Court Opinion

ID: 3428591
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:57:29.4955+00
Date Added: 2024-06-11T12:40:00.634445
License: Public Domain

ON PETITION FOR REHEARING.
The School City of Gary and the Michigan City Erection Company have joined in a petition for rehearing, and the Symons Clamp and Manufacturing Company has filed a separate petition for rehearing.
The first petition referred to asserts that the school city had the right under the bond given by the surety company to pay non-lien claimants who furnished service, and that such claimants had an interest in the funds held by the school city; that the surety company did not complete the contract, since it contracted to pay all debts; that therefore the school city had the right to withhold not only enough to pay those claimants whose liens had been perfected, but an additional sum sufficient to pay all unpaid bills.
This contention overlooks the fact that the appellant had a claim, for which he was entitled to a lien, amounting to more than the total amount remaining due on the contract; that, if settlement had not been made with him, he might have filed the claim, and his claim, and the claims of those others who had procured liens, would have amounted to more than the total amount withheld and still due under the contract, and the appellant and those others who had filed claims and procured liens would have been entitled to the whole amount, to the *Page 550 
exclusion of those who had not procured liens, and to the exclusion of the surety company.
But if the balance had been paid to the surety company, rather than to the appellant who was entitled to a lien, still the school city would have no interest in this controversy. The statute only requires that the school city withhold sufficient to pay the claims of those who have procured liens. The school city has no right of action to recover back from a contractor in order to pay obligations that are not protected by liens. The right to an action on the bond to pay such claims is in the claimant, and not the school city, and the claimants may not maintain an action against the school city to recover the amount of their claims unless they filed their claims and procured liens. Having withheld enough of the funds to pay all liens that were filed, and having paid out the balance, the school city is not liable to the claimants, and no claimant is asserting that the school city is liable, and it is difficult to see how the school city has any interest whatever in this controversy.
It is also asserted in this petition for rehearing that this court erred in holding that there was a mistake of fact in the agreement between the appellant and the school city. It is clear, however, from the recitals in the resolutions and records of the school city that its intention was to pay MacDonald all of the balance of the funds in its hands except sufficient to pay the claims which had matured into liens, and it is clear that this is what the appellant agreed to. The mistake was in assuming that there were liens amounting to the full $20,000 withheld. The school city had no right to withhold more than enough to pay the liens, and the appellant was entitled to a lien, and to receive all of the balance due over and above the amount necessary to pay the liens. In fact, had the settlement not been made, and had the appellant perfected his lien, the total liens would have exceeded *Page 551 
the total amount due, including the $20,000 item, and those parties to this action who had perfected liens would not have been paid in full as they are now being paid.
The Symons Clamp and Manufacturing Company furnished forms which were used by the original contractor. When the appellant took over the work he continued to use the forms, which remained on the premises. At the time of the settlement between the appellant and the school board, the Symons Clamp and Manufacturing Company had a claim on file. After the settlement, the appellant paid for the use of the forms during the time he used them as a sub-contractor.
The Symons Clamp and Manufacturing Company is now contending that the court erred in holding that it did not have a valid lien.
The appellant contends that the Symons Clamp and Manufacturing Company is not entitled to a lien, since the rental of forms is not within the statute, and that if the claim is within the statute it is divisible and must be treated as two claims, one against the appellant and one against the original contractor, and that that part of the claim which is now unpaid was against the original contractor and was not filed within sixty days after the service was rendered.
The latter contention is entirely inconsistent with the contentions of the appellant concerning the principal issue involved, and with the views expressed in the principal opinion. But there is another reason why appellants contentions cannot now prevail. The claim of the Symons Clamp and Manufacturing Company was on file, in proper form, at the time of the agreement between the appellant and the school city that sufficient funds should be withheld to pay the claims on file, and that the appellant should forego any claim against so much of the funds on hand as were necessary for that *Page 552 
purpose. The appellant might at that time have contended that the claims on file were invalid, but he did not do so, but chose to agree to forego his claim against so much of the funds as were necessary to pay those claims. It must be concluded that he is bound by that agreement and cannot question the validity of the claim at this time.
The Symons Clamp and Manufacturing Company is entitled to preference and to have its claim paid out of the funds prior to the payment of the appellant, and the original opinion is modified to that extent, and otherwise the petitions for rehearing are denied.