Court Opinion

ID: 863703
Source: CourtListenerOpinion
Date Created: 2013-04-27 00:04:34.684203+00
Date Added: 2024-06-11T10:18:20.987610
License: Public Domain

IN THE SUPREME COURT OF MISSISSIPPI

                             NO. 98-CT-00762-SCT

AMERIHOST DEVELOPMENT, INC.

v.

BROMANCO, INC.; K & K BATHTUB REPAIR;

DIAMOND DOOR GROUP, INC.; DEER PARK

FENCE & INSULATION CO.; GREY PLUMBING, INC.;

S & L CREATIVE CARPET; VICKSBURG PAINT &

GLASS COMPANY; PRECISION ROOF SERVICES, INC.;

VINZANT CONSTRUCTION; CONTROLLED AIR

COMFORT COMPANY; SOUTHERN ELECTRIC

SUPPLY COMPANY, INC.; WRIGHT'S PAINTING;

BRUCE COPES ELECTRICAL, INC.; METROPOLIS

BUILDERS SUPPLY; PARADISE POOLS & SPAS;

BARRY LANDSCAPE, INC.; UNITED PIPING, INC.;

UPTON PLASTERING; MID-SOUTH LUMBER &

SUPPLY, INC.; W. J. RUNYON & SON, INC.; TESA/ENTRY

SYSTEMS, INC.; AND GEE & STRICKLAND, INC.

                          ON WRIT OF CERTIORARI
DATE OF                    4/15/1998
JUDGMENT:
TRIAL JUDGE:               HON. FRANK G. VOLLOR
COURT FROM                 WARREN COUNTY CIRCUIT COURT
WHICH APPEALED:
ATTORNEYS FOR              PHIL B. ABERNETHY
APPELLANT:
                           JEFFREY TODD WAYCASTER
                           RICHARD M. DYE
ATTORNEYS FOR              ROBERT R. BAILESS
APPELLEES:
                           CHARLES L. BALCH, III
                           JAMES L. PENLEY, JR.
                           LUCIUS B. DABNEY, JR.

                           JOHN H. SHOWS

                           ALAN L. BURRELL

                           WREN C. WAY
NATURE OF THE              CIVIL - CONTRACT
CASE:
DISPOSITION:               The judgment of the Warren County Circuit Court is reversed and remanded for
                           further proceedings consistent with this opinion. The judgment of the Court of
                           Appeals is affirmed.- 4/12/2001
MOTION FOR                 4/25/2001; denied 6/21/2001
REHEARING FILED:
MANDATE ISSUED:            6/28/2001

     EN BANC.

     WALLER, JUSTICE, FOR THE COURT:

¶1. This appeal presents the issue of whether a subcontractor's stop payment notice to the owner benefits
all subcontractors and suppliers, including those who failed to give a stop payment notice before the owner
made the final payment to the general contractor. We find that one stop payment notice does not inure to
the benefit of the other subcontractors.

                               FACTS AND PROCEEDINGS BELOW

¶2. Amerihost Development, Inc., an Illinois corporation licensed to do business in Mississippi, is the
owner/developer of a construction project known as Days Inn, Rainbow Park, in Vicksburg, Mississippi.
Amerihost entered into a construction contract with general contractor Bromanco, Inc., for $2,011,082.83.
No construction lender was involved as Amerihost self-financed the project. Amerihost made irregular
inspections of the project site through its personnel, choosing to rely heavily on Bromanco's expertise as the
general contractor.

¶3. The contract specified that periodic progress payments minus a ten percent retainage would be made to
Bromanco. Before Amerihost would send progress payments, Bromanco was required to submit periodic
applications for payment, stating the percentages of completion and including appropriate lien waivers. A
total of eight progress payments were made to Bromanco.

¶4. Initially, Bromanco provided the appropriate applications, and the project progressed without any
major problems. However, as the project neared completion Bromanco began to submit applications for
payment without complete lien waivers, and, in fact, submitted some duplicate lien waivers. Yet, during this
period, no stop notices were sent to Amerihost by any subcontractors, materialmen, or suppliers.

