65 N.J.L. 577 | N.J. | 1901
Lead Opinion
The opinion of the court was delivered by
This is an action for the enforcement of a mechanics’ lien for materials furnished by the plaintiff below to the Eden Mills Paper Company, builder and owner. The lien claim was filed in the office of the clerk of the county of Morris on the 14th day of March, 1898, claiming a lien upon the mill of the defendant and a certain tract upon which the same was located, for the sum of $1,333.33, for materials furnished the said owner between the 13th day of August, 1897, and the 23d day of February, 1898. Judgment by default was entered on the 13th of July, 1899, for $1,512.89, both generally against the Eden Mills Paper Company, as builder, and specially, as a lien upon the premises mentioned.
The defence is that the plaintiff has not prosecuted his lien claim in the manner required by the statute, and that by
The date of the last work, as exhibited in the bill of particulars, was February 23d, 1898. The lien claim was filed March 14th, 1898, within the time prescribed by the statute. The summons was sealed and issued on the same da}', and the time of issuing was endorsed upon the lien claim by the clerk. It was served on the 14th of March and returned on the 25th of March, 1898. The declaration was filed on the 13th of April, 1898. Everything was done in compliance with the statute, except that the plaintiff failed to-enter judgment by default within a year from the time the summons was issued. To excuse this delay the plaintiff' relies, in the first place, on an order made by the Circuit Court allowing the plaintiff three months further time from the date of the order to prosecute his claim upon the mechanics’ lien. This order was made on the 3d of June, 1899,. more than a.year from the date of the last work for which the lien is claimed and more than a year from the date of issuing the summons on the mechanics’ lien. I think the proper construction of this statute requires an order of the-
The decision of this case must turn upon the existence of facts which justified the plaintiff in the delay in prosecuting his suit. Everything had been done by him—filing his claim, issuing summons, having it properly endorsed and served, and filing his declaration—in strict compliance with the statute. He may be said to have prosecuted his claim with diligence; his neglect was simply in.the failure to enter the judgment he was entitled to. The inquiry, then, is whether the plaintiff’s failure to enter his judgment discharged the lien.
On the same day the lien claim was filed by the plaintiff the Eden Mills Paper Company went into the hands of a receiver—William A. Macy being appointed receiver by'the Court of Chancery. The debt due from the company to the plaintiff has been admitted by the receiver, and the property on which this lien was claimed was sold by the receiver on the 15th of September, 1898, and purchased by George A. Bagley. Macy testified that the announcement
The lien claim not having been paid, the plaintiff took steps to have his judgment entered. On the 39th of May, 1899, he presented a petition to the Chancellor, asking per
It was objected that the rule to plead should have been served on Bagley or the Stony Brook Paper Company, and not having been so served, the judgment is irregular. The Mechanics’ Lien law recognizes as owner throughout the entire proceedings the person who was owner when the lien claim was filed: Purchasers after lien, claim filed are purchasers pendente lite, and take title subject -to the issue of the pending suit. If a party acquiring an interest subsequent to the filing of the lien claim desires to contest it, he should apply to the court for leave to defend, by an appropriate plea, in the name of the person who was owner when the lien was filed. This order the court, in its discretion, will grant, either with or without terms. The Circuit Court would have no power to make an order that the lien was discharged for want of diligence in the prosecution of the suit. That question is one of fact, upon which the claimant would have a
On the 7th of August, 1899, Bagley filed a petition in the Circuit Court for the benefit of himself and the Stony Brook Paper Company, and in the name of the Eden Mills Paper Company and William A. Macy, the receiver, praying that the judgment should be opened and set aside on the ground of the non-compliance by the plaintiff with the provisions of the Mechanics’ Lien act. Mr. Macy did not sign this petition, nor does it appear that he took any part in this proceeding, except to be a witness, and the Court of Chancery, of which lie was-the officer, by the Chancellor’s order of May 29th, 1899, expressly permitted the plaintiff to prosecute this suit. On presenting this petition the judge of the Circuit Court granted a rule to show cause, with leave to take depositions, and depositions were taken. This rule was discharged on the 16th of October, 1899, whereupon this writ of error was sued out. The facts stated in this opinion are taken from those depositions, which were returned with this writ of error.
The errors assigned are, first, that the return of the sheriff to the summons does not show a lawful service on the defendant; that no jurisdiction over the defendant appears, and that there is error in that the declaration does not recite how the defendant was served.
The eighteenth section of the Mechanics’ Lien act provides that the suit shall be commenced by a summons against the builder and the owner of the land and building, and that said summons shall be directed and tested and made returnable, and may be served and returned, in the same manner as other writs of summons. Gen. Stai., p. 2066. Section 87 of the Corporation act provides that in any personal action against a corporation the first process may be a summons, a copy whereof shall be served on the president or other head officer of the corporation, or left at his dwelling-house or usual place of abode, at least six entire days before its return. It then provides that if the president or other head officer cannot be found in this state to be served with process, and
The objection to the manner of service of the summons was not made in the court below. It was introduced in this court by an amendment of the assignments of error. This proceeding came before the Circuit Court on the petition already referred to. The depositions taken conform to the petition, and the case was decided in the court below upon the petition and depositions. In setting out the grounds on which relief against this judgment was prayed in the petition, no allusion was made to the manner in which the writ was served, nor was any evidence offered or called for on that subject in the taking of the depositions. If such a point had been made before the Circuit Court, the imperfection in this return might have been cured b3i' testimony. The objection cannot now be entertained. The same disposition, and for the same reason, will be made of the objection to the manner in which the mode of service is set out in the declaration.
The remaining question is whether the plaintiff prosecuted his claim diligently within the year, within the meaning and intent of the statute. That presents a question of fact to to be found, in the first instance, by the Circuit Court.
