Kelley v. City of Syracuse

Weight, J. On June 18, 1892, the defendant John A. Isley entered into a contract with the city of Syracuse, through its board of education, for the construction of a brick school house for $23,000. Isley commenced work about September ninth, and continued until December tenth, when he suspended work. On December 15, 1892, the board of education served on Isley a notice that, unless he should resume work within forty-eight hours, the board would consider the contract abandoned, and proceed to complete the building under the clause of the contract authorizing such action in the case of an unreasonable suspension of the work. Isley did not resume. Isley had subcontracted the mason work to James J. Dixon for $10,879, who up to December 1, 1892, had performed work at an expense of $3,788, but a part was defectively constructed, and the value of properly relaying that defective part was $200, which left as the value of the work $3,588, and he had deposited on the premises, for use in the continuance of the mason work, materials of the value of $700. He had received thereon only $1,000. At this time Isley, the contractor, applied to the architect for an estimate for $2,000, which was refused on the ground that it was not due. This refusal caused the contractor to become financially embarrassed, and compelled him to suspend the work on December tenth. The city, thereupon, on December fifteenth, served the forty-eight hour notice above mentioned, and Isley not resuming work, the city on December seventeenth took possession of the building, and on December thirty-first let the contract for its completion for $21,675, which sum, added to the $1,000 which had been paid Isley, is $525 less than the [308] original contract price. All concede that sum, at least, to be liable to the claimants according to the priority of their rights. But it is urged by Dixon and other lienors that the city should be held liable to the extent of $2,000 on the ground that the architect unreasonably refused to give the certificate above mentioned. The contract provides that the contract price shall be paid “ in payments as the work progresses,” and that on all payments fifteen per cent of the amount due shall be retained to insure the faithful performance of the agreement, “ and that no payment shall be made except on the written certificate of the architect, stating that he considers the payment properly due.” The value of the work performed was not the sole guide in determining the amount due. The architect must have had regard also to the amount and value of the work remaining to be performed, and if it were apparent that the expense of completing the contract from that point would be substantially the full amount of the unpaid contract price, nothing was due the contractor. The court can hold the architect to' only a fair and reasonably correct judgment in that regard, and the fact that the expense of completing /this building was only $525 less than the balance of the original contract price which remained unpaid at the time when the certificate was demanded, is conclusive evidence of such fairness and reasonableness of judgment. We are referred to Foshay v. Robinson, 137 N. Y. 134. In that case it was held that the materialman had a lien to the extent of an installment which had been earned, though the owner, after the contractor had abandoned the building, expended more than the amount of the contract price remaining unpaid at the time of such abandonment; but in that case “ by their contract, the owner was to pay the contractor in installments fixed by different and designated stages of the work of building,” and it was further provided, “ that a certificate of the architect should be obtained as each of the stages was reached.” It will be noticed in that case that the con [309] tractors specified the precise contingencies upon which certain definite installments should become due, but in this case no such arbitrary standards were fixed. There were no segments in either the building or price. Payments, indefinite in amount, were to be made when, in the architect’s judgment, they became due. And,' in order to determine whether the $2,000 or any sum were due, the architect, necessarily, was obliged to observe the contract and building as entireties. The injury to the walls caused by the elements during the winter was not occasioned by the neglect of Isley or Dixon; hence, the amount due either of them is not diminished thereby. Objection is raised against the hen of John Preston on the ground that a copy, instead of a duplicate original notice of lien, was served on the president of the board of education. The original was served on the city treasurer. Since the statute does not in terms require the service of the originals, this method of service is sufficient. Smith v. Kerr, 11 N. Y. St. Repr. 351. Notices of lien aggregating about $4,000 have been filed against the building on account of work and material furnished to the subcontractor Dixon. But the claimant, John J. Preston, urges that, as assignee of P. Preston & Brother, he is entitled to payment prior to any lien, on the ground that he held by an order an equitable assignment of the money due from Isley to Dixon up to the sum of $684, which was accepted by Isley prior to the filing of any lien. P. Preston & Brother furnished brick to Dixon, the contractor, and on October 25, 1892, when brick to the value of ninety dollars had been delivered, the Prestons and Dixon entered into a written contract for the furnishing of brick at an agreed price, and which “ were to be paid for as fast as the outer walls of each story are substantially laid.” And the contract further states that “ an order is hereby given by the party of the second part (Dixon) to party of the first part (P. Preston and John Preston) on John A. Isley for the payment of the purchase price of said brick, and it is hereby agreed [310] that said John A. Isley may pay to the parties of the' first part the purchase price of said brick as aforesaid. And said parties of the first part are hereby given a lien on the contract price between said John A. Isley and said Dixon for the purchase price of all the brick delivered as herein specified.” The contract was signed by both parties, also by John A. Isley, on the day of its date, and a copy delivered to Isley. The order was taken by Preston & Brother as payment for the brick already delivered and which might be thereafter delivered. Preston & Brother continued to deliver brick until November 15, 1892, when a quantity, worth $684 at the agreed price, had been delivered. Preston & Brother duly filed their lien on December 10, 1892. P. Preston subsequently assigned his interest in the claim to John Preston. Several other liens were filed prior to that of Preston & Brother. It is objected that this contract and order do not constitute an equitable assignment on the ground that the specific fund out of which Isley was directed to pay the Prestons is not sufficiently identified, and, further, that if the fund is sufficiently identified, the order operates as an equitable assignment to the extent only of ninety dollars, that being the value of the brick delivered at the time of the execution of the contract, for the reason that only that sum was then due. These objections are untenable. The contract, read in the light of the surrounding circumstances, shows with sufficient clearness what fund is intended. Brill v. Tuttle, 81 N. Y. 454. And from the wording of the whole contract it is evident that the parties intended the order to cover the value of the brick to be thereafter delivered, as well as those already delivered. Isley’s signing the contract was an acceptance of the order. The amount of this claim was determined by the delivery of all the brick prior to the filing of any lien. The liens [311] would attach only upon the money which Dixon was entitled to receive from Isley at the respective dates of their filing. But on October twenty-fifth, after the execution and acceptance of the order, the amount of Dixon’s claim against Isley was thereby diminished by the amount of the purchase price of the brick. Prior to the filing of the liens the claims of the lienors were merely contractual, each standing on an equality, and Dixon had a right to make a preference among them, which he did in favor of the Prestons. The office of the mechanics’ liens is to intercept moneys in the hands of the payor due or to become due his payee. In this case nothing would become due the payee Dixon until after Isley had paid to the Prestons the amount of Dixon’s order. Stevens v. Ogden, 130 N. Y. 182 ; Lauer v. Dunn, 115 id. 405 ; McCorkle v. Herrman, 117 id. 297 ; Hirshfield v. Ludwig, 69 Hun, 554. This claim amounting to more than the entire sum due from Isley to Dixon, it is unnecessary to give further consideration to the other liens, except to direct their discharge. Costs are awarded to John Preston, as plaintiff, against all parties, except as against the City of Syracuse, and costs are awarded to the City of Syracuse, as defendant, against all the parties, except John Preston. Judgment ordered accordingly.