
    Theodore H. Dinkel and Others, a Copartnership Doing Business under the Firm Name and Style of Dinkel & Jewell Co., Respondents, v. Roman Catholic Church of St. Teresa of North Tarrytown, N. Y., Appellant, Impleaded with Eugene O’Toole and Robert G. Perry, as Trustee of the Estate of Eugene O’Toole, a Bankrupt, and Christian P. Johnson and Others, Respondents.
    Second Department,
    May 1, 1912.
    Mechanic’s lien — foreclosure — advance payments — variance between pleadings and findings — exception of findings.
    In a suit for the foreclosure and sale of property to satisfy several mechanic’s liens thereon, it appeared from the findings of-the. court at Special Term that the liens of the plaintiffs D. and C. exceeded the amount due the contractor. The amount due was enlarged to a sum sufficient to pay said claimants by findings (1) that the owner had, from moneys reserved as security for the performance of the contract, made advance payments to the contractor in fraud of the claims of Dinkel and Curtiss; (2) that it promised to retain sufficient money to pay the claim of Curtiss,' and had assured both claimants that there'was sufficient money in reserve to pay. them, and that relying thereon the claimants furnished the material and forebore to file liens.” Exceptions were duly taken to these findings, as there were no allegations of fraud or breach of promise to pay in' the pleadings. Claimants attempted to justify this variance upon the ground that the issue was presented by failure to object to the evidence.
    
      Held, that the exception to the findings was sufficient, and a new trial should be granted.
    When the whole issue as indicated by the complaint in a suit in- equity is changed so that a person, not charged with contractual obligation, is subjected to a finding of fraud of which no suggestion is made until the finding appears, the limit of permitted departure from the issue has been, far passed.
    Appeal by the defendant, the Roman Catholic Church of St. Teresa of ¡North Tarrytown, NT. Y., from a, judgment of the Supreme Court in favor of the plaintiffs and certain of the defendants, entered in the office of the clerk of the- county of Westchester on the 18th day of April, 1911, upon the decision of the court rendered after á trial at the Westchester Special Term.
    
      James Kearney, for the appellant.
    
      Hugh A. Thornton, for the plaintiffs, respondents.
    
      
      Henry C. Griffin, for the respondent C. H. Curtiss & Co.
    
      Nathan P. Bushnell [Arthur Knox with him on the brief], for the respondent Emil Bartolicius.
   Thomas, J.:

The plaintiff Dinkel and another, C. H. Curtiss & Co., and Bartolicins have recovered a judgment for the sale of the appellant’s church to meet their several mechanic’s liens thereon, as herein found, on account of the indebtedness to them of one O’Toole, the contractor to build such church. Allegations of material bought by the contractor and used in the building, filing of notice of lien, and that at time of such filing money due the contractor was unpaid — such is the pleading in each instance, save that the Curtiss Company, after pleading sale and delivery of the material to the contractor, further states that the same was “ duly furnished by these defendants with the knowledge and consent of the owner, * * * and with the knowledge and consent and at the request of the agents and contractors of said defendant, the Roman Catholic Church of St. Teresa * * * to wit, said defendant, Eugene

