
    John L. Hamilton et al., Respondents, v. James J. Coogan et al., Appellants.
    (New York Common Pleas—General Term,
    April, 1894.)
    A provision in a contract for the erection of a large and costly building requiring the co-operation of a number of different trades, that the contractor shall receive therefor “the cost of labor and materials” and a percentage thereon, refers to the actual charge of the subcontractors for doing such work and furnishing such material.
    As between the contractor and the owner of the property a mechanic’s lien is effected when the proper notice is tiled, and it is not affected by the failure to serve notice of claim upon the owner.
    Appeal from a judgment of this court in an action to foreclose a mechanic’s lien upon the premises 225-227 Sixth avenue, finding due to the plaintiffs a balance of $65,122.83 upon their contract with the defendants to erect and finish a building upon the said premises.
    
      Abner G. Thomas, for respondents.
    
      A. & L. Levy, for appellants.
   Daly, Ch. J.

The plaintiffs agreed to erect a building for the defendants and to receive “ for such work, as compensation, the cost of labor and material used therein and ten per cent added thereto as profit.” The plaintiffs did the carpenter work at a cost for labor and materials of $18,193.30, but the other portions of the work they sublet to various contractors, whose bills amount to $93,294.57, and plaintiffs’ whole demand was the total of these two sums, being $111,487.87, with ten per cent added thereto, $11,148.78.

The defendants resist this claim upon the ground that the bills of the subcontractors include the profits of the latter, in addition to the cost of the labor and materials furnished by them respectively, and they instance the subcontract of Wills for the mason and stone work, in which the plaintiffs agreed to pay Wills the cost of labor and materials with ten per cent added for profit, the very contract which plaintiffs made with these defendants. Wills’ charge for labor and materials is $42,250.62, and his ten per cent is $4,225.06, mailing his total bill $46,475.68, upon which plaintiffs claim ten per cent, or $4,647.56, thus charging defendants with ten per cent on the labor and materials of the mason work twice over.

The other subcontracts do not present the point of contention as sharply as the Wills contract, but it is indisputable that each contractor has charged, not only what he paid for labor and materials, but .his customary profit in addition thereto, and the question for our determination is, whether the plaintiffs shall be allowed the amount of these subcontracts as the cost of labor and material.”

The plaintiffs contend that defendants themselves have construed their agreement in conformity with the plaintiffs’' view by recognizing the employment of subcontractors, having recommended one party to plaintiffs, with a request to give him an opportunity to figure upon the plumbing work, and having expressed a wish that Wills should do the mason work. Defendants claim that this was not inconsistent with their contract and in no wise bound them to pay more than the stipulated price, viz., the cost of labor and material.

What is a reasonable construction of the contract must be gathered from the circumstances of the case, the work to be done and the usages of business as known to both parties. This was a contract for the taking down of an old structure, excavating for a new one and erecting a large and costly building, which required the co-operation of a number of different trades, and the whole work was to be completed within a comparatively short period. The custom of apportioning building work among persons engaged in the several trades was known to and recognized by defendants, and is so generally understood that unless the contrary appears we must consider that the parties entered into this contract with the understanding that that course was to be pursued. It is not pretended that defendants understood that the plaintiffs were masters of all mechanical crafts, or were to attempt to erect the building without the assistance of experts in the several trades ; that they were to purchase material at first cost, hire the laborers and produce a completed structure, the mechanical execution of which in every department should be as perfect as if each department had been under the charge of competent contractors.

It is more reasonable to conclude that what the parties intended by the cost of labor and material was the actual charge of the several contracting mechanics for the portion of the work done by each, and his profit upon what he paid his workmen and the price of the material they used, as it repsesented the necessary expenses of supervision and skill in directing and performing the work in a workmanlike manner, and the maintenance of facilities for the proper performance of his contract. Thus, Wills’ ten per cent represented his own supervision over the mason work, the proportional expenses of his shop, employees, etc., and was as much a part of the actual cost of labor and materials as the wages of his foreman, and was necessary in order that the mason work should be executed by a competent expert in that trade.

Were the plaintiffs to go into the market and purchase material, they would still be paying a profit to the dealers, and yet it cannot be pretended that, in order to save this expense to the defendants, they were bound to manufacture such material themselves; and if they hired laborers and set over them competent superintendents, it would not be contended that they had to pay the compensation of the latter out of their own percentage. The common understanding of the cost of labor and material in the erection of such a structure as was contemplated in the contract of the defendants is the customary charge of contractors for doing such work and furnishing such material. The ten per cent to be paid to the plaintiffs was simply a means of confining the whole expense of erecting the building to a certain percentage upon the actual cost of each of the several portions of the work, and to fix a limit upon the plaintiffs’ compensation, and not to provide a novel and extraordinary method of erecting a large building.

In this view of the contract the case was properly tried, and the evidence developed that the several portions of the work were done at a fair and reasonable price, and that the plaintiffs were entitled to recover as claimed. Ho error is pointed out by the exceptions which requires a new trial.

The court correctly ruled that as Between the contractor and the owner of the property the lien was effected when the proper notice was filed, and is not affected by the failure to serve notice of claim upon the owner. Kenney v. Apgar, 93 N. Y. 539; Kelly v. Bloomingdale, 139 id. 343. The case of the Cream City Furniture Co. v. Squier, 2 Misc. Rep. 438, does not hold the contrary. The decision in that case concerned only the insufficient verification of the notice.

The judgment should be affirmed, with costs.

Bookstaver and Pryor, JJ., concur.

Judgment affirmed, with costs.  