Aeschlimann v. Presbyterian Hosp.

• Decision Date: 22 January 1901
• Parties: AESCHLIMANN et al. v. PRESBYTERIAN HOSPITAL et al.
• Court: New York Court of Appeals Court of Appeals

165 N.Y. 296

59 N.E. 148

AESCHLIMANN et al.

v.PRESBYTERIAN HOSPITAL et al.

Court of Appeals of New York.

Jan. 22, 1901.

Appeal from supreme court, appellate division, First department.

Action by Charles Aeschlimann and others against the Presbyterian Hospital and others on a contractor's bond. From a decision of the appellate division (53 N. Y. Supp. 998) affirming a judgment for defendants, plaintiffs appeal. Affirmed.

George Putnam Smith, for appellants.

Frederic E. Perham, for respondents.

MARTIN, J.

This was in form an action to foreclose a mechanic's lien filed by the plaintiffs as subcontractors under the defendants Smyth and Robinson, the original contractors with the Presbyterian Hospital. It was, in fact, an action upon a bond given to procure a discharge of the plaintiffs' lien, in which the defendants Smyth and Robinson were principals and the defendants Dunn and Hutkoff were sureties. The lien was to secure payment for work and materials performed and furnished by the plaintiffs upon property owned by the hospital. It was based upon an agreement between the original contractors and the plaintiffs, whereby the latter agreed for $3,900 to do all the mosaic tiling in the corridors and operating pavilion of the hospital, strictly in accordance with plans and specifications, which were a part of the contract. It was also based upon a claim that certain work and materials had been furnished for that purpose, which were reasonably worth the sum of $5,575.40; that an increased expense had been incurred in the employment of laborers amounting to $400, one-half of which the defendants Smyth and Robinson agreed to pay, and upon a claim for extra work performed by the plaintiffs in relaying the mosaic floor in the corridors and in cutting the concrete in the operating rooms, which was alleged to have been done at the request of the original contractors, and to be worth $51. The complaint admitted that Smyth and Robinson had paid the plaintiffs $3,240 on account of the work performed and materials furnished by them. It was then alleged that, after the filing of the plaintiffs' notice of lien, the original contractors instituted a proceeding under the statute to authorize the filing of a bond to discharge such lien; that such proceedings were had that an order was duly entered approving of the bond filed, and the plaintiffs' lien was canceled and discharged. The condition of the bond was that, it case of payment by the original contractors of any judgment which might be recovered against the premises by reason of the plaintiffs' claim, the obligation of the bond should be void; otherwise, to remain in full force. The demand for judgment was that the plaintiffs be adjudged to have a valid lien upon the premises for $2,786.40, with interest from May 23, 1893, besides costs; that the sureties be declared liable therefor, and that the plaintiffs have judgment for that sum against the defendants Smyth and Robinson and against the respondents as sureties upon their bond. The original contractors interposed no defense. The sureties, however, answered by denying all the allegations of the complaint, except as to the amount paid to the plaintiffs, and as to that they alleged that it was $3,340, instead of $3,240. They admitted the allegations to the effect that a proceeding was instituted to discharge the plaintiffs' lien, and that a bond was given for that purpose, which was executed by the original contractors as principals and by the respondents as sureties. On the trial the plaintiffs insisted that the respondents, who were mere sureties for the original contractors, by the default of the latter were precluded from questioning the amount of the plaintiffs' claim, or the liability of the respondents therefor. The trial court held that the sureties were not precluded by such default from questioning the amount or validity of the plaintiffs' claim. The court found that when the plaintiffs filed their lien for $2,786.40 they were, according to the terms of their written agreement, entitled to recover only $611; that the plaintiffs' claim that the written agreement was subsequently modified by an oral one, by which the original contractors agreed to pay a large additional sum to compensate them for an alleged mistake on their part, was not substantiated by the evidence, but that the plaintiffs entirely failed to establish a subsequent oral contract; and that the claim of the plaintiffs that they were delayed by the contractors, and therefore obliged to incur increased expense in the hire of labor, and that the contractorsagreed to pay one-half thereof, was not substantiated by the proof. But the court found, to the contrary, that the contracts did not delay the work, were not responsible for such increased expenditure, and did not agree to pay any part thereof. From these facts, with the added fact that the day before the notice of lien was filed for $2,786.40 the plaintiffs rendered to the contractors a bill, which was in full for the amount then due, in which they claimed only $811, the court further found that the claim in the notice of lien was enormously exaggerated; that this was done intentionally, by pretense of a fictitious contract, for the purpose of enforcing a false and fabricated demand; and held that the plaintiffs thereby forfeited their right to recover against the sureties, and directed a judgment in their favor. As the affirmance of the judgment of the trial court was unanimous, no question of fact is before us for determination. The facts as found must be regarded as correct, and so treated in the determination of any question presented upon this appeal. Hence it must be assumed that the only contract which existed between the parties was the written one, that the claim stated in the plaintiffs' notice of lien was to a very great extent intentionally false and fabricated, and that there was sufficient evidence to sustain those findings. Under these circumstances the only possible questions of law which are presented for determination by this court are: (1) Whether the sureties upon the bond of the original contractors were properly allowed to show that the amount of the plaintiffs' claim was exaggerated and fictitious, and that they were not entitled to a judgment for the amount claimed; and (2) whether the insertion of an exaggerated and willfully false and fabricated demand in the notice of lien rendered it invalid.

It seems to be well established, as a general rule, that a surety may defend an action against his principal, may set up any legal or equitable defense which would have availed the former, and may establish it by proof; especially when a party to the action. Does the fact that this action was to foreclose a mechanic's lien, and that the judgment demanded was in form against the property represented by the defendants' bond, in any way alter that rule? We think not. The condition of the bond substantially required the sureties to pay any judgment which might be recovered against the premises upon the claim set forth in the plaintiffs' notice of lien. It ought not to require discussion or authority to sustain the proposition that the judgment which the sureties agreed to pay was only a judgment properly obtained for the actual amount which was owing by the original contractors to the plaintiffs. We are aware of no principle...