Opinion
10-11-1937
WOODBRIDGE LUMBER CO. v. VARACSKA et al. NIELSEN v. SAME.
Orlando H. Dey, of Rahway, for plaintiffs. John C. Stockel, of Perth Amboy, for defendants Varacska.
Actions by the Woodbridge Lumber Company and Endre Nielsen against William Varacska, Julia Varacska, his wife, owners, and another, builder. Judgment was entered against the builder, it having filed no answer. On motion to strike a portion of the answer filed by the owners.
Motion denied.
Orlando H. Dey, of Rahway, for plaintiffs. John C. Stockel, of Perth Amboy, for defendants Varacska.
BARBOUR, Judge.
These matters came on on motion to strike a portion of the answers filed by William Varacska and Julia Varacska, his wife, owners.
Each suit is founded upon a lien claim, judgment having been heretofore entered against the builder, it having filed no answer.
In their answers the owners admit that they are both the owners of record of the land, having become such by deed dated August 3, 1936, and recorded August 5, 1936, in Book 1099 of Deeds for Middlesex county, at page 406, etc., that the building was erected for them by the builder, and that the plaintiffs performed labor and furnished material for the construction. In the answers the owners assert that the plaintiffs furnished the labor and material to the builder for the construction of the building, "pursuant to the building contract entered into between William Varacska and Lester L. Drummond, Inc., which contract together with specifications was filed with the clerk of Middlesex County on September 15th, 1936," and deny that either they personally or their land are liable for the plaintiffs' claims.
At the time of oral argument the court determined that a question of fact was presented with respect to three points which were raised by the plaintiffs, and we are now confronted with only one point, viz.: "The filing of the said contract is ineffectual to protect the premises against mechanics' lien claims because it was not 'signed by the record owner of the estate or interest in the land which is to be charged with the lien hereunder' as required by section 2 of the Mechanic's Lien statute as amended in 1930. (Comp. St.Supp.1930, p. 950, number 126 —2, P.L. 1930, c 212, page 974)".
It is evident that the building was intended to be constructed pursuant to a contract entered into with William Varacska, and the question is whether or not the signing of the contract by William Varacska was a compliance with the 1930 amendment which required the contract to be signed by the "record owner," the title to the premises being in the name of William Varacska and Julia Varacska, his wife.
In order to determine this point, we must determine the purpose of the statute in question which is entitled "An act to secure to mechanics and others payment for their labor and materials in erecting any building and in making certain improvements to land." We are aided in this by several decisions of the courts of our state, among which are the following:
Ayres v. Revere, 25 N.J.Law 474, at page 479, dealing with the Mechanics' Lien Act of 1853 (the pertinent provisions of which were substantially the same as the present Mechanics' Lien Act prior to the 1930 amendment [3 Comp.St.1910, p. 3291 et seq.]), holds:
"The second section of the act provides, that when any building shall be erected in whole or in part by contract in writing, such building and the land whereon it stands shall be liable to the contractor alone for work done or materials furnished in pursuance of such contract; provided such contract, or a duplicate thereof, be filed in the office of the clerk of the county where the building is situate before such work done or materials furnished. The plain design and operation of this section is to exempt buildings erected by contract from the encumbrance of all liens, except those of the contractor himself.
"The exemption, however, extends only to work done and materials furnished in pursuance of the contract. It applies to buildings erected by contract, either in whole or in part. One design of requiring the contract to be filed, must have been to apprize all mechanics and material men to what extent the building was exempt from liens, and how far they must look to the responsibility of the builder alone for their remuneration. * * * The beneficial design of the act must have been to enable parties interested, before the work was done or materials furnished, to ascertain whether they must look to the responsibility of the builder or may rely upon the security of the building itself. * * *
"The lien and the mode of enforcing it are creatures of the statute. They are unknown to the common law. The statute charges the property of one man with the debt of another. Though the owner may have paid the contractor in full for the erection of the building and for all the i materials used in its construction, his property is nevertheless charged by the default of the contractor with the repayment of the debt. It gives preference to one class of creditors over another. The man who has furnished a brick, or a stone, or a plank, for the erection of the building, or who has labored a day in its construction, is secured his remuneration in full, while those who have furnished provisions for the owner and his family, who have supplied them with the necessaries of life, or who have toiled in their service, are deprived of all means of recompense until the favored creditors are satisfied. It reaches to the claims of mortgage and judgment creditors, and supersedes even these encumbrances, if created after the building is commenced in favor of the subsequently created debts of a favorite class of creditors. It gives to the favored creditor a remedy not only against his debtor, but against an innocent third party, with whom he has never contracted, and for whom he has never labored. It gives him a cumulative remedy, which, if enforced, may compel the owner to pay a debt which he has once satisfied in full; and it may be, as in this instance, that this hardship will result from mere inadvertence in filing his contract, or from misapprehension of the precise meaning of' a statute.
"These suggestions are not made with the design of impugning the wisdom or the policy of the law, but to show that the statute is not of that purely remedial character which calls for a peculiarly liberal construction at the hands of the court. * * *
"Neither a sound construction of the statute, nor the promotion of the ends of justice requires that the statutory remedy should be extended beyond the obvious design and clear requirements of the law."
The Court of Errors and Appeals, dealing with the then existing Mechanics' Lien Act in 1860, in the case of Associatesof Jersey Company v. Erastus Davison, 29 N.J.Law 415, at page 424, said:
"The principle of construction is, that although a matter may fall within the words of the act, it shall not control it, unless within the reason and spirit also. This principle was acted upon in the case of Beardsley v. Southmayd, 3 Green [15 N.J.Law] 171; Taberrer v. Brentnall, 3 Harrison [18 N.J.Law] 262; Howe v. Lawrence, 1 Zabriskie [(21 N.J.Law) 714], 750 ; Hoguet v. Wallace, 4 Dutcher [28 N.J.Law] 523.
