Mcneal Pipe & Foundry Co v. How-land

• Decision Date: 22 December 1892
• Citation: 111 N.C. 615,16 S.E. 857
• Court: North Carolina Supreme Court
• Parties: McNEAL PIPE & FOUNDRY CO. v. HOW-LAND et al.

16 S.E. 857

111 N.C. 615

McNEAL PIPE & FOUNDRY CO.

v.HOW-LAND et al.

Supreme Court of North Carolina.

Dec. 22, 1892.

Mechanic's Lien—Property Subject — Assignment of Contract—Judgment against Corporation—Receiver.

L Code, §§ 1781, 1782, provide that every kind of property shall be subject to a lien, for all work done or materials furnished, prior to any incumbrance after the work was begun. Sections 1801 and 1802 provide that all subcontractors who furnish material for any improvements on real estate shall have a lien thereon, which shall be preferred to the mechanic's lien now provided by law, when notice thereof shall be given; and the person claiming the lien may give notice to the owner or lessee who makes the contract for such improvement at any time before settlement with the contractor, and, upon failure of such owner to retain out of the amount due the contractor enough to pay the claimant, the latter may enforce his lien. Section 1789 provides that notice of the lien shall be filed within 12 months after the final furnishing of materials. Held, where H., a private individual, contracted with a town to operate a system of waterworks, and supply it with water, and acquired lands for a reservoir, and a right of way for pipes, and plaintiff furnished the pipes, machinery, and materials for constructing the works, that the waterworks and easements connected therewith were the private property of H., and plaintiff was entitled to his lien thereon.

2. Pending the construction of such waterworks, defendant water company was incorporated, whereupon H., without notice to plaintiff, assigned his contract with the town, and all his waterworks property, to defendant, and thereafter completed the works as subcontractor under his assignee, plaintiff continuing to furnish the materials under his original contract with H. therefor. Held, where plaintiff did not file notice of his lien until after the transfer to defendant, but within 12 months from the date of furnishing his last materials, that the lien related back to the time when the first materials were furnished, which antedated defendant's purchase, and defendant took subject to plaintiff's lien for materials furnished both before and after the transfer.

3. Code, § 671, provides that, where a judgment is entered against "a corporation authorized to receive fare or tolls, the franchise of such corporation, with all the rights and privileges thereof, so far as relates to the receiving of fare or tolls, " may be taken on execution. Held, that the statute includes defendant water company, authorized to charge a water rate, and the proper method to enforce plaintiff's judgment is by a receiver for defendant, under Code, § 379, providing for such appointment after judgment to carry the same into effect. Avery, J., dissenting.

Cross appeals from superior court, Durham county; E. T. Boykin, Judsre.

Action by the McNeal Pipe & Foundry Company against A. H. Howland and the Durham Water Company. From a judgment vacating plaintiff's lien for materials furnished, and a warding judgment against defendant Howland, both parties appeal. Reversed.

In June, 1886, the defendant Howland contracted in writing with the defendant town of Durham to construct a system of waterworks for said town to supply water for public and domestic purposes. On November 3, 1886, the plaintiff contracted to sell to Howland the necessary materials, and the same were supplied and used, for constructing said waterworks; and the delivery thereof, which was included in the contract, began on December 4, 1886, and was completed on May 7, 1887. In the latter part of the year 1886 the Durham Water Company was incorporated, and on January 1, 1887, Howland assigned his contract with the town to the said Durham Water Company; and the company assumed the duties, liabilities, and obligations of Howland to said town under the contract aforesaid. On July 19, 1887, Howland having failed to pay plaintiff a large part of his indebtedness for materials furnished, the plaintiff filed its claim for the same in the office of the clerk of the superior court of Durham county, in order to secure a lien as allowed by Code, §§ 1781-3808. It was admitted that this claim was sufficient in form and comprehensiveness, but it was contended that it was not sufficient to create the lien as claimed by plaintiff. On the day the claim was filed the plaintiff gave the defendants notice of Howland's indebtedness to it, and of the riling of its claim and its alleged lien, and demanded of said defendant company that it retain out of theamount due, or to become due, from it to the said Howland, on account of the said waterworks, so much as was necessary to pay plaintiff's claim. The court below adjudged that the lien filed by plaintiff was of no force and effect, and that the same be vacated and set aside; and it was further adjudged that the Durham Water Company recover its costs of plaintiff, and also that plaintiff pay all the costs connected with the filing of the lien; and it was further adjudged that plaintiff recover of the defendant Howland the sum of $16,975.73, with interest, etc. Both parties appealed.

