Court Opinion

ID: 6696149
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:51:35.842177+00
Date Added: 2024-06-11T12:50:06.530859
License: Public Domain

Ci.akk, C. J.
The Merchants Bank, owner of a lot in the city of Durham, in July and August, 1914, made a contract with N. Underwood to put up a bank building and in February, 1915, they made a further contract for the interior of the building, at a total price for all the work of $27,000.
On 31 July, 1914, Underwood, the contractor, contracted with the Pennsylvania Marble and Granite Company to furnish and erect the superstructure of the front of the bank building, and the latter company contracted with the Blue Pearl Granite Company to furnish certain, granite to be used by the Pennsylvania Marble and Granite Company.
On 16 March, 1915, the Blue Pearl Granite Company filed with the Merchants Bank, the owner, and N. Underwood, the contractor, respectively, an itemized account for $435, setting forth in detail the material furnished by it to the Pennsylvania Marble and Granite Company, giving the details as to time and so forth as required by the statute. At the time of filing said notice there was in the hands of the owner, the Merchants Bank, the sum of $5,263 due the contractor for the exterior of the bank building upon which the material furnished by the Blue Pearl Granite Company had been used, and this sum was subsequently thereto paid by the bank to the contractor, and the contractor at the date of the filing also had in his hands, due the Pennsylvania Marble and Granite Company, its subcontractor who furnished said material, the sum of $760.98.
On 12 June, 1915, less than three months after filing its notice with the owner and contractor, the Blue Pearl Granite Company brought *356tbis action against tbe Merchants Bank, N. Underwood, and tbe Pennsylvania Marble and Granite Company, i. e., tbe owner, tbe contractor, and tbe subcontractor, to enforce its lien as material man, and at August Term, 1915, of Durham, Frank Gabardini was duly made a party defendant, and filed bis answer.
On 22 December, 1914, about a month after tbe Blue Pearl Granite Company bad furnished tbe granite under its contract to tbe Pennsylvania Marble and Granite Company, tbe latter company assigned all its right, title, and interest in tbe amount due it by Underwood, tbe contractor, to tbe Commercial Credit Company. But Underwood bad no notice of tbis assignment until 29 March, 1915, thirteen days after notice bad been served on him, as above, by tbe Blue Pearl Granite Company, and tbe latter company bad no notice of such assignment until 9 November, 1915, when suit was started by sa'id assignee, tbe Commercial Credit Company, against Underwood, to recover of him tbe amount due by him to tbe Pennsylvania Marble and Granite Company.
Tbe Pennsylvania Marble and Granite Company during 1913 and 1914 became indebted to Frank Gabardini in tbe sum of $3,345, on which, deducting payments, there was a balance due of $656.14, for which on 11 March, 1915, Gabardini brought an action to Durham Superior Court against tbe Pennsylvania- Marble and Granite Company, service being made by publication. On said 11 March, 1915, a warrant of attachment was issued in said action against tbe funds in the bands of Underwood, tbe contractor, due tbe Pennsylvania Marble and Granite Company, and be was summoned as garnishee to appear before the clerk, and, being examined, stated that be owed said Marble and Granite Company tbe sum of $760.98, which, on order of the court, be paid into tbe office of the clerk of said court to' abide tbe result of tbis action.
These cases were all consolidated and referred to W. B. Guthrie, Esq., and on exceptions to bis report by Gabardini and the Merchants Bank and Commercial Credit Company, tbe court approved tbe findings of fact and conclusions of law of tbe referee, and held that it appearing therefrom that tbe contractor, Underwood, having paid into tbe clerk’s office the sum of $760.98, being the amount due by him to bis subcontractor, the Pennsylvania Marble and Granite Company, that the Blue Pearl Granite Company was entitled to a material man’s lien upon said funds to tbe amount of its claim upon said funds for $435 for material furnished, with interest thereon from 7 November, 1914, and that tbis was a prior lien to any other parties, and that after payment of said amount and tbe costs of tbis action, including tbe allow-*357anee to tbe referee and stenographer, tbe balance of tbe fund should be applied to tbe claim of Frank Gabardini, and tbe Merchants Bank and Underwood were discharged from liability.
From said judgment tbe Commercial Credit Company and Gabardini appealed.
Gabardini contends that bis claim should have been satisfied out of said fund in preference to tbe Blue Pearl Granite Company, because bis attachment was levied 11 March, 1915, prior to 16 March, 1915, when tbe Blue Pearl Granite Company filed its notice of lien as material man, and prior to tbe filing, on 29 March, 1915, by tbe Commercial Credit Company with Underwood, tbe contractor, of notice of tbe assignment to it by the Pennsylvania Marble and Granite Company of tbe sum due it by Underwood. Tbe Blue Pearl Granite Company bad no notice of such assignment until 9 November, 1915. Only a part of tbe sum due by tbe Pennsylvania Marble and Granite Company to Gabar-dini, and none of that to tbe Commercial Credit Company, was on account of this building contract, but was indebtedness incurred on other transactions, and tbe former asserted a lien only by virtue of tbe attachment.
