*3 DMR not an account by McKee to was FULLER, Before WOODARD and not DMR and that MBank did receivable of KOEHLER, JJ. by priority to the of its have funds virtue security in such account receivable. interest OPINION that not Featherlite counters were KOEHLER, Justice. not as far as funds an account receivable argues, in a MBank was concerned but presents relatively simple This error, that single cross-point of the court funds question priority of lien claims to failing in to find in Feath- erred a novation court, interpled trial find- into court. The exchange for of lien erlite’s release security inter- ing party neither had that is- indicating that it McKee’s letter funds, equally them est in the divided be- joint and Featherlite sue a check DMR claimants, each of which tween the two by released for the when claiming en- appealed from the owner. aof to the entire amount because titlement superior security We reverse interest. parties, by stipulation The their fact

render. briefs, by are trial their a val- McKee, agreement although MBank had Inc., general that contractor R.E. Paso, re- interest in DMR’s account security Inn id for the Brock Residence ceivables, lien Featherlite’s affidavit of for DMR Associates subcontracted with DMR, turn, priority it a from time gave con- interest masonry work. released on for filed until lien was tracted with Featherlite if 1984. MBank asserts even gave prop- Featherlite masonry materials. inter- acquired priority on Featherlite had filed lien er notice and a materialman’s DMR, the any amount year, funds April of that est January 1984. In its as an ac- did lose character $25,000.00of owed not assigned to Featherlite after either before On count receivable by McKee DMR. the funds owed argues relating priority lien was released. Featherlite that Code and the rules by liens, inception the amount owed McKee to DMR was of the mechanic’s lien and receivable, back, materialman, an account it lost that char- lien ever relation of a pay acter when McKee became properly perfected, superior pri has Featherlite as a result of the latter’s lien. ority lien land or over other security goods interest or accounts stipulated actually prior not that has attached “rep into funds tendered court McKee Incep inception of the materialman’s lien. resents funds owed to DMR for work done place tion of the lien takes when there first by DMR in connection the construc with delivery is a of construction materials to project.” Inn tion the Brock Residence filed properly the construction site and a the Texas Under Uniform Commercial lien relates back to that time. Diversified Code, “account” is defined as follows: Lloyd Mortgage Blaylock Investors v. D. [A]ny payment goods sold or Contractor, Inc., 576 General leased or for services rendered which *4 (Tex.1978); Ann., Tex.Prop.Code sec. 53.- by not evidenced an instrument or chat (Vernon 1984). security 124 MBank’s inter paper, tel whether or not it has been est could not attach to an account receiva by performance. earned Tex.Bus. & ble until it had come into existence and Ann., (Vernon Supp. Com.Code sec. 9.106 perfected security therefore not be a 1990). interest under Section 9.303 of the Tex. generally The definition of “account” is Compare Bus. & Com.Code. Section with construed to include “accounts receivable.” gives 9.310 a mechanic or artisan a which Jones, (Tex. Chester v. 386 547 S.W.2d enhancing priority of lien for work or im 1965), Civ.App. Tyler by agr., writ dism'd — proving goods possession prior in his over (Tex.1965); 391 722 Texas Oil & security perfected interest. Coast Gulf States, 466 Gas v. United Nelms, (Tex. State Bank v. 525 S.W.2d 866 (5th Cir.1972); F.2d 1050 re In Coo Ann., 1975); Tex.Bus. & Com.Code sec. (Bankr.S.D.Tex.1980); per, B.R. Tex. (Vernon Supp.1990). 9.310 Ann., Bus. Com.Code sec. 9.106 comment (Vernon Supp.1990). 1968 and Where by the At the time of its creation goods are sold or services rendered not for DMR, delivery of materials the account account, open cash but an an account subject immediately became receivable Cooper, receivable is created. In re 2 B.R. lien and MBank’s securi the materialman’s quoted stipulation at 192. The above ty have attached while would the fits the definition of an account outstanding while that lien remained an or account receivable. charge against property, the owner’s was Fidelity except any to the lien as to amount

