Tri-State Culvert Mfg., Inc. v. Crum

• Decision Date: 29 July 1976
• Docket Number: TRI-STATE,No. 3,No. 52200,52200,3
• Citation: 228 S.E.2d 403,139 Ga.App. 448
• Parties: CULVERT MANUFACTURING, INC. v. Emily F. CRUM et al
• Court: Georgia Court of Appeals

Page 403

228 S.E.2d 403

139 Ga.App. 448

TRI-STATE CULVERT MANUFACTURING, INC. v. Emily F. CRUM et al.

No. 52200.

Court of Appeals of Georgia, Division No. 3.

July 29, 1976.

Lipshutz, Zusmann, Sikes, Pritchard & Cohen, Charles C. Pritchard, Abraham A. Sharony, Atlanta, for appellant.

Sutherland, Asbill & Brennan, John A. Chandler, Atlanta, for appellees.

WEBB, Judge.

Tri-State Culvert Manufacturing, Inc. brought suit against the owners of described realty seeking to foreclose a materialman's lien for corrugated pipe used in a development known as Century Center. It was alleged that plaintiff furnished the pipe to a subcontractor on the job, 'P & D Pipe Contractors, Inc.,' a corporation, against which a judgment had previously been obtained in a suit on the account. A copy of the claim of lien, attached to the complaint as an exhibit, stated that the materials were furnished 'at the special instance of P & D Pipe Contractors, Inc.,' and a copy of the judgment fi. fa., also attached, showed that the judgment had been obtained against the corporation as the account debtor.

At trial of the lien foreclosure it developed that plaintiff materialman had brought the prior suit on the account jointly against the corporation and its two individual incorporators, Raleigh Lovett and Fred Wagner, alleging that they were all liable on the account. Lovett and Wagner andswered, denying liability, but the case went into default as to the corporation. Plaintiff chose to take a default judgment against the corporation and to dismiss as to the individuals Lovett and Wagner, and in this manner plaintiff elected to rely upon its default judgment against the corporation as satisfying the condition precedent that judgment on the account be obtained against the contractor to whom the materials were furnished.

At trial, however, plaintiff's general manager testified that throughout the relevant time period plaintiff had sold the pipe not to the corporation but to the two individuals, Lovett and Wagner, trading as P & D Pipe Contractors; that he had relied upon the credit of these individuals in setting up and maintaining the account; and that he never knew they had incorporated until after they ceased doing business.

At the close of plaintiff's evidence defendants moved for an involuntary dismissal pursuant to CPA § 41(b) (Code Ann. § 81A-141(b)) on the ground, inter alia, that plaintiff had not proved a judgment against the subcontractor to whom the material was furnished, i.e., Lovett and Wagner, the individuals. The trial court granted the motion, and this appeal followed.

We affirm. Unless the case falls within one of the exceptions enumerated under Code Ann. § 67-2002, which are not applicable here, 'in a suit to foreclose a materialman's lien on real estate, plaintiff must show that he has brought suit against the contractor or subcontractor, as the case may be, to whom the material was furnished . . .' Eubank v. Barber-Colman Co., 115 Ga.App. 217, 219, 154 S.E.2d 638, 641. 'The reason of the rule is that the landowner should not be called on to pay a debt he did not contract, and for which his property is liable only by force of a statute, until the materialman has established by judgment, in a proceeding to which the contractor is a party, that the contractor owes to him the amount for which he is seeking to assert his lien.' Pike Bros. Lumber Co. v. Mitchell, 132 Ga. 675, 676, 64 S.E. 998. 'It is in the antecedent suit against the contractor that the adjudication is made as to items furnished and the amount due with respect to a particular contract.' Chambers Lumber Co. v. Gilmer, 60 Ga.App. 832, 835, 5 S.E.2d 84, 87. 'It seems clear that one reason for this requirement of a prior suit is that most of the defenses to the lien (i.e., the materialman has not complied with his contract) can best be presented by the contractor with his direct knowledge of the transactions in question rather than by the relatively uninformed owner.' Ben O'Callaghan Co. v. Schmincke, 376 F.Supp. 1361, 1364 (D.C.Ga.). Thus in a lien foreclosure the materialman must distinguish between an individual and his corporation and must bring suit against the correct account debtor. D. H. Overmyer Warehouse Co. v. W. C. Caye & Co., 116 Ga.App. 128, 157 S.E.2d 68 (W. J. Nixon and W. J. Nixon Construction Company, a corporation). See also Jordan Co. v. Adkins, 105 Ga.App. 157, 123 S.E.2d 731. This is also the rule in suits on account in general. National Advertising Co. v. North American Ins. & Realty Co., 122 Ga.App. 481, 177 S.E.2d 510.

Here the suit on account against the corporation proceeded to a default judgment. The statement of the account attached as an exhibit to the complaint in that case lists the debtor as 'P & D Pipe Contractors' which, according to the complaint, is a trade name of the corporation. ¹ Hence under CPA § 55(a) (Code Ann. § 81A-155(a)) these matters, as well as those pertaining to materials furnished and amount due as shown on the statement of the account, must be deemed 'supported by proper evidence' so...