Tbe Blue Pearl Granite Company having furnished its material on 7 November, 1914, and having filed in due time its itemized statement in tbe manner provided by law, claiming tbe lien for material, is entitled to tbe prior lien on tbe funds due by Underwood, tbe contractor, to tbe Pennsylvania Marble and Granite Company, as set forth, in tbe judgment, Chadbourn v. Williams, 71 N. C., 444; Lumber Co. v. Hotel Co., 109 N. C., 658; and this is true even though an attachment was levied against tbe fund prior to filing such statement and bringing suit thereon. Tbe statement having been filed within tbe statutory time, and in tbe manner required by law, dates back to tbe time of furnishing the material. Tbe claim of Gabardini. is not for laborer’s or mechanic’s lien, but is on an open account, and bis only lien is by virtue of bis attachment, while the Commercial Credit Company claims purely under an assignment of tbe account; hence there can be no prorating of tbe fund. Tbe Blue Pearl Granite Company, having perfected its lien, is entitled to its claim and interest in full before tbe other claimants. Hardware Co. v. Schools, 151 N. C., 507.
Tbe Blue Pearl Granite Company; by filing in due time an itemized account with tbe owner and with tbe contractor, and following this notice having brought suit within six months to perfect tbe lien, is entitled to payment without filing its statement with tbe clerk. Revisal, 2020, 2022, 2023; Hildebrand v. Vanderbilt, 147 N. C., 639, and Mfg. Co. v. Andrews, 165 N. C., 294, where it is said: “Tbe lien of tbe subcon*358tractor is acquired by notice to the owner (Rev., 2020), and there is not only no requirement that he shall file notice of a lien with the justice or clerk, but it is expressly provided in Revisal, 2022, that the sums due for furnishing the materials, etc., shall b'e a lien without any lien being filed before a justice of the peace or in the Superior Court.”
It is immaterial whether the contractor had been paid up in full for work done to the time notice was filed by the material man. The fact that he continued the work under the same contract for the exterior of the building and thereafter was paid $5,262 for work done under the said contract will make the fund thereafter earned subject to the material man’s lien. Brick Co. v. Pulley, 168 N. C., 371.
The claim of the Commercial Credit Company that the assignment to it by the Pennsylvania Marble and Granite Company entitled it to the fund in preference to the Blue Pearl Granite Company under its material lien cannot be sustained. The assignee of a chose in action stands in the shoes of the assignor, and, as Puffin, J., says in King v. Lindsay, 38 N. C., 81, “In truth, the assignee of a chose in action gets no title to it, properly speaking, and cannot be said to be a purchaser without notice. He gets only the right to use the assignor’s name to enforce the claim, therefore, to recover what the assignor might, and the very nature of the subject warns him of the necessity of inquiring respecting the obligor’s equity, and, therefore, amounts to notice of such equity.”
In Clark v. Edwards, 119 N. C., 119, it was held that “Where a mechanic’s or laborer’s lien or lien for material is filed as required it dates back and takes priority of all liens attaching and against all purchasers for value (though without notice) made subsequent to the beginning of the work or furnishing the first material.” This was decided under Code, sec. 1789, now Revisal, 2028, originally enacted in 1868, and which was followed by the enactment of Revisal, 2022, in 1887, dispensing with filing statement with the justice of the peace or the clerk of the court.
The Commercial Credit Company contends that there is no precedent for a case like this where there is an assignment and attachment and a material man’s lien, all contesting for priority; but our statute provides that the material man’s lien, when properly perfected, as in this case, is "prior to all liens attaching subsequent to the furnishing of the first material.”
As to the priority between the lien of the attachment and the assignee, the authorities seem to agree that notice by an assignee to the debtor at any time before a judgment is sufficient, and if after such notice the debtor pays out the fund to the attaching creditor, or other claimant, without pleading the assignment, he becomes individually liable. The *359law is thus summed up 4 Cyc., 32: “As between, assignor and assignee, it is not necessary to the validity of the assignment that the debtor be notified thereof; and as between successive assignees of the same chose from the same person, the assignee prior in time will be prior in right, although he has failed to give notice of the assignment to the debtor, and subsequent assignee has given such notice. The assignment will also be complete against creditors of the assignor gamisheeing the chose after assignment, and before notice of the assignment to the debtor if given in time to permit him to disclose the assignment in his answer to the garnishee process,” citing many cases.
The judgment should have been in favor of the Commercial Credit Company instead of in favor of Gabardini after the payment of the. claim of the Blue Pearl Granite Company, and the court costs, and should be thus
Modified and affirmed.