The appointment of the receiver in this case did not per se stay the plaintiff’s suit. But the policy of the law in this state is that all controversies concerning the indebtedness of the insolvent company and the liens upon its property shall be disposed of in the Court of Chancery. Such is plainly the import of sections 68, 78, 81 and 86 of the Corporation act of 1896 (Pamph. L., p. 299), and such has always been the practice in this state. Smith v. Trenton Falls Co., 3 Gr. Ch. 505, 510; State Bank v. Receivers, 2 Id. 266; Jacobus v. Mutual Benefit Life Insurance Co., 12 C. E. Gr. 604. In the case first cited it was held that an execution creditor of an incorporated company could not, after the appointment of receivers, file a bill to settle the validity and priority of claims and encumbrances upon the property of the company; that it is the duty of the receivers to settle priorities, and, in so doing, to decide upon the validity of claims against the company. A precedent quite pertinent to this subject is found in Demott v. Stockton Paper Ware Manufacturing Co., 5 Stew. Eq. 124. It was held in that case that the receiver had power to adjust, by agreement, the rights of claimants-under the Mechanics’ Lien law, although no steps beyond filing their claims had been taken, and that where such claims had passed into judgment with the receiver’s knowledge, they should be regarded as established. It appears in the case that some, if not all, of the lien claims upon which-
' Under these circumstances, it seems to me that a prudent man would have pursued the same course the plaintiff did. He would have gained nothing whatever by the entry of a judgment, except an ascertainment of the amount of his ■claim, which was not disputed. To enter his judgment was quite a nugatory act if he could not proceed to collect it by ■execution. Under these circumstances, it would be highly inequitable to take from the plaintiff the lien for his debt and confer the benefit upon a purchaser who took and held title subject to the payment of his debt; for, although the petition is in the name of the Eden Mills Paper Company .and of the receiver, it was signed by Bagley alone, and purports to be for the benefit of him and of the Stony Brook Paper Company.
The judgment in this case being regular, whether it should be opened to admit a defence to the suit is a matter largely in the discretion of the law court. This court, on writ of ■error, will not interfere with that discretion unless for substantial reasons. AVe think, under all the circumstances, that the plaintiff prosecuted his claim within the year with due ■diligence, according to the spirit and meaning of the statute. The order of the Circuit Court discharging the rule to show cause should be affirmed.
Dissenting Opinion
(dissenting). This case turns on the clause of the Mechanics’ Lien law {Pamph. L. 1896, p. 198; Pamph L. 1898, p. 545) which declares that if the claimant of such a lien “shall fail to prosecute his claim diligently within one year from the date of issuing summons, or such further time as the court may, by order, direct, such lien shall be discharged.”
The meaning of this clause is somewhat obscure. It implies that some end is to be reached within the year by ■diligent prosecution, but does not expressly state what end.
In the case before us summons was issued March 14th, 1898, and the judgment upholding a lien was not entered until July 13th, 1899. Without an order for further time, such a judgment would be, on its face, illegal, as it would have awarded a lien which, by the statute, had been discharged. Wheeler v. Almond, 17 Vroom 161. But on June 2d, 1899. an order giving the claimant three months further time to-prosecute his claim was made by the court, and if this order can be sustained, no error will appear in the judgment.
The order recites that it was based on a verified petition then presented to the court by the claimant. The order and petition are not strictly part of the record, and so are not brought into this court by the writ of error, and regularly a certiorari should have been issued to bring them here; but
If the petition presents any matter on which it was lawful for the Circuit Court to find, as a fact, that the claimant had diligently prosecuted his claim during the year following the issuing of summons, then the conclusion of that court cannot be here disturbed, for our jurisdiction extends only to errors of law. But if the petition presents no such matter, then the finding was erroneous in law, and the order based thereon is illegal.
The petition states that on March 14th, 1898, the day on which the summons was issued, but after service of the summons, the Chancellor appointed a receiver of the defendant company; that on April 13th, 1898, the claimant filed his declaration in the cause; that thereafter he had frequently applied to the defendant and to the receiver to pay his claim and had hoped that they would do so, but they had not paid it; and that the receiver had sold the property on September 15th, 1898, subject to the lien claim.
These facts contain no evidence of diligent prosecution of the lien claim in the Circuit Court. Upon such prosecution, the proceeding in Chancery had, proprio vigore, no effect whatever. True, the Chancellor might, in those proceedings, have enjoined the suit at law, but he did not, and without such injunction that suit was in no way affected. The claimant was free to obtain judgment at any time after June 13th, 1898, when the time to plead expired, until March 14th, 1899, but simply chose to do nothing. Even after all hope of payment from the receiver was ended by the sale of September 15th, 1898, the claimant still had six months in which to obtain judgment. I am quite unable to perceive in these circumstances any evidence of the diligent prosecution of the claim; they show, on the contrary, an intentional omission to prosecute.
It therefore follows that the order of June 2d, 1899, was made without legal evidence, and should be set aside. With
I have not attempted to consider whether the Chancery proceedings and the conduct of those holding title under the receiver’s sale give the claimant any equitable rights, because such rights are not capable of adjudication on this writ of error. Nor is it necessary to discuss the testimony taken in the Circuit Court on the motion to set aside the order of June 2d, 1899; it suffices to say that the testimony does not change, for present purposes, the aspect of affairs set forth in the petition on which that order was made.
For affirmance—The Ci-iiee Justice, Van Syckel, Fort, Garretson, Krueger, Hendrickson, Adams, Vredenburgi-i. 8.
For, reversal—Dixon, Collins, Bogert, Voorhees. 4.