Thomas v. Bd. of Educ. of City of Paterson

• Citation: 81 N.J.Eq. 186,86 A. 412
• Parties: THOMAS et al. v. BOARD OF EDUCATION OF CITY OF PATERSON et al.
• Decision Date: 03 March 1913
• Court: United States State Supreme Court (New Jersey)

86 A. 412

81 N.J.Eq. 186

THOMAS et al.

v. BOARD OF EDUCATION OF CITY OF PATERSON et al.

Court of Errors and Appeals of New Jersey.

March 3, 1913.

(Syllabus by the Court.)

Appeal from Court of Chancery.

Action by Benjamin Thomas, Jr., and others against the Board of Education of the City of Paterson and others. From the decree advised, complainants appeal. Reversed.

The litigation arose under the act of 1892, relating to liens on moneys growing due on municipal contracts for public improvements (P. L. p. 369; C. S. 3315), and the controversy brought up by this appeal was between the complainants as claimants under a stop notice, and the respondent claiming under assignment from Maloney, the original contractor, to one Farnon, and further assignment from Farnon to respondent Brogan. The fund available amounted to $589.59, and the stop notice called for $806.10, but claimants at the hearing limited their claim to $400, being the amount awarded for extra work in excavation, conceding that the claim of Brogan under the assignments, which was prior in time, was superior to theirs as against the $189.59 remainder of the fund, but asserting that the assignment from the contractor to Farnon, which controlled the claim of Brogan, did not cover the allowance of $400 for extras. The Vice Chancellor decided that it did, and awarded the whole fund to Brogan. From this decision complainants appeal.

William B. Gourley, of Paterson, for appellants.

John J. Fallon, of Hoboken, for respondent.

PARKER, J. (after stating the facts as above). The decision of this case turns on the operation and effect of the assignment from the contractor Maloney to Farnon. Maloney had a contract with the board of education for the building of a schoolhouse at a lump figure of $33,886, payable monthly on the basis of 85 per cent of work done, as certified by the architect; the other 15 per cent. to be retained as a guaranty until the final completion of the building. The contract contained provisions that, if the board should request alterations, etc., during the work, they should not void the contract, but be added or deducted from the contract price, as the case might be, by a fair and reasonable valuation; that no extra work should be done without a written order from the architect and an express agreement in writing not only as to the alteration itself but as to the cost; also a provision that the written consent of the board through its architect should be the only authority, to vary, alter, amend, or change the contract or any of the plans or specifications. Maloney defaulted and abandoned the work, which was taken up and completed by his bondsmen, and, on a final adjustment of all matters under the contract, the sum of $589.59 remained as a balance to meet claims under the act and otherwise, after satisfying the bondsmen.

With these facts in mind, we turn to the assignment to Farnon. It recites that Maloney has made his note to Farnon, at six months for $2,200, and that Brogan has indorsed it; that Maloney has the school contract above mentioned; that 15 per cent. of the contract price is to be retained until 30 days after completion; that such...