
    Patrick J. Condon, Plaintiff, v. The Church of St. Augustine, Respondent, Impleaded with George S. Stanfield and Others, Defendants, and Clifford L. Miller and Henry P. Robinson, Appellants.
    First Department,
    April 6, 1906.
    Mechanic’s lien on property of religions corporation —- when church bound on contract made by rector with knowledge of trustees — failure of contractor to complete work on demand—when sub-lienor should not be charged with costs,
    
      It seems, that a religious corporation, although never formally assenting thereto, may be bound by a building cdntract made by its rector on the theory of his agency, when the building was erected upon the church lands, and everything, connected therewith >vas left to the rector, and money received from a mortgage given by the corporation was- deposited by and drawn on by the rector as such, and applied to the work.
    
      It seenis, also, that, under such circumstances, a notice of lien filed by such contractor would be valid, as against the corporation.
    
      But when such contractor has completed his work so far as possible until material is put in by other contractors, and while the latter material is being j>ut in refuses to go on with the work on three days’ notice to- do so as required by the contract because a claim for extra work had not been paid, which disputes as to such extra work were to be left to arbitration by the terms of the contract, and it also appears that he had signed an agreement to ask for no more money until certain other work was done, his failure to continue is not justified and a finding that nothing was. due him on'the contract is supported by the evidence.
    A sub-lienor who has furnished material to such contractor and has been made a party defendant in an action to foreclose the lien, who merely endeavors to enforce his rights in subordination to those of the plaintiff, should not be charged with the costs of such action.
    Appeal by the defendants, Clifford L. Miller and another, from certain portions of a judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 26th day of August, 1897, upon the report of a referee.
    
      Jacob F. Miller, for the appellants.
    
      David McClure, for the respondent.
   Patterson, J.:

This action was brought to foreclose a mechanic’s lien on real property belonging to the defendant The Church of St. Augustine, a religious corporation. On the 30th of June, 1894, the plaintiff' entered into a contract in writing, which upon its face purported to be made between himself and the trustees of St. Augustine’s Roman Catholic Church of the city of New York. It was signed by T. F. Gregg, rector of the church, and does not appear to have been executed or, when it was made, authorized by the board of trustees of thé church at a regular meeting. By that contract the plaintiff agreed to complete and finish mason work to be done in the erection of a new church and rectory building on land belonging to the church corporation, and to supply materials therefor; the owner agreed to pay the contractor for doing the work and furnishing the materials the sum of $27,900 in partial payments' at certain stages of the work.. The contractor stipulated to provide whatever was necessary for the proper completion of the mason work within a limited time, and that if he failed to do so the owner might notify him in writing to proceed and complete the work, and if he failed so to do for the space of three days after service of a notice the corporation might do the work as the agent of the' contractor and deduct, the cost thereof from any moneys due or to become duelo him under the. contract. Alterations and extra work, were provided for; and a stipulation was made that if any dispute, should arise regarding the alterations or extra work it should be decided by arbitrators.- On the 16th day of December, 1894, another contract in writing was made, which on its face purports to be between the plaintiff and the Church of St. Augustine-, formerly the Trustees of St. Augustine’s Roman Catholic Church of New York City.” T° that contract was affixed the official seal of the corporation, and apparently oil its behalf was signed “ T. F. Gregg, Rector S:t. Augustine’s, N. Y.” This second contract recited that certain extra work had been performed and materials furnished by the plaintiff in accordance with modifications made of the previous contract, and arbitrators were appointed to determine the matters in dispute arising between the-parties relating to such extra work. When the contract of June .was made, the title to the real property was in the name of Thomas F. Gregg, as rector of St. Augustine’s Roman Catholic Church' of the city of New York. On the 27th,day of September, 1894, Thomas F. Gregg, individually. and as rector of’ St. Augustine’s Roman - Catholic Church .of the city of New York, con veyed the ■property to the Church of St. Augustine of the city of New York. On the 25th of October, 1894, the church corporation mortgaged the property to the Emigrant Industrial Savings Bank of the city of New York, and that mortgage was executed by the president and secretary of the mortgagor, the' corporate seal was affixed and the acknowledgment, was made by Thomas F. Gregg, rector of the Church of St. Augustine, who in the certificate of. acknowledgment swore that the seal of the corporation was* affixed by order of the board of ■ trustees;. that he signed his name thereto by like -order, as secretary of the' corporation, ,and that the president of the corporation signed the- instrument- by like order of the board of trustees. That mortgage was authorized by order of the Supreme Court upon a petition presented by the board of trustees of the Church of St. Augustine, with the ..object of raising money to pay off a prior mortgage Upon the property and for .use in'the construction of a new church .building and a new rectory upon the' real estate involved in this action. .

