Opinion
March 9, 1910.
Chambers Finn [ Daniel J. Finn of counsel], for the appellant.
George W. Curry and Herbert Van Kirk, for the respondent.
The appellant first complains that the judgment is defective in not granting to it a deficiency judgment against Richards. With that question the board of education has no concern. It is admitted that such a judgment should have been granted and its omission is conceded to have been an oversight, caused, as it is claimed by the respondent, by the failure of the appellant to specifically call the attention of the court thereto. An order has been since granted at a Special Term amending the judgment so to provide. But the power of the Special Term is doubted. (See Union Bag Paper Co. v. Allen Bros. Co., 94 App. Div. 598.) The judgment should, therefore, be modified on this appeal so as to provide for judgment for deficiency in favor of the appellant as against the defendant Richards.
Various questions are raised which are entitled to a passing notice. The claim that the Fielding lien was unverified would seem to be answered by reference to the statute, which at that time required no verification of such a lien as against moneys held for a municipal improvement. (See Lien Law [Gen. Laws, chap. 49; Laws of 1897, chap. 418], § 12, as amd. by Laws of 1902, chap. 37.) Other informalities in the liens are not sufficient to invalidate them as liens, as the form of the lien substantially complies with the requirements of the law and no prejudice has been shown. Fielding was not a member of the board of education until after the contract was made with Richards, the contractor, and his subsequent accession to the board could not deprive him of the full rights to enforce that contract. Nor does the fact that Gray was interested in the Consolidated Electric Company make invalid the lien of that company or make illegal the payment to the company of the amount of their compensation for work actually furnished and actually accepted by the contractor and by the board of education. The finding of the trial court as to the amount of the allowance made by the contractor for certain changes in the original plans cannot be said to be against the weight of the evidence, and the principal question upon this appeal arises as to the bank note of $400 made by the contractor Richards and afterwards paid by the board. This it is claimed by the appellant was paid without authority.
This note was made by Richards for the purpose of obtaining money for the payment of the wages of employees upon this building. The bank refused to accept the note of Richards without some protection. The president of the board of education was, therefore, called in and the indorsement was made upon the back of the note that the same was authorized by the president of the board of education and was to be deducted from the next estimate. The note itself contained the words that it be charged to the bond account. When, therefore, the next estimate was fully paid to Richards and he accepted the same without any deduction by reason of this note, the authority still remains with the bank to collect the note out of any moneys remaining in the bond account due or to become due to Richards. This authority the law will imply from the circumstances under which the note was given. It probably did not amount to an assignment of so much of the fund, because of chapter 692 of the Laws of 1907 (adding to Lien Law, § 15a), which went into effect a few days before this note was given. At the time that the note was paid, however, except as against the liens that were then filed, the board of education might have paid to Richards, the contractor, this $400, or it might have paid the same to the bank at the direction of Richards after the bank had loaned the same to Richards for the purpose of paying the wages of employees upon this building. Upon the record it appears that the note was charged to the bond account by the order of the president of the board. So that we find the consent both of Richards and the president of the board that the money be paid to the bank.
It is true as against the liens then filed that payment was not good, but the liens then filed have all been paid by the board of education. The question is here raised by the lienor whose lien was not filed for more than two months after this payment. The payment could not have been collusively made as against the appellant lienor, and whether or not the note with the order thereupon constituted an equitable assignment of any part of the fund, the payment made in good faith was valid, and for it the board of education should have proper allowance. The appellant calls attention to section 25 of article 4 of title 8 of the Consolidated School Law (Laws of 1894, chap. 556), which provides for the manner in which moneys shall be drawn from the funds in the possession of the treasurer of the board. That statute, however, does not make invalid a payment actually made upon a valid debt, though not in form as therein prescribed.
The claim that these prior liens were unlawfully paid cannot be upheld. They were paid within three months from the time they were filed, and the board had the clear right to pay them, taking the risk of a subsequent finding that they were not valid claims. After they were paid they naturally would not be renewed, and for their payment the board should have a proper allowance as for moneys paid upon the contract.
One further question remains, and that is as to the costs which were charged to the fund and not to the members of the board personally. We see no reason for any personal charge of costs against the members of the board. They have proceeded lawfully. The litigation was not by their invitation. Claims for extras were made for $2,750, and upon the trial the extras were allowed at only the sum of $1,276. We find no reason for disturbing the judgment except as to the modification above suggested.
The judgment should be modified by providing for a personal judgment for deficiency in behalf of the appellant lienor as against defendant Richards, and as modified affirmed, with costs to respondent board of education against appellant.
Judgment modified by providing for a personal judgment for deficiency in behalf of the appellant lienor as against defendant Richards, and as modified unanimously affirmed, with costs to respondent board of education against appellant.