Anderson v. White

32 S.E.2d 72, 183 Va. 302, 1944 Va. LEXIS 154
CourtSupreme Court of Virginia
DecidedNovember 20, 1944
DocketRecord No. 2823
StatusPublished

This text of 32 S.E.2d 72 (Anderson v. White) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson v. White, 32 S.E.2d 72, 183 Va. 302, 1944 Va. LEXIS 154 (Va. 1944).

Opinion

Gregory, J.,

delivered the opinion of the court.

Elizabeth Realty Corporation made a contract with W. B. Miller, as general contractor, for the construction of a number of houses, at an agreed price, upon its property situated in the city of Norfolk. ' Under the terms of the contract the general contractor agreed to furnish all necessary labor and materials for the erection of the buildings.

The general contractor having defaulted in the performance of the contract, the buildings were completed by the owner, and when finally completed there remained in its hands $21,697.92 due under the contract. This amount, together with interest, was paid into court by the owner to be distributed to those entitled to it.

Before the general contractor defaulted he had completed a considerable portion of the work. During the progress of the work, and before his default, the general contractor executed and delivered separate orders, or assignments, upon the owner in favor of the petitioners herein, who were subcontractors on the job. These orders represented the respective amounts due these subcontractors • for labor and materials furnished on the job.

In addition to these subcontractors who are the petitioners, there were other subcontractors who furnished labor and materials for the job, but these other subcontractors do not hold any assignments or orders on the owner. They are made defendants to this petition and have duly filed and perfected mechanic’s liens against the said property. The petitioners also perfected mechanic’s liens against the property.

[304]*304The assignments in favor of the petitioners were served upon the owner before any of the mechanic’s Hens were filed.

A chancery suit was instituted and intervening petitions filed by all of the subcontractors for the enforcement of their respective mechanic’s Hens. The petitioner herein alleged that the owner was personally Hable to each of them for the amount of their said assignments, and that they constitute prior claims' and Hens upon said property and should be paid in full before the payment of any other Hens against the property, the amount remaining due on the contract being insufficient to pay all of the subcontractors in full. The priority claimed by the petitioners by reason of the assignments was contested by the owner and by the other subcontractors who did not hold assignments. The matter was referred to Mr. Thomas H. Willcox, a commissioner in chancery, who, among other tilings, was directed to report upon the validity and priority of aU orders and assignments asserted by any party or parties hereto. After taking considerable evidence, the commissioner filed his report in which he held “I am of the opinion and now report that as against parties holding valid mechanic’s Hens the assignments or orders are nuU and void, and that the holders of the mechanic’s Hens are entitled to share pro rata in the funds available”.

The petitioners filed exceptions to the report of the commissioner but the court overruled the exceptions and confirmed the report by its decree. It is by this action of the court that the petitioners claim to be aggrieved.

The contention of the petitioners is that the orders and assignments to them from the general contractor constitute equitable assignments pro tanto of the funds in the hands of the owner, due at the time of the execution thereof or thereafter becoming due to the general contractor from the owner on the contract price of the buildings. They also contend that upon receipt by the owner of notice of the assignments it thereupon became its duty to make an immediate sequestration of sufficient funds then due or becoming due to the general contractor to insure payment thereof, and that since [305]*305there were sufficient funds in the hands of the owner to satisfy all of the assignments, and it having received notice of them before any mechanic’s liens were filed, it is contended that all of the assignments are entitled to priority of payment in full before the mechanic’s liens of the other subcontractors not holding assignments shall receive any portion of the funds.

The appellees, or the subcontractors holding no assignments,- rely upon Code, sections 6435 and 6437 (Michie). Section 6435 reads:

“Every assignment * * * by a general contractor * # * of any money * * # coming to him under such contract * * * and every writ of fieri facias, attachment or other process against the general contractor # * * shall be subject to the hens given by this chapter to laborers, mechanics, and material-men. No such assignment or transfer shall in any way affect the validity or the priority of satisfaction of liens given, by this chapter.”

And section 6437 reads:

“There shah be no priority among them except that the lien of a sub-contractor shall be preferred to that of his general contractor; the lien of persons performing labor or furnishing materials for a sub-contractor, shall be preferred to that of such sub-contractor; and hens filed by persons performing manual labor shall have priority over material men to the extent of the labor performed during the thirty days immediately preceding the date of the performance of the last labor.”

This case seems to be one of first impression in this court, in so far as we are advised. We are not referred to any case in which we have been called upon to decide a question of priorities between hens of mechanics holding assignments on the owner from the general contractor and those holding no assignments.

Mr. Willcox, in an able and comprehensive report, in part made these findings, in which we concur:

“The holders of mechanic’s hens who have received no assignments contend that statute (sec. 6435) is controlling. Those who have assignments claim that the statute does not [306]*306interfere with the validity and priority of their hens, and they rely in the main on Schrieber Sons & Co. v. Citizens Bank of Norfolk, et al., 99 Va. 257; Thomas & Co. v. McCauley, 143 Va. 451; D. F. Tyler, et al. v. Building Supplies Corp. et al. (Ended Cases Court of Law and Chancery of the City of Norfolk, 1935, No. 422), and City Supply Co., Inc. v. Harry Lipman, et al., (Circuit Court of the City of Norfolk 1924, Ended Chancery Cases No. 2798).
uThomas & Co. v. McCauley, supra, followed the Schrieber case on a single point,’ which is not involved in this controversy. It did not deal with assignments.
“The Schrieber case was decided while Chