
    The Concord Construction Company, Plaintiff, v. Guthrie B. Plante et al., Defendants.
    (Supreme Court, New York Special Term,
    April, 1909.)
    Mechanics’ liens — Foreclosure — Extent and nature of right in general — Setting aside fraudulent conveyance—Assignment of moneys due on contract.
    Where, in an action to foreclose a mechanic’s lien upon a public school in the city of New York, it appears that, prior to the completion of the work and upon the day before the filing of plaintiff’s lien, the contractor made four assignments covering the moneys to be paid by the city upon the contract and thereafter other liens were filed and, about four months subsequently, the contractor was adjudicated a bankrupt and a trustee appointed, the court has jurisdiction to determine the validity of the assignments, as they interfered with the enforcement of plaintiff’s lien.
    The lienors, at the time of furnishing materials that were used in the construction of the school, had a right to rely upon a provision of the contract which prohibited the assignment of any funds due thereunder and to assume that, as no such assignments could be lawfully made, they .would be protected.
    
      Action to foreclose a mechanic’s lien.
    Bassett, Thompson & Gilpatric, for plaintiff.
    H. & J. J. Lesser, for defendants.
   Newburger, J.

This is an action to foreclose a mechanic’s lien. It is conceded that there is now due and owing from the city of New York on the contract made between H. M. Weed & Co. and the city for the erection of public school No. 51 the sum of $25,140. Before the work had been fully performed and the contract completed Weed & Co. executed a number of assignments covering the moneys to be paid by the city upon said contract. Of the four assignments thus made one was to the wife of Hamilton Weed, another to a brother-in-law, the third to the mother-in-law and the fourth to one Bolton. These assignments are dated the 2d of October, 1907. On the third of October the plaintiff filed his lien, and thereafter the defendant lienors filed liens, while the defendant Hamershlag filed instruments claiming the amount of $15,000. On the 12th of October, 1907, a petition in involuntary bankruptcy was filed against H. M. Weed & Co. Thereafter they were adjudicated bankrupts, and on the 7th of February, 1908, the defendant Plante was duly appointed and qualified as trustee of the assets and effects of said bankrupts. The plaintiff and defendant lienors ask in their pleadings that the question as to the validity of the assignments and of the claim of the defendant Hamershlag be determined in this action. It has been repeatedly held that a court of equity having jurisdiction of the parties and of the action can determine the. validity of claims that in anywise interfere with the enforcement of a lien under the Mechanic’s Lien Law. See Gross v. Daly, 5 Daly, 540; Mahoney v. McWalters, 3 App. Div. 256; New York L. & W. W. Co. v. Seventy-third St. Bldg. Co., 5 id. 87. The court thus having jurisdiction, the question to be determined is as to the validity of the four assignments, and I find that the assignments to Jane M. Janes, Martha B. Weed, Janes & Leo and William H. Bolton were not only fraudulent and made for the purpose of giving a preference to these parties, but were made for the purpose of defeating the liens filed. It furthermore appears that under the contract between the city and the contractor the contractor was prohibited from assigning any funds due under the contract. The lienors had a perfect right at the time of furnishing materials that were used upon the building to rely on that provision of the contract, and to assume that as no assignments could be made they would he protected. As to the claim of Hamershlag, a reading of the papers offered by him in evidence and marked Exhibits A and B, under which he claims, shows conclusively that it was understood that they should not operate as an assignment of any of the funds. At most it was a mere promise on the part of Weed & Co. to pay out of the moneys which became due the amount of the claim, and as against the lienors it is not binding. As to the priority of the liens, that will he determined by me upon the settlement of the findings and decree. I, therefore, find that the four assignments heretofore referred to are void as against the plaintiff and the defendant lienors, and that the defendant Hamershlag is not entitled to any portion of the fund, but that the same should be distributed among the lienors.

Judgment accordingly.  