"A thing which is within the letter of a statute, is not within it, unless within the intention of the makers. Bac. Ab., title 'Statute,' I 5; Stradling v. Morgan, Plow. 205.
"When the intention is doubtful, the court will interpret the law consonant with equity and what is most convenient. Kerlin's Lessee v. Bull, 1 Dall. [(Pa.) 175], 178, ; Crocker v. Crane, 21 Wend. [N.Y.] 211 ; People v. Utica Insurance Co., 15 Johns. [N.Y.] 358 ."
In Dalrymple v. Ramsey, 45 N.J.Eq. 494, at page 496, 18 A. 105, Vice Chancellor Van Fleet said: "Independent of the statute, a debt contracted in the erection of a building stands no higher, in point of natural justice, than many other debts, and the lienable quality of such a debt should therefore be rigidly restricted to just what the legislature has made it."
This case is cited with approval in Passaic-Bergen Lumber Company v. Currie, 111 N.J.Law, 63, at page 65, 166 A. 711.
In Shoemaker v. Maloney, 102 N.J.Law 363, at page 365, 132 A.' 606, 607, Mr. Justice Kalisch said: "The 'mechanics' lien' statute is entitled: 'An act to secure to mechanics and others payment for their labor and materials in erecting any building.' Now, it has always been the policy of our courts to construe the provisions of the statute in such manner, so as to give effect to the purpose of this legislation. The statute, in substance declares that every building to be erected shall be liable for the payment of any debt owing to any person for labor performed or materials furnished in the erection and construction thereof, which debt shall be a lien on such building, and on the land whereon it stands, except, in the case where there is a contract and specifications on file, the land and building shall be liable to the contractor alone. Thus it is quite clear that the building and land become security for the payment of the debts of the laborers and materialmen, except in cases where a contract and specifications are on file."
In Weinberger v. Goldstein, 106 N.J. Eq. 489, at page 490, 151 A. 397, Vice Chancellor Lewis said: "The remedy under the mechanics' lien alone is a statutory one * * * and there must be a strict compliance with its terms."
We might very properly sum up the foregoing in the words of Judge Brown, in the Hudson county circuit court, In re Dujanski, 179 A. 693, 695, 13 N.J. Misc. 546, at page 551, where it is said: "The answer to the question presented on the rule depends primarily upon the construction of the foregoing provisions of the Mechanics' Lien law. It is the policy of our courts to construe the statute in such manner as to give effect to the purpose of the legislation. Shoemaker v. Maloney, 102 N.J.Law 363, 132 A. 606, and so far as it operates to charge the lands of a party with a debt not contracted by him or for his ultimate benefit it should be strictly construed. Associate of Jersey Co. v. Davison, 29 N.J.Law 415. The remedies provided in the statute should not be extended beyond its obvious design and clear requirements. Ayres v. Revere, 25 N.J.Law 474; Associates of Jersey Co. v. Davison, 29 N.J.Law 415; Griggs v. Stone, 51 N.J.Law 549, 18 A. 1094, 7 L.R.A. 48."
It is very clear that the purpose of the statute is to secure to persons furnishing labor or materials for use in the construction of a building payment for such labor or materials, but it is likewise clear that it was also the purpose of the statute to provide a means by which owners might have a building erected for them without subjecting the land and building to a lien in favor of a person or persons to them unknown involving amounts over which the owner would have no control.
In so far as the statute does give a lien, it introduced into the law something which was not known at common law, and it should not, therefore, be extended in its provisions by the court.
It is evident that by amending the act in 1930 the. Legislature intended toeliminate conditions theretofore existing, the courts having held that where a contract was filed it need not be necessarily a contract with the owner. It was therefore impossible for the person furnishing material or labor to the building to know who the owner was without examining the record of the title. An examination of the Reports shows cases where the contract for the construction of a building was entered into by some one who apparently had no connection with the owner or at best was acting for an undisclosed principal. Materialmen and others, therefore, were unable to serve stop notices upon the owner, but had to rely upon the financial responsibility of the person making the contract. Where such person was in fact the owner, the materialman, of course, was given some security for his payment because, if the owner disregarded the stop notice, the materialman would then be in a position to proceed against such owner, and in time obtain a judgment and levy upon the property. Since the one purpose of the statute was to secure to materialmen payment for their materials, it was reasonable to require that the land should not be exempt from a lien unless the owner was the person who executed the contract with the builder.
It is to be noted that in the same amendment in 1930 a lien was denied to materialmen and others unless before furnishing material or labor they filed a mechanic's notice of intention. The evident purpose of this was so as to enable the owner to determine who had furnished material and to protect himself from having to pay twice, once to the builder and once to the materialman. The 1930 statute, therefore, was intended not only to protect materialmen and laborers, but also to protect the owner from liens where he procured the erection of a building pursuant to a written contract.
I, therefore, hold that the statute in so far as it attempts to exempt properties from liens should be liberally construed.
It is certain that the materialmen were given notice by the filing of the contract in the instant case that it was intended that the property should be exempt from lien, and, the contract being entered into by "one of the owners, the husband, it was clear that there could be no undisclosed principal. The plaintiffs' rights were not jeopardized and they were in a position to protect themselves fully by serving stop notices. The plaintiffs, however, apparently chose to rely upon a technicality in the execution of the contract and seek to compel the owners to pay a second time for the same debt. To permit them now to enforce their alleged lien would be "to compel the owner to pay a debt which he has> once satisfied in full." Ayres v. Revere, supra.
I therefore deny the motions to strike the answers on the grounds given.