Opinion
December Term, 1902.
Joseph N. Goldbacher, for the plaintiff.
Henry Schoenherr, for the defendant.
The contract was one and not several for the printing of the first edition of defendant's reference book. It shows upon its face that the intention of the parties was that the plaintiff should do all the work required in the way of making the type, printing and correcting proof; in fine, everything necessary up to the binding and publication of the book. Although the contract provided for weekly payments for work performed, this did not effect a change, as there was but one contract for the entire work. That being so, a lien for the total amount due attached to the goods manufactured by the plaintiff and not delivered to the defendant, and the plaintiff waived its lien only on such of the goods as were delivered to the defendant. ( Wiles Laundering Co. v. Hahlo, 105 N.Y. 234.) In the case cited, suit was brought to enforce a lien on goods of the defendant laundered by the plaintiff under a contract which provided that payments should be made on the first of each month for goods laundered and returned during the preceding month. It was held therein that no lien attached either for the balance due the plaintiff or for the work done on the goods in its possession, for the reason that a particular time of payment was fixed by the contract, which was subsequent to the time when the owner was entitled to a return of the property. It was stated in the opinion, however, that where work is done under a single contract which does not specify that payments are to be made after delivery of the goods, a lien attaches to all the property undelivered, "and if part of it is voluntarily returned without payment for the work, the only consequence is that the person doing the work has abandoned a part of his security for the total amount due him and retained his lien therefor only upon the property which remains in his possession." In the case at bar the contract did not require that deliveries should be made to the defendant prior to payments for the work performed. The plaintiff had a lien, therefore, for sums due on all the goods produced and not delivered to the defendant.
We are thus brought to the question as to what goods were undelivered after they were produced under the contract. First, we have the goods manufactured up to February 8, 1901. It is conceded that payments made on account were sufficient to pay for what was produced up to that date, including not only the printed sheets, but also the slugs. The sheets were all delivered and the defendant obtained the actual possession of them, and no question of lien arises as to them. With regard to the slugs, the contract provided that when manufactured and paid for, ownership therein passed to the defendant, and there was nothing in the contract to prevent the defendant from taking them into its actual possession, also, save that the plaintiff under the contract was entitled to use them for the purpose of making any needed corrections or revisions. It was to facilitate this purpose that the defendant permitted the slugs to remain with the plaintiff. Were the slugs retained by the plaintiff, however, as property on which a lien might attach as property undelivered to the defendant, or were they kept for the defendant as its property? The answer to this question is to be found in the manner which the parties themselves construed the contract and treated the property. Possession was retained by the plaintiff, but it made a charge of $900 for storage which was assented to by the defendant. This charge for storage excludes the idea that plaintiff retained possession under a claim for lien because where property is retained for a lien no storage can be charged. It was held in Somes v. Brit. Emp. Shipping Co. (8 H.L. Cas. 338), that no authority can be found for the proposition that one holding property for the purpose of enforcing a lien can hold the proprietor for the expense of keeping it, and the rule works both ways. These slugs, therefore, were the property of the defendant and legally stand in the same position as the sheets delivered by the plaintiff prior to February 8, 1901, and no lien attaches thereon. We thus agree with the learned judge at Special Term in the statement that "these goods were fully paid for and were left in plaintiff's possession for a particular purpose wholly inconsistent with the claim of a lien, and under such circumstances no lien will attach. (19 Am. Eng. Ency. [2d ed.] 12.)"
We are, then, to determine whether a lien attaches, as found by the Special Term, to the slugs produced by the defendant subsequent to February 8, 1901, for which it is conceded payment has not been made. Up to this point we have discussed the questions presented as if the contract originally made between the parties was being carried out in its entirety. As a matter of fact, however, the evidence shows that there was a material deviation from the terms of that contract upon the subject of payments. It provided that the payments should be weekly for the work performed. The defendant, however, soon fell behind and the plaintiff agreed not to insist upon payment for the time being nor until a date named when certain work was performed. The claim thus deferred was for $5,000 for work produced, and the weekly statements show that payments were made only in excess of such $5,000 due. Credit was further extended by the plaintiff accepting three notes for the balance due over the $5,000. It is true that these notes were never paid and were tendered to the defendant on the trial, but they were accepted in payment and such acceptance was a waiver of the lien. An extension of credit waives a lien. (19 Am. Eng. Ency. of Law [2d ed.], 28.)
We have not overlooked the cases in which it has been held that mere acceptance of notes where they are not paid and where possession of the property has in the meantime been retained, does not constitute a waiver, it being competent to return the notes. In the application of such rule, however, the character of the possession must be considered, and where, as here, the possession which the plaintiff had was for the defendant, as shown by the fact that a charge for storage was made, the legal result upon the question of waiver is the same as though there was an actual delivery of the property and acceptance of notes in payment therefor.
With respect to the slugs, therefore, it thus appears that the plaintiff has lost its lien by accepting payment or extending credit or transferring ownership and charging storage, either and all of which would constitute a waiver of any lien which plaintiff might otherwise have had. And what has been said about slugs applies equally to the paper and other property which it holds.
That part of the judgment, therefore, appealed from by the plaintiff, which holds that the plaintiff is not entitled to a lien upon the entire property, should be affirmed; and as to the defendant's appeal, the judgment should be reversed and a new trial ordered, with costs to the defendant to abide the event.
VAN BRUNT, P.J., INGRAHAM, McLAUGHLIN and HATCH, JJ., concurred.
Judgment so far as appealed from by plaintiff affirmed; and on defendant's appeal, judgment reversed, new trial ordered, with costs to defendant to abide event.