Hudson Wrecking & Lumber Co. v. Aldrich

Lehman, J. The complaint herein sets forth that the plaintiff furnished to the Simar Realty Company lumber for use in certain buildings in which the defendant was interested as a mortgagee under a contract to advance to the Simar Realty Company a sum of money as a building loan. That the Simar Realty Company agreed to pay for this lumber the sum of $1,965, and also agreed that the moneys due or to become due to it from the defendant under the building loan contract and mortgage should be applied to the amount due to the plaintiff for lumber. That the said Simar Realty Company having failed to pay the said snm of $1,965.49 the plaintiff threatened to file a lien for the [252] materials furnished by the plaintiff as aforesaid; that the defendant fearing that by the filing of said lien and the commencement of such action by the plaintiff, other persons having furnished labor and materials- would file notices of lien and stop work on said buildings and that' defendant would sustain and suffer damages •thereby represented to the plaintiff that he was in possession of certain moneys due under the building loan and that he would pay the same to the plaintiff for the materials furnished as aforesaid. That relying thereon the plaintiff ‘ ‘ entered into an agreement with the said defendant wherein and whereby it was agreed that this plaintiff refrain from filing notice of lien against the. said premises for the amount of the purchase price of said lumber hereinabove mentioned, or of any. part thereof and that the said plaintiff refrain - from commencing an action for the enforcement thereof and in consideration thereof the said defendant promised and agreed to pay to the plaintiff, the amount of the purchase price of said lumber herein-above mentioned.” The answer denies-the making of this contract and sets up the Statute of Frauds as an affirmative defense. The trial justice submitted to the jury the issue of whether the defendant had made this contract and for the purposes of this appeal we must assume that the plaintiff’s testimony as to the making of the contract is correct. The only serious question in the case is whether the contract as testified to by the plaintiff is enforceable in spite of the Statute of Frauds-. The testimony of the plaintiff upon this point is as-follows-: 11 Its treasurer saw the defendant towards the end of November after he had delivered all but a small portion of the lumber. At that interview he stated that he understood that the defendant was making or was about to make a building loan on the building. He [253] understood there was some trouble and payments were being diverted from the owner and ‘11 thought I would look into the matter to see if I could be secured or get my money in some way, otherwise I would be compelled to file a lien. Mr. Aldrich says ‘ there is no sense in filing a lien, it would be bad for every body, it might be bad for you.’ I said: ‘ I won’t be in any worse position, there is no building loan contracts on record and my lien would come ahead of anything that was on, record except the mortgages there ’. So Mr. Aldrich says, ‘ Don’t file a lien; yon wait, when Siegel comes in we will see what can be done about it.’ ” Thereafter he saw the defendant again and told him that he was to receive sixty-five per cent of the amount due him out of the next or “ enclosure ” payment under the building loan. I said ‘ ‘ we would not deliver any more lumber there, unless we knew where we stood ” and the defendant answered “ there is no sense stopping the job now; you might as well go ahead, it will be better for everyone concerned. I will pay you your money out of the enclosure payment.” Thereafter the plaintiff stated that he would not file a lien and delivered the small part of the lumber not theretofore delivered. There is no doubt that the defendant’s promise was a promise to pay the debt of the Simar Realty Company and the primary debt continued to exist concurrently with the promise. Such a promise is original and not within the statute only when it is supported by a new and further consideration which “ should move to the promisor and be beneficial to him.” White v. Rintoul, 108 N. Y. 222. In the same case it is stated in effect, that the earlier cases establish that the promise must be made primarily to ‘1 subserve or promote some interest or purpose of the promisor himself and upon [254] which the respondent very much relies. Nelson v. Boynton, 3 Metc. 396. That this expression was understood to mean, not merely some moral or sentimental object, but to relate to a legal interest or purpose tangible by the law and a product of the consideration received from creditor or debtor is apparent from the further current of the explanation.” In this case the only consideration for the promise of the defendant as alleged in the complaint is the plaintiff’s promise to file a lien. Moreover the promise to furnish the lumber not yet furnished to the Simar Realty Company under its contract was not a new or further consideration for the original debtor was not at that time in default under its contract and the plaintiff was bound to proceed with it. The sole question of law in the case is whether the promise not to file a lien on the premises owned by the Simar Realty Company to enforce a debt of that company is a consideration moving to the defendant and beneficial to him. There would be no doubt that if the defendant at that time had any direct interest in the property which would be injuriously affected by the threatened'lien, then the promise made by him would be enforceable. In this case, however, the defendant’s only interest in the premises as alleged in the complaint was as mortgagee under a building loan contract. His mortgages were, however, already on file and took precedence over any lien which the plaintiff could file, at least to the extent of the moneys already advanced. It is urged, however, by the respondent, that the defendant’s right to enforce these mortgages was open to doubt and that by the plaintiff’s promise he secured an abandonment of plaintiff’s colorable claim to obtain a prior lien. Even if such a benefit could be considered as a sufficient consideration, there is absolutely no evidence in this case that the defendant had any doubt about his rights or sought [255] from the plaintiff for his own benefit any abandonment of a doubtful claim. The evidence shows only that for the sake of all parties he wished to avoid the placing on the property of any lien whether prior or subsequent to his mortgages. It is also urged that the consideration was beneficial to the defendant and moved directly to him because under the building loan contract he would obtain certain future profits by reason of future advances which he would lose by reason of the termination of the contract through the filing of a mechanic’s lien. It seems to me that this contention is not sound. Such a benefit, if it exists, is merely incidental and is not the direct result of the forbearance of the defendant and it is nowhere claimed that the promise of the defendant was made to promote or further any such interest in the building contract. Judgment should therefore be reversed, with costs, and complaint dismissed, with costs.