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Johnson Service Co. v. Hildebrand

Supreme Court of New York, Appellate Division

March 15, 1912

JOHNSON SERVICE COMPANY, Respondent,
v.
GEORGE HILDEBRAND and NATIONAL SURETY COMPANY, Appellants, Impleaded with THE BABCOCK & WILCOX COMPANY, Respondent, and THE CITY OF NEW YORK and Others, Defendants,

APPEAL by the defendants, George Hildebrand and another, from a judgment of the Supreme Court in favor of the plaintiff and the defendant The Babcock & Wilcox Company, entered in the office of the clerk of the county of New York on the 26th day of April, 1911, upon the decision of the court rendered after a trial at the New York Special Term.

COUNSEL

Page 681

M. Carl Levine, for the appellants.

J. Power Donellan, for the plaintiff, respondent.

LAUGHLIN, J.:

This is an action to foreclose a municipal lien. On the 25th day of June, 1907, the appellant Hildebrand entered into a contract with the city for the erection of a public bath building in the borough of Brooklyn, pursuant to certain plans and specifications, for the gross sum of $165,480. On the 10th day of February, 1908, he sublet the furnishing of materials and the work required in heating and ventilating the building to the defendant R. J. Sovereign Company, Inc., for the gross sum of $21,000; and on the thirteenth day of the same month the Sovereign Company in turn sublet the furnishing and installation of the Johnson system of temperature regulation to the plaintiff, for the gross sum of $734, 'less 10%.' The judgment awards the balance of $868.50 due from Hildebrand to the Sovereign Company to the plaintiff to the extent of $756.93 in payment of the balance due on its claim against the Sovereign Company, and the balance to the Babcock & Wilcox Company, which was also a sub-contractor of the Sovereign Company for the installation of two Babcock & Wilcox patent steam boilers, for which there remained due from the Sovereign Company $1,000, for which the the Babcock & Wilcox Company had filed a lien. The liens of the plaintiff and of the Babcock & Wilcox Company were discharged by Hildebrand's filing an undertaking with the appellant surety company as surety. Hildebrand and the surety company are the sole appellants, and their contentions are the same.

The appellants contend at the outset that the action was prematurely brought, in that there was nothing due or owing from Hildebrand to the Sovereign Company at the time it was commenced. The contract between Hildebrand and the Sovereign Company provided for the payment of eighty-five per cent of the contract price of the work as it progressed, and that the last payment should be the remaining fifteen per cent, which should not be payable until the work was completed and accepted by Hildebrand and until he received his final payment from the city. The Sovereign Company with the consent of

Page 682

Hildebrand abandoned its contract before completion, and thereupon its contract was modified so as to provide that only five per cent of the contract price should be retained by Hildebrand for final payment. The court has found that this final payment of five per cent was not to be made by Hildebrand until the Sovereign Company's work was completed and accepted by him and until he received his final payment on his contract with the city. The final payment was not made to Hildebrand by the city until the 21st day of February, 1910, and it aggregated $28,727.54. The action was commenced on September 2, 1909. It is not essential that the entire amount earned by a lienor shall be due and payable at the time his action to foreclose the lien is commenced, but it is essential that some part thereof shall be then due and payable. ( Preusser v. Florence, 4 Abb. N. C. 136; Beecher v. Schuback, 4 Misc. Rep. 54; Ringle v. Wallis Iron Works, 85 Hun, 279; affd. on opinion below, 155 N.Y. 675; Firth v. Rehfeldt, 30 A.D. 326; affd., 164 N.Y. 588; Palmer Lumber Co. v. Stern, 140 A.D. 680.) If, therefore, there was no amount due and payable from Hildebrand to the Sovereign Company at the time this action was commenced, since its sub-contractors stand in its shoes, there was no amount due to them (Brainard v. County of Kings, 155 N.Y. 538; Van Clief v. Van Vechten, 130 id. 571; Campbell v. Coon, 149 id. 556; Wexler v. Rust, 144 A.D. 296), it was prematurely brought and the recovery cannot be sustained.

The final payment from Hildebrand to the Sovereign Company, under the contract as modified, was to be the sum of $1,050. The Sovereign Company abandoned its contract in May, 1909. At that time there remained a balance unpaid on its contract of $1,568.50. The contract between the Sovereign Company and Hildebrand provided that, upon its failure to furnish sufficient labor and materials, Hildebrand might upon three days' notice procure the same and 'charge and deduct the cost thereof from the amount due the sub-contractor under this present agreement, and to collect the deficiency, if any, from the sub-contractor.' On the abandonment of the work by the Sovereign Company, Hildebrand took charge and completed it. By the judgment the court has allowed him the

Page 683

sum of $700 for thus completing it, and has awarded the balance of the $1,568.50, being $868.50, to the plaintiff and the Babcock & Wilcox Company as already stated. The appellants contend that it has not been shown that there was any balance due from appellant Hildebrand to the Sovereign Company, to which the liens of respondents could attach for the reason that the evidence does not show the actual cost of completing the work left undone by the Sovereign Company, and that the finding that appellant Hildebrand completed it at a cost of $700 is without support in the evidence, and is inconsistent with the finding, made at his request, to the effect that the evidence does not show the amount of money 'necessarily expended' by him in completing the work. Where findings are inconsistent the appellant is entitled to have the appeal decided on the basis of those findings which are most favorable to him. On that theory appellants claim that there should be a reversal, because, since the cost of completing the work has not been shown, there is no basis upon which to determine the amount owing to the Sovereign Company. If we should decide the appeal on that theory, it would only result in a new trial, which we think would be of no avail to appellants for the actual cost could then be shown and it probably would not exceed $700.

The president of the Sovereign Company testified at one point that his company completed its contract with the exception of furnishing and installing the electric fan to operate the blower, the motor, electric wiring and switchboard, and that appellant Hildebrand did this work. He was then asked the fair market value of the work done by appellant Hildebrand in completing the contract, and he answered that the fair market value was between $700 and $800; and he further testified, in effect, that his company abandoned the work pursuant to an arrangement made at his suggestion, with appellant Hildebrand, that the latter should give his company three days' notice pursuant to the contract, which his company would accept, 'and he could finish the job at the ...


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