Spengler v. Stiles-Tull Lumber Co.

• Decision Date: 26 October 1908
• Docket Number: 13540
• Citation: 94 Miss. 780,48 So. 966
• Court: Mississippi Supreme Court
• Parties: AUGUSTINE SPENGLER ET AL. v. STILES-TULL LUMBER COMPANY

48 So. 966

94 Miss. 780

AUGUSTINE SPENGLER ET AL. v. STILES-TULL LUMBER COMPANY

No. 13540

Supreme Court of Mississippi

October 26, 1908

FROM the circuit court of Madison county, HON. WILEY H. POTTER Judge.

The Stiles-Tull Lumber Company and others, appellees, were plaintiffs in the court below; Augustine Spengler, and another, appellants, doing business under the copartnership name, A. & S. Spengler, were defendants there. From a judgment in plaintiffs' favor defendants appealed to the supreme court.

The opinion of the court in response to the suggestion of error fully states the facts.

Reversed and remanded. Suggestion of error overruled.

Brunini & Hirsh, for appellants.

The principal question for determination is:

Has one, to whom a contractor has given a written assignment of moneys due and to become due under a contract for the construction of a building, and who has given notice of such assignment to the owner of the building, a right to such moneys prior to the rights of subcontractors and material men who, thereafter, give such owner notices of their claims against the contractor or materials furnished for, or labor performed on, the building?

It is apparent that Code 1906, § 3072, applies where the owner does not let the entire contract to one person, but gives, to illustrate, the brick work to one person, the woodwork to another, the plastering to a third, the roofing to a fourth and the painting to a fifth. In such case all are original contractors and not subcontractors; and, under the code section, each has a concurrent lien.

Whatever claim appellees have to the fund in court must be asserted if at all, under Code 1906, § 3074, because Jaffray was the contractor while appellees were subcontractors and sub-material men.

Appellants A. & S. Spengler, were not the assignees of the contract but were simply the assignees of the money due and to become due under the contract. They therefore did not stand in the same relation to the subcontractors, appellees, as did the contractor Jaffray. If the assignment to appellants had embraced the contract, then they would have stood, so to speak, in the shoes of Jaffray, and appellees would undoubtedly have had a prior right to the fund in court.

In placing an interpretation upon our law by the aid of decisions of the appellate courts of other states, it will be well to observe that while in the main the statutes of the various states are the same in general policy yet, in many essentials, they differ widely. Judicial precedent is serviceable in furnishing canons of interpretation and analogies to aid and direct judicial inquiry; but when the statutes are essentially different its assistance extends no further. The inquiry at last is, in every case in any state what is the legislative intent as expressed in the statute of the state. 20 Ency. Law (2d ed.), 268.

An examination of Code 1906, § 3074, will disclose the fact that the subcontractor or sub-material man has no lien nor has he any way of creating one. All that he can do to protect his interest is to give notice in writing to the owner of the building stating the amount due him by the contractor for work done on, or materials furnished in, the building; and this notice thereupon will "stop" any amount in the hands of the owner due to the contractor. It will be observed that the subcontractor is given no lien on the property. Until the subcontractor serves the owner with the specified notice the subcontractor remains merely an ordinary creditor of the contractor. The owner can disregard him absolutely until the notice is served.

Our statute on this subject is the same as what is known as the New York system, which is distinguished from the Pennsylvania system, which latter system gives the subcontractor or sub-material man a direct lien. The plan adopted in New York does not secure to any one except the original contractor an absolute lien on the property for the whole sum due, but by a species of equitable subrogation allows the subcontractor or sub-material man to give a written notice to the owner stating the particulars of the unpaid claim and requiring the owner thereupon to retain such funds as were in his hands belonging to the contractor to abide the results of proper proceedings. 27 Cyc. 89. Under statutes which follow the Pennsylvania system a subcontractor or sub-material man is entitled to a direct lien for what he has done or furnished without regard to any rights of the contractor. 27 Cyc. 90.

From the foregoing it will be perceived that the Mississippi statute law on the subject is fashioned after and similar to the New York system. In some of the states it will be found that at one time the New York system prevailed, and at another time the Pennsylvania system was in force; hence, in reviewing the decisions of our sister states it is well to note the foregoing.