J. W. Hinsdale, and Wm. A. Guthrie, for plaintiff.

W. W. Fuller and Boone & Parker, for defendants.

MacRae, J. We adopt the following opinion prepared by the late Chief Justice Merrimon in this case, with such additions thereto as in our judgment are necessary to a full determination of the questions presented to us on appeal. That opinion is as follows:

"The statute (Code, §§ 1781-1808) entitled 'Liens' is remedial, and its clear purpose is to give contractors, subcontractors, and laborers liens upon property as therein prescribed and provided, to secure the payment of money due for labor done or materials supplied on or about the same. To that end its language, phraseology, and scope are broad and comprehensive. There are few, if any, express exceptive provisions in it; and, in the absence of them, exceptions and limitations affecting such liens cannot be allowed, unless by necessary implication. The object is to give a lien on particular property deriving particular benefit, in favor of classes of persons whose claims are supposed to have peculiar merit. All this is made the more manifest bv the amendatory statute, (Acts 1887, c. 67.) Moreover, numerous decisions of this court interpreting this statute, and theamendments thereto, fully sustain the view here expressed. Chad-burn v. Williams, 71 N. C. 444; Wooten v. Hill, 98 N. C. 48, 3 S. E. Bep. 846; Burr v. Maultsby, 99 N. C. 263, 6 S. E. Rep. 10S.

"Adverting now to provisions of the statute pertinent to the present case, section 1781 thereof provides, among other things, that 'every lot, farm, or vessel, or any other kind of property, real or personal, not herein enumerated, shall be subject to a lien for the payment of all debts contracted for work done on the same, or material furnished.' it is further provided that' the lien for work on crops or farms or materials given by this chapter shall be preferred to every other lien or incumbrance which attached upon the property subsequent to the time at which the work was commenced or the materials were furnished.' Code, § 1782. It is further provided that 'all subcontractors and laborers who are employed to furnish, or who do furnish, material for the building, repairing, or altering of any house or other improvement on real estate, shall have a lien on said house and real estate for the amount ofsuchlabor done ormaterial furnished, which lien shall be preferred to the mechanic's lien now provided by law, when notice thereof shall be given as hereinafter provided: provided that the sum total of all the liens due subcontractors and material men shall not exceed the amount due the original contractor at the time of notice.' Code, § 1801. In this connection section 1802 provides that 'any subcontractor, laborer, or material man who claims a lien as provided in the preceding section may give notice to the owner or lessee of the real estate who makes the contract for such building or improvement at any time before the settlement with the contractor; and if the said owner or lessee shall refuse or neglect to retain out of the amount due the said contractor underthe contract as much as shall be due or claimed by the subcontractor, laborer, or material man, the subcontractor, laborer, or material man may proceed to enforce his lien, and after such notice is given no payment to the contractor shall be a credit on, or discharge of, the the lien herein provided.' It is further provided in section 1789 that 'notice of the lien shall be filed as hereinbefore provided at any time within twelve months after the completion of the labor, or the final furnishing the materials, or the gathering of the crops: provided that in cases of liens on real estate, or any interest therein, given by this chapter, the notice shall be filed in the office of the superior court clerk within twelve months after the completion of the laboror the final furnishing of the materials.' When the claim is so filed within twelve months the lien relates back'to the time at which the work was commenced or the materials were furnished, ' and is preferred to all liens orincumbrances created subsequent to that time. Code, § 1782; Burr v. Maultsby, supra, and casesthere cited. And this is so although the subsequent incumbrancer had no notice of the lien thus relating back. The clause of the statute (Code, § 1781) first above recited declares that 'every lot, farm, or vessel, or any kind of property, real or personal, not herein enumerated, shall be subject to a lien for the payment of all debts contracted for work done on the same, or materials furnished.' This phraseology, and the purpose of it, are comprehensive. The lien prescribed attaches, in the case provided for, to any real property, whether it be denominated ' a lot or farm, ' ora storehouse site, a mill site, a...