Opinion
02-18-1913
TEXAS CO v. UNITED PAVING CO. et al. (LAMBERTVILLE STONE & QUARRY CO., Intervener.)
John H. Backes, of Trenton, for complainant. Vroom, Dickinson & Scammell, of Trenton, for defendant Mechanics' Nat. Bank. Bourgeois & Coulomb, of Atlantic City, for defendant United Paving Co. J. Albert Homan, of Trenton, for intervener.
Action by the Texas Company against the United Paving Company and the Inhabitants of the City of Trenton and the Mechanics' National Bank, in which the Lambertville Stone & Quarry Company intervened. Decree giving priority to the claim of the Mechanics' National Bank.
John H. Backes, of Trenton, for complainant. Vroom, Dickinson & Scammell, of Trenton, for defendant Mechanics' Nat.
Bank. Bourgeois & Coulomb, of Atlantic City, for defendant United Paving Co. J. Albert Homan, of Trenton, for intervener.
LEWIS, V. C. The bill in this case is filed by the complainant claiming that there is due it $6,935.16 under a certain contract made by it with the United Paving Company. It appears that on the 17th day of July, in the year 1911, the inhabitants of the city of Trenton entered into an agreement, in writing, with the United Paving Company, a corporation of this state, by the terms of which agreement the said United Paving Company was to furnish all materials and perform all labor in the construction of a certain texaco asphalt pavement on Second street, in the city of Trenton. The Texas Company, it is alleged, furnished certain of these materials to the United Paving Company for the paving of said street. The pleadings and proof show that the Texas Company on October 17, 1911, served a notice of the amount due it under its contract with the United Paving Company upon the proper city officers of the city of Trenton, and filed its bill, giving the statutory notice. The proof shows further that the work was completed and finally accepted by the city on or about October 1, 1911. For the municipality of Trenton it is admitted that it holds a balance of $11,769.13 on account of a contract entered into by it with the United Paving Company.
On April 11, 1912, the Lambertville Stone & Quarry Company served its notice; but it was contended that it had not complied with the statutory requirement by giving notice of the pendency of its suit within 90 days from the filing of its notice, and therefore could not be considered by the court. The opinion is reached, however, that there has been a sufficient compliance with the requirement of the statute. The statute in question has been construed to afford an equitable and not a legal remedy. Delafield Construction Company v. Sayre, 60 N. J. Law, 449, 38 Atl. 666. At the time the Lambertville Stone & Quarry Company filed its notice of lien, this cause was pending to enforce the complainant's claim. On May 15, 1912, and within 90 days of the time when the quarry company served its notice of lien, an order was made admitting the Lambertville Stone & Quarry Company as a party to it. It filed its answer to the complainant's bill and the cross-bill of the Mechanics' National Bank. Notice was served upon the city of Trenton of the intervention and of its purpose. The act of March 30, 1892 (Public Laws of 1892, p. 370, § 4), provides that no lien shall be binding unless an action is commenced within 90 days. Section 6 authorizes the claimant to enforce its claim by a civil action, and section 7 declares the claimant must make all parties who have filed claims parties defendant, and the court may decide as to the extent, justice, and priority of the claims of all parties to the action. The claimant is not required to bring suit to establish his lien within 90 days, where he has been made a party to a similar suit by another claimant. National Fire Proofing Company v. Daly, 76 N. J. Eq. 35, 74 Atl. 152.
It was suggested by the defendants that the Texas Company was without standing to attack the validity of the assignment of the United Paving Company to the Mechanics' National Bank on the ground that it was not a judgment creditor. The Texas Company is a lienholder under the statute and entitled to the fund for the payment of its debts subject to prior legal claims. If the claim of the bank is defeated, payment to the Texas Company would be first in order. The Texas Company's right to contest to accomplish this result is undoubted.
The principal controversy in the case is between the Texas Company and the Mechanics' National Bank of Trenton. The latter is one of the defendants to this action. It sets up in its answer that at various times since August 1, 1911, it has loaned the United Paving Company, upon notes, approximately $11,000, and that on August 6, 1911, the said paving company, as security for the payment of the said notes, assigned to it all interest in the balance of the money then due it under its contract with the city of Trenton.
The Texas Company insisted that the assignment by the United Paving Company tothe Mechanics' National Bank was made without authority. Proof was, of course, required and offered to show that the paving company was in debt to the bank at the time of the assignment, and this fact was satisfactorily established. The assignment made to the bank was a complete assignment of so much of the amount as was due from the paving company to the bank. There is unquestioned authority under the municipal lien law (3 Comp. St. 1910, p. 3315) for a contractor for municipal improvements to assign in advance all moneys to be derived under the contract and defeat the claims of the creditors of the contractor doing the work or furnishing materials for the improvements. See Somers Brick Company v. Souder, 71 N. J. Eq. 759, 70 Atl. 158, Garretson v. Clark, 57 Atl. 414, and Cope v. Walton Company, 77 N. J. Eq. 512, 76 Atl. 1044.
The evidence produced satisfied the court that the officers of the United Paving Company, who made the assignment, had full authority to do so. The proof disclosed a resolution authorizing the assignment regularly passed by the board of directors of the paving company, and, at the time of the making and delivery of the assignment, there was annexed to it a copy of the resolution in question; that in all the sum of $25,000 had been loaned by the Mechanics' National Bank to the paving company on the security of the assignment, and that payments had been made upon this sum until it reached about $11,000; that due diligence had been exercised by the bank in the filing of the assignment.
A decree is allowed directing the city of Trenton to pay to the Mechanics' National Bank the amount due under the assignment, and the balance, if any, remaining in its hands to the Texas Company.