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1919.]

Points of counsel.

[225 N. Y.]

5. Where worthless checks for work on the improvements were given by the lessee to laborers who, not knowing the checks were worthless, indorsed and delivered them in payment of bills to others who still hold them, such laborers cannot urge their right to file and sustain a lien for their labor accounts so far as they were canceled by the checks so used by them. Such checks still outstanding in the hands of bona fide holders represent an indebtedness against the lessee and the holders of the checks have a valid claim against the exposition association.

6. The trustee in bankruptcy of the lessee holds his title subject to the liens filed by materialmen and laborers which were filed within the time prescribed by statute.

Gates & Co. v. Nat. Fair & Exposition Assn., 172 App. Div. 581, modified.

(Argued November 26, 1918; decided January 7, 1919.)

APPEAL from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered May 19, 1916, affirming a judgment in favor of plaintiff and defendants, respondents, entered upon a decision of the court on trial at Special Term.

The nature of the action and the facts, so far as material, are stated in the opinion.

Joshua M. Fiero, Joshua M. Fiero, Jr., and John H. Rogan for appellant. There was no owner's request or consent to the improvements, which is the basis of the liens, and, in fact, there was a written dissent by the owner to the improvements or alterations, unless security was furnished by the lessee. (Hartley v: Murtha, 36 App. Div. 196; Mitchell v. Dunmore Realty Co., 126 App. Div. 829; Powers v. Schlicht Power Co., 23 App. Div. 380; Orvis v. Warner & Co., 75 App. Div. 463; Mathews v. Hardt, 79 App. Div. 570; Miners & Merchants Bank v. Ardsley Hall Co., 113 App. Div. 194; Brigger v. M. R. F. Assn., 79 App. Div. 149; Karsch v. Pottier & Stymus Mfg. Co., 82 App. Div. 230; Marine Bank v. Nelson, 31 N. Y. 33; Wilson v. Met. El. Ry. Co., 120 N. Y. 145;

[225 N. Y.]

Points of counsel.

[Jan.,

Fifth Nat. Bank v. Navassa Phosphate Co., 119 N. Y. 256; Merchants Banking Assn. v. N. Y. & S. White Lead Co., 35 N. Y. 505.) The W. J. Sullivan and Lawrence Bros. liens were not valid in any event as against the real property of the defendant, appellant, Empire City Racing Association. (McNulty Bros. v. Opperman, 164 App. Div. 949; 221 N. Y. 98.) Mechanics' liens filed by laborers who cashed their pay checks with third parties and retained the moneys are invalid. (Knapp v. Brown, 45 N. Y. 207; Muldoon v. Pitt, 54 N. Y. 269; Rollins v. Cross, 45 N. Y. 766; Deaz v. Chrystie, 2 Abb. Pr. 109; Ogden v. Alexander, 63 Hun, 56; 140 N. Y. 356; Gibson v. Lenane, 94 N. Y. 183; Stevens v. Ogden, 130 N. Y. 182.) The lien notices of the plaintiff and defendants, respondents, lienors were defective and insufficient. (Grippen v. Weed, 22 App. Div. 593; 165 N. Y. 612; Finn v. Smith, 186 N. Y. 466; Fanning v. Belle Terre, 152 App. Div. 718; Mahley v. German Bank, 174 N. Y. 499; Strauchen v. Pace, 195 N. Y. 167; Bossert v. Fox, 89 App. Div. 7.)

George H. Taylor, Jr., and Everett L. Barnard for plaintiff, respondent, and Wright Ogden Company, defendant, respondent. The findings of consent on the part of the owner as far as the parties joining in this brief are concerned being supported by evidence the judgment of the Special Term charging the owner's interest in the property with the liens of said parties and the Appellate Division's determination of affirmance were both proper as to the plaintiff and defendant Wright-Ogden Company; as a matter of law the fee interest of the appellant was chargeable with their liens. (Wahle Phillips Co. v. Fifty-ninth Street, etc., Co., 153 App. Div. 17; McNulty Bros. v. Offermann, 152 App. Div. 181; N. Y. El. S. & R. Co. v. Bremer, 74 App. Div. 400; Hilton & Dodge Lumber Co. v. Murray, 47 App. Div. 289; Nat. Wall Paper Co. v. Sire, 163 N. Y. 122; Rice v. Culver, 172 N. Y. 60; Cowen v.

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1319.]

Points of counsel.

[225 N. Y.]

Paddock, 137 N. Y. 188; Butler v. Flynn, 51 App. Div. 225; Mosher v. Lewis, 14 App. Div. 565; Steeves v. Sinclair, 56 App. Div. 448; 171 N. Y. 676; Barnard v. Adjoran, 166 App. Div. 535; 191 N. Y. 556; Tinsley v. Smith, 115 App. Div. 708; 194 N. Y. 581; Jones v. Menke, 168 N. Y. 61, 64; Miller v. Mead, 127 N. Y. 544, 549; Gates v. Natural Fair, etc., 172 App. Div. 581.) The notices of lien filed by the parties on whose behalf this brief is submitted are sufficient in form to charge the real estate in question including the fee interest of the appellant therein; the tenant did not appeal to this court. (Clarke v. Heylman, 80 App. Div. 572; Kerrigan v. Fielding, 47 App. Div. 246; Hubbell v. Schreyer, 14 Abb. [N. S.] 284; Beals v. Congregation, 7 E. D. Smith, 564; Anderson v. Dillaye, 47 N. Y. 678; Luscher v. Morris, 18 Abb. [N. C.] 67; Lien Law, art. 2, § 9, subd. 7; Waters v. Goldberg, 124 App. Div. 511; Grippin v. Weed, 22 App. Div. 593; 165 N. Y. 612; Strauchen v. Pace, 195 N. Y. 167; Kerrigan v. Fielding, 47 App. Div. 246; Hall v. Thomas, 111 N. Y. Supp. 979.) The letters of the appellant to the fair association accorded the consent of the owner unconditionally; the consent was absolute and the acceptance of the individual bond was likewise absolute; the letter constituted merely a contract between the owner and the tenant, in pursuance of which the tenant was required to give a supplemental bond. (Comey v. United Surety Co., 217 N. Y. 268; Geneva M. S. Co. v. Coursey, 45 App. Div. 248; Maloney v. Iroquois Brewing Co., 63 App. Div. 454.)

