Md. Cas. Co. v. Des Moines City Evangelistical Union
| Decision Date | 20 May 1918 |
| Docket Number | No. 32134.,32134. |
| Citation | 184 Iowa 246,167 N.W. 695 |
| Parties | MARYLAND CASUALTY CO. v. DES MOINES CITY EVANGELISTICAL UNION (RANDALL LUMBER CO. ET AL., INTERVENERS). |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Polk County; L. De Graff, Judge.
Suit in equity to foreclose a mechanic's lien. A decree was entered, finding defendant indebted to plaintiff as assignee of one Errington, a building contractor, in the sum of $1,362.43, and establishing a lien therefor upon certain property, subject, however, to the payment of certain debts due from Errington to several intervening subcontractors. The plaintiff appeals. Affirmed.Miller & Wallingford and O. H. Miller, all of Des Moines, for appellant.
W. L. Smith, Royal & Royal, Ole O. Roe, Wessels & Wessels, C. E. Snyder, and Tesdell & Mackman, all of Des Moines, and R. L. Hudson, of Pocahontas, for appellees.
On April 30, 1914, Arthur Errington, a builder, entered into a written contract with the defendant to provide the necessary materials and labor and to construct a certain church building in the city of Des Moines, and to complete the same on or before September 1, 1914. The contract price of the building was fixed at $9,880. Payments in installments not to exceed 85 per cent. of the material and labor actually furnished by the contractor were to be made from time to time as the building progressed--not oftener than once each week--and the remainder of the contract price within 30 days after the completion of the building and its acceptance by the owner and the performance of certain conditions by the contractor as expressed in the following paragraphs, which we quote from the written argument:
“If at any time there shall be evidence of any lien or claim for which, if established, the owner of said premises might become liable and which is chargeable to the contractor, the owner shall have the right to retain out of any payment then due or thereafter to become due an amount sufficient to completely indemnify the owner against such lien or claim. Should there prove to be any such claim or lien after all payments are made, the contractor shall refund to the owner all moneys that the owner may be compelled to pay in discharging any lien on said premises made obligatory in consequence of the contractor's default.
Prior to the making of the final payment and as a condition precedent thereto, the contractor agrees to furnish and deliver to the owner receipts in full for all materials and labor furnished and used in said church building. The contractor further agrees to indemnify against any and all mechanic liens that may be placed against said church building.”
The building was not completed within the contract period, and in January, 1915, the work being still unfinished, the contractor abandoned it, and on February 18, 1915, instituted suit to recover an alleged remainder due him of $2,735, and for the enforcement of a mechanic's lien to that amount upon the property. On March 6, 1915, the defendant appeared in said suit and filed its answer, denying any indebtedness to plaintiff and alleging in substance that he had failed to perform his contract or perform the conditions upon which the contract price was made payable. There was also a plea of payment. In May, 1915, the Maryland Casualty Company gave written notice to the defendant that it had received from Errington an assignment of his account and claim against defendant, but said company did not become a party to the suit, and was not substituted as plaintiff until December 30, 1915, and the issues were not finally settled until December 4, 1916. During the period beginning May 4, 1915, and ending March 23, 1916, the Randall Lumber Company and nine others, who had furnished Errington labor and materials in the construction of the building, and whose claims and accounts so arising had not been paid by Errington, severally intervened in this suit, setting up their said claims and asserting a lien therefor which they asked the court to confirm and enforce. With perhaps one or two exceptions none of these subcontractors had filed any previous itemized account of their several claims under the provisions of Code, § 3092, but each in his petition of intervention set out the alleged facts in general terms and each asserted a lien for the amount of his claim and prayed a foreclosure thereof. Upon each of these petitions the plaintiff joined issue and pleaded the failure of the interveners to file verified statements of their several claims in the manner or within the time provided by the statute.
The issues having been settled they were referred to W. G. Harvison, Esq., to hear, try, and report thereon with findings of fact and conclusions of law. Trial was had to the referee, who made and filed his report in due form. For the purposes of this appeal it is unnecessary to set out the report in full. Briefly stated, the referee found that, as between the plaintiff and its assignor, Errington, on the one hand and the defendant, Evangelistical Union, on the other, there was a remainder due the plaintiff to the amount of $1,362.43, for which sum it was entitled to have its claim for a mechanic's lien established. This relief, was, however, made subject to the claims of the interveners, to whom it was found Errington was indebted in the aggregate sum of $1,009.21 for labor and materials furnished him in the construction of the building. In other words, the referee, having found the remainder due to Errington and assigned to plaintiff, further found that this sum, when collected or paid, should be first applied to the payment of the intervening subcontractors' claims as adjudicated, and that the remainder, if any, should then be paid over to the plaintiff. The plaintiff's objections to the report of the referee were overruled, and a decree entered in accordance therewith. Plaintiff appeals.
I. The appellant makes no complaint in argument that the amount found due from the defendant to plaintiff is less than it should have been, nor is it contended that as between Errington and the interveners the latter were not entitled to recover the several sums reported by the referee in their favor. The proposition relied upon for a reversal or modification of the decree below is that the interveners failed to observe the provisions of Code, §§ 3092, 3094, in that they did not, within 30 days from the date when the materials were furnished or labor was performed by them for Errington, file with the clerk of the district court verified statements of their several accounts or demands, nor did they, or either of them, intervene in this action or file petitions asserting their alleged right to a lien or liens until long after said period of 30 days had expired, and after the plaintiff had served notice upon defendant of Errington's assignment to the plaintiff, and that by reason of this alleged failure of the interveners their alleged liens and right to preference in the distribution and application of the moneys earned by Errington and remaining unpaid cannot now be asserted or given preference against the plaintiff as Errington's assignee. This objection, variously stated, presents the only question we have to consider upon the merits of this litigation. So far as is material in this case the statute under consideration is as follows:
“Sec. 3094. Subcontractor's Claim After Thirty Days. The subcontractor may, at any time after the expiration of said thirty days, file his claim for a lien with the clerk of the district court, and give written notice thereof to the owner, or his agent or trustee, * * * and from and after the service of such notice his lien shall have the same force and effect, and be prosecuted or vacated by bond, as if filed within the thirty days, but shall be enforced against the property or upon the bond, if given by the owner, only to the extent of the balance due from the owner to the contractor at the time of the service of such notice upon him, his agent or trustee; but if in such case the bond is given by the contractor, or person contracting with the subcontractor filing the claim for a lien, such bond shall be enforced to the full extent of the amount found due the subcontractor.
Sec. 3095. The liens provided for by this chapter shall take priority as follows: * * *
Par. 2. They shall take priority of all garnishments of the owner for the contract debts, whether made prior or subsequent to the commencement of the furnishing of the material or performance...
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