The plaintiff proceeded to do the work and to furnish materials under the contract with the Bev. Mr. Gregg, the rector of St. Augustine’s Church, and he also did certain extra work upon the requirement of the rector. Concerning that extra work an arbitration was had, but if is unnecessary -to enter into the details of it. The plaintiff contracted with the firm of Miller & Bobinson, defendants herein, for materials to be used in the performance of his, the plaintiff’s, contract. Those materials, consisting of brick, lime and laths, were furnished. On the 10th of April, 1895, the plaintiff filed a lien against the property described in the complaint and against the Church of St. Augustine, as owner, for the sum of $20,417.95 for “ work, labor and services done and materials furnished between the first day of. July, 1894, and the 10th day of April, 1895.” ■ On the 20th of December, 1895, Miller & Bobinson filed a notice of lien for the sum of $4,354.10 for cement, lime, brick, flue linings and lath furnished between July 30 and December 13, 1894, of the agreed value of $7,354.10, upon which they credited as having been received on account the sum of $3,000, leaving a balance due of $4,354.10. To the action to foreclose his lien the plaintiff made parties defendant the church corporation,. Miller & Bobinson and other lienors. The church answered as did also the defendants Miller & Bobinson, the latter setting up in their answer their lien and claiming their right to payment from any amount that' might be found due from the St. Augustine Church to the plaintiff. The referee found that the contract of June 30, 1894, between the Bev. Mr. Gregg and the plaintiff was not binding upon the church corporation, inasmuch as it was-not executed or authorized formally by the trustees of that corporation; that that contract was not ratified by the corporation because its trustees failed as a body to ratify it; that the corporation did not consent to the performance of work and the furnishing of materials by the plaintiff; that the notice of lien filed by the plaintiff was insufficient and ineffectual; that there was nothing due to the plaintiff for extra work or under the contract at the time the notice of lien was filed, and that the plaintiff without excuse abandoned the work; that the notice of lien filed by Miller & Bobinsbn was also defective, but that Miller & Bobinson had a claim against the plaintiff for the material furnished bv them. He dismissed the .complaint against St. Augustine’s Church, but directed a money judgment in favor of Hiller & Eobinson .against the plaintiff, with costs, and he charged all the costs and disbursements of the church corporation against Miller & Eobinson. Appeals were taken by the plaintiff and the defendants Miller & Eobinson, but that of the last-named parties is alone before us. .

Many matters were, discussed on the argument which we do not find it necessary to consider in the determination of this controversy as it is now presented. -We are' concerned only with the rights ..of Miller &' Eobinson and of the plaintiff, so far as they are connected with or related to each other, and as those of .the former depend upon those of the latter. It is as well to say, perhaps, that we are not satisfied of. the correctness of the ruling of the referee that the notice of lien filed by the. plaintiff was insufficient, but .we are satisfied that the notice, of lien filed by Miller & Eobinson was sufficient; and that is all that is required under the Mechanics’ Lien Law of (1885 (Laws of 1885, chap. 342, as amd.): That the referee was technically correct in- ruling that the churph corporatioft was not bound as an original contracting party to the agreement of June - 30, 1894,-need not be questioned and that there was no technical ratification of that, agreement may also be .conceded, but it is very plain that there was a consent on-the part of the corporation to- the plaintiff. performing work and supplying materials under, the June contract above referred to. The property upon which the improvements were, made and to which the contract related was always that of the church. The réctor, on the whole evidence, is clearly shown to have been in fact the agent of the church corporation. All' through the. record it appears that everything connected with the progress of this work from its initiation until the end was left in the hands of .Mr. Gregg as the representative of the corporation. Money raised upon the mortgage was applied to the payment of work done in part by the plaintiff in the construction of the church and the. rectory Connected therewith; that money was put into and drawn from the bank account of the church kept in the name' of “ Thomas F. Gregg,.. Hector St. Augustine’s, Hew Fork,” and the' chiu-ch corporation had no other bank account than the one kept in. that way, and the Rev. Mr. Gregg paid out the money to- the plaintiff' on áccoünt of Ms work. Upon the proof before us, we conceive it to be an impossibility that those who constituted, the board of trustees could have remained in ignorance of the fact that the plaintiff was doing work and furnishing materials under the employment and direction of the Rev. Mr. Gregg and was being paid by him from money in his hands belonging to the church. The president of the board of trustees testified that in a general sense the Rev. Mr. Gregg was the superintendent in the construction of the church building and the rectory. If there are any cases in which the assent of the owner — that owner being a corporation — is to be implied from facts and circumstances, we conceive this to be a most conspicuous one. But it'is unnecessary to dilate upon that subject, for we have reached the conclusion that the referee was right in finding that at the time the lien was filed by the plaintiff there was nothing due to the plaintiff, that he had no right to. a lien and that he abandoned the work without reason. He had begun work on the bhurch structures in July, 1894, and at the end ;of October of that year had completed it so far as might be done in the absence of iron girders or trusses which another contractor had agreed to furnish and put into the buildings. ' He had also done extra work not included in the contract. In December, 1894, a contractor who was under obligation to furnish the girders began to put them in, and the Rev. Mr. Gregg gave notice to- the plaintiff to proceed with his work. The plaintiff had already presented his bill for extra work, but the rector refused to pay it,' and the plaintiff declined to go on until that bill was paid. Thereupon the rector caused to be served a notice in accordance with the provision of the contract referred to, requiring the plaintiff to go on with his work, and that in the event of his not doing' so, other persons would be employed to finish it and the cost would be deducted from any moneys found due to the plaintiff under his contract. That course was authorized. The contract price of the work was $27,900, upon which had. already been paid the sum of $21,650. It cost the church to finish and complete the work of the plaintiff $10,270. The referee found that upon this statement of figures there was a balance to be deducted from the plaintiff’s claim for extra work of $4,020, and that he was entitled for extra work to the sum of $4,653, but that the church was entitled to credit for work omitted. to the amount of $4,974. If those findings are right, there was nothing owing to the plaintiff at the time the liens were filed. We thinlc the figures as found by .the referee are correct and supported by the evidence.