¶5. On April 17, 1995, Wright's Painting Co., a subcontractor, tendered a statutory stop payment notice
for $25,000 to Amerihost. This dispute was resolved. On April 30, 1995, Bromanco submitted an
application for payment on the project in the amount of $272,819.13, which would leave a retainage of
$110,330.20 after payment. On May 5, 1995, Amerihost received a stop notice letter from Southern
Electric Supply Company stating that it had not been paid approximately $30,881.56. On May 15, 1995,
Amerihost paid Bromanco $272,819.13.

¶6. After receiving this payment, Bromanco defaulted as general contractor even though the project was
substantially complete. As a result Amerihost hired its own work force at a cost of $19,844.62 to complete
the project, leaving a retainage of $90,485.58.

¶7. Between May 15 and November 15, 1995, Amerihost received numerous stop payment notices and/or
bills from several of the Bromanco subcontractors and materialmen. Consequently, on November 15,
1995, Amerihost filed an interpleader action against the subcontractors and materialmen(1) and paid the
remaining retainage of $90,485.58 into the registry of the Warren County Circuit Court.

¶8. The circuit court found that one subcontractor's stop payment notice was sufficient to require Amerihost
to withhold all outstanding money due Bromanco until an investigation was made to determine whether there
were other unpaid subcontractors. Based on the single stop payment notice, the owner was held liable for
all other unpaid claims of subcontractors that existed on the date of the notice, together with attorneys' fees
and costs to the subcontractors.

¶9. The Court of Appeals reversed, finding a statutory stop-payment notice benefits only the subcontractor
giving notice. Amerihost Dev., Inc. v. Bromanco, Inc., No. 98-CA-60762-COA (Miss. Ct. App.
2000). A motion for rehearing was denied by a 5-3 vote. We, in turn, granted certiorari.

                                               DISCUSSION

      I. INTERPRETATION OF MISS. CODE ANN. § 85-7-181 (1999).

      A. Effect of One Subcontractor's Stop Payment Notice.

¶10. Save an amendment in 1987 allowing reasonable attorney's fees, Miss. Code Ann. § 85-7-181 has
remained unchanged since it was amended to its present form in 1918. A comparison of the wording in the
predecessor 1906 statute and the 1918 statute shows a single stop payment notice protects only the party
giving actual written notice. The following is a partial(2) comparison of the 1906 statute, 1906 Miss. Laws §
3074, and the 1918 statute, 1918 Miss. Laws ch. 128:

1906 Statute                                            1918 Statute

Deletions made in 1918 are in bold:               Additions made in 1918 are in bold:
When any contractor or master workman shall not   When any contractor or master workman shall not
pay any person who may have furnished materials   pay any person who may have furnished materials
used in the erection, construction, alteration or used in the erection, construction, alteration or
repairing of any house, building, structure, fixture,
                                                  repairing of any house, building, structure, fixture,
boat, water-craft, railroad, railroad embankment, or
                                                  boat, water-craft, railroad, railroad embankment,
the amount due by him to any subcontractor therein,
                                                  the amount due by him to any subcontractor therein,
or the wages of any journeyman or laborer         or the wages of any journeyman or laborer employed
employed by him therein,                          by him therein, any
such person, sub-contractor, journeyman or laborersuch person, sub-contractor, journeyman or laborer
may give notice, in writing, to the owner thereof of
                                                  may give notice, in writing, to the owner thereof of
the amount due                                    the amount due him and claim the benefit of this
                                                  section;
and thereupon the amount the amount that may be and thereupon the amount that may be due upon the
due                                               date of the service of such notice
by such owner to the contractor or master workman by such owner to the contractor or master workman
shall be bound and liable                         shall be bound
in the hands of such owner for payment of the sum in the hands of such owner for payment in full, or if
so claimed                                        insufficient then pro rata, of all sums due such
                                                  person, subcontractor, journeyman or laborer
                                                  who might lawfully have given notice in writing
                                                  to the owner hereunder;

