Kirtland v. Moore

• Decision Date: 08 September 1885
• Citation: 40 N.J.E. 106,2 A. 269
• Parties: KIRTLAND v. MOORE and others.
• Court: New Jersey Court of Chancery

2 A. 269

40 N.J.E. 106

KIRTLAND

v. MOORE and others.

Court of Chancery of New Jersey.

September 8, 1885.

On final hearing on answers to bill of interpleader and proofs taken in open court. The facts are stated in the opinion.

Willard P. Voorhees, for Butler.

J. V. D. E. Mott, for Howell, Totten & Co.

George O. Ludlow, for McFadden & Dooley.

James E. Howell, for Chapin Hall Manuf'g Co.

Robert Adrain, for Samuel Armstrong.

VAN FLEET, V. C. This suit was commenced by bill of interpleader. A decree has been made, by consent, that the defendants interplead, and the questions now to be decided are—First, which of the defendants are entitled to the fund in court? and, second, in what order shall they be paid? The fund in controversy was earned under a building contract, made by the complainant with Frank W. Moore, which was filed pursuant to the directions of the statute, so that the right of all persons, except the contractor, to acquire a lien against the building was cut off. The sum in dispute is $1,273.83. The claimants are five in number, and the aggregate amount of their claims is $2,571.18. They all base their claims on notices given pursuant to section 3 of the mechanic's lien law. Their notices were served as follows: That of Alfred J. Butler, September 8, 1883; those of Howell, Totten & Co. and McFadden & Dooley, September 27th; and that of the Chapin Hall Manufacturing Company, October 24th.

The questions at issue in the case arise upon the answers to the bill of interpleader, no other pleading having been filed by the defendants. The court, in disposing of the questions in dispute among the defendants to a bill of interpleader, is at liberty to adopt any recognized method of trial which will best accomplish justice in the particular case. If, at the hearing on the bill, the questions in which the defendants are alone interested are stated with sufficient clearness and certainty in the answers to the bill to present proper issues, and they are ripe for decision, the court may, at the same time that it decides the question whether the bill was properly filed or not, also decide questions at issue among the defendants, and dispose of the case finally. If, however, the case, as among the defendants, is not at that time in condition to be properly disposed of, the court may then adopt such course as may seem best, under the circumstances; as by directing that issue shall be raised by appropriate pleadings, or that an action at law shall be brought, or that such other course shall be taken as may seem best suited to the nature of the case. Executors, etc., v. King, 13 N. J. Eq. 375; 2 Daniell, Ch. Pr. (5th Amer. Ed.) 1569.

No direction has been given by the court in this case, but the defendants have brought the case to hearing on their answers filed to the complainant's bill. By their answers they each rest their claim to the money in dispute on a single ground, namely, notice given to the owner, pursuant to the direction of section 3 of the mechanic's lien law. Neither, by his answer, discloses any other ground of claim, or sets up a right acquired by any other means, or in any other way; so that no other, no matter how well founded, has been put in issue in such manner that its validity can, under the present records, be the proper subject of either judicial investigation or determination. This remark is made because the proofs seem to show that two of the contestants have a ground of claim in addition to that set up in their answers. As the proofs now stand, it appears that the contractor, on the eighteenth of October, 1883 drew an order in favor of the Chapin Hall Manufacturing Company on the owner for the same sum claimed in the notice, which they served on the owner on the twenty-fourth of October, 1883; and that the order was delivered by the payees to the owner within a day or two after its date, and remained in her hands up to the time of the trial.

It also appears that the contractor subsequently drew an order on the owner in favor of McFadden & Dooley for the sum specified in their notice. This order is without date. The proofs do not show that it was ever presented or shown to the owner, nor that she was ever notified of its existence. The doctrine is now at rest that an order drawn by a creditor upon his debtor, directing the payment of a sum of money out of a specified fund, and which is presented to the debtor, though not accepted, constitutes a good assignment in equity. Superintendent of Schools v. Heath, 15 N. J. Eq. 22; Shannon v. Hoboken, 37 N. J. Eq. 123; S. C. on appeal, Id. 318.

A person, to be in a position to be entitled to the remedy given by section 3 of the mechanic's lien law, must, in the first place, be a creditor of the contractor; not a general creditor, but a creditor whose debt was contracted for work done to the building erected by the contractor for the owner, or for material furnished for the building. Such is the plain direction of the statute. Second. He must be a creditor whose debt is due. Before a workman or material-man can notify the owner of his claim, he must put the contractor in fault. The statute says that when the contractor shall, upon demand, refuse to pay the money or wages due, the owner may be notified. Until, therefore, the contractor has refused to pay what is justly due and in arrear, the statutory remedy is not applicable. Reeve v. Elmendorf, 38 N. J. Law, 125. Third. There must be a demand and refusal, and the demand must be for such an amount as the creditor is entitled to be paid at once. There can be no recovery against the owner of a lesser sum than that demanded of the contractor, because the finding that such lesser sum was the debt really due would, per se, show that the contractor was not in fault in refusing to pay. His obligation is to pay the money or wages due, and, if more is demanded, he has a right to refuse to pay. Reeve v. Elmendorf, supra. Fourth. The creditor must give notice, in writing, to the owner of the contractor's refusal to pay, and of the amount by him demanded.

In a case where all these requisites exist, the workman or materialman has a right to have the owner retain the amount so due to him and demanded "out of the amount owing by him to the contractor;" and the owner, on being satisfied of the correctness of the sum demanded, must pay the same to the workman or material-man, and the receipt of the workman or material-man will entitle the owner to an allowance therefor against the contractor. In a case where the statutory requisites exist, notice, given according to the statute, works an assignment, pro tanto, to the workman or material-man of the rights of the contractor against the owner. Wightman v. Brenner, 26 N. J. Eq. 489. Upon notice given, the workman or...