Nathan S. Zucker for Percy Bloom, respondent. The defendant, appellant, Empire City Racing Association, consented to the making of the alterations and improvements which are the basis of the liens filed. (Miller v. Mead, 127 N. Y. 544; Wahle Phillips Co., v. West 59th St. Co., 153 App. Div. 17; McNulty Bros. v. Offerman, 141 App. Div. 730; Barnard v. Adorjan, 116 App. Div.

[225 N. Y.]

Points of counsel.

[Jan.,

535; 191 N. Y. 566; Tinsley v. Smith, 115 App. Div. 708.) The mechanic's lien filed by defendant Percy Bloom is in full compliance with the statute. (Burkitt v. Harper, 79 N. Y. 278.)

William J. Wallin for Samuel Woodfaulk et al., respondents. The alterations and improvements upon which the labor lienors worked were made with the consent of the owner, Empire City Racing Association, one of the appellants herein. (Rice v. Culver, 172 N. Y. 60.) The worthless checks given to the labor lienors did not operate as payment, nor prevent the workmen from filing liens. The lienors having become re-possessed of the checks indorsed by them to third parties, and having offered to surrender the checks on payment of their liens, were properly awarded judgment on their liens. (Teaz v. Chrystie, 2 Abb. Pr. 109; Linneman v. Bieben, 85 Hun, 477.) The notices of lien of the labor lienors were sufficient and valid. (Chambers v. Vassar's Sons & Co., Inc., 81 Misc. Rep. 562; McDonald v. Mayor, etc., 170 N. Y. 409; Strauchen v. Pace, 195 N. Y. 167; De Klyn v. Gould, 165 N. Y. 282.)

Milo J. White for Yonkers Lumber Company, respondent. The evidence establishing the consent of the owner to the improvements made upon the property is sufficient. (Steeves v. Sinclair, 56 App. Div. 448; Schmalz v. Mead, 125 N. Y. 188; Miller v. Mead, 127 N. Y. 544.) The Yonkers Lumber Company contends that the name of the owner, as attempted to be stated in its lien, to wit, "James Butler," was sufficient, under the statute, to bind the interests of the lessor in the real property affected by the lien. (Abelman v. Mayer, 122 App. Div. 470; Waters v. Goldberg, 124 App. Div. 511.)

Stephen Holden and James H. Cavanaugh for Jacob Norden et al., respondents. There was consent of the

1919.]

Opinion, per CHASE, J.

[225 N. Y.]

owner within the meaning of section 3 of article 2 of the Lien Law. (Ray on Mech. Liens, 279; Nat. W. P. Co. v. Sire, 163 N. Y. 122; Jones v. Menke, 168 N. Y. 61; Montant v. Moore, 135 App. Div. 334; Toplitz v. Bauer, 161 N. Y. 325; Dunn v. Steubing, 120 N. Y. 232; Clark v. West, 193 N. Y. 349.) The notices of liens filed by these defendants fully comply with the statute. (De Klyn v. Gould, 165 N. Y. 282; Strauchen v. Pace, 195 N. Y. 167.)

William J. Foster and Francis M. Applegate for Colwell Lead Company, respondent. The plaintiff amply proved consent on the part of the Empire City Racing Association to the improvements on the Empire City track, which proof is available in respect to the plumbing materials furnished by this defendant, respondent. (H. & D. Lumber Co. v. Murray, 47 App. Div. 289; Nat. W. P. Co. v. Sire, 163 N. Y. 131; Tinsley v. Smith, 115 App. Div. 708; Burkitt v. Harper, 79 N. Y. 273; Otis v. Dodd, 90 N. Y. 336; Miller v. Mead, 127 N. Y. 544; Jones v. Menke, 168 N. Y. 61; Wahle Phillips Co. v. 59th St.-Madison Ave. Co., 153 App. Div. 17; Wahle Phillips Co. v. Fitzgerald, 83 Misc. Rep. 636; Barnard v. Adorjan, 116 App. Div. 535; Steeves v. Sinclair, 56 App. Div. 448; 171 N. Y. 676.) The naming of the Empire City Trotting Club, the original name of the Empire Racing Association, sufficiently complied with section 9 of the Lien Law in naming the owner of the premises. (Fish v. Anstey Const. Co., 71 Misc. Rep. 2; Strauchen v. Pace, 195 N. Y. 167; Hyatt v. McMahon, 25 Barb. 457.) The contents of the lien notice of this defendant-respondent's mechanic's lien complied with the statute. (Burkett v. Harper, 79 N. Y. 273.)

CHASE, J. This action is brought to foreclose a mechanic's lien for materials furnished pursuant to a contract with a lessee of real property and used in

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