, 1917, by which the plaintiffs agreed to put up a building upon real estate owned by the said defendant at a stipulated price; the contract provided that as soon as the roof was on the building the owner would apply for and secure a first mortgage on the property for at least $12,000, the net proceeds of which, after paying a mortgage on the building lot for $1,150, would be paid to the plaintiff contractors. In the performance of this contract the liens involved in this action had their rise.

The proposed intervenors, who were directors of the Sphinx Holding Corporation, guaranteed, in writing, the execution of the building contract “in the following particulars, First: that the mortgage will be procured upon said premises as provided in said contract and the proceeds thereof paid to the contractor as therein mentioned.”

The roof was on the building on or about August 27, 1917, but no money was procured by mortgage or [439]*439otherwise and no payment was made to the plaintiffs upon the contract at that time or at any other time, except a small sum negligible for our present purpose.

In July, 1918, the plaintiffs herein commenced an action at law against the proposed intervenors upon their guaranty; the first trial resulted favorably to the defendants; upon appeal the plaintiffs’ exceptions were sustained and a new trial granted; on the second trial a verdict was directed in favor of the plaintiffs for an amount equivalent to the net proceeds of the twelve thousand dollar mortgage with interest from August 27,1917; after the affirmance on appeal of the judgment entered upon the verdict and on or about October 16, 1920, the said proposed intervenors, the defendants in that action, paid the judgment; it is upon this fact of payment that the Sphinx Holding Corporation founds its application to serve a supplemental answer in this action and the proposed intervenors predicate their right to intervene.

A better understanding of the problem can perhaps be had by having in mind the relative stages of these two actions during their parallel course through the court.

The foreclosure action was first commenced; the action at law was first tried and the plaintiffs were unsuccessful; this action to foreclose the liens was tried and the memorandum of decison filed favorable to the plaintiffs, while an appeal was pending from the determination of the trial court in the action brought upon the guaranty; the second trial in the last mentioned action in which the plaintiffs were successful and the appeal were had during the period that elapsed after decision in the lien action was rendered and the entry of judgment in it; the time came, therefore, when the plaintiffs had a favorable judgment in both the action upon the guaranty and that [440]*440upon their lien; their lien having been-established for the value of all the labor and material that entered into the building it is obvious that they had secured double relief, in appearance at least, and practically so if the real estate were of sufficient value to satisfy their lien and the costs and expenses of the action brought to foreclose it; in this state of the relations between the parties concerned the proposed interveners paid the judgment against them.

It was suggested upon the argument that it was neither necessary nor proper upon this motion to determine what the equities of the moving parties are, but only to grant the relief asked for and leave for later decision, after further inquiry, the merits of the controversy. Johnston v. Donvan, 106 N. Y. 269, is cited in support of that proposition; the facts in that case and in this are widely different; there the application was made before the time to answer had expired and evidently questions of fact needed to be determined on common-law evidence; here, all the facts have been adjudicated, the action has proceeded to final judgment, and that judgment has settled the interests of all the parties in the property beyond the hazard of interference; these fixed rights ought not to be swept aside and the entire litigation in which they were established abrogated unless there be a very clear comprehension that the claims of the proposed interveners are rooted in very definite and precise equities.

The answers which the moving parties seek to interpose are not a part of the papers before me, but the desire of the corporate defendant is “to file and serve an amended supplemental answer” and that of the proposed interveners is “to come in as parties defendants to the action and to file and serve answers herein setting up such rights as they may have or claim to [441]*441have in respect to the real property in and by said judgment herein directed to be sold.”

The only fact that the Sphinx Corporation could properly plead would be that the first installment on the contract price of the building has been paid to the plaintiffs and the proposed interveners could only be heard to say in their answers that they paid it; whatever rights, therefore, the moving parties have acquired since the final determination of the two actions are such as arise between themselves and the plaintiffs; the skein is further untangled by' the circumstance that the rights of the proposed intervenors are derivative from those of the defendant corporation; by the payment of the judgment against them they became entitled to be subrogated to the rights of the defendant owner, and to the security held by the plaintiffs for the payment of the owner’s debt. United States F. & G. Co. v. Carnegie Trust Co., 161 App. Div. 429; affd., 213 N. Y. 629.

They are in no different position than an owner who makes a payment to a contractor or one who makes advances upon a mortgage with knowledge that notices of lien have been filed; such payments and advances are made at the peril of those making them and do not affect the remedy of the lienor. Lien Law, §§ 11, 13; Foshay v. Robinson, 137 N. Y. 134; Gass v. Souther, 46 App. Div. 256; affd., 167 N. Y. 604; Upton Co. v. Flynn, 169 App. Div. 79.

The moving parties claim the absolute right to be allowed to set up their alleged defenses under section 452 of the Code of Civil Procedure. Uhlfelder v. Tamsen, 15 App. Div.

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Related

Smith v. Mangin
161 Misc. 288 (New York City Court, 1936)
Lowenstein v. Reikes
140 Misc. 645 (New York Supreme Court, 1931)
Van Etten v. Sphinx Holding Corp.
197 A.D. 929 (Appellate Division of the Supreme Court of New York, 1921)

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Bluebook (online)
114 Misc. 436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/van-etten-v-sphinx-holding-corp-nysupct-1921.