Opinion
09-11-1890
WAKEMAN v. NOBLE et al.
Coult & Howell, for complainant. Guild & Lum, for defendants.
The complainant entered into what is commonly called "a buildingcontract" with the defendants. Noble & Van Aulen, under which they agreed to erect two double houses in the city of Newark, on Summer avenue, on lots Nos. 416, 418, 420, and 422. They soon after entered into another agreement to build for the complainant two other houses on the same avenue, further north, on lots Nos. 428 and 430. They proceeded with the construction of said houses until the 25th day of May, 1889, when they ceased all work thereon, and when the houses were not yet complete. From the time the second contract was entered into as between the contracting parties they treated both contracts separately, as nearly as possible, yet in the main it is impossible to distinguish them. The complainant proceeded immediately with the work until all of the houses were finished according to the contract. After the cost of completing the houses is deducted from the money due to the contractors, had they completed the work, there remained in the hands of the complainant $2,983.33. The contractors had purchased materials of different ones, and had employed laborers and mechanics who assisted in the construction of the houses. These present claims against the owners upon this fund; some of them having orders drawn by the contractors, and others notices under the third section of the mechanic's lien law. There is a dispute between the claimants as to which is entitled to be first paid, and, there being not enough to pay all, the complainant files this bill asking that he may be permitted to pay the fund in hand into court, and that the defendants may settle their respective rights between themselves. As the contractors quit work, on the 25th of May, the owners paid to one of them $800, which, according to the terms of the contract, was due at the time of payment. His right to make this payment is denied by one or more of the defendants. They insist that an order had been obtained by one of them on the 11th of April, previous, directed to the owner, requiring him to pay $1,300, of which he had notice at the time, and that having such notice the last-named sum was controlled by such order.
Two questions are therefore presented for consideration, viz.: How much is in the hands of the complainant for distribution among the laborers and material-men who were creditors of the contractors, and what is the order of payment as between such creditors? 1 think the amount in the hands of the complainant, which the several creditors of the contractors are entitled to, is the sum of $2,983.33. It was urged upon the argument that the payments made to the contractors after the order of April, 1889, was brought to the attention of the complainant was unjustifiable; in other words, having notice of this order, it was the duty of the owner to retain all the moneys then due or to become due. I cannot think this was the intention of the contractors who gave the order. While there may be room for discussion, the order itself indicates that it was to be satisfied out of the last payment to be made upon the contract when the houses were completed, which payment was to be $1,400. The order is in these words: "Newark, N. J., April 11, '89. John P. Wakeman, Esq.—Dear Sir: Please pay Thos. A. Murphy & Co. thirteen hundred and no-100 dollars, & charge to our account, to be paid upon completion of houses # 424 & # 426, Summer avenue. Yours, very truly, NOBLE & VAN AULEN. "So far as appears, the contract between the owners and the contractors was complied with by the latter, and the last payment but one—that is, the $800—was due. This being so, had the contractors brought suit against the owners for the recovery of that amount, the order would have been no defense. And I come to the same conclusion with respect to the order given to C. A. Dalley, which is in these words, and figures: "Kearney, N. J., May 2, 1889. Mr. J. P. Wakeman: Pay to the order of C. A. Dalley the sum of eight hundred dollars, when the south pair of houses are complete, and deduct the same from our last payment, also pay to his order the same amount on the north pair, and deduct the same from the last payment on the north pair, and each pair to be complete before the said payments are made. Yours, etc., NOBLE & VAN AULEN." And that this was the understanding of C. A. Dalley is shown by his notice to the owner of the amount which he claimed to be due him, which includes the amount specified in said order, in which notice he used the following language: "Being on account the last payments, as called for in said contract." If I am right as to the foregoing, then the order of Thos. A. Murphy & Co. must be assigned to the same result. It is in the words and figures following: "Newark, N. J., May 20, 1889. John P. Wakeman, Esq.—Dear Sir: Please pay Thos. A. Murphy & Co. six hundred & no-100 dollars, on completion of # 416, # 418, # 428, & #430 houses, north & south pair houses on Summer avenue, for lumber furnished on them & oblige, yours, truly. NOBLE & VAN AULEN. "Nor do I find that the owner should be charged with any ad ditional amount on account of unwarranted disbursements in completing the houses. It was urged that some of the work which had been done by the contractors was rejected, and other materials and work supplied after it had been accepted by the architect. It was also urged that exorbitant charges by the mechanic who completed the job had been made. At the hearing, I was impressed with the belief that there was no little force in the insistment thus made. Upon full consideration, however, of the testimony, I cannot conclude that there was any material de parture from the terms of the contract. I conclude, therefore, that $2,983.33, the amount stated by the complainant in his bill, is the true amount, less costs due from the complainant, for distribution among the creditors of Noble & Van Aulen entitled thereto.
