McNulty Bros. v. Offerman (141 A.D. 730, 1910)

Burr, J.:

"Plaintiff and the defendant-appellants seek to enforce against the real property owned by the defendant-respondents mechanics’ liens, tiled by them respectively, upon the ground -that they have performed labor or furnished materials for the improvement thereof, with the consent of said owners. At the threshold of the case, we are confronted with the question as to the nature of the' judgment which has been entered. After plaintiff had introduced its evidence and rested, and the defendant lienors who claimed affirmative, relief against tlieir codefendants, the owners, and may be deemed quasi plaintiffs, had also introduced evidence in support of their respective claims, defendant owners moved to dismiss the complaint. and the claims, of the lienors other than the plaintiff, up,oh the ground that they had respectively failed to prove a cause of action against them. That motion was granted. Subsequently a decision, containing findings of fact and conclusions of law, separately stated, was made by the trial court, and judgment was entered thereon “on the merits.” Thereaftér a motion was made by plaintiff and defendant appellants to strike from the decision those findings relating to questions of fact, and to strike from the judgment the words “ on the merits,” and insert in lieu thereof “ for failure of proof.” That motion was denied. From said judgment and order1 this appeal is taken.

The question is one of substance. ' -If the decision is to ' be deemed one of nonsuit, then the defeated parties are entitled to have it reviewed in the light of the facts and inferences most favorable to them. (Veazey v. Allen, 173 N. Y. 359.) If,, however, the case was submitted for determination upon disputed evidence, or evidence from which different inferences or conclusions may be drawn, then, if there is any evidence to sustain the findings of fact, they will not be disturbed unless they are against the clear weight thereof. (Lowery v. Erskine, 113 N. Y. 52; Collins v. McGuire, 76 App. Div. 443.) That the statute now contemplates a decision in an equity action analogous to a nonsuit at law seems clear. “ The decision of the court, * * *' upon the trial of the issues of fact or law, where a nonsuit is granted, must direct the finalor interlocutory judgment to be entered thereupon, and in any such case it shall not be necessary for the court * * * to make any finding of fact.” (Code Civ. Proc. § 1021.) Not only is it unnecessary, but the court under such circumstances ha.s no right to make findings upon disputed or inconclusive evidence. (Raabe v. Squier, 148 N. Y. 81; Place v. Hayward, 117 id. 487. See, also, Cowen v. Paddock, 137 id. 188.) We do not mean to say that in every action in equity when a motion to dismiss at the close of plaintiff’s case is made, the decision must be treated as one of nonsuit only. Defendant has a right to permit the case to be decided by the trial court upon the facts as they appear from the evidence which is already in the case. His conduct may be equivalent to a statement by him that he rests without giving any evidence. In such case the court is authorized to determine all the issues and to decide all questions of fact and law as fully as it would have been had defendant’s counsel expressed the legal effect of his action in words. (Deeley v. Heintz, 169 N. Y. 129; Keyes v. Smith, 183 id. 376; Neuberger v. Keim, 134 id. 35; Lindenthal v. Germania Life Ins. Co., 174 id. 76, 81; Griffen v. Mechanics & Traders' Bank, 61 App. Div. 434.) That it was not the intention of the parties or of the court at the time the motion was made and granted to regard the case as finally submitted for decision upon the merits, is apparent. When the motion to dismiss was made the court said : “ I think you had better try out the law at the Appellate Division. I am going to grant the motion.” Some discussion as to the propriety of findings followed, and the court said : “ I will refuse to find except sufficiently to state the one question, that the facts proven do not constitute a cause of action, and will find that there was no consent on - the part of the owners within the meaning of the law. Every fact and every inference from every fact must be deemed to be in the lienor’s favor by the court. This is beyond discussion. I will simply find that there were no facts proven on which to base a conclusion of consent.” And again: “ I will do anything to present an unembarrassed question of law to the Appellate Division. Anything that the defendant-lienors and the plaintiff think is essential to raise that single question as to whether these owners gave consent, I will sign.” An examination of the evidence leads us to believe that different inferences might be drawn therefrom as to the consent of the defendant owners and the extent thereof, and the discussion in respondent’s brief in respect thereto confirms this view. It may well be urged that if the appellants had supposed that a decision was to be made, including findings of fact based on such evidence, they would have sought by argument to • change the view of the trial court with respect to the effect thereof. We think, therefore, within the authorities above cited, findings óf fact should-not have been included in the decision nor judgment granted on the merits, and the motion to strike out such findings and to amend the judgment'should have been granted. We shall consider the case, therefore, as one where a nonsuit had been granted.

