Charlotte Pipe & Foundry Co. v. Southern Aluminum Co.

• Decision Date: 19 December 1916
• Docket Number: 412.
• Citation: Charlotte Pipe & Foundry Co. v. Southern Aluminum Co., 172 N.C. 704, 90 S.E. 923 (N.C. 1916)
• Parties: CHARLOTTE PIPE & FOUNDRY CO. v. SOUTHERN ALUMINUM CO. ET AL.
• Court: North Carolina Supreme Court

90 S.E. 923

172 N.C. 704

CHARLOTTE PIPE & FOUNDRY CO. v. SOUTHERN ALUMINUM CO. ET AL.

No. 412.

Supreme Court of North Carolina

December 19, 1916

Appeal from Superior Court, Stanly County; Justice, Judge.

Suit by the Charlotte Pipe & Foundry Company against the Southern Aluminum Company and others.Judgment for plaintiff, and defendants appeal.Error.

This is an action, brought by plaintiff, the Charlotte Pipe & Foundry Company, for the purpose of enforcing a lien against the property of the Southern Aluminum Company, owner, on account of materials furnished to Stier-March Contracting Company contractor.

The defendant the Southern Aluminum Company admits that the plaintiff's claim is for materials and supplies furnished to and used by Stier-March Contracting Company, contractor on the land and in the improvement of the land of the said Southern Aluminum Company, described in the complaint; that notice and claim of lien was duly given; that suit was brought for the purpose of enforcing said lien within the time prescribed by law, against Stier-March Contracting Company, contractor, and Southern Aluminum Company, owner that sufficient funds were, and still are, in the hands of Southern Aluminum Company, belonging to Stier-March Contracting Company to pay plaintiff's claim in full that none other of the creditors of Stier-March Contracting Company have brought suit to enforce their lien, within six months from date of filing notice of the same with the owner, or with the clerk of the superior court.But the Southern Aluminum Company contends that all creditors filing notice of claims with the owner are entitled to pro rata with the plaintiff in the distribution of the funds in hand, despite the fact of their failure to bring suit to enforce their liens as prescribed by statute.

The amount due the plaintiff is $814.23, the amount due the contractor is $1,250, and the total amount of claims filed is $6,133.47.

Judgment was entered in favor of the plaintiff against the Aluminum Company, requiring it to pay the claim of the plaintiff in full, and adjudging the amount to be a lien on its property, and the defendant excepted and appealed.

R. L. Smith, of Albemarle, for appellants.

A. C. Huneycutt and O. J. Sikes, both of Albemarle, for appellee.

ALLEN J.

The lien for labor done and materials furnished is given by statute to enforce the payment of a debt, and the general principle underlying the lien laws is that the relation of debtor and creditor must exist, and that there can be no lien without a debt (Boone v. Chatfield,118 N.C. 916, 24 S.E. 745;Weathers v. Borders,124 N.C. 610, 32 S.E. 881); and it was therefore held in Wilkie v. Bray,71 N.C. 205, that as there is no contractual relation between the owner of property and one who furnishes materials to the contractor that the subcontractor could not have the benefit of the lien.Soon after this decision, however, the statutes were amended to include subcontractors, and the provisions for their benefit are now sections 2019 to 2023, inclusive, of the Revisal.

The injustice was recognized of permitting the labor and material of one man to be used to enhance the value of the property of another without compensation, which would have been the result prior to the amendments if the contractor could not be made to pay, and also that the owner ought not to be required to pay the contractor, and then have to pay for labor and material when he had not agreed to do so, and the statute was enacted in an effort to adjust the rights of the parties along lines that would be just to both.

The dominant ideas in the statute are that the laborer and materialman may by notice protect themselves to the extent of the contract price, that the owner shall not be liable beyond the amount due the contractor at the time of notice given, and that when a lien upon the property is once acquired by giving notice, the amount due the contractor shall be distributed among the claimants pro rata.

The lien is acquired by notice to the owner and not by filing with some officer (Mfg. Co. v. Andrews,165 N.C. 294, 81 S.E. 418, Ann. Cas. 1916A, 763), and the amount due the contractor at the time of notice is not a debt due by the owner in the ordinary sense, but a trust fund (Bond v. Cotton Mills,166 N.C. 23, 81 S.E. 936).

The statute furnishes the claimants a double security.It gives to them, upon giving notice, a lien on the property of the owner (Revisal, § 2019), and then imposes upon the owner the duties of a trustee with respect to the amount due the contractor, and requires him "to distribute the amount pro rata among the several claimants, as shown by the itemized statements furnished the owner."Revisal, § 2023.

The first of these requires an action to enforce it, and this is the lien referred to in Hildebrand v. Vanderbilt,147 N.C. 641, 61 S.E. 620 as "lost if action is not begun thereon in six months," while the second does not...