76 N.J.L. 524 | N.J. | 1909
Lead Opinion
The opinion of the court was delivered by
This action was brought under the third section of the Mechanics’ Lien act (Pamph. L. 1898, p. 538), against Rudolph Herold and Wilhelmina Herold, his wife, to recover money due the plaintiff from Albert Raas, for materials used in the erection of a building on Mrs. Hero-Id’s land, under a contract with her husband. It was admitted at the trial that the defendant Wilhelmina had in hand mo-re money than the amount of the plaintiff’s claim (probably meaning the balance of the contract price due to Raas). The plaintiff discontinued as to Rudolph and the entry of a judgment against him, as well as his wife, seems to have been an inadvertence. It is not assigned as error and may be corrected.
It is convenient to dispose first of certain formal objections to the notice that was served. It is said to be defective because it is addressed to Rudolph Herold. Vice Chancellor Stevenson intimated a doubt as to the validity of such a notice in Beckhard v. Rudolph, 2 Robb. 315, 327, although he was inclined to concede that the notice would be valid if not addressed to anyone and handed to the owner. All that the statute requires is that notice be given to the owner of the contractor’s refusal to pay and of the amount due. It is a legitimate inference that the building should be described
The objection that the notice spoke of Baas Brothers as the contractors seems to us likewise without merit. The statute does not-require the name of the contractor to be mentioned, and we think the notice quite sufficient if it identifies him as the master workman or contractor. The owner cannot then be misled. In the present case the mistake was obvious, for the notice itself consistently used the singular pronouns him and he, and the defendant must have known that “Baas Bros.” was a mere slip. The notice stated all that the statute in terms required, and sufficiently identified the building and the contractor. It is not questioned that demand of payment was made of Albert Baas and by him refused, or that the money is due from him to the plaintiffs.
The court refused to allow the defendant to show the condition of the doors in the building after the work was completed by one Garish, who had been employed by the defendant to finish the house. To this objection there are two answers: (1) The condition of the doors so long after the original contractor had left was irrelevant, for injury might have been done them in the meantime; (2) the court in overr’uling the question was careful to state that the defendant might prove that the work required by the specifications had not all
The important question in the ease is whether suit can be maintained upon a notice served under the third section of • the Mechanics’ Lien act upon the person on whose land the building is erected when the contract was made with a third person and there is no contractual liability on the part of the owner of the land.
It is settled that the remedy by stop notice is not available where there is a right of lien under section 1 of the act. It has also been held in this court that a lien cannot be filed where the building has been erected under a contract duly filed pursuant to section 2, even in a case where the contract is with a third person and not with the owner of the land. Earle v. Willetts & Co., 27 Vroom 334. Under the established law the building in this case was protected from lien unless the contract between Raas and Rudolph Herold was tainted with fraud. The only suggestion that can be made looking in that direction is that he was agent for his wife and was not contracting for himself. This, however, would hardly amount to fraud, especially in view of section 13 of the act which creates a statutory presumption that a building erected upon land of a married woman has been so erected with her consent. We fail to find any circumstance in this case which will take it out of the rule of Earle v. Willetts & Co. The property was therefore not subject to lien under section 1, and the plaintiffs were left without remedy unless they could impound the money due the contractor by a stop notice under section 3.