Since the claims of the several creditors are greatly in excess of the amount in hand, the material question remaining is which of them is entitled to said funds. It will be seen that the orders above recited amount to more than the balance in the hands of the owner. Taking the amount of the first order due to Murphy & Co., whichis for $1,300, there will not be enough remaining on either of the said contracts to satisfy it should it be regarded as having been drawn upon the fund in hand, which would have been due for finishing either of said pair of houses under such contract. It will also be seen that the order given to C. A. Dalley May 2d, and the order to Murphy & Co. May 20th, will more than absorb the balance in hand due upon the said contracts, provided such order was really drawn against the proceeds of such contract, except houses 420 and 422. It is material, therefore, to determine whether or not these orders are so definitely expressed as to satisfy the mind that they point to any particular fund and thereby effectually assign so much of that fund. Counsel for the defendant Carlisle, to whom the Dalley order was assigned, insisted that the order to Murphy & Co. was at best only a general order for the payment of money, and not drawn upon any certain fund. He, however, as earnestly insisted that the order to Dalley fulfilled all the requirements of an order intended to reach a particular fund. The doubt sought to be impressed upon the mind with respect to the Murphy order is that it directed the sum named to be charged to the account of the makers, and to be paid upon the completion of the houses 424 and 426, Summer avenue, when in fact there were no houses in either of the contracts so numbered, and when no particular account is referred to. To my mind the objection cannot prevail. There is nothing to show that Murphy and Noble & Van Aulen had any other contracts or dealings whatever. No refinement of reasoning can remove the conviction that this order referred to one or the other of these contracts. It, beyond all doubt, referred to the houses actually numbered 420 and 422, or to the houses on lots numbered 428 and 430; and I have no hesitation in coming to the conclusion that this order referred to the houses numbered 420 and 422 under the first contract, for when Murphy takes his second order it will be seen he takes it upon the payment due on 416, 418, 428, and 430, and when they serve their notice of retainer they speak of the houses as "416, 418, 424, 426, 428, and 430," leaving out the numbers 420,422, and using instead thereof 424, 426. These facts, together with the facts that the order to Dalley was against the payment due on the southernmost pair, and on the northernmost pair when considered as the work of intelligent business men, leave no room for doubt but that the parties referred to numbers 420 and 422 in said order.
I have said that counsel for Carlisle insisted that the order to Dalley is so certain as to the fund intended to be assigned as to be entirely satisfactory. I think that when this order is read by a person of unbiased judgment it will be seen to be quite as indefinite or uncertain as the Murphy order. It simply directs the payment of $800 when the south pair of houses are completed, and also of $800 when the north pair are completed, without in any wise locating the houses intended, not even mentioning the avenue. True, it directs the sum to be paid "out of our last payment," but without referring to any contract or any account. But in this case, as in the former, my mind is entirely at rest as to the intention of the parties. As remarked with respect to the Murphy order, there is no evidence of any other transaction between these parties. All their dealings had reference to the houses which were in process of construction under these two contracts. It would be scarcely more satisfactory if the Murphy order had been drawn upon the back of the first contract against the last payment due thereunder, and the Dalley order upon the first contract, and against the last payments due thereunder on houses 416 and 418, and also on the second contract.
It seemed to be admitted upon the argument that the complainant should be charged with $4,334.28, less the price of materials furnished to Noble & Van Aulen, amounting to $264.37, also less certain alterations in favor of the complainant amounting to $45, and likewise less the cost of completing the houses. The cost of completing the houses under the first contract was ascertained to be $503.12. To this should be added two-thirds of the price of materials furnished by the complainant to Noble & Van Aulen, and the difference in favor of the complainant occasioned by alterations in the contract, all of which amount to $206.24. These two items make the sum of $709.36. Deducting these from the whole amount for which the complainant should be charged on the first contract, $2,889.52, leaves in his hands $2,180.16, after all proper payments and allowances for completing the contract. And since there was no effort at ascertaining the exact amount of costs of the respective pair of houses under the first contract, nothing more equitable can be done than to assign one-half of this sum ($2,180.16) to each of said pair of houses. The cost of completing 428 and 430, the northernmost pair, was $538.46. To this should be added the one-third of materials furnished by the complainant to Noble & Van Aulen, and of the difference in the complainant's favor arising from alterations in the contract. These two are $103.12, which added to the $538.46 makes $641.58. This subtracted from $1,444.76 (the amount with which the complainant is chargeable on the second contract) leaves $803.18, the whole balance now due, and for distribution among creditors. The first order to Murphy & Co. for $1,300, it will be seen, more than consumes the amount due after the completion of houses 420 and 422 under the first contract. The Dalley order directs the payment of $800 out of the fund due upon houses 416 and 418, being the southernmost pair. To this $800 must be added the interest and the costs. These deductions being made, there will probably be less than $200 remaining due on houses 416 and 418. Said order also directs the payment of $800 out of the amount due upon the completion of 428 and 430, being the northernmost pair. The amount so due is $803.18. Evidently, when the interest and costs have been added to the amount due upon the Dalley order, it will exceed the amount in the complainant's hands. The order of Murphy & Co., dated May20th, directs the payment of $600 out of the amount due on houses 416 and 418. This more than consumes the balance remaining in the hands of complainant, without any reference to costs or interest. If I am right in these conclusions, it is needless to consider the question of priority with respect to other claims.