Summary
In Merchants Traders National Bank v. City of New York, 97 N.Y. 355, 362, also referred to in Fenton v. FentonBuilding Co., it was held that, under a contract containing a retention provision prescribed by ordinance, the city assumed no express liability to pay laborers and materialmen dealing with the contractor, and could not be sued upon such a liability.
Summary of this case from Pelton King, Inc. v. BethlehemOpinion
Argued October 28, 1884
Decided November 25, 1884
John H. Strahan for plaintiff. D.J. Dean for the Mayor, etc., defendant. L. Laflin Kellogg and James Ridgway for the Bigelow Blue Stone Company et al., defendants.
The ordinance relied upon by the defendants was authorized by law and was in force when the contract with Gavin was made, and it authorized the clause in the contract upon which the judgment below was based. The ordinance provides for a notice to be given "at any time within ten days after the completion" of the work, and the counsel for the plaintiff, therefore, contends that the notice cannot be given before the completion of the contract, but that it must be given after the completion and within ten days thereafter. We think this is not the proper construction. The parties entitled to give notices might not know, and might find it difficult to know when the contract was completed, and they might thus lose the benefit intended for them. There could be no purpose to compel such parties to wait for years before they could give the notices and to limit them to the precise ten days. The meaning of the ordinance is that the notices must be given before the expiration of ten days after the completion, and hence the clause in the contract providing for notices "before or within ten days" after the completion was authorized.
The notices in this case were accompanied with proof of the amounts due the claimants, and hence in that respect complied with the ordinance, and no other evidence of their claims was required.
Hence as the plaintiff was in no better position than its assignor, and the claims of which notices had been given had not been paid or discharged, the city had the right to hold the money unpaid upon the contract, and the complaint was properly dismissed.
But the plaintiff claims that even if it was not in a condition to claim the money at the time of the commencement of the action, a judgment ordering payment to the defendants who had filed notices was wholly unauthorized. We think the purpose of the ordinance was to secure to persons furnishing labor and materials to contractors with the city, some of the advantages which the lien laws of the State give to mechanics and materialmen; and this result was sought to be accomplished by making the city a trustee of the unpaid balance due upon the contracts with it for the benefit of such persons. It certainly was not the purpose to leave such balance in the possession of the city forever, capable of being drawn by no one. It could not have been the understanding of the parties to the contract that if the contractor failed to pay the persons giving notices, they could have no claims upon the money due from the city, and that the city should be exempt from payment to any one. The ordinance and the clauses inserted in the contract in pursuance thereof were intended for the benefit of the laborers and materialmen dealing with the contractor, and they should not be so construed as to make them illusory, misleading and nugatory. The city in such a contract assumes no express liability to pay the laborers and materialmen, and cannot be sued upon such a liability. But it is placed under an implied obligation to hold the money as trustee according to the terms and effect of the contract which can be enforced in an action to which all persons interested in the money are made parties. Hence we think the judgment made a proper disposition of the money.
But there was manifest error in ordering the city to pay interest on the money. As before stated, the city was a trustee of the money, and there is no proof that it received any interest upon the money, or that it could have received any. It was in no default and there was no time until the judgment was entered when it could with safety pay the money. It never denied the rights of its co-defendants, but on the contrary prayed in its answer that the money should be paid to them. It held the money in discharge of its trust while the claimants thereto were settling their interests therein. None of them demanded that the money should be paid into court, and if it had thus been paid it does not appear, and is by no means certain, that any interest would have accrued. The city was liable to pay interest after the entry of judgment but not before.
The judgment should, therefore, be modified by striking therefrom all the interest on the various sums ordered to be paid, and as thus modified, should be affirmed, with costs in this court to the city, to be paid by the plaintiff, and without costs as to other parties.
All concur.
Upon a subsequent motion to amend the remittitur, the following opinion was handed down:
All the points now made for an amendment of the remittitur were considered when we rendered our judgment. The city should pay interest from the entry of the judgment at Special Term. The time had then come when it should have paid the principal sum, about the amount of which there was no longer any dispute, into court, and then the claimants could have obtained it, or have compelled the plaintiff to give such security upon the appeal as would have secured to them the interest.
As to the costs, the plaintiff made the city as well as the claimants, respondents, and failed utterly, and the city succeeded in its appeal against the claimants. Instead of ordering the plaintiff to pay costs to the claimants and they to the city, we thought it better to order the plaintiff to pay costs directly to the city, as we had the undoubted discretion to do, and no injustice was done.
The motion should be denied.
All concur.
Judgment accordingly.