Onondaga Commercial Dry Wall Corp. v. 150 Clinton St., Inc.

• Decision Date: 29 June 1967
• Citation: 281 N.Y.S.2d 208,28 A.D.2d 71
• Parties: , 20 A.F.T.R.2d 5196, 67-2 USTC P 9599 ONONDAGA COMMERCIAL DRY WALL CORP., Petitioner, v. 150 CLINTON STREET, INC., Respondent. UNITED STATES of America, Intervenor-Appellant, v. ADIRONDACK CARPENTERS WELFARE FUND and Adirondack Carpenters Pension Fund, Respondents, Onondaga Commercial Dry Wall Corp., et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 208

281 N.Y.S.2d 208

28 A.D.2d 71, 20 A.F.T.R.2d 5196,

67-2 USTC P 9599

ONONDAGA COMMERCIAL DRY WALL CORP., Petitioner, v. 150 CLINTON STREET, INC., Respondent.

UNITED STATES of America, Intervenor-Appellant, v. ADIRONDACK CARPENTERS WELFARE FUND and Adirondack Carpenters

Pension Fund, Respondents, Onondaga Commercial Dry

Wall Corp., et al., Defendants.

Supreme Court, Appellate Division, Fourth Department.

June 29, 1967.

James P. Shanahan, Asst. U.S. Atty., for appellant; Donald A. Statland, Washington, D.C., of counsel.

Lewis G. Spicer, Jr., Watertown, for respondent 150 Clinton Street, Inc.; Richard F. Schwerzmann, Watertown, of counsel.

Richard F. Schwerzmann, Watertown, for respondents Adirondack Carpenters.

Before WILLIAMS, P.J., and GOLDMAN, HENRY, DEL VECCHIO, and MARSH, JJ.

OPINION

WILLIAMS, Presiding Justice.

The order appealed from denies the application of the United States of America, appellant herein, for an order restraining and prosecution of mechanics' lien foreclosure actions instituted in the Supreme Court under article 3 of the Lien Law. The liens asserted in the article 3 actions were against a conceded balance due to the contractor by the owner, upon a contract for the construction of certain apartment dwellings in Jefferson County, New York.

After the institution of those actions, Onondaga Commercial Dry Wall Corp. commenced this present action in the Supreme Court of Onondaga County, based on the same factual situation, under the provisions of article 3--A (the trust provisions of the Lien Law).

All actions are now pending. The United States of America was permitted to intervene in the latter action by court order, and it is in this action that the appeal arises.

The entire problem revolves around the construction of the language of section 79, article 3--A, of the Lien Law, which provides: 'Nothing in this article shall prevent the enforcement of any lien as provided in articles two and three of this chapter and neither such lien nor any satisfaction obtained thereby, shall be deemed a diversion of trust assets or an unauthorized preference.'

The Special Term Justice construed this sentence to mean that the commencement of an action to enforce a lien under article 3 absolutely nullifies any benefits to the parties to an action to establish a claim to trust assets as defined in section 70, article 3--A, unless, after the termination of the article 3 action and the distribution of funds thereunder, a surplus should remain. (All of the parties concede that there will be no surplus here.) Such a construction of a single sentence, so as to entirely destroy the beneficial provisions of article 3--A is completely inconsistent and inharmonious with the rules of statutory construction.

'Several rules of statutory construction come into play and the application of any or all of them sustains defendant's position. The first is the rule that to get the sense of a statute one must read the whole of it (People v. Ryan, 274 N.Y. 149, 8 N.E.2d 313; People v. Dethloff, 283 N.Y. 309, 28 N.E.2d 850).' (People v. Martell, 16 N.Y.2d 245, 247, 264 N.Y.S.2d 913, 914, 212 N.E.2d 433, 434.)

In Matter of the Village of Gowanda v. County of Erie, 25 A.D.2d 18, 20, 266 N.Y.S.2d 439, 441--442, affd. 19 N.Y.2d 735, 279 N.Y.S.2d 189, 225 N.E.2d 892, we stated:

'In Essenfeld Bros., Inc. v. Hostetter, 14 N.Y.2d 47, 52, 248 N.Y.S.2d 45, 48, 197 N.E.2d 535, 537, in considering certain specific language of the Alcoholic Beverage Control Law, the court said: 'This is sweeping language but, as this court wrote some years ago in construing the latter subdivision, 'In the interpretation of statutes, the spirit and purpose of the act and the objects to be accomplished must be considered. * * * Literal meanings of words are not to be adhered to or suffered to 'defeat the general purpose and manifest policy intended to be promoted ". (People v. Ryan, 274 N.Y. 149, 152, 8 N.E.2d 313, 315.) 'There is no more likely way to misapprehend the meaning of language--be it in a constitution, a statute, a will or a contract', Judge LEARNED HAND has reminded us, 'than to read the words literally, forgetting the object which the document as a whole is meant to secure.' (Central Hanover Bank & Trust Co. v. Commissioner of Int. Revenue, 2 Cir., 159 F.2d 167, 169; see, also, Spencer v. Childs, 1 N.Y.2d 103, 106--107, 150 N.Y.S. 788, 789--790, 134 N.E.2d 60, 61; Cabell v. Markham, 2 Cir., 148 F.2d 737, 739.)'

'There are numerous other authorities which apply this general rule of construction. (McKinney's Cons.Laws of N.Y., Book 1, Statutes, § 97, and cases cited.)'

Unless we were willing to hold that the institution of the mechanic's lien foreclosure action under article 3 renders a proceeding under article 3--A meaningless and ineffective, then the above-quoted language of section 79 cannot be construed literally. All the provisions of articles 3 and 3--A should be considered together, side by side. If that is done, it becomes apparent that the Legislature intended to provide that the passage of 3--A should not be interpreted as a repeal of article 3 or a diminution of its benefits. On the other hand, an intelligent legislative approach would not contemplate that the very definite beneficial provisions of 3--A be completely nullified and in effect repealed should an article 3 action be started. The legislative intention must have been, just as the statute says, only that the satisfaction of liens in a completed or terminated article 3 action should not be considered trust fund diversions. That declaration could have been the chief purpose of the enactment of the entire section.

Actually, the granting of the injunction which was sought would result in complete equity. The failure to grant such injunction will almost certainly result in the frustration of the priority lien of the Government provided for in section 77, subdivision 8, article 3--A of the Lien Law. If the injunction is granted, all of the proper parties will or can then be...