Cent. Fin. Corp. v. Brown

• Decision Date: 21 January 1936
• Docket Number: Case Number: 24489
• Citation: 1936 OK 44,175 Okla. 528,54 P.2d 196
• Parties: CENTRAL FINANCE CORPORATION v. BROWN et al.
• Court: Oklahoma Supreme Court

1936 OK 44

54 P.2d 196

175 Okla. 528

CENTRAL FINANCE CORPORATION v. BROWN et al.

Case Number: 24489

Supreme Court of Oklahoma

Decided: January 21, 1936

Syllabus

¶0 MECHANICS' LIENS - Laborers' Liens in Hands of Assignee Held Prior to Liens of Materialmen.

Labor liens arising in favor of laborers who performed work and labor in the construction of a building, which liens were acquired by plaintiff by purchase and assignment, take precedence over liens of materialmen who furnished material which was used in the construction of said building.

Appeal from District Court, Tulsa County; Thurman S. Hurst, Judge.

Action by the Central Finance Corporation against E.M. Brown and others. From the judgment, plaintiff appeals. Reversed and remanded, with directions.

Moss. Breckinridge & Young and S.F. Goldwin, for plaintiff in error.

Mauzy & Coppedge, Lashley & Rambo, S.C. Edmister, Massingale, Duff & Manatt, Chas. R. Nesbitt, E.M. Connor, Steele & Daugherty, R.E. Gish, H.A. Tallman, Hunter L Johnson, Floyd E. Staley, Searcy & Underwood, Yancey, Spillers & Fist, Neal E. McNeill, John W. McCuen, and Bailey E. Bell, for defendants in error.

OSBORN, V. C. J.

¶1 This action was instituted in the district court of Tulsa county by the Central Finance Corporation against E.M. Brown and a number of other defendants wherein it was sought to establish and foreclose 109 laborers' lien claims held by plaintiff by purchase and assignment A number of the defendants by answer and cross-petition set up materialmen's liens against the property of the defendant Brown. After hearing, the trial court fixed the amount of the various lien claims by plaintiff and defendants and ordered the same foreclosed. The court refused to hold, however, that plaintiff's liens were prior to those of defendants, but held that all of said liens were equal. From said judgment plaintiff has appealed. The parties will be referred to as they appeared in the trial court.

¶2 In November, 1930, defendant E.M. Brown, who was the owner of certain lots in the city of Tulsa, entered into a contract with one O.H. Rundquist, doing business as the Rundquist Construction Company, for the construction of an apartment building on said lots, said contractor to furnish all labor and material and construct said building for an agreed sum of $30,789.50. A portion of the work was subcontracted by Rundquist to other parties. The principal contractor and the subcontractors employed mechanics and laborers who performed work and labor in the construction of said building.

¶3 The contractor purchased a large amount of material from various dealers which went into the construction of the building. Much of the material was not paid for by the contractor or the owner, and timely materialmen's liens were filed.

¶4 After the work had started and had progressed for two or three weeks, the principal contractor was unable to meet his pay roll. He went to Mr. W.A. Delaney, president of the plaintiff company, and sought a loan of money for the purpose of paying wages to the laborers as the same became due. He offered to give the company a lien on the building for the money. Delaney consulted an attorney and was advised against entering into such an arrangement. Thereafter an arrangement was made whereby the plaintiff company was to buy claims of the laborers from time to time as their wages became due. Rundquist, the contractor, by agreement, paid plaintiff 10 per cent. of each laborer's claim paid by plaintiff. It is shown that on the day prior to each pay day, Rundquist would make out a list of all the laborers showing the name of each, the number of hours worked by each laborer, and rate of wage per hour and the amount due, and deliver it to plaintiff at its office. On the following day the plaintiff company would make up a laborer's lien claim for each laborer for the amount due as shown on the list furnished by Rundquist and would send an employee of the office, who was a notary public, with the lien claim statement so prepared, together with checks for the amount due the several mechanics and laborers, to the office of the contractor and there each mechanic and laborer would sign and verify a lien claim statement receive his check, and execute an assignment of the lien claim to plaintiff. Then Rundquist would give plaintiff a check for 10 per cent. of the whole amount paid out by plaintiff on the pay roll for that week. This arrangement was carried on until the work was practically completed. Plaintiff had never agreed to take care of the entire pay roll until the work was completed. He could have declined to do so at any time, but the arrangement was carried out until the work was practically completed. Not only the laborers employed by the principal contractor, but those employed by the subcontractors, were included in the general method pursuant to the agreement between plaintiff and the principal contractor.

¶5 No cross-appeal was filed by defendants: therefore, the scope of our inquiry is confined solely to the issue of priority.

¶6 In order to sustain the finding of the trial court it is urged by defendants that the lien claims accruing to the laborers are personal to the laborers and are not assignable. Section 11016, O. S. 1931, provides:

"All claims for liens and rights of action to recover therefor hereunder shall be assignable so as to vest in the assignee all rights and remedies herein given, subject to all defenses thereto that might be made if such assignment had not been made. Where a statement has been filed and recorded as herein provided, such assignment may be made by an

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