It is claimed, however, that the plaintiff was justified in refusing to complete the work in consequence of the refusal of the church corporation to pay him. for the extra work. What is said in Flaherty v. Miner (123 N. Y. 389), to the effect that where a contract required defendants to make to a plaintiff payments as the work progressed, and the defendants refused to pay as required, there was a breach of the .contract by the defendants which justified a refusal on the part ef the plaintiff to continue the work, does not apply under the facts as ‘they appear in the record before us. On the 1st of December, 1894, the plaintiff received a sum of moiiey from the church and delivered to it a writing in the following words: “ I hereby agree to ask for no more money for work on St. Augustine’s Church and Rectory, of which I am the contractor, until all plastering is completed in both buildings, if I am paid the sum of Two thousand dollars to-day.” That sum was paid, and it would appear that nothing was due the plaintiff when it was paid. .The plastering never was completed. When the plaintiff left the work the first truss had been put up. It fell, and they were re-erecting it about December 17th, 1894.” On December 14, 1894, the three days’ -notice was served. Before the expiration of that period the- first truss was in position, and much work could have been done by the plaintiff under his contract. The remarks of the referee in his opinion on this subject are satisfactory, and in our judgment dispose of it.

We are of the opinion that the referee did not err in his finding that the plaintiff and the defendants Miller & Robinson had no right to enforce a lien against the property at the time their respective notices of lien' were filed, but we are unable to'see how, upon any just, reasonable or -equitable ground all the costs and disbursements of this action should he charged upon the defendants Miller & Robinson. T-hey did not foment a litigation nor did they protract it; they were made parties to the action and they merely endeavored to enforce their rights in subordination to those of the plaintiff, if peradventure his lien were established and the church property made subject to it. The proceedings before the referee set forth in the voluminous record before us were almost all connected with the efforts of the plaintiff to establish his claim and those of the church corporation to resist it. Eleven witnesses were called and examined bn the plaintiff’s behalf, sixteen were called and examined on behalf of the St. Augustine Church corporation and but one or two on behalf of the defendants Miller & Robinson. At- the beginning of the trial the referee directed what course of procedure should be pursued, namely, that “ the plaintiff shall prove his case, and after the taking of the testimony it appearing that the defendants other than the Church of St. Augustine are sub-lienors, if the referee shall deny a motion if made to dismiss the complaint or to dismiss the lien of the plaintiff, he will then direct that the other defendants claiming liens on the property shall prove their cause of action ; and will cause a notification to be given to the attorneys of such sub-lienoi’s in due time for them to prove the same before him. Until that time, the' attorneys for said lienors are excused from attendance on the reference if they so desire, and their defaults will not be noted.” The greater part of the record of the proceedings before the referee consists of testimony of the plaintiff’s witnesses and some exhibits which are interspersed through it.. In courts of record it was within the discretion of the court in mechanics’ lien eases under the act of 1885 to award costs to the prevailing party. (Laws of 1885, chap. 342, § 14.) We think it was an erroneous exercise of judicial discretion to charge the immense bill of costs taxed in this case, against defendants who were merely standing upon their legal rights dependent upon the fate of a claim which the plaintiff sought to establish against the. owner of the property. The costs should have been charged only against' the plaintiff.

The judgment should be modifed by striking out the provision respecting the recovery of costs against Miller & Robinson, and as modified affirmed, with costs of this appeal to Miller & Robinson.

O’Brien, P. J., Ingraham, Laughlin and Clarke, JJ., concurred.

Judgment modified as directed in opinion, and as modified affirmed, with costs of appeal to Miller & Robinson. Settle order on notice.  