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1 Daly 338

Oates v. Haley

New York Court of Common Pleas

Decided December 15, 1863

New York Court of Common Pleas · decided 1863-12-15

Appeal by the plaintiff from a judgment at Special Term, confirming the report of the referee. The action was brought by the plaintiff as a sub-contractor, against the defendant Haley as contractor, and Stone as assignee of the contractor and of the owner Kenney.

Cited by 1 later decisions — most recently May 1902

1 district ·

Good law ✅— No negative treatment on recordhow we know

Decided 1863-12-15

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Hiltoít, J.

¶1Under the mechanic’s lien law, the sub-contractor, by filng his notice of lien in the -manner prescribed acquired only the right to be subrogated to the claims of the contractor under the contract made with the owner. But if, at-the time of filing the notice, there is nothing due, and nothing thereafter becomes due under the contract, to the contractor from the owner, the sub-contractor acquires nothing by his lien. The only exception that I am aware of to the rule as thus stated, is the case of an assignment by the contractor of his property, in trust for the benefit of his creditors, and the reason for the exception there is, that as such assignees stand in the place of the contractor, and act substantially for his benefit, if they perform the contract for him, or become entitled to any payments under it, the sub-contractor may acquire a lien to the same extent as if the assignment had not been made.

¶2But it is otherwise where it is shown, as was the case here, that, prior to the filing of any notice claiming a lien by a subcontractor, the contractor in good faith and for a full consideration transferred to a purchaser the rights winch the contractor might thereafter acquire to any payments under the contract.

¶3Under such a transfer the purchaser succeeds to the rights of the contractor upon the contract freed from any lien which might thereafter have been acquired had the transfer not been made.

¶4Ho lien attaches by the mere performance of work pursuant to the contract, but it is gained only by filing the notice prescribed by the act, and until that notice is filed, the contractor, while acting in good faith, may deal with and dispose of the indebtedness which may accrue to him under the contract as effectually as he may by law with any other maturing indebtedness.

¶51 think the-judgment should be affirmed.

*344Brady, J.

¶6The contract was assigned to Stone as security for materials to be furnished which were necessary to enable the contractor to perform. The plaintiff knew of the assignment, and said, with such knowledge, that he was satisfied to go on with the work. The evidence shows that Stone’s debt was not paid. This case differs from one in which an assignment appears, made for the benefit of creditors. Stone was the person through whose aid the contractor went on with the building, and to secure the advances he made the assignment was executed. He certainly has_ a superior equity to the plaintiff, if the equities were to control. I think the judgment should he affirmed.

¶7Judgment affirmed.

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