We refer to the following decisions of the New York appellate courts throwing light upon the matter: Stevens v. Ogden, 130 N.Y. 182, 29 N.E. 229; Brill v. Tuttle, 81 N.Y. 454, 37 Am. Rep. 515; Conselyea v. Blanchard, 103 N.Y. 222, 8 N.E. 490; Lauer v. Dunn, 115 N.Y. 405, 22 N.E. 270; McCorkle v. Herrman, 52 Hun, 610, 117 N.Y. 297; Bates v. Salt Springs National Bank, 157 N.Y. 322, 51 N.E. 1033; Beardsley v. Cook, 143 N.Y. 143, 38 N.E. 109. See also Binns v. Slingerland, 55 N.J.Eq. 55, 36 A. 277; Superintendent, etc., v. Heath, 15 N.J.Eq. 22; Lannigan's Admr. v. Bradley, 50 N.J.Eq. 201; Hall v. Banks, 79 Wis. 299, 48 N.W. 385; Copeland v. Manton, 22 Ohio St. 398; Board of Education v. Duparquet, 50 N.J.Eq. 234, 24 A. 922; Tollhis v. James, 25 Ohio L. Jour. 277.

The lien of a subcontractor is defeated by an assignment of the claim due from the owner of a building erected under contract with the original contractor, made in good faith before the notice of the lien is served, although the owner knew when he paid the assignee that the subcontractor held unpaid claims. Dorestan v. Kreig, 66 Wis. 604; Hall v. Banks, supra.

Now, let us advert to the decisions of our own state. It has been well settled that a plain interpretation of Code 1906, § 3074, gives no lien to the subcontractor. Holmes v. Shands 27 Miss. 40; Rivers v. Mulholland, 62 Miss. 766. And where a written notice of a claim to the fund by laborers has been served subsequently to the writ of garnishment, the garnishment being first in time is also first in right. Herrin v. Warren, 61 Miss. 509. This last cited decision is 0absolutely decisive of the question here in issue. If the notice by garnishment be good as against "stop" notices of laborers upon what reasoning can it be held that an assignment with notice is not good as against a "stop" notice of a subcontractor?

We cite the case of Peck-Hammond Company v. Williams, 77 Miss. 824, 27 So. 995, as also decisive of and controlling this issue. The facts in this case are in substance as follows: One Wedgworth was a contractor having charge of the erection of a municipal school building, and when he had halfway completed the building there remained only about $ 8,000 due to him by the municipality on the contract price. Wedgworth then executed an assignment of all moneys due and to become due to him under the contract, in favor of one Mrs. Williams in settlement of certain debts due to Mrs. Williams for material furnished by her in the construction of the building. Wedgworth continued to construct the building and to draw money from the municipality to pay for labor and to buy material for the unfinished building, and in all other ways he exercised full authority and contested the assignment on the ground that the advertisement by the owner (municipality) in the newspapers had stated that the successful bidder for erection of the building would be required to secure the payment of all labor and material employed in the construction of the building. The right of the contractor Wedgworth to make the assignment to Mrs. Williams was not at all called in question by learned counsel for the Peck-Hammond Company. It seems to have been admitted by counsel for the parties that the assignment would in law be valid against the Peck-Hammond Company if the aforesaid advertisement did not affect its validity. This appellee court held that, as Wedgworth's assignment to Mrs. Williams was shown to be valid, the acts of the contractor Wedgworth, after the assignment did not affect its validity. This appellate court held that, the contract with the municipality for payment of labor and material men was intended obviously to operate to protect the owner, the municipality, and in no way affected the right of the assignee, there being no contest between the owner and the assignee.

We know of no law in Mississippi by which assignments of the kind here in controversy are declared to be void or unforceable. There is nothing in Code 1906, § 3074, which prohibits or prevents a contractor from exercising his common law right of assigning what is due him or what is to become due to him. Until our legislature changes the statute law assignments of this nature will continue to be recognized and enforced by our courts.

Appellants secured the assignment to protect them in their advances, gave notice the same day to the owner, and they thereby acquired a prior right to the fund as compared with appellees who served their notices subsequently. While appellants obtained a preference, this was nothing more than what the appellees were severally endeavoring to do when they each filled their notices under Code 1906, § 3074.

Appellants' claim was for money and material which went into the building just as the claims of appellees are likewise for material and labor for the building. Certainly appellants claim must stand irrespective of the assignment and the...