Buffalo Forge Co v. Southern Ry. Co

• Citation: 159 S.E. 301,43 Ga.App. 445
• Decision Date: 15 June 1931
• Docket Number: No. 21024.,21024.
• Parties: BUFFALO FORGE CO. v. SOUTHERN RY. CO. et al.
• Court: United States Court of Appeals (Georgia)

43 Ga.App. 445

159 S.E. 301

BUFFALO FORGE CO.

v.SOUTHERN RY. CO. et al.

No. 21024.

Court of Appeals of Georgia, Division No. 2.

June 15, 1931.

Syllabus by the Court.

While it is true that a materialman who furnishes material to a subcontractor for the improvement of real estate is not entitled to a lien upon the property so improved, where the subcontractor has no contractual relation with the owner of such realty, still, under the evidence in this case, it appeared as a matter of law that the material was furnished to a contractor of the owner, and not merely to a subcontractor; and, the right of the lien as claimed by the materialman being otherwise established, a judgment of foreclosure should have been entered in the plaintiff's favor. The appellate division of the municipal court of Atlanta correctly reversed the judgment of the trial court denying such lien, and the superior court erred in sustaining the certiorari and reversing the judgment of the appellate division.

Error from Superior Court, Fulton County; G. H. Howard, Judge.

Suit by the Buffalo Forge Company against the Southern Railway Company and others. Judgment for plaintiff was reversed by the superior court, and plaintiff brings error.

Reversed.

On March 14, 1928, a contract was entered into between Southern Railway Company, of the one part, and United Engineers & Constructors, Inc., of the other part, for the erection of additions to buildings of the Southern Railway Company on Spring street in the city of Atlanta. On June 18, 1928, United Engineers & Constructors, Inc., made a contract with the Seeley Company, Inc., by which the Seeley Company, Inc., agreed to install a heating system in the building for the sum of $22,875. This company then purchased certain material from Buffalo Forge Company at a cost of $1,850, for which the forge company duly filed and had recorded its claim as a materialman. This amount was not paid according to agreement, and the forge company brought suit in the municipal court of Atlanta against the Seeley Company, Inc., as con-tractor, and Southern Railway Company, as owner, to recover a judgment against the former and to foreclose its materialman's lien against the latter upon this claim. The trial court rendered judgment in favor of the plaintiff against the Seeley Company, Inc., but exonerated the owner, the Southern Railway Company. The appellate division reversed the judgment of the trial court as to the Southern Railway Company, and rendered a final judgment against both the defendants, as contended for by the plaintiff. The Southern Railway Company then carried the case by certiorari to the superior court, which reversed the judgment of the appellate division and held with the trial judge that the plaintiff was not entitled to a lien against the real estate improved; whereupon Buffalo Forge Company excepted.

The parties will be referred to as the railway company, the engineers company, the Seeley company, and the forge company, respectively.

Underwood, Haas & Gambrell and R. Emerson Gardner, all of Atlanta, for plaintiff in error.

McDaniel, Neely & Marshall and W. O. Wilson, all of Atlanta, for defendants in error.

BELL., J. (after stating the foregoing facts).

A materialman who furnishes material to B subcontractor for the improvement of real estate is not entitled to a lien upon the properly so improved, where the subcontractor has no contractual relation with the owner of the realty. General Supply Co. v. Hunn, 126 Ga. 615 (1), 55 S. E. 957. The question for decision in this ease is whether the Seeley company was a subcontractor. If so, the judgment of the superior court was correct, but if this company was a contractor, and not a mere subcontractor, the plaintiff was entitled to its lien, and the court erred in sustaining the certiorari. The solution of this question will depend upon the nature of the contract between the railway company, as owner, and the engineers company by which the contract was made with the Seeley company for the installation of the heating system. If the en' gineers company was itself the contractor, then the Seeley company was a subcontractor, but, if the engineers company was made the agent of the railway company for the erection of the building, the Seeley company became the contractor, and the plaintiff's claim of lien should have been established.

The following is a statement of the material portions of the contract between the railway company and the engineers company:

"New York, March 14, 1928 "Southern Railway System, Washington, D. C.

"We hereby propose to design and construct for you at Atlanta, Georgia, a two-story ad dition to office building and a five-story addition to freight warehouse, together with such other changes to lower floors of these buildings as may be necessary.

"I. Service to be rendered.

"With respect to this work we propose to act as your own engineering, construction and purchasing departments, being guided in all respects by such instructions as you may from time to time give us.

"As Engineers, we will make all necessary engineering studies and determinations, recommend to you the type and character of equipment and of construction required, and prepare plans and specifications for equipment, material and construction work.

"As Constructors, we will execute with our own forces the construction and install the machinery and equipment, subletting parts of the work when it is to your advantage to do so, and turn the completed work over to you ready for regular use.

"As purchasing agents,-we will purchase the necessary machinery, equipment and materials.

"We will furnish at our own expense: (a) The service of the executive officers of the company who will direct and oversee the work performed under this agreement, (b) The service of the construction department in our home office, (c) The service of the purchasing department in our home office which will assist in the purchase of the machinery, apparatus and materials, (d) The service of the accounting and auditing departments in our home office, (e) All other expenses of our home office, excepting only the salaries of employees, and materials utilized, in the engineering and drafting departments for your work.

"II. Compensation.

"You are to pay us for the services specified the sum of $55,000, which covers the work included in our estimate of $739,000, dated March 14, 1928. In case the actual cost of the work included in the estimate is less than the estimated cost, our compensation is to be reduced to 7¹/₂ per cent, of the actual cost of the completed work.

"Compensation is payable in installments on the last of each month in the same proportionate amount that the actual expenditure made during that month bears to the total estimated cost of the work, until 90 per cent, of the total is paid, the balance of 10 per cent, being payable on completion of the work.

"If material change in the scope of the work is ordered by you there shall be added to or subtracted from this amount a sum equal to 7¹/₂ per cent, of the estimated cost of the work added to or deducted from that now contemplated.

"III. Cost of the work.

"It is understood that 'cost of the work' shall include the following items whethercommitments or expenditures are made by you direct or by us for your account: (a) The cost of all materials, machinery, equipment and labor, (b) The cost of tools and construction equipment purchased and the rental of any equipment hired, removing at mutually agreed depreciation such major construction equipment as you do not wish to retain—or we will supply any part of such equipment on a rental basis, (c) The cost, at salary rates, of men in the engineering and drafting departments in our home office or in the field, in connection with the engineering or designing, the choice and purchase ot materials and apparatus, and the inspection of the work, (d) The cost of a works office, including the salaries and expenses of a superintendent of construction, an accountant, a purchasing agent, and such assistants as they may require; the cost of all field engineering and inspection; the expense of maintaining the works office, (e) The cost of insurance and any expense incurred in connection with any accident or damage to person or property, (f) Any traveling expenses or expenses of a similar character and any other expenditures we may make except for items specified in section 1, as furnished at our own expense.

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