Philip Carey Mfg. Co v. Place

• Decision Date: 03 May 1907
• Docket Number: (No.281.)
• Citation: 1 Ga.App. 707,58 S.E. 274
• Parties: PHILIP CAREY MFG. CO. v. VIADUCT PLACE et al.
• Court: Georgia Court of Appeals

58 S.E. 274

(1 Ga.App. 707)

PHILIP CAREY MFG. CO.

v.VIADUCT PLACE et al.

(No.281.)

Court of Appeals of Georgia.

May 3, 1907.

1. Mechanics' Liens—Proceedings to Per-fect—Judgment.

A materialman's lien is not complete as such until there is a judgment fixing the amount.

2. Same.

In order to foreclose and perfect such lien, so as to bind the owner of real estate for the price of material furnished a contractor, there must be a judgment against the contractor, where no privity exists between the materialman and the owner of the property.

3. Same—Operation and Effect—Extent of Liability of Owner.

The filing of a suit to foreclose a materialman's lien, claim of which has been previously filed in accordance with law, does not of itself create such lien; and the existence of such lien may be prevented.

(a) There is a difference between a claim of lien and the lien itself, when established in accordance with section 2804 of the Civil Code of 1895.

(b) The contractor must be sued with the owner of the realty sought to be subjected to the special lien, and the owner's liability as to amount and in all other respects can be no greater than the contractor's.

4. Bankruptcy—Discharge of Bankrupt.

Consequently, where the contractor is discharged in bankruptcy prior to the judgment creating the lien, and his liability is thereby annulled, the lien cannot thereafter be foreclosed against the property of the owner and a judgment be rendered against him. It would require an equitable action to protect the plaintiff in the rights sought to be asserted under the circumstances. Hudson v. Lamar, 49 S. E. 735, 121 Ga. 835; Bell v. Dawson Grocery Co., 48 S. E. 150, 120 Ga. 628.

(Syllabus by the Court.)

Error from City Court of Atlanta; Reid, Judge.

Suit to foreclose a materialman's lien by the Philip Carey Manufacturing Company against the Viaduct Place and others. Judgment for defendants, and plaintiff brings error. Affirmed.

J. E. & L. F. McClelland, for plaintiff in error.

Smith, Hammond & Smith, Culberson & Johnson, and W. E. Talley, for defendants in error.

RUSSELL, J. Philip Carey Manufacturing Company brought suit to foreclose a materialman's lien on the property called the "Viaduct Place, " in the city of Atlanta, against Steiner-Emery Company as owners and J. F. Clemmons as contractor. By agreement of the parties his honor, H. M. Reid, judge of the city court of Atlanta, without the intervention of a Jury, rendered judgment in the case upon the following agreed statement of facts: The Philip Carey Manufacturing Company is a corporation of Ohio with a place of business in the city of Atlanta, and is a materialman. J. F. Clemmons was a contractor, and had contracted to improve the Viaduct Place. Clemmons purchased of the Philip Carey Manufacturing Company certain material, part of which, amounting to $51.15, was used in improving the building of Viaduct Place. Said material was furnished during the month of August, 1905. Philip Carey Manufacturing Company filed its claim of lien in the office of the clerk of the superior court of Fulton county October 7, 1905, and it was recorded October 10, 1905. The building improved is in Fulton county, Ga. The Philip Carey Manufacturing Company filed their suit on October 13, 1905, against J. F. Clemmons, contractor, and Steiner-Emery Company, now Viaduct Place, owners. Both of said parties were served October 20, 1905. Clemmons was adjudicated a bankrupt on October 5, 1905. On the schedule of said bankrupt it appears that the Philip Carey Manufacturing Company was a creditor of the bankrupt in the sum of $159.-76, and it was admitted that said debt was scheduled in said bankruptcy proceedings, and the manufacturing company had notice of the bankruptcy proceedings, but never proved or attempted to prove their claim. The balance due Clemmons by Viaduct Place was set apart to him as a homestead. The order of court confirming the homestead was dated July 18, 1906, and Clemmons was granted his final discharge in bankruptcy July 21, 1906. Upon the above agreed statement of facts and the admissions of the pleadings the following judgment was rendered: "Upon the pleadings in said case andupon the agreed statement of facts submitted the court finds for the defendant J. F. Clem-mons on his plea of discharge in bankruptcy. As no judgment can be rendered against Clemmons as contractor, I find in favor of the other defendant; and judgment is rendered against the plaintiff for costs." The plaintiff in error excepts, upon the ground that the judgment is contrary to law and without authority of law; that the effect of said judgment is to hold that the discharge in bankruptcy of a contractor relieves the property improved of a materialman's lien for material furnished to improve the same. The contention of the plaintiff in error is that while no general judgment can be obtained against the contractor after his discharge in bankruptcy, the bankrupt can be made a party for the purpose of fixing the amount of the debt and that the debt so fixed thus becomes a lien against the property improved, and the contractor's discharge in bankruptcy does not relieve the property improved of its lien.

We think the finding of the trial judge was manifestly correct, in view of the facts submitted. The contractor was adjudged a bankrupt on October 5, 1905, two days before the plaintiff in error filed its claim of lien on the property of Viaduct Place on account of the material in question. In the contractor's schedule in bankruptcy it was shown that the plaintiff in error was a creditor of the contractor on this claim for material, and that the claim was provable in bankruptcy. According to the agreement of facts, the plaintiff in error paid no attention to the proceedings in bankruptcy. It could have gone into the bankrupt court, and have established the amount of its lien and identified the use to which its material was put. It had notice that the bankrupt court was dealing with this debtor, the contractor, and all of his rights and liabilities. This case came on to be tried November 30, 1906. On July 21, 1906, the contractor, Clemmons, was given his final discharge in bankruptcy, and such discharge was set up by defendant In his plea. The amount due the contractor by Viaduct Place, as shown by the agreed statement of facts, had been set apart to Clemmons as part of his exemption. The discharge of the contractor relieved Viaduct Place, especially in view of the fact that the title of the indebtedness was vested in the defendant as part of his exemption. The plea of the defendant Viaduct Place, which is not denied, says that "demands had been made on this defendant by the trustee in bankruptcy for said J. F. Clemmons for the balance due by this defendant to said Clemmons on account of said work. This defendant shows that the exclusive jurisdiction of the assets of said J. F. Clemmons, part of which indebtedness of this defendant to said Clemmons on account of work done by him on said building, is vested in the United States District Court, sitting in bankruptcy, and, if the plaintiff has any claim to or lien upon said fund or any part of it, the court of bankruptcy has full jurisdiction to adjudicate said claim." The plea proceeded further to state that the defendant withheld the amount due, as shown by the affidavit of Clemmons, made in accordance with the statute, to wit, the sum of $51.15, which is mentioned in the agreed statement of facts. Under the very letter of the bankrupt act the court could not enter judgment against Clemmons, because he had been adjudicated a bankrupt and discharged. Being without power to render judgment against the contractor, the court could not render a general judgment against Viaduct Place; and the plaintiff's only remedy was to enforce against the specific property, into which its material went, a previous or contemporaneous judgment against the contractor, fixing the amount of the balance due...