Atlantic Terra Cotta Co. v. Rubenfield Construction Corp.

Cropsey, J. In this action to foreclose a mechanic’s lien, the only question is whether defendants Young and Creamer are entitled to recover. They are lienors, and their hens, with others, were bonded, the defendant Eagle Indemnity Company being the surety. The surety contests the right of those two defendants to recover, because, although their answers were served upon the surety, they were not served upon the owner against whom those defendants had their claims. The undertaking given to discharge the hens was eonditione ’ to pay any judgment that the henors might obtain against the property. The sureties upon such an undertaking are not hable unless the hen was vahd and enforcible. (Vitelli v. May, 120 App. Div. 448, 449.) The henor’s claim against the owner and his right to a hen must be determined, otherwise the surety cannot be held. Judgment may first be obtained by the henor against the owner- (Harley v. Plant, 210 N. Y. 405; Ringle v. Matthiessen, 10 App. Div. 274; affd., 158 N. Y. 740), but it is not necessary to do so, as the owner and surety may both be sued in the one action. (Morton v. Tucker, 145 N. Y. 244.) A henor cannot recover against the surety unless the owner has been or is sued as just stated. (Maneely v. City of New York, 119 App. Div. 376, 386, 390.) Where the owner is joined with the surety, he must be served. (Von Den Driesch v. Rohrig, 45 App. Div. 526; Spitz v. Brooks & Son, Inc., 210 id. 438, 440.) In such an action the same parties are necessary as defendants as in an action to foreclose the hen where no bond has been given. (Scherrer v. Music Hall Co., 18 N. Y. Supp. 458; Maneely v. City of New York, 119 App. Div. 376, 393.) The foregoing indicates plainly what these defendants, henors, would have to do if they were seeking to enforce their hens as plaintiffs. Here they are defendants, but seeking to enforce their hens. Undoubtedly that may be done. The sole question is as to how they must proceed. The general rule prescribing the procedure when- one defendant [281] makes a claim against another defendant is set forth in section 264 of the Civil Practice Act. That requires the defendant who makes the claim to demand it in his answer and to serve a copy of his answer upon the attorney for each of the defendants to be affected by the determination and also upon defendants who would be affected and have not appeared. As the defendant lienors cannot recover against the surety without suing the owner, the above provision would seem to require them to serve their answers upon the owner if they seek to enforce their claims against the surety unless there is some provision of the Lien Law that makes this unnecessary. The lienors contend that a portion of section 17 of the Lien Law (as amd. by Laws of 1916, chap. 507) dispenses with the necessity of the service of their answers upon the owner. That section is headed: “ Duration of Lien.” It provides that no hen specified in that article should be a lien for more than one year after the notice of hen has been filed, unless within that time an action is commenced to foreclose the hen, and a notice of the pendency of the action is filed, or unless an order has been made continuing the hen. It further provides that if a henor is made a party defendant in an action to enforce another hen, and the plaintiff or such defendant has filed a notice of the pendency of the action within the time prescribed, the hen of such defendant is thereby continued, and that “ Such action shall be deemed an action to enforce the hen of such defendant henor.” It is the sentence just quoted upon which these lienors rely. That sentence, however, seems plainly to relate merely to the time of commencing the action and the necessity for filing a notice of pendency. It does not indicate that all the general provisions of law applicable where a claim is made by one defendant upon another are not to be observed. And other provisions of the Lien Law make this still more clear. Section 44- deals with parties to an action in a court of record; and among others stated to be necessary parties defendants are persons appearing by the records to be owners of the property or any part thereof. And immediately following is this provision: “ Every defendant who is a henor shah, by answer in the action, set forth his hen, or he will be deemed to have waived the same, unless the hen is admitted in the complaint, and not contested by another defendant.” And by section 45 the court is required to adjust and determine the equities of ah the parties and the order of priority of different hens, “ and determine all issues raised by any defense or counterclaim in the action.” There seems to be nothing in the Lien Law that makes the general provision of section 264 of the Civil Practice [282] Act not applicable, except in the one case specified in section 44, where a defendant’s lien “ is admitted in the complaint and not contested by another defendant.” With that exception it has been held that the forerunner of section 264 (Code Civ. Proc. § 521) was “ particularly applicable to actions for the enforcement of mechanics’ hens.” (Hinkle v. Sullivan, 108 App. Div. 316, 317, 318.) The Appellate Division in the First Department has said that the answer must be served upon the party primarily liable, though that statement was obiter. (Maneely v. City of New York, 119 App. Div. 376, 391.) If the lien of a defendant be admitted in a complaint and not contested by any defendant, then it is unnecessary for the defendant having the hen to set it forth in his answer and he will not be deemed to have waived it even though he fails to do so, but may have judgment. This is the provision of section 44 of the Lien Law; and under this it has been held that where a hen is admitted in the complaint, if .any defendant seeks to contest it, he must serve his answer upon the defendant owning the hen in question. (Kelley Lumber Company v. Otselic Valley Railroad Co., 136 App. Div. 146, 149.) This case plainly emphasizes the need of a defendant henor, whose hen is not admitted in the complaint, to set it forth in his answer and to serve a copy of his answer upon all parties affected by his claim. The case of Wilson v. Niagara City Land Co. (79 Hun, 162) is claimed to hold to the contrary. It is not clear from the opinion whether the complaint admitted the vahdity of the defendant’s hen, but in any event the statement of the court on the point was merely dictum. Neither of the defendant henors claims that he could recover in this action without having served his answer upon the surety, and yet such a service would seem to be unnecessary if it is not necessary to serve the owner. The complaint does not admit the hens of these defendants. It merely asserts that they. “ have or claim to have mechanics’ hens against said premises which said hens, if any, are subsequent and subordinate to the hens of the plaintiff.” For the defendant henors to succeed it was, therefore, necessary for them to set forth their hens in their answers and then to serve their answers upon the owner and the surety. Not having done this, they are deemed to have waived their hens and there must be judgment accordingly. The findings of the plaintiff and of defendants, and also the judgment should be settled upon notice.