New Haven Orphan Asylum v. James A. Haggerty Co.

• Decision Date: 18 July 1928
• Court: Connecticut Supreme Court
• Parties: NEW HAVEN ORPHAN ASYLUM v. JAMES A. HAGGERTY CO. ET AL.

142 A. 847

108 Conn. 232

NEW HAVEN ORPHAN ASYLUM v. JAMES A. HAGGERTY CO. ET AL.

Supreme Court of Errors of Connecticut.

July 18, 1928

Appeal from Superior Court, New Haven County; Isaac Wolfe, Judge.

Action in the nature of interpleader by the New Haven Orphan Asylum against the James A. Haggerty Company and others to determine the disposition of an unpaid balance due on a building contract, brought to the superior court in New Haven county. An interlocutory judgment was entered by stipulation that the money be paid into the hands of the clerk of that court and plaintiff and its property discharged of all claims of the defendants, and thereafter the defendants presented their several claims and were fully heard: From a final judgment awarding priorities certain defendants appeal. Error, and cause remanded, for entry of judgment in accordance with opinion.

Manuel S. Sachs, Louis Sachs, and Joseph I. Sachs, all of New Haven for appellant Drazen Lumber Co.

Henry Rabinowitz, of New Haven, for appellant Hardwood Floors, Inc.

Charles T. McClure, of New Haven, for appellants Connecticut Sash & Door Co. and Mary E. Clark.

David L. Daggett and Frank E. Callahan, both of New Haven, for appellee Connecticut Adamant Plaster Co.

William L. Beers, of New Haven, for New Haven Orphan Asylum.

Argued before MALTBIE, HAINES, HINMAN, BANKS, and AVERY, JJ.

HAINES, J.

The finding discloses that the plaintiff, owning land and buildings in the town of Hamden, made a contract with the Haggerty Company in October, 1923, for the construction of certain buildings and improvements thereon, and a second contract in February, 1924, for certain other work on the same property.

The work was fully performed by the Haggerty Company. The defendants Richard W. Desmond, the DeForest & Hotchkiss Company, the F. L. McDermott Iron Works, Inc., Hardwood Floors, Inc., the Connecticut Sash & Door Company, the Drazen Lumber Company, Horace E. Clark, Cairns & Funkie, Inc., and the Connecticut Adamant Plaster Company were subcontractors engaged by the Haggerty Company, and each rendered services and furnished materials pursuant to the plaintiff's contracts with the Haggerty Company; but none of these subcontracts were in writing, nor were any of them assented to in writing by the plaintiff.

Upon the completion of the work a substantial balance of the contract price was due from the plaintiff, but the latter refused to pay because of conflicting claims by subcontractors and general creditors of the Haggerty Company, and brought this action in the nature of interpleader to determine the rights of all parties. The plaintiff waived certain claims it had first made against the Haggerty Company for counsel fees and disbursements, and agreed that the net sum due and in its hands was $20,768,70. The defendant John A. Conlen was a general creditor of the Haggerty Company and served process of garnishment on this fund in the hands of the plaintiff, and the same course was taken by two of the above-named subcontractors, the Adamant Plaster Company and Hardwood Floors, Inc.

At the opening of the hearing, defaults were entered against certain defendants, some by agreement and some for nonappearance, and disclaimers were filed by certain others. All the remaining parties consenting thereto in writing, the court entered an interlocutory judgment that the above-named sum be paid into court and held by the clerk subject to the final judgment of the court, and that the plaintiff and its property be freed of all claims theretofore made by the parties. It does not appear of record that a formal judgment of interpleader was entered, but the claims of the parties were made by answer and cross-complaint and were fully heard.

The fund being insufficient to pay all claimants in full, the main question presented to the court was that of priorities. The trial court adopted the views of the garnisheeing creditors, that the rights of the subcontractors dated from the time they gave notice of intention to claim their liens, and gave judgment for payment in full to the following claimants: To Cairns & Funkie, Inc., whose notice was given September 16, 1925, $3,616; to John A. Condon, who served garnishee process October 3, 1925, $1,698.61; to R. W. Desmond, whose notice was given October 16, 1925, $3,234.64; to DeForest & Hotchkiss Company, whose notice was given October 23, 1925, $751.89; to F. L. McDermott, Inc., whose notice was given October 23, 1925, $2,841.53; to Adamant Plaster Company, which served garnishee process October 23, 1925, $7,365.83--dividing the balance of the fund pro rata between five subcontractors whose notices were given subsequent to October 23, 1925, the date of the Plaster Company's garnishment, viz.: Hardwood Floors, Inc., Connecticut Sash & Door Company, Drazen Lumber Company, J. E. Bassett Company, and Horace E. Clark. From this judgment the last-named subcontractors, with the exception of the Bassett Company, took separate appeals, but on identical grounds.

