Glidden Coatings & Resins, Div. of SCM Corp. v. Suitt Const. Co., Inc.

• Decision Date: 17 June 1986
• Docket Number: No. 0799,0799
• Citation: 290 S.C. 240,349 S.E.2d 89
• Court: South Carolina Court of Appeals
• Parties: GLIDDEN COATINGS & RESINS, a DIVISION OF SCM CORP., Appellant, v. SUITT CONSTRUCTION CO., INC., and Earl Cummins d/b/a Arrow Painting and Sandblasting, of whom Suitt Construction Co., Inc., is Respondent. . Heard

Page 89

349 S.E.2d 89

290 S.C. 240

GLIDDEN COATINGS & RESINS, a DIVISION OF SCM CORP., Appellant, v. SUITT CONSTRUCTION CO., INC., and Earl Cummins d/b/a Arrow Painting and Sandblasting, of whom Suitt Construction Co., Inc., is Respondent.

No. 0799.

Court of Appeals of South Carolina.

Heard June 17, 1986.

Decided Sept. 22, 1986.

Alexander S. Macaulay, of Miley & Macaulay, Walhalla, for appellant.

Robert A. deHoll and James H. Watson, of Leatherwood, Walker, Todd & Mann, Greenville, for respondent.

BELL, Judge:

Glidden Coatings & Resins commenced an action to foreclose a materialman's lien on a construction project, known as the Fairfield project, for which it had supplied paints and materials. Suitt Construction Co., Inc. was the general contractor on the project and Arrow Painting and Sandblasting was the painting subcontractor. After Glidden filed its notice and certificate of mechanic's lien, Suitt posted the bond provided for in Section 29-5-110, Code of Laws of South Carolina, 1976, thereby discharging the real property from the lien. The circuit court entered judgment foreclosing Glidden's lien in the sum of $2,164.34 and granting Suitt judgment on its cross claim against Arrow in the sum of $107.61. Suitt filed a notice of appeal from the judgment, but did not perfect the appeal. Glidden cross appeals. We affirm.

The material facts are stipulated. In 1981, Suitt entered into a contract with Fairfield Manufacturing Co. to build a plant in Oconee County, South Carolina. The contract obligated Suitt to indemnify the owner for any mechanic's or materialman's liens placed on the project. Suitt then entered a subcontract with Arrow calling for Arrow to do the painting and concrete coating work on the project. With the consent of the owner and notice to Suitt, Arrow contracted with Glidden to supply paint. Because Arrow had failed to pay Glidden for materials furnished on other projects in the past, Glidden requested that Suitt remit payments on the Arrow subcontract by joint check payable to Arrow and Glidden until such time as Arrow's account with Glidden had been paid in full. Suitt refused to sign a joint payment request, but indicated it would attempt to issue joint checks to Arrow and Glidden. Suitt specifically stated it would not guarantee to issue joint checks nor would it guarantee any payment to Glidden. In fact, Suitt did issue five joint checks to Arrow and Glidden totalling $26,133.00. These five checks were endorsed by Glidden, but Glidden received none of the proceeds from them.

In October 1982, Arrow abandoned work on the Fairfield project. At that time, Glidden had furnished materials to Arrow valued at $19,300.26. Suitt hired another subcontractor to complete the work at a cost of $7,640.00 plus an additional $550.00 representing its own work and labor. In December 1982, Suitt paid $2,370.61 directly to Glidden to cover an invoice submitted that month. Prior to the time Arrow abandoned the job, Glidden gave no notice to Suitt or the owner that it had not received full payment for the paint and materials it supplied to Arrow.

Based on these facts, Glidden duly filed its notice and certificate of mechanic's lien against the project and thereafter brought suit to foreclose the lien and recover against Suitt's bond. Suitt defended on the ground that Glidden had received payment in full for paints and materials furnished to Arrow in the form of joint checks payable to Glidden and Arrow.

On the authority of City Lumber Co. v. National Surety Corp., 229 S.C. 115, 92 S.E.2d 128 (1956), the circuit court held that any obligation to Glidden by reason of materials furnished to Arrow was discharged by its endorsement of the joint checks. Since the first two joint checks on the Fairfield project were issued before any money was due on Arrow's account with Glidden, the court deducted those two checks, totalling $8,997.08, from the amount Glidden was deemed to have been paid by joint check, leaving a debt owing of $2,164.34. The court then ordered the Fairfield lien foreclosed in that amount.

Although the parties have briefed several issues on appeal, one question is dispositive: if, at the request of the materialman, an owner or general contractor makes the materialman and a subcontractor joint payees on a check for labor and materials furnished, and there is no agreement with the owner or general contractor as to allocation of the proceeds, will the materialman, by endorsing the check, be deemed to have been paid the money due him to the amount of the joint check?

In our judgment, City Lumber Co. v. National Surety Corp., 229 S.C. 115, 92 S.E.2d 128 (1956), clearly requires an affirmative answer to this question. City Lumber involved a suit by a materialman on...