Hallahan v. Herbert

By the Court.—Robinson, J. The facts of the case are substantially as follows: The defendants, Daniel and Elias Herbert, and William S. Ford, composing the firm of D. & E. Herbert & Co., in 1860, made a verbal contract with the defendant, Cudlipp, to purchase from him twenty-eight lots on the northerly side of Sixty-ninth-street, in the city of New York, commencing at Tenth-avenue and extending about six hundred and fifty feet westerly, and to erect sixteen houses thereon, Cudlipp agreeing to advance money towards the erection of the houses, and when they they were built, the purchasers were to take deeds and give back mortgages for the price of the land and the advances. They proceeded with the work, and, on December 23, 1866, the houses being all enclosed, Cudlipp and Graff and wives, con — 331 — veyed the lots to Daniel Herbert, who at the same time executed to his grantors two mortgages on the property, one for ten thousand dollars, and one for thirty-one thousand nine hundred dollars. Subsequently, Daniel Herbert and wife, by deed dated February 13, 1863, conveyed to Cudlipp the same twenty-eight lots, subject to all incumbrances. Cudlipp, together with his wife, subsequently, by deed dated March 7, 1863, reconveyed to Herbert twenty-four of the same lots, who at the same time executed to Cudlipp a mortgage thereon, for twenty-three thousand five hundred dollars. It was agreed on the trial, that these several deeds and mortgages were executed in pursuance of the original verbal agreement between Cudlipp and Herbert & Co. The reconveyance to Cudlipp, dated — 332 — February 12, 1862, was upon a consideration then received from him. In May, 1862, D. & E. Herbert & Co. contracted with Jacob Demarest, for the furnishing of the blue stone for the sixteen houses, under written contract, by which it was provided, if he delayed in fulfilling his contract, Herbert & Go. might proceed with the same, and charge the expense to him. In August, 1862, he became insolvent, and left the work incomplete, and ■plaintiff, his assignee, and Herbert & Co., supplied what was required, and on an accounting and settlement, which shortly afterwards took place between them (the only parties then interested), nine hundred and sixty dollars and sixty-seven cents was found due for the work performed under this contract. In November, 1862, Demarest filed a mechanics’ lien on these sixteen buildings for this work, claiming seven hundred and ninety-five dollars to be still due him, in which Cudlipp was alleged to be the owner. ' On January 23, 1863, he filed another notice of lien in the county clerk’s office, claiming nine hundred and ninety dollars to be due him on this contract with Herbert & Co., and that they were the equitable owners, under a written contract of sale made0, by them with Cudlipp, the legal owner. This latter is the lien' attempted to be foreclosed in this action. The evidence shows the claim of Demarest, as attempted to be asserted under these several liens, had been assigned to the plaintiff; and there was proof of some such transfer, before November, 1862 ; but the formal assignment was dated January 23, 1863. The first lien was radically defective, in attempting to assert rights against the title of Cudlipp, as owner, under an alleged contract with Herbert & Go., as “ contracting builders” (Beals v. Congregation B’nai Jeshurun, 1 E. D. Smith, 654). Cudlipp, the owner of the legal title, having agreed — 333 — to sell the lots,' and also to make the loan to enable the purchasers to build, the buildings were not erected for him, but for the purchasers, who were the equitable owners, and were engaged in erecting the buildings on their own account. They contracted with Demarest on their own behalf, and it was only against their interest in the premises that the lien could be asserted (Loonie v. Hogan, 9 N. Y. [5 Seld.], 435; Walker v. Paine, 2 E. D. Smith, 662; McMahon v. Tenth-ward School, &c., 12 Abb. Pr., 129). The mortgage of Herbert to Cudlipp for twenty-three thousand five dollars, above referred to, was foreclosed in an action in which Daniel Herbert, the mortgagee, and wife, and William S. Ford, were defendants, and by judgment therein, dated January 19, 1864, the premises were sold February 12, 1864, to Robert J. Brown; but neither the plaintiff nor defendant was made a party to the proceedings, nor was the lien that had been created by the notice filed January 23, 1863, upon the interest which Daniel Herbert had in the land on which the buildings were erected, whether legal or equitable, affected thereby. Although the interest of D. & E. Herbert and Ford in the land was merely equitable, and subject to such •proceedings at law as operated to extinguish it, yet being one patent and matter of record, so long as it subsisted, the creditor holding the lien was entitled to notice of and to be made a party to any proceeding instituted for its foreclosure or extinguishment. By statute, his lien continued until the ‘ ‘ expiration of one year from the creation thereof and until judgment rendered in any proceeding for the enforcement thereof” (Laws of 1851, ch. 513, § 12). These proceedings for the foreclosure of the lien as against the owner and subsequent parties in interest, were commenced within the year, to wit, January 14, 1864, and have ever since been pending. — 334 — Neither the act of 1851 nor the amendatory act of 1855, affords any way of relieving or discharging the lien created by the filing of the notice as provided for by the former act, except in the manner provided by section 11 of the act of 1861 (ch. 513). 1. By satisfaction; 2. A. deposit of the amount claimed with the clerk ; 3. An entry of clerk, after the lapse of one year, that no notice had been given Mm to enforce the lien ; 4. Proof of default of claimant on notice by owners to commence action for the enforcement of the lien ; and, 5. By its satisfaction after action brought for its enforcement. The act of 1863 (ch. 500), which took effect July 1, 1863 (§15), repealed (§ 12) the acts above referred to, except so far as might be necessary to carry into effect liens acquired before that act took effect, and to allow persons thereafter performing work or furnishing work prior to July 1,1863, to acquire a lien pursuant to the provision of that act. This lien had been acquired under the act. of 1851, and its amendment of 1855, under which both the right and the remedy had then been perfected so far as could be afforded by those acts. It was within the province of the legislature to alter the remedy for the enforcement of the right, but not to affect its. validity or efficacy as created