From the evidence it was possible for the court to find the following facts: ■ Prior to April 26, 1907, negotiations were had between defendants Carsten Henry Offerman, John Offerman,' Theodore Offerman, Lena Mazda Rasch and Anna 0. Schmidt on the one part,- either personally or through their duly authorized agent, and defendant Ralph Leininger on the other part, relative to the leasing of certain premises owned by the- former, known as Nos. 503 to 513 Fulton street, Nos. 234 to 248 Duffield street, and No. 237 Duffield street and No. 409 Bridge street in the borough of Brooklyn, to be used as a department store. The buildings known as 503 to 513 Fulton street and 234 to 248 Duffield street were in such condition that extensive improvements and alterations were necessary to make thezn well adapted for such- use. The expense of the proposed irhprovéznents was a matter of discussion between said parties, as was also the estimated cost thereof, which was deemed to be about $60,000. The owners of the property were asked to contribute in the first instance one-half and then one-third of the estimated cost of such impz-ovements. . It was finally agreed that they should contribute the sum of $15,000 toward the same upon certain conditions. ' This sum was fixed upon, not because of any contemplated change in the extent ór cost of -such improvements, hut by reason of possible expenditures on the part of the defendant owners in connection with the Bridge street property, which was to be included in the, said lease. " On the 27th of April, 1907, a lease of the premises was executed by these defendants to the said Leininger. It was at first proposed to take the lease irz the name of the. Kingston Realty Company, but a question having arisen as to the corporate power of said company to take a lease of a department store, the lease was made to defendant Leininger, and the Kingston Realty Company guaranteed the performance by him of the covenants therein. This lease was for a period of ten years from May 1, 1907, at a yearly rental of $53,500 for the first two years. The amount of rent was gradually increased, until for the last four years of said term an annual rental of $74,000 was to be paid. The lease contained, among others, these provisions : “ It being understood that no rent shall accrue or be payable for the months of May, June and July, 1907, a part of the period estimated for the making of repairs and improvements as hereinafter set forth, and equipping the premises for a department store. * * * And the party of the second part [Leininger] further covenants and agrees that said premises shall during the said term be occupied and used for the carrying on of the business of a first class department store, so called; * * *. The party of the second part hereby agrees * * * in all respects to comply with any and all requirements of the Hew York Board of Fire Underwriters and the Hew York .Fire Insurance Exchange' with reference to insurance of the buildings upon said premises and all the appurtenances thereto; to comply with and conform to all rules, orders and regulations of the State and City (government, and of any and all their departments and bureaus, including the Board of Health, Department of Buildings, and .all other departments, boards and authorities in said City applicable to said premises or any part thereof, for the correction, prevention and abatement of nuisances or other grievances in, upon or connected with said premises or any part thereof during said term; all at the expense of the party of the second part; And the party of the second part further covenants and agrees that for the sum of Fifteen Thousand Dollars ($15,000) to be paid to him by the parties of the first part [the Offermans] subject, however, to the conditions as hereinafter provided, he will during the first six months "of the term make the following improvements and repairs in and to the building known as Hos. 503 to 513 Fulton Street and Hos. 234 to 248 Duffield Street, same to be done in a good and workmanlike manner in all respects, under the supervision of a competent architect, to be approved by the parties- of thé first part, viz., new maple wood flooring on the first floor and basement; appropriate balcony, extending around the walls ’on the first floor, and divided into suitable rooms; a connection with the subway station from the basement, if permit- for the same can be obtained; bringing the second and third floors out even with the Fulton Street front of the building; a hew cloak, and suit room with retiring room for ladies on the second floor; all show windows changed and improved ; lcalsomining or painting all walls and ceilingspainting all woodwork inside and outside, including all pillars; cleaning entire fronts of building; repairing roof and placing elevators and all plumbing in good condition throughout; it being understood and agreed that said Fifteen Thousand Dollars ($15,000)" shall be paid as follows, and only upon the following conditions, viz.: (1) That the party of the second part has theretofore paid all instalments of rents as they became due hereunder, and faithfully kept and performed all the other terms and conditions hereof for the period of at least nine months, and (2) That there be produced to the parties of the "first part a certificate ■ of the architect showing that all said improvements and repairs have been done and performed in a good and workmanlike manner and within the period above specified and that all the cost and expense thereof has been actually paid and satisfied by the party of the sec- . ond part; together with proof, by search and certificate of the clerk of Kings County, showing that no liens for any work or materials employed" in connection with said improvements and • repairs have been filed against the premises or any part thereof and remain unsatisfied; it being understood that. the parties of the first part may (but only at their election, however) out of said Fifteen Thousand Dollars ($15,000) or any part thereof, and on account of the same • pay off and discharge any lien or alleged lien that may be so filed. All improvements and repairs to the buildings shall belong to the parties of the first part as soon as made.”

Leininger thereupon entered into possession of the said premises and remained in possession until the 1st day of October, 1907, when, in summary proceedings instituted by defendant owners for non-payment of rent, lie was dispossessed. They thereupon took possession of the said premises, with all the buildings and improve^ men-ts thereon, which possession they have since retained. Leininger was the president and principal stockholder of the Kingston Realty Company, and thereafter, either personally or acting through the said realty company as his agent,' entered into contracts for materials and labor with the plaintiff and defendants McMurray