Oates v. Haley , 1 Daly 338 ( 1863 )

Hiltoít, J.

Under 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.

But 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.

Under 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.

Ho 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.

1 think the-judgment should be affirmed.

Brady, J.

The 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.

Judgment affirmed.