O’Toole,” and save also that Bartolicins also pleads extra work and material in the sum of $589, alleged and properly found to have been bought directly of him by the church corporation. The pleading and finding as to this item are supported by the evidence and need no further consideration. ' We may, then, consider the finding as to the two Dinkel and Curtiss claims and the evidence that relates to them. There is found due for Dinkel $1,130.51 and for Curtiss $351.42, and sale of the property to pay the same is directed. Hence, according to the pleadings it should be found that there is unpaid and payable on the main contract $1,481.93, and so indeed there is finding as to each claimant that at the time of the lien' there was due to the contractor from the church á sum in excess of the claim. But there is a specific finding that denies such finding, for it is found, as it must be, that the contract price for the building was $63,500, and extra work to the amount of $850 (which aggregates $64,350), that the contractor “neglected and refused to complete said building in accordance with said agreement, and abandoned the same in an incomplete and unfinished state,” and that the church “necessarily incurred and paid, laid out and expended in the completion of the work of constructing ■ said Church building the , sum of ” $453.50, which was a “fair and reasonable value,” and “that there was and is due and unpaid to the defendant O’Toole from the defendant Church at the time of the filing of plaintiffs’ said lien, or has since grown' due, the sum of” $662.20, which sum is what, if anything, was owing the contractor. That was applicable to Dinkel’s claim of $1,130.51. How, then, was it enlarged to a sum sufficient to pay the balance of that claim and also the Curtiss claim of $358.16 ? It was done by findings (1) that the owner had, from moneys reserved as security for the performance of the contract, made advance payments to the contractor in fraud of the claims of Dinkel and Curtiss; (2) that it promised to retain sufficient money to pay the claim of Curtiss, and had assured both claimants that there was sufficient money in reserve to pay them, and that relying thereon the claimants furnished the' material and forebore to file liens. Hence the action is converted from one based simply on a contractor’s indebtedness and lien therefor for unpaid moneys into an action for moneys that should have been in the hands of the church except for its fraud and breach of promise to pay. Not a trace of the grave accusation is found in the pleadings, and there are due exceptions to the findings. As there is no personal judgment against, the church for the Dinkel and Curtiss claims, it is concluded it was not intended to find that it legally bound itself to pay the same. The finding then is that, although there was not at the time the notice of hen was filed money in the hands of the owner to pay the same except to the amount of $662.20, yet there should have been, inasmuch as the advance payments to the contractor of the twenty per cent reserve fund were made by the owner in bad faith, and for the purpose of defeating the claim and liens of Dinkel and Curtiss, for which section 7 of the Lien Law (Consol. Laws, chap. 33, Laws of 1909, chap. 38) is invoked: “Any payment by the owner to a contractor upon a contract for the improvement' of real property, made prior to the time when, by the terms of the contract, such payment becomes due, for the purpose of avoiding the provisions of this article, shall be of no effect as against the lien of a sub-contractor, laborer or material man under such contract, created before such payment actually becomes due.” So, while the complaint does not even charge an owner with personal liability, but merely with having moneys due, but unpaid to its contractor, the decision finds the owner guilty of fraud in paying out the money. The learned counsel for the respondents would justify this variance upon the ground that the issue was presented by failure to object to the evidence. It may be that the evidence on which the finding is based was not subject to objection, as it somewhat tends to prove the allegation of money in hand, but, even otherwise, much irrelevant matter often comes into a record, and in equity cases the frequent objection to items of immaterial evidence is often deprecated by trial justices, as it will be disregarded upon decision. But when the whole issue as indicated by the complaint is changed so that a person, not charged with contractual obligation, is subjected to a finding of fraud of which no suggestion is made until the finding appears, the limit of permitted departure from the issue has been far passed, and the exception to the finding is sufficient. (Romeyn v. Sickles, 108 N. Y. 650.) But as there should be a new trial, the present evidence of the fraud may be considered. The owner was represented by Father McKenna, the rector, and Kerby, the architect and proven financial agent. The finding is that Kerby fraudulently represented that there was money in reserve to pay, and that their claims would be paid therefrom, that relying thereon they severally furnished material and refrained from filing liens. The evidence to sustain this finding may be considered. Dinkel testified to a conversation with the rector, who in some degree confirms him, but no finding is based thereon. But Kerby told Dinkel, as the latter states, that there was about $3,000 left, and asked him not to file the hen, and Dinkel continues: “And immediately upon leaving his office I went to the Grand Union Hotel and telephoned our (sic) to go to your, office and put on a lien. * * * That was a day or two before the lien was filed. At that time all the work had been done.” Here is evidence that Dinkel did not rely on what Kerby said, while the finding is that he did. Certainly such finding is unsustained. The finding as to Curtiss depends upon the evidence of O’Toole.that Kerby had said to him that Curtiss had spoken to him “ And wanted the payments made out of the money paid to you,” to which O’Toole assented. This evidence was given in reply to leading questions, and O’Toole had slight recollection of it. And again, the witness says that Mr. Kerby said he had gone security for the bill and intended to pay it. Kerby testified: “1 remember,seeing Mr. Curtiss and I told him what I told Mr. Dinkel, if he would get an order from O’Toole, so far as the money would go I would pay him. Q. Did you tell him there was enough money for him ? A. There was at that time. Q. This was August 18 ? A. Yes, this other one had not been paid at that time, neither the Foundry people nor Wilson & Adams. I did not tell him over the telephone I would reserve enough money to pay him.” In behalf of Curtiss there is also offered a letter' to Kerby, dated August 18, 1908, wherein Kerby is stated to have said that he would, upon being advised of the amount, reserve enough to pay the claim, but that is not competent evidence. It is considered that the testimony of O’Toole does not overcome that of Kerby sufficiently to sustain the finding upon which the fraudulent advance payments to the contractor is based. There is a contention also that the evidence shows that the' agreement amounted to an equitable assignment of the amount of the Curtiss bill: That is not a matter pleaded or found.

The judgment as to the defendant Bartolicius should be affirmed, with costs, and as to the plaintiff Dinkel and the defendants Curtiss and Cramer reversed, and a new trial granted, costs to abide the final award of costs.

Hirsohberg,. Burr, Carr and Rich,-JJ., concurred.

Judgment as to the defendant Bartolicius affirmed, with costs; judgment as to plaintiff Dinkel and defendants Curtiss and Cramer reversed, and new trial granted, costs to abide the final award of costs.  