Goldberger-Raabin, Inc. v. 74 Second Ave. Corp.

• Decision Date: 06 December 1929
• Citation: 252 N.Y. 336
• Court: New York Court of Appeals Court of Appeals
• Parties: GOLDBERGER-RAABIN, INC., Plaintiff, v. 74 SECOND AVENUE CORPORATION, Respondent, and JACOB S. HARMAN, Appellant, Impleaded with Others.

252 N.Y. 336

169 N.E. 405

GOLDBERGER-RAABIN, Inc.,

v.74 SECOND AVENUE CORPORATION et al.

Court of Appeals of New York.

Dec. 6, 1929.

Action by Goldberger-Raabin, Inc., against the 74 Second Avenue Corporation, Jacob S. Harman, and others, to foreclose a mechanic's lien. From a judgment of the Appellate Division (226 App. Div. 787, 234 N. Y. S. 802), reversing as a matter of law a judgment of the Special Term for defendant Harman, and directing judgment for defendant corporation, defendant Harman appeals.

Judgments reversed, and new trial granted.

Appeal from Supreme Court, Appellate Division, First Department.

Harold R. Medina and William Gillbert, both of New York City, for appellant.

Frederick Zorn and Joseph Kahn, both of New York City, for respondent.

CARNE, J.

The 74 Second Avenue Corporation commenced the erection of an office building known as 97-101 Walker street, in the borough of Manhattan, city of New York, and employed Jacob S. Harman as superintending engineer in charge of construction. Work commencedAugust 15, 1926, and ended April 25, 1927, before completion through the owner's financial inability to complete. Harman filed a mechanic's lien which he has sought to foreclose in this action. The Special Term upheld the lien, awarding him judgment for $4,500. The Appellate Division has reversed the Special Term judgment, holding the notice of lien defective and insufficient under the statute.

Before examining the notice of lien, we had better understand the nature and extent of Harman's claim.

The contract between the parties was made orally in August of 1926, and later reduced to writing October 1st of the same year. There is no dispute over the terms of the contract. After the recitals it is agreed:

‘First. The Corporation hereby hires Harman, and Harman hereby agrees to be employed by the Corporation as general superintendent of the Corporation with relation only to the construction of a modern office building on premises 97-101 Walker Street, Borough of Manhattan, City of New York.

‘Second. That the duties of said Harman shall be only that of generally superintending the job, procuring bids from sub-contractors for the different items of work necessary to be performed; the co-ordinating of the work of the sub-contractors; and to co-operate with the engineer and architect, subject, however, at all times to the orders, directions and unstructions of the Corporation.

* * *

‘Fourth. That for his services as aforesaid the Corporation shall pay to Harman a sum equal to two and one-half per cent. (2 1/2%) of the total net cost of construction. The total net cost of the construction shall be deemed to include net cost of material and labor, but shall not include the cost of the land, insurance, plans, nor the salaries and fees paid to those who act in a superintending, executive or advisory capacity with relation to the construction of said building.

‘Fifth. The Corporation shall pay to Harman the sum of One Hundred Dollars ($100.00) at the end of each and every business week during the course of his employment, which payment shall be on account of the commissions or compensation earned or to be earned by Harman. If the compensation earned by Harman is less than the aggregate of the sums paid in weekly installments as herein provided for, the said Harman shall reimburse the Corporation to the extent of the surplus received by him.’

As this contract was broken in April of 1927 by the 74 Second Avenue Corporation, Harman has an action against it for damages in which he may recover the profits he would have made if the contract had been fully completed. He cannot recover such damages through a mechanic's lien. O'Reilly v. Mahoney, 123 App. Div. 275, 108 N. Y. S. 53;Whritenour Co., Inc., v. Colonial Homes Co., Inc., 209 App. Div. 676, 205 N. Y. S. 299.

The Lien Law (Consol. Laws, c. 33), § 3, gives to a contractor who performs labor for the improvement of real property a lien for the value or agreed price of such labor upon the real property improved. Section 2 defines improvement: ‘The term ‘improvement,’ when used in this chapter, includes the erection, alteration or repair of any structure upon, connected with, or beneath the surface of, any real property and any work done upon such property or materials furnished for its permanent improvement, * * * and shall also include the drawing by an architect or engineer, of any plans or specifications which are used in connection with such improvement.' Harman was to have 2 1/2 per cent. upon the total net cost of construction for doing some things for which he could not file a lien, standing alone and by themselves. The record shows that there was a building upon this property which had to be torn down before the new building could be erected. We are not told the nature of this building or how extensive was the work of demolition. All we have is the statement that a building was torn down. Neither does Harman testify as to his connection with this work of destruction Where the removal or tearing down of a building does not amount to an improvement of the real property, it has been held that no mechanic's lien can be filed for the value of such work. Thompson-Starrett Co. v. Brooklyn Heights Realty Co., 111 App. Div. 358, 98 N. Y. S. 128.

Harman did not prepare the plans and specifications. He says, however, that he supervised and prepared the contracts for the subcontractors. For this work there can be no mechanic's lien. Section 2, as above quoted, gives a lien to an architect or engineer for drawing plans and specifications which are used in connection with such improvement. Ordinarily, such work would probably include the contracts prepared by the architect or engineer, but, where an architect has prepared the plans and specifications, our Mechanics' Lien Law does not provide that an engineer may have a lien for merely preparing and obtaining subcontracts based upon these plans and specifications. The case of Bennett v. Frederick R. Gerry Co., 273 Pa. 585, 117 A. 345, under an act giving an architect no lien for his services, held that the work of securing contracts from subcontractors was no part of the work of superintendence.

The tearing down or destruction of the building may have been an improvement to the real property or part of the necessary improvement according to the circumstances to be determined as a question of fact. If...