Court Opinion

ID: 9675833
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:06:51.158895+00
Date Added: 2024-06-11T18:16:40.175649
License: Public Domain

TATE, Justice
(concurring in part, dissenting in part).
I respectfully dissent insofar as the majority opinion both fails to recognize Valley’s materialman’s lien and discharges Farnsworth from any liability whatsoever to Valley.
With due respect to the able opinion of the majority, the fallacy therein is its holding that Farnsworth “discharged its obligations [to Valley] properly by putting within the control of plaintiff sufficient funds out of which it could have been completely paid.” This statement is based upon the circumstance that up through April 9, 1956, checks totalling $78,857.10 (covering work performed through progress estimates dated through March 31st) were made jointly payable to Valley and Loup & Younger (hereinafter “Loup”), whereas the total sales by Valley to Loup on the contract only totalled $66,858.22.
However, Farnsworth has to this date not paid the last $19,091.70 due upon the total contract price of $97,948.70. This amount still due represents what is still owed for work performed and materials sold by Valley after March of 1956 (Loup’s subcontract was not completed until June of 1956) and for a 10% reserve deducted from payments made jointly to Loup and Valley for materials supplied (by Valley) and work performed (by Loup) between the contract’s inception in November and prior to March of 1956. (The last payment made by Farnsworth was by check of April 9, pursuant to the progress estimates for March, 1956.) For these amounts, which Farnsworth has not paid by joint checks to Valley and Loup and which in fact Farnsworth to this date retains, Valley has no recourse save this suit to protect itself.
Reference must be made to the terms of the agreement between Valley and Farnsworth, incorporated in full in the exchange *328between them of letters of November 7 and November 28, 1955, set forth in full in the majority opinion.
Both parties admit that Valley waived its material lien for the consideration stated in Valley’s letter of November 7th and specifically accepted by Farnsworth’s letter of November 28th, namely, “In consideration of your [Farnsworth’s] making all checks and payments jointly payable to Valley Supply Company and Loup & Younger on this job'." Since Farnsworth has not made all checks and payments for the job jointly payable to Valley and Loup —that is, since instead of doing so it has retained the last $19,091.70 due for the work performed by Loup and for the materials furnished by Valley to Loup for use on the job — , it seems clear to me that at least to the extent of this last amount due upon the contract Valley should have a right to the usual materialman’s lien if it does not have also a right to a monied judgment against Farnsworth.
I am unable to understand the reasoning which permits Farnsworth to have the benefit of Valley’s waiver of the materialmen’s lien per the agreement of November, i955, when it has not furnished the agreed consideration for the waiver of making all payments upon the job jointly to Valley and Farnsworth. Valley gave up its legal right to have the price of materials furnished for the job protected by a material-man’s lien in exchange for the protection of having all payments for the job made jointly payable to both it and Loup; and although the last nineteen thousand dollars of the contract sum have not been made so payable so as to permit Valley the benefit of this protection, we have likewise refused Valley the protection of its material lien which — except for the waiver pursuant to the agreement — it otherwise possessed as a matter of law.
It is necessary to elaborate a little upon the method of payment under the subcontract in order to explain fully my non-concurrence in the view expressed by the majority opinion with the statement “Plaintiff [Valley] had within its complete control sufficient funds out of which the indebtedness due it for sold materials could have been paid” based upon the simple circumstance that $78,857.10 of checks were made jointly payable to Valley and Loup whereas Loup had sold materials only to the extent of $66,858.52. Succinctly, if the Farnsworth checks had been intended to cover the full liability due by Loup to Valley, I would not disagree with the majority’s holding; but the evidence explicitly shows that such checks as were paid, were not intended to do so.
In the performance of its contract, Valley furnished materials to Loup, which latter firm itself in the performance of the contract furnished labor, supervision, and certain other supplies and services. Each month a progress report would be com*330pleted by Loup and furnished to Farnsworth showing the dollar value of the work performed (including materials furnished by Valley) during the month. On the basis of this progress report, Farnsworth (after deducting a 10% reserve) would make a check jointly payable to Valley and Loup covering only the work performed through the date of the progress report (less 10%). It was never contemplated that Valley would retain the entire amount of such checks due for both material furnished by it and work performed by Loup, but only that it would retain the share of the check attributable to the supplies furnished by it. Otherwise, it would have stripped Loup of operating capital by deducting from such checks for materials for which Loup was not yet paid by Farnsworth or which, in fact, had not even yet been sold to Loup.
For purposes of this dissent, it has not been necessary to reconcile the various figures contained in the 600 pages of the record and in the thick package of documentary exhibits, and I cannot pretend to have made an exhaustive analysis thereof. But I do note that through the last payments ever made by Farnsworth upon the contract which were on April 6th and 9th per progress reports submitted by Loup for work performed up through March 31st (as supplemented by an estimate dated April 7th), Farnsworth had withheld $8,-412 of monies due for work performed by Loup (including compensation for supplies furnished by Valley) prior to the date of Farnsworth’s last payment. See Tr. 228; Exhibits P-36b, P-37, and P-39a. I further note that although the balance due as claimed by Valley amounts to $19,474.33, there are indications that the balance due Valley by Loup on the contract was $12,-820.76 as of date of receipt by Valley of sums paid jointly to Valley and Loup for work performed up through the last progress estimate for which Farnsworth ever made payment. Tr-267. If true, and I see no denial of this claim in the record, it would indicate that approximately six thousand five hundred dollars of supplies were sold by Valley to Loup for use on this contract after the date of the last payment made by Farnsworth. As to at least all the sums enumerated in this paragraph insofar as attributable to supplies furnished by Valley, I do not see how Valley can be prejudiced by Farnsworth’s failure to make checks for such amounts payable jointly to Valley and Loup.
A circumstance to which the majority opinion under its disposition of this case found no occasion to allude is that Farnsworth stopped making payments to Loup because of an alleged breach by Loup of an obligation contained in the contract between Loup and Farnsworth. Such breach *332of this contract to which Valley is not a party cannot excuse Farnsworth’s failure to comply with its contract with Valley (to which Loup is not a party), and certainly cannot be used to permit Farnsworth to retain the benefit of such contract (Valley’s waiver of its material lien) and yet evade its obligation thereunder (to make Valley a party to all payments due under the contract.) It may be true that Farnsworth will suffer prejudice by compliance with its contractual obligation to Valley to make all payments directly payable to both Valley and Loup, but certainly Valley should not suffer prejudice because of Farnsworth’s breach of this obligation; in short, Valley should either have its lien or Farnsworth’s compliance with the obligation.
In closing, I may add that if the record could be said to support the majority’s conclusion that Valley diverted from payments due it for materials furnished any monies to repay itself for advances made to Loup outside of for materials furnished, such diversion (not contemplated within the contract between Valley and Farnsworth) should not be allowed to prejudice Farnsworth. But there are indications in the record that if any diversion did place as to a part of the funds due to Valley for materials, that they did so with the approval of Farnsworth in order to enable Loup to continue and complete the contract. Cf., e. g., Tr-416.
For the foregoing reasons, I dissent from the majority opinion insofar as it relieves Farnsworth from any liability whatsoever under, or by reason of its breach of, its contract with Valley.