Featherlite cites Citizens inferior contractor or Company Rig by v. Fenton the subcontractor Bank Trust owed latter’s (Ky. the lienholder in excess of the ging Company, 1975) by the contractor proposition for the that once the ma- claim. The amount owed filed, or lienholder would terialman’s lien was the debt was no to subcontractor receivable but the funds longer an account of the contrac still be an account receivable by the retained or owed owner by tor the owner became a direct that were but lien subject priority to the of the obligation be of the owner to the subcontrac would he has the against property his abso tor had filed a mechanic’s lien on the which therefore, the lien removed before lute to have property owner’s payment. Under or the contractor make by the to contractor he amount owed owner Bank, Kentucky by prior Fidelity securi was not covered the bank’s Citizens secur recognized that the bank had a in account re ty interest the contractor’s to the ity in amount owed There are no Texas cases on interest ceivables. in excess of the lienholder’s primarily for reason contractor point, this exact claim, it remained an that, presumably because generally speaking, under Sections contractor. Even Property of the Texas account receivable 53.123 and 53.124 sup- position previous obligation took if we Peatherlite’s The Bank, by ported Fidelity agreement, Citizens that the this case was the contractual by owed McKee to DMR lost their arising therefrom, funds and indebtedness be receivable, character as an account whatev- Featherlite, DMR not the lien tween was account re- er amount was owed an against property. asserted owner’s up the time the lien was filed. ceivable until obligated the owner is under Section While prematurely the lien released When was Property of the Code to retain at 53.101 paid Feather- the funds were over to before percent price, least ten of the contract lite, DMR, they had the funds owed obligated does not owner become it, regained status of an account lost becoming indebted to a lienholder. sense when the release filed. To receivable protec The owner is own his effectively nullify a hold otherwise would paid out tion to see that the after-acquired interest in security creditor’s Chapter provisions with the accordance in a like this. accounts receivable situation Property Code order to obtain However, line we see no need follow the A under 53.152. release of the lien Section reasoning Fidelity Bank. Citizens claim a contractor materialman’s by McKee We hold the amount owed case, frequently, in this subcontractor DMR’s account receiva- remained ma- retainage. exceeds amount subject priority lien of Feather- ble get lien he terialman with a valid will what perfected lite virtue of its materialman’s if that can out of the but lien was released and lien and when the insufficient, has his claim for the he still lost, security interest thus MBank’s party to he sold whom shortfall superior DMR’s account receivable became *5 However, all the materi- the materials. of unsecured claim. MBank’s to Featherlite’s are rights to the retained funds alman’s are of Nos. One and Two Points Error A contingent having a lien. upon valid sustained. face, is, set lien, on its until release of valid two Having sustained its first aside, by the complete action bar unnecessary we it to consider points, find on matters covered former lienholder based cross-point In its of point. third MBank’s discharged by the Hart v. release. error, having argues by its Featherlite that 146, Co., 144 Tex. Ins. Traders General exchange its lien in released materialman’s (1945); Turner v. PV 189 S.W.2d it would confirming McKee’s letter that Corporation, 765 International jointly to DMR payable draw a check 1988), de (Tex.App. writ - Dallas retainage funds be Featherlite when the (Tex.1989). nied, Feather available, constituted a novation was came is cross-point of error overruled. lite’s pri kept previous alive its somehow which trial is reversed Judgment of the presumably theory on the that ority, that hereby rendered is money had forever lost its status amount, includ- the entire MBank recover cor account receivable. Featherlite DMR’s deposit ing now on accrued of rectly recites four essential elements Clerk of Paso of the District office obligation, a previous valid a novation: a standing registry of County, Texas, accept agreement of all mutual All cause. contract, 205th District Court this of a substitution ance of new are old, its extin- of this assessed effecting costs contract for the agreement. Featherlite. guishment, and a new v. Commercial Credit (Tex.Civ.App. Brown, 471 S.W.2d MOTION APPELLEE’S OPINION ON n.r.e.). dis ref’d We writ —Amarillo REHEARING FOR here that the facts agree with Featherlite Corpora Featherlite Appellee novation.” true present “a classic case its assertion tion is correct finding correct The trial court was the fore law when in misstated McKee Court from the had not resulted

novation said, is the owner it “While opinion going letter. obligated Prop- under Section 53.101 of the

erty percent Code to retain at least ten WILSON, Appellant, Barbara price, the contract the owner does not be- v. come becoming the sense of Texas, Appellee. STATE indebted to a lienholder.” The Court say, obligat- meant to “While the owner is No. 05-88-00146-CV ed under 53.101 Property Section of the percent Code to retain at least Texas, ten Appeals Court of price, contract the owner does not become Dallas. obligated in the becoming sense of indebted 1990.

to a lienholder outside the existence words, latter’s lien.” In other the owner personally to the liable lienholder for his percent ratable share of the ten notice, gave proper the lienholder

required by 53.051, seq., Section et

owner, secured, a lien has properly been

and the claim has been reduced to judg- Tex.Prop.Code

ment. Ann. sec. 53.084

(Vernon 1984). released, Once the lien is longer personally owner is no liable to

the former lienholder. As far as the own-

er, Inn, concerned, Brock Residence

matters little whether

paid by the owner to McKee before or after

the release of lien was delivered Feath-

erlite to McKee.

Featherlite maintains that there owner,

was a novation between the McKee

and Featherlite to the effect that Feather- promised

lite the owner that it would dis

charge the lien indebtedness McKee

promised pay Featherlite to

received from the owner to Featherlite. problem with Featherlite’s novation that,

theory stipulated facts, under the

there no evidence that Featherlite made owner,

any promise to the and even if there promise,

had been such the claim would

be McKee for breach of contract

and not funds which

lost their character as such once the lien

was released. same, original holding

Our remains the

that the of the trial court is re-

versed and rendered as set forth

opinion.