That section requires that the notice be served upon the owner of the building. In the present case the building was upon land of Mrs. Herold. Her husband had no estate therein. Porch v. Fries, 3 C. E. Gr. 204, approved by this court in Trade Insurance Co. v. Barraclif, 16 Vroom 543, 550. Unless therefore we are to give some peculiar meaning to the words “owner of the building,” it is plain by the express language of the statute that the notice was properly served
The difficulty in the ease—and it is a real difficulty—is caused by the provisions of section 3, which authorize the owner to retain the amount due the journeyman, laborer or the materialmen out of the amount owing on the contract, or that may thereafter become due on the contract, and in a proper case to pay the same and receive an allowance therefor in the settlement of accounts between him and the master workman or contractor. There is great force in the argument that where there is no privity of contract between the owner and the contractor, there can never be anything owing on the contract and consequently no allowance to the owner for any moneys paid to laborers or materialmen in satisfaction of stop notices. The difficulty, however, is not insuperable. Where the contract is duly filed, the contractor alone may file a lien against the building and curtilage. If he does so, he has a claim against the owner’s property, and this claim the owner must satisfy or lose his property. The enforcement of such a lien by suit, 'or its adjustment by private settlement, necessarily involves an accounting between owner and contractor to ascertain the amount due, and on that accounting due allowance may be made for money which the owner has been compelled to pay in satisfaction of stop notices. It may
We are led to adopt this construction not only in order to reconcile the later provisions of section 3 with the earlier provisions requiring notice to be served upon the owner of the building, but by a consideration of the aim and spirit of the act. The aim is well stated in the title; it is “to secure to mechanics and others payment for their labor and materials in erecting any building.” This title would be most deceptive in a case like the present, unless our construction is adopted. No lien could be filed, since the rule in Earl v. Willetts forbids ; and no stop notice could be served if privity of contract is required between owner and contractor. Such a construction would open wide the door for a fraudulent evasion of the act. Any owner might have a contract made in the name of a third person, might file it, and -protect his building from lien by the laborers and materialmen, and successfully defend against stop notices. It would no doubt be open to lien claimants to expose the' fraud, but it would put that burden upon those least able to bear it because least likely to know the facts, and least able to prove them.
It is settled that the effect of a stop notice is to work an assignment pro tanto of the fund due the contractor. Carlisle v. Knapp, 22 Vroom 329. This right by way of assignment has been enforced even where the payment to the contractor was to be in land and not in money. Anderson v. Huff, 4 Dick. Ch. Rep. 349. The contractor has a double security; he has Ms personal claim against the one with whom he has made his contract, and he has security for this claim by a lien upon the building and land of the owner. It is analogous to a debt secured by bond and mortgage, and there can be no doubt that an assignment of one carries the other. The object of the Mechanics’ Lien law was to substitute a claim upon the
This construction does away with another difficulty that might be. thought to arise—that the owner of the land might be subjected to a personal judgment in excess of the value added to his land by the building. If he is liable to satisfy the stop notices only out of the special fund arising from the building and land, upon which the contractor has a right of lien, it is open to him to plead that the value of the building and land is less than the amount of the stop notices, very much as an administrator might plead plene administravit. In such a case, if it should ever arise, the action would be in form a personal action, but the judgment would be special, to be satisfied out of the property. It will be time enough to decide that question when presented. It is not involved in the present case.
We do not attribute great force to the suggestion that the amount due might be paid to the contractor by the person with whom the contract is made. That is a risk which the laborers and materialmen always run, and if the payment has been properly made the right of the contractor to file a lien on the building is gone, and there is no fund due him that his creditors can impound.
It is objected that our view makes it possible to serve a stop notice in a case where the owner is entirely ignorant that a third person is erecting a building on his land. This is an error. The right to serve stop notices is limited in such cases to those instances in which the contractor has a right of lien. Fie has no right of lien where the building is not authorized by the owner or is built without the knowledge of
We have discussed the case with the fullness which its importance demands, as if the question presented were the propriety of the direction of a verdict by the trial judge in favor of the plaintiff. No exception was sealed to this direction. There was an exception sealed to the refusal to direct a verdict for the defendant. This, refusal was clearly correct.
The judgment is affirmed, with costs.
Concurrence Opinion
(concurring). On the testimony in the ease a jury question was raised as to whether the defendant helow, whose husband signed the building contract as ostensible owner, was not in fact the contracting principal, and the holder of the fund sought to be reached by the stop notice on which plaintiff’s claim was based, the husband being merely her agent and no fraud being intended. On this theory of the propriety of serving the stop notice on the wife, I vote to sustain the action of the court below in refusing to direct a verdict for the defendant, no exception having been taken to the positive direction in favor of the plaintiff. I concur in the majority opinion on the minor points involved.
For affirmance—The Chancellor, Chiee Justice, Garrison, Swayze, Eeed, Trenchard, Parker, Bergen, Yoorhees, Bogert, Yredbnburgh, Yroom, Gray, Dill, J.J. 14.
For reversal—Minturn, J. 1.