Rodbourn v. Seneca Lake Grape & Wine Co.

Rapallo, J.

We think that the court erred in excluding the evidence offered to prove that the contractor became unable to complete the building; and that, after the filing of the notice .of lien, the defendant, in order to complete the building, was forced to, and did, 'purchase materials and pay laborers to an amount exceeding the contract-price, and that the contractor did not complete the building.

Expenditures made under such circumstances should not, we think, be treated as payments to the contractor upon his contract, which should render the owner liable to a material-man who had before such payments filed a notice of lien. The amounts so paid were never earned by the contractor, nor did they belong to him. The fact that, by the terms of the contract, the owner had the right to charge such payments to the contractor did not confer any rights upon the material-man. He was entitled, by virtue of his lien, to such sums as the contractor was, at the time of the filing of the notice, or might afterwards become entitled to receive under his contract, but no more. He was protected by the statute against the extinguishment of the contractor’s right by payment after notice of the lien; but payments made by the owner to' third parties for work or materials which the contractor had failed to furnish, and which the owner was compelled to obtain on his own responsibility, in order to complete the building, were not prohibited by the statute; and even though there were no formal abandonment of the contract, such payments did not subject the owner to liability to the person filing the notice of lien. It is only what the contractor earns under his contract that is reached by the hen. In this case, payments made to third parties were treated as an admission of indebtedness of the owner to the contractor. We think that the owner should have been permitted to prove the circumstances under which the payments were made, and that the contractor was in default.

The judgment should be reversed and a new trial ordered, with costs to abide the event.

All concur.

Judgment reversed.