Case ID: ohio-app_3/html/0240-01.html
Source: Caselaw Access Project
Author: {"author": "Jones, E. H., J.; Jones, Oliver B., J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richards v. Bennett, Receiver.
    
      Mechanics’ liens — Payment of payrolls and for material — After notice by material man — Owner liable, when — Section 8325, General Code.
    
    An owner who fails to retain in his hands a sufficient amount to satisfy the claim of a material man, who has given the proper notice, becomes liable on such claim notwithstanding the payments which he made after notice were made in good faith and embraced only actual, payrolls and bills for material necessary to complete the building.
    (Decided June 4, 1914.)
    Error : Court of Appeals for Hamilton county.
   Jones, E. H., J.;

Swing, J., concurring; Jones, Oliver B., J., dissenting in a separate opinion.

This was an action brought below by O. W. Bennett, receiver of The Enterprise Lumber Co., a material man, against an owner for money judgment, under Section 8324 et seq., of the General Code of Ohio.

The material man, in his petition, claims that he furnished the head contractor certain materials for a building then being constructed for the plaintiff in error, William F. Richards; that he gave the requisite notice in sufficient time; that thereafter payments became due the head contractor from the owner and the owner neglected to retain a sufficient amount to cover his, the material man’s, claim and that thereby, under the statute, the owner became liable for the payment of the claim.

The cause was tried below by the court without the intervention of a jury. The court made separate findings of fact and law, giving the material man, plaintiff below, a judgment for the full amount of his claim with interest. The finding of fact shows that after the notice was served upon the owner, -in compliance with the provisions of the mechanic’s lien law, Mr. Richards made payments to the head contractor upon estimates by the architect, as he had done before and as provided for in the contract. In so doing he failed to comply with the provision of Section 8325, which reads as follows:

“Upon receiving the notice required by the next preceding section, such owner, board or officer or public authority or authorized clerk, agent or attorney thereof, shall detain in his hands all subsequent payments from the principal or subcontractor to secure such claims and the claims and estimates of other subcontractors, material men, laborers, mechanics, or persons furnishing materials to or performing labor for any contractor or subcontractor who intervenes before the next subsequent payment under the contract, or within ten days thereafter.”

While it may be true that the payments made in this case to the architect were made in good faith and only embraced the money necessary to meet the payroll and to pay for material necessary for the completion of the building, yet it constitutes an evasion or violation of the plain language of the section above quoted. To permit this to be done in any particular case would open the door for collusion and fraud and result in nullifying the inhibition of said section.

We think, therefore, that the judgment below is correct and should be affirmed.

Judgment affirmed.

Jones, Oliver B., J.,

dissenting.

I dissent from the opinion of the majority of the court for the reason that, in my opinion, the record shows that all of the payments made by the owner after the service of notice of the lien upon him by the defendant in error were for labor and material that were necessarily used in the completion of the house, and no money whatever became due to or was paid to the contractor for his own benefit or for his services after the notice of lien. The fact that the owner availed himself of the force of carpenters then working upon the house in the employ of the contractor and that instead of paying them direct he permitted the money to be paid to them through the contractor does not, in my opinion, operate as a payment to the contractor. All of the money paid was to meet these payrolls, the names of the men and the amount of their wages being detailed each week, outside of a few trifling amounts for hauling and materials that were necessary expenses of the work, about which there was no question, and the fact that the architect made estimates in a form similar to his previous estimates to cover these expenses does not change the situation.

Messrs. Dolle, Taylor & O’Donnell, for plaintiff in error.

Messrs. Hunt, Bennett & Utter, for defendant in error.

The owner was entitled to proceed with the completion of his house in a proper method, and whatever was necessary out of the balance of the contract price to effect this purpose it was proper for him to expend, without liability to the claimant under the subcontractor’s lien.

There is another objection to the claim of defendant in error. The affidavit for lien fails to set out promissory notes that were given covering this claim. Afterwards an order was given by the head contractor to plaintiff in error upon the owner for the payment of the amount due on this work, which the owner failed to accept. This order represented one of the notes which was paid by the credit obtained from the sale of a horse and wagon by the head contractor to the defendant in error, and this lien was in fact thereby satisfied.