by existing laws by authorizing any substituted security (Bronson v. Kinzie, 1 How. U. S., 311 ; Howard v. Bugbee, 24 Id., 461). The provision in the subsequent act of 1863, authorized a discharge of the lien effected under that act ' by an entry (on the judgment docket) by order of the court, that the judgment [on proceeding to enforce it] had been “ secured on appeal,” but it did not in terms or in effect otherwise interfere with liens acquired under previous statutes, or authorize their discharge upon the terms or in the manner provided as to those ..that might subsequently be acquired under that act. — 335 — This action being one in rem, the Code did not provide for any release of the primary lien of the debt, upon a judgment for its enforcement, or authorize the marking of a judgment directing a sale of the property, as “ secured on appeal,” with any such effect as to discharge the lien or security upon the property. The granting of an order to that effect could at most operate as a stay of the personal judgment (Rathbone v. Morris, 9 Abb. Pr., 213; Code, § 339). The answer does not by way of defense allege any release or removal of the lien, through that proceeding, nor can any be claimed (when not alleged) through the desultory proof that an order was granted directing the docket to be marked “ secured on appeal.” Notwithstanding the order in this cause made August 30, 1864, substituting the • plaintiff Hallaban as assignee of the claim in suit, instead of Demarest, the person performing the work, it is claimed that as Demarest had, prior to the filing of this lien, assigned the claim to plaintiff, the defendants are entitled to maintain the invalidity of the lien, because the debt upon which it was predicated, having been assigned by the party, did not belong to him, and no such right of lien belonged to him. NTo such fact was presented or objection taken for the consideration of the court, when it decided that the plaintiff as assignee ought properly to be substituted in this action as plaintiff, instead of Demarest, the original creditor. Upon such interlocutory decision the matter presented for adjudication under section 121 of the Code was definite and certain, and was to be determined upon the evidence then presented, and if erroneously decided was the subject of immediate appeal as affecting a substantial right. It was not, however, permissible for the defendants on the trial to introduce proof tending to show that decision was wrong, nor on appeal upon any such — 336 — evidence to base the right (under § 329 of the Code) to review the merits of that order. The answer does not in terms assert the invalidity of that order, but simply alleges that the affidavit on which the order was granted did not state the date of Demarest’s death, and of his having made the assignment of the claim prior to the filing of any notice of lien, nor defendant’s ignorance of any such fact. Any misapprehension or ignorance may have furnished ground for a reconsideration of the motion, but that was never applied for, and as it affected a substantial right and remained unreversed, it is res adjudícala upon the matter so decided, precluding subsequent inquiry or controversy on the trial as to facts on which it was predicated. There is, however, no merit in the objection. Even if such a lienor had assigned his claim, he was justified, notwithstanding the assignment, in doing any such act in aid of the claim as the law accorded to it, and if he neglected so to act, his ' assignee, as his attorney or agent, might execute or perform in Ms name whatever by law was permitted him to do, for the security or enforcement of the demand (1 Chitty Pl., 16.) What was done in the , present case after any such alleged assignment of the debt, was by way of assurance of the title to it, or in perfecting and making available the collateral securities appertaining to it, and although pro forma in his name (not being allowed in the name of the assignee) was strictly in accordance with the rights of the parties, and .in no way compromised or prejudiced the debtor or any one claiming under him. Such transfer of interest cannot be construed into any release or abandonment of the rights of the creditor, nor of any right of lien incident to or attached to the debt. The act of 1851, in terms provided that the “contractor, laborer or person furnishing material, should enforce or bring to a close such lien by serving or cans — 337 — ing to be served personally on such owner,” &c., notice to appear and submit to an accounting and settlement of the amount claimed to be due. The right of the assignee to file such lien in his own name was denied in Roberts v. Fowler, 3 E. D. Smith 632, but what was done in this case was by and in the name of the original contractor in accordance with the provisions of the act. The Code (§ 111) requiring suits to be prosecuted in the name of the real party in interest, had no application, to these proceedings previous to the service of notice to foreclose the lien, and it was only after such jurisdiction had been acquired and they had become a suit in this court, that the orders of the court became operative upon the rights of the parties. The objection that the right of lien, incident to this debt, in the name of Demarest the contractor, was lost by reason of Ms assignment of the debt previous to the filing of the notice of lien, for these reasons should not prevail. The last point is that the separate judgment against the equitable owners (D. & E. Herbert & Co.) with whom the contract was made for that amount due upon it, could not be made in this action. A determination of the amount due from the owner to the contractor was necessary in the action, and where, as in this case, the owner appeared (by section 8 of the act of 1851, chapter 513) and answered denying the debt, the issue was to be “tried and judgment thereon” enforced in all respects, and in the same manner as upon issues joined and judgment rendered in civil actions for the recovery of money in “ said „court.” This authorized a personal judgment against the owner and contracting party, and its enforcement by execution as in other actions. The judgment is to the effect that the lien existed only on the sixteen buildings, and the appurtenances — 338 — and the lots upon which the same stood, to the extent of such (equitable) interest as D. & E. Herbert & Co., had therein on January 33, 1863, and there is no error in this respect, as is claimed in defendant’s points, intimating that it ordered the sale of either twenty-eight or twenty-four lots. The judgment should be affirmed with costs. C. P. Halt, F. J., concurred.