The appellants are contending for priority over the garnisheeing creditors and equality with the other subcontractor lienors, on the ground that their right to the fund dates from the time their service began. This precise question has not heretofore been presented to this court. Where it has been passed upon in other jurisdictions there is a sharp conflict of opinion, not only or solely because of differing statutory provisions, but of differing views of the spirit and purpose of mechanics' lien laws in general.

That portion of our own law in which we are to seek the solution of the present question is contained in General Statutes, Rev. 1918, § § 5217 to 5220, inclusive.^[1]

One of the purposes of this legislation is to give to building creditors certain peculiar and different rights from those enjoyed by general creditors. Chapin v. Persse & Brooks Paper Works, 30 Conn. 461, 474, 79 Am.Dec. 263; National Fireproofing Co. v. Huntington, 81 Conn. 632, 634, 71 A. 911, 20 L.R.A. (N. S.) 261, 129 Am.St.Rep. 228.

" The design of the statute was to give to one who, by furnishing services or materials, under a contract with the owner of land, had added to its value by constructing a building upon it. * * * a substantial security for his proper remuneration. * * * To carry out this intent, it is necessary to give the statute such a construction, if its terms are doubtful, as may serve to make mechanics' liens of some value." Balch v. Chaffee, 73 Conn. 318, 320, 47 A. 327, 328 (84 Am.St.Rep. 155).

" The mischief to be prevented was loss to those furnishing services or materials in the construction of a building, if unable to collect what might be due them on such account from the owner of the real estate." National Fireproofing Co. v. Huntington, 81 Conn. 632, 634, 71 A. 911 (20 L.R.A. [N. S.] 261, 129 Am.St.Rep. 228).

In determining the legislative intent we may not wholly rely upon the literal meaning of particular provisions, but must proceed upon the assumption that the law was intended to be read as a whole with each provision in harmony with every other. Hartford Builders' Finish Co. v. Anderson, 99 Conn. 343, 352, 122 A. 76. " The mechanic's lien law is the creature of statute, and this statute is to be construed so as to reasonably and fairly carry out its remedial intent. It is not to be construed with unreasonable strictness." Parsons v. Keeney, 98 Conn. 745, 748, 120 A. 505; Cronan v. Corbett, 78 Conn. 475, 478, 62 A. 662; Brabazon v. Allen, 41 Conn. 361, 362.

A mechanic's lien law was first enacted in this state in 1836. It only secured the original contractors having claims of over $200 and applied only to buildings in cities. Pub. Acts 1836-37, c. 76. Three years later, by amendment, subcontractors were given the lien if their claims were $50 or more, and if they had an agreement in writing with the contractor assented to in writing by the owner of the property. Pub. Acts 1839, c. 29.

In the succeeding 16 years, by amendments, it was provided the mechanic's claim need only exceed $25; that any person having such a claim for services or materials should have a lien, but all save the main contractor or a subcontractor whose contract with the main contractor was in writing and assented to in writing by the other party to the contract, must notify the owner within 60 days from the beginning of his service of that fact and that he intended to claim the lien. Pub. Acts 1855, c. 76.

Thereafter for 20 years the law remained practically without change, and then it was provided that the claim must be " by virtue of an agreement with or by consent of" the owner or his agent. Pub. Acts 1875, c. 15. Four years later it was provided that it should not be necessary for any subcontractor to obtain an agreement with or consent of the owner for furnishing labor or material in order to claim a lien. Pub. Acts 1879, c. 43.

By later amendments, in 1889 and 1901, this provision regarding subcontractors was made to read substantially as it appears in the closing paragraph of our present section 5219:

" No subcontractor, without a written contract complying with the provisions of this section, and no person who furnishes material or renders services by virtue of a contract with the original contractor or with any subcontractor, shall be required to obtain an agreement with or the consent of, the owner of the land, as provided in section 5217, to enable him to claim a lien under this section." Public Acts of 1899, c. 121; Public Acts of 1901, c. 80; General Statutes of 1902, § 4137; General Statutes of 1918, § 5219.

Under these conditions, it will be seen that our law gives liens to two classes of subcontractors: (1) Those who have an agreement with the contractor in writing and have...