Loonie v. Hogan

The act entitled “ an act for the better security of mechanics and others erecting buildings in the city and county of New York,” provides that every mechanic doing any work towards the construction of any building in the city of New York, erected under a contract, in writing, between the owner and builder, or other person, “may deliver to the owner of the building an attested account of such labor, and thereupon such owner shall retain, out of his subsequent payments to the contractor, the amount of such work and labor, for the benefit of the person so performing the same.” (Statute of 1830, p. 412, § 31.)

The subsequent section of the act provides for the adjustment of the account between the contractor and the party who rendered it, when it shall be disputed, which is to be brought about by arbitration, if the parties cannot agree; and when the amount due shall have been determined, if the contractor shall not pay it in ten days, “the owner shall pay the same out of the fund as above provided, and which amount due may be recovered from the said owner by the creditor of the said contractor, in an action for money had and received, to the use of said creditor, and to the extent in value of any balance due by the owner to his contractor under the contract with him, at the time of the notice first *687given aforesaid, or subsequently accruing to such contractor under the same, if such amount shall be less than the sum due from the said contractor to his creditor. (§ 4.) “ If, by collusion or otherwise, the owner of the building shall pay the contractor in advance of the times of payment mentioned in the contract, and there shall not be enough left to pay the party who shall have served the account, the owner shall, notwithstanding, be liable to the party, as though such payments in advance had not been made.” (§ 5.)

This is the whole of the act.; and the question in this case is, whether the relation between the defendant, of one part, and Mullaney and Flinn of the other, is that of owner and contractor for building, within the true construction of the statute. Assuming that the contract for the sale of the lot was entered into in good faith, and without any view to evade the provisions of the lien law, it certainly presents a different case from the one which was primarily in the contemplation of the legislature.

The object of the law was to enable a laborer, mechanic or sub-contractor to attach, in effect, in the hands of the person for whom the building was erected, the debt which the. latter might owe to the immediate contractor on his contract for the work. As no lien attached to real estate, the title to the lot is not a matter of any importance, and the question would be the same, so far as I can perceive, if one should agree to lend money to the owner of a lot to enable him to build a house thereon, with an agreement to secure the loan by mortgage, when the building should be completed. It would not be seriously contended, in such a case, that a mechanic or laborer, employed by the borrower, could proceed under this act" to reach the money agreed to be loaned. The remedy which the statute gives, is against money due to the principal contractor for the work which he agreed to do, but which the subcontractor or mechanic has actually performed for him. It does not extend to money payable to the contractor on any other account. It is quite reasonable that the party meritoriously entitled to be paid for the work, *688should be allowed to intervene between the owner for whom the house was built, and the person who has contracted to build t, and to divert the course of the payments which would have passed into the hands of such contractor to his own. It is a form of equitable subrogation, regulated by statute ; but it is limited by the act to the plain case of money due upon contract for performing the work. The case is equally without the letter of the statute, if it is the “ owner of the building ” against whom the remedy is given.- In this case, although the title of the lot remained in the defendant, Mullaney and Flinn were erecting the building for themselves, and not for the defendant. They, and not the defendant, were to own it when it should be completed.- The money which the plaintiffs seek to obtain, is money agreed to be loaned, and not a debt agreed to be paid. It is only the latter to which the statute refers. If public policy or the just interests of laborers and mechanics require that the remedy should be extended so as to embrace the case of money agreed to be advanced otherwise than by a party contracting to have a building erected for himself, it is for the legislature to provide for such cases by new enactments.

I am aware that the Supreme Court of the city of New York has arrived at a different conclusion in a similar case; but, with every disposition to concur in opinion with so respectable a tribunal, I find myself unable to assent to the judgment in that case. (McDermott v. Palmer, 11 Barb. S. C. R. 9.)

I see no reason to doubt but that the parties to the contract for the sale of the lot intended, in good faith, to make the precise bargain contained in it. It is not an unreasonable, nor, I believe, an unusual arrangement for the owner of town lots to connect with a contract to sell them, an agreement to loan money to the purchaser, to bé expended in building upon them, taking a lien upon the real estate, to secure both the purchase price and the money loaned.

There is no ground for holding the defendant liable on the draft. Considering what was said between the parties as an *689agreement to accept, it is unavailable for two reasons : first, it was not in writing; (1 R. S. 768, §§ 67-8 ;) and second, the plaintiffs were to present the bill to the defendant on the same day on which the conversation was had, and it was only on that condition that the defendant agreed to accept: It does not appear to have been presented at all. There was no promise to pay for this work," except what was said about accepting the bill. The ruling in the court below was therefore correct, and the judgment ought to be affirmed.

Judgment of the Court of Common Pleas affirmed.