¶11. Relying on McNair v. M.L. Virden Lumber Co., 193 Miss. 232, 4 So. 2d 684 (1941), the
subcontractors argue that the 1918 statute requires the owner to hold up all payments due the general
contractor and give equal rights to all subcontractors regardless of when or whether the other
subcontractors give written notice. In McNair we explicitly refused to decide the issue, stating,

     We are not considering a case where the owner pays the balance to the one giving notice before he
     receives such notice from others, or before others assert their claims in court. That is not the case. We
     will deal with that when and if such situation arises.

     ***

     One notice stops the right of the owner to pay the contractor the amount claimed in that notice.

Id. at 689 (emphasis added).
¶12. The statute clearly contemplates notice in writing to the owner of all sums due each subcontractor.
Only subcontractors who give the required notice under the statute are entitled to claim the benefit of this
statute. We agree with the Court of Appeals' interpretation of § 85-7-181: "It would be destructive of the
overall purpose of the construction of § 85-7-181 to hold . . . that the legislature intended for one notice to
serve as right of lien by all potential subcontractors . . . who have labored and provided supplies but have
not followed the requirements of the same." Therefore, we hold that the filing of a stop-payment notice
under § 85-7-181 benefits only the subcontractor(s) giving actual notice prior to the time the owner pays
the prime contractor.

¶13. In affirming the Court of Appeals on this issue, we must acknowledge that this is a very difficult
decision to make, but no other result can be reached under a fair reading of the statute. We think it
significant that this statute has apparently worked well under our interpretation since the present version was
adopted in 1918. That is not to say that the Legislature should not revisit this statute to bring the language up
to date and to review the protections offered in light of use and custom in today's construction industry.

      B. Filing of Suit.

¶14. Further comparison of the 1906 and 1918 statutes is helpful:

1906 Statute                                            1918 Statute
and if, after                                           and if, after such
notice, the contractor or master workman shall bring    notice, the contractor or master workman shall bring
suit against the owner, the latter may pay into court   suit against the owner, the latter may pay into court
the amount due on the contract                          the amount due on the contract;
and                                                     and
the person giving notice                                thereupon all persons entitled hereunder, so far
                                                        as known,
shall be                                                shall be made parties and
summoned                                                summoned into court
to                                                      to
                                                        protect their rights,
contest the demand of such contractor or master         contest the demand of such contractor or master
workman;                                                workman and other claimants;

¶15. We interpret the statute to provide that, once a suit is filed, all interested persons, so far as known,
shall be made a party to the suit. The subcontractors argue that since all parties are entitled to notice when
suit is filed, the filing of a single stop-notice should also be interpreted to protect all. The reasons for
providing all known persons notice once a suit has been filed are obvious. By this point all negotiations have
broken off, any debts owed are disputed, and to adjudicate a dispute in a construction project, all
interested persons should have notice. The filing of a stop payment notice, on the other hand, comes before
matters have deteriorated and ideally will prevent the need for the filing of a lawsuit by encouraging disputes
to be resolved between the subcontractor seeking payment and the general contractor/owner. As no lawsuit
was filed by the subcontractors, we affirm the Court of Appeals' finding that a subcontractor is not required
to give notice to all known persons that he has given an owner/subcontractor a stop-payment notice.

      II. DOES THE COURT OF APPEALS' OPINION CONFLICT WITH PRIOR
      DECISIONS OF THIS COURT?

¶16. The trial court held that Amerihost negligently or wilfully failed to ensure that Bromanco was paying the
subcontractors, that such failure proximately caused the subcontractors' losses, and that Amerihost, as both
owner and lender, was liable for all subcontractors' claims even if the claims exceeded the amount due to
them under the contract. The court reasoned that Amerihost was liable due to its failure to monitor properly
the progress of the work and, citing First Nat'l Bank v. Virden, 208 Miss. 679, 45 So. 2d 268 (1950),
due to its failure to ensure that the subcontractors were paid.

¶17. In distinguishing Virden, the Court of Appeals noted that Virden was decided in the context of
mortgage law where an issue of preference arose between competing liens. In Virden, we held that where
a bank accepted a deed of trust on property from the contractor and advanced proceeds to the contractor
but failed to ensure that the funds were being spent on the construction project, the bank's lien was superior
to those of materialmen only to the extent that the loan proceeds actually went into the project. Id.

¶18. However, in the present case, a mortgage was not involved because Amerihost was self funded. A
mechanic's lien case, Engle Acoustic & Tile, Inc. v. Grenfell, 223 So. 2d 613 (Miss. 1969), is more on
point. Suit was brought by several subcontractors against the project's owners and architect for balances
due them as a result of the default of Fran Builders, the prime contractor. Fran made nine applications for
payment for labor and materials furnished. Each application was submitted to the owner's architect for
verification before payment was remitted. Near the end of the project, it became apparent that Fran had not
paid all laborers and materialmen involved in the project and work ceased shortly thereafter. Fran was later
declared bankrupt. None of the laborers or materialmen filed a stop payment notice on their claims until
after the owners had paid Fran in full in response to its ninth and last application for payment.

¶19. In reaching a favorable decision for the owners, we acknowledged the difficult consequences resulting
from our decision: "[I]t is regrettably true that either the subcontractors will lose their labor and materials in
the amounts stated or the owners will be forced to make a double payment. It does not necessarily follow,
however, that the owners were in the best position to have prevented the loss." Id. at 618. As was the
situation in the case sub judice, the owners in Engle, initiated the overall project and trusted and relied
heavily upon their prime contractor to complete the contracted project without any difficulties or problems.
We acknowledged that the subcontractors and materialmen also relied on and trusted Fran, but their
reliance and trust were as equally misguided and displaced as was that of the owners.

¶20. In ultimately deciding which party, the owners or the subcontractors, was in the best position to
prevent the resulting losses, we held that none of the subcontractors had availed themselves of the pertinent
statutory remedy. Id. So long as advance payments to the prime contractor extinguished debt and were
paid prior to receipt of the statutory stop payment notices, liability was precluded on the part of the owners.
Id. at 619.

¶21. The Court of Appeals, relying on Engle, determined that

      the subcontractors and materialmen were not left without recourse under the current statutory
     construction of § 85-7-181, provided they invoke its benefits and protections through their own due
     diligence and in accordance with the statutory requirements. To allow those who failed to avail
     themselves of its benefits, would seek to circumvent the statutory requirements and ride the coat-tails
     of those subcontractors and materialmen who actually asserted their rights.

¶22. We agree with the Court of Appeals that to allow such a result would offend justice and be destructive
of the overall purpose and intent behind § 85-7-181. As such, we find that the Court of Appeals properly
interpreted and applied Virden and Engle to the facts in this case.

     III. ATTORNEY'S FEES.

¶23. The Court of Appeals determined that the subcontractors were not entitled to attorney's fees, but
remanded the case to the circuit court on the sole issue of whether Amerihost was so entitled.

     A. Subcontractors.

¶24. Miss. Code Ann. § 85-7-181 provides that a subcontractor is entitled to attorney's fees if the owner
denies any indebtedness. The circuit court awarded attorney's fees to the laborers, subcontractors and
materialmen. The Court of Appeals reversed, finding that there was no showing that Amerihost had denied
any indebtedness. Southern Electric's stop payment notice did not constitute a denial of debt by Amerihost.
Rather, Amerihost's filing of this interpleader action sufficiently demonstrated that it was willing to pay
whomever the trial court determined had a valid claim to the interpled funds.

     B. Amerihost.

¶25. Amerihost argues that it was entitled to attorney's fees for defending the subcontractors' claims in the
interpleader action. See Perkins State Bank v. Connolly, 632 F.2d 1306, 1311 (5th Cir. 1980) (A
party who initiates an interpleader action and qualifies as a mere disinterested stake holder may be awarded
reasonable attorney's fees); Maryland Cas. Co. v. Sauter, 377 F. Supp. 68, 70 (N.D. Miss. 1974) (A
party who has properly brought an interpleader action may be entitled to an award of attorney's fees). The
Court of Appeals remanded to the circuit court to make a factual finding of whether Amerihost was a
disinterested stakeholder and therefore entitled to attorney's fees. "An award of attorneys' fees and costs in
favor of the party representing an interpleader action against funds interpled into the court registry is a
discretionary matter lying with the trial court." See Hartford Acc. & Indem. Co. v. Natchez Inv. Co., 161
Miss. 198,132 So. 535, 539 (1931). We agree that the Court of Appeals properly remanded this issue.

                                              CONCLUSION

¶26. For the foregoing reasons, the judgment of the Court of Appeals is affirmed, and the judgment of the
Warren County Circuit Court is reversed and this case is remanded to that circuit court for further
proceedings consistent with this opinion.

¶27. THE JUDGMENT OF THE COURT OF APPEALS IS AFFIRMED. THE JUDGMENT OF
THE CIRCUIT COURT IS REVERSED AND THIS CASE IS REMANDED TO THE
CIRCUIT COURT OF WARREN COUNTY.

     PITTMAN, C.J., BANKS, P.J., SMITH, MILLS, COBB AND EASLEY, JJ., CONCUR.
     McRAE, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION. DIAZ, J., NOT
      PARTICIPATING.

      McRAE, PRESIDING JUSTICE, DISSENTING:

¶28. Once a stop payment notice is filed pursuant to Miss. Code Ann. § 85-7-181 (1999), it should benefit
all subcontractors and suppliers of the same class. The circuit court so held, and I would affirm its decision.
When the owner of a construction project receives a statutory stop payment notice, it is aware that a
financial dispute exists and should have a duty to check for other disputes before paying off the general
contractor. Where there is smoke there is usually a fire. Accordingly, I dissent.

¶29. Relevant portions of the statute are as follows:

      When any contractor or master workman shall not pay any person . . . any such person,
      subcontractor, journeyman, or laborer may give notice, in writing, to the owner thereof of the amount
      due him and claim the benefit of this section .. . . and, thereupon the amount that may be due upon the
      date of the service of such notice by such owner to the contractor or master workman shall be bound
      in the hands of such owner for payment in full, or if insufficient then pro rata, of all sums due such
      person, subcontractor, journeyman, or laborer who might lawfully have given notice in writing to
      the owner hereunder. . . .

Miss. Code Ann. § 85-7-181 (1999) (emphasis added).

¶30. The statute states that, upon written notice, the owner must retain "all such sums" that are owed to
anyone who might have given notice under this section. It does not require them to have actually given
notice to receive the benefits of this section, so long as the owner has received a written stop payment
notice. They must merely have been entitled to give notice.

¶31. Furthermore, section 85-7-181 states that if, after giving notice, the contractor sues the owner:

      thereupon all persons entitled hereunder, so far as known, shall be made parties and summoned into
      court to protect their rights . . . or, in case any person entitled to the benefits hereof shall sue the
      contractor or master workman, such person so suing shall make the owner and all other persons
      interested, either as contractors, master workmen, subcontractors, laborers, journeymen, or
      materialmen, so far as known, parties to the suit . . . .

(emphasis added).

¶32. The majority holds that each and every subcontractor and supplier must give a written stop payment
notice before reaping the benefits of this section. This is contrary to the plain language of the statute, which
states that anyone who might have given notice under the statute is entitled to its protections once the
owner has received a written stop payment notice. Such an interpretation only serves to protect an owner
who negligently pays a general contractor with funds that are owed to subcontractors and suppliers. The
majority notes that its decision is a difficult one. The resolution of this case should not be difficult because,
under the statute, once notice is given the owner is under a duty to find out what the problems are and to
withhold payment from the general contractor until they are resolved. Once a lawsuit is filed, all
subcontractors, materialmen, etc. must be made parties, regardless of whether they submitted stop payment
notices. It makes no sense to bring these people into court if they have no rights to protect, as the majority
now holds.
¶33. Once a suit is commenced, the statute requires all interested persons be made party to the suit. It
specifically includes "contractors, master workmen, subcontractors, laborers, journeymen, or materialmen,"
and does not limit its scope to only those who have provided written stop payment notices. This provision is
contrary to the majority's holding that "[o]nly subcontractors who give the required notice under the statute
are entitled to claim the benefit of this statute." If only those parties who give written notice may benefit from
this statute, then it is senseless to require all others to be joined in the lawsuit as well. The statute mandates
that all parties be joined, not merely those who submitted written stop payment notices.

¶34. Amerihost Development, Inc., received its first stop payment notice for $25,000 on April 17, 1995,
from Wright's Painting Co. Less than two weeks later, on April 30, Amerihost received a request for
payment of $272,819.13 from Bromanco. On May 5,1995, Amerihost received its second stop payment
notice for more than $30,000 from Southern Electric Supply Co.(3) Inexplicably, a mere ten days after
receiving the second stop payment notice, Amerihost paid Bromanco the entire amount it requested without
investigating into claims by Southern Electric or any other subcontractors or suppliers.

¶35. Amerihost received not one but two stop payment notices in less than three weeks, in addition to other
irregularities, such as incomplete or duplicate lien waivers. Even so, rather than honor the notice from
Southern Electric, much less investigate into other possible claims, Amerihost paid off Bromanco on May
15, 1995. Almost immediately after receiving payment, Bromanco defaulted on the remainder of the project
and failed to pay numerous suppliers and subcontractors.

¶36. Amerihost was clearly in the best position to prevent this loss. The contract between it and Bromanco
required requests for payment to be accompanied with lien waivers from each of the subcontractors and
suppliers before payment was to be made. However, later payments were made without complete lien
waivers, or with duplicate lien waivers. Had Amerihost performed its duties under the contract, the
subcontractors and suppliers would have been protected. Also, requiring Amerihost to contact the
subcontractors and suppliers to find out whether they have been paid before making final payment to
Bromanco would not impose an onerous burden. Amerihost should know who they were from previous
payments and lien waivers. At the least, it could have demanded a list of subcontractors and suppliers from
the general contractor.

¶37. A stop payment notice issued pursuant to Miss. Code Ann. § 85-7-181 (1999) should provide notice
of a payment dispute for the benefit of all subcontractors and suppliers of the same class. Because
Amerihost received two such notices, one only ten days before paying off Bromanco, it should be liable to
the subcontractors and suppliers for amounts paid to Bromanco after receiving the first stop payment
notice. Accordingly, I dissent.

                                                 Appendix A

1906 Statute                                            1918 Statute

Deletions made in 1918 are in bold:                     Additions made in 1918 are in bold:
When any contractor or master workman shall not       When any contractor or master workman shall not
pay any person who may have furnished materials       pay any person who may have furnished materials
used in the erection, construction, alteration or     used in the erection, construction, alteration or
repairing of any house, building, structure, fixture, repairing of any house, building, structure, fixture,
boat, water-craft, railroad, railroad embankment, or  boat, water-craft, railroad, railroad embankment,
the amount due by him to any subcontractor therein,   the amount due by him to any subcontractor therein,
or the wages of any journeyman or laborer             or the wages of any journeyman or laborer employed
employed by him therein,                              by him therein, any
such person, sub-contractor, journeyman or laborer    such person, sub-contractor, journeyman or laborer
may give notice, in writing, to the owner thereof of  may give notice, in writing, to the owner thereof of
the amount due                                        the amount due him and claim the benefit of this
                                                      section;
and thereupon the amount the amount that may be and thereupon the amount that may be due upon the
due                                                   date of the service of such notice
by such owner to the contractor or master workman by such owner to the contractor or master workman
shall be bound and liable                             shall be bound
in the hands of such owner for payment of the sum in the hands of such owner for payment in full, or if
so claimed                                            insufficient then pro rata, of all sums due such
                                                      person, subcontractor, journeyman or laborer
                                                      who might lawfully have given notice in writing
                                                      to the owner hereunder;
and if, after                                         and if, after such
notice, the contractor or master workman shall bring notice, the contractor or master workman shall bring
suit against the owner, the latter may pay into court suit against the owner, the latter may pay into court
the amount due on the contract                        the amount due on the contract;
and the person giving notice                          and thereupon all persons entitled hereunder, so
                                                      far as known,
shall be                                              shall be made parties and
summoned                                              summoned into court
to                                                    to
                                                      protect their rights,
contest the demand of such contractor or master       contest the demand of such contractor or master
workman                                               workman and other claimants;
and the court may                                     and the court shall
cause an issue to be made up and tried, and direct cause an issue to be made up and tried, and direct
                                                      the
payment of the amount claimed by the person           payment of the amount found due in accordance
giving the notice out of the money so paid into with the provisions hereof;
court
or, in case the                                       or, in case any
person giving the notice                              person entitled to the benefits hereof
shall sue the contractor or master workman, he          shall sue the contractor or master workman, such
                                                        person so suing
shall make the owner                                    shall make the owner and all other persons
                                                        interested, either as contractors, master
                                                        workmen, subcontractors, laborers, journeymen
                                                        or materialmen, so far as known,
a party                                                 parties
to the suit,                                            to the suit, (and any such party not made a party
                                                        in any suit hereunder authorized may intervene
                                                        by petition),
and thereupon the owner may pay into court the          and, thereupon the owner may pay into court the
amount                                                  amount admitted to be
due on the contract, or sufficient to pay the sum       due on the contract, or sufficient to pay the sums
claimed, and costs,                                     claimed,
and the court shall                                     and the court shall cause an issue to be made up
                                                        and
award the same to the person who may be                 award the same to person lawfully

entitled thereto;
and                                                     entitled;
in neither                                              in either
case shall                                              case
the owner                                               the owner shall not
be liable to pay costs;                                 be liable for costs;
but if the owner, when sued with the contractor or      but if the owner, when sued with the contractor or
master workman, shall deny any indebtedness             master workman, shall deny any indebtedness
sufficient to satisfy the sum claimed, and all costs,   sufficient to satisfy the sums claimed and all costs, the
the court,                                              court shall,
at the instance of the plaintiff,                       at the instance of any party interested,
may
cause an issue to be made up to ascertain the true      cause an issue to be made up to ascertain the true
amount of such indebtedness, and shall give             amount of such indebtedness, and shall give judgment
judgment and award costs according to the justice       and award costs* according to the rights of the
of the case.                                            several parties in accordance herewith.
In case judgment shall be given in favor of the         In case judgment shall be given
person giving notice, as hereinbefore provided
for,
against the owner, such judgment shall be a lien        against the owner, such judgment shall be a lien from
from the date of such notice,                           the date of the original notice,
on the building, house, structure, fixture, boat,
water-craft, railroad, or railroad embankment
in or upon which the material or labor
mentioned in such notice was used or done,
and may be enforced as in case of liens in other and shall be enforced as other liens
cases
provided for in this chapter.                     provided in this chapter. The owner shall not be
                                                  liable in any event for a greater amount than the
                                                  amount contracted for with the contractor.

* This statute was amended in 1987 to allow reasonable attorneys fees to further protect the parties.

1. For convenience, the Court will refer to the subcontractors and materialmen as "subcontractors."

2. A full text comparison is set out in Appendix A.

3. A joint payment agreement entered into February 8, 1995, by Southern Electric, Bromanco, and Copes
Electric elevated Southern Electric to the status of a supplier of a general contractor and, therefore, entitled
to the protections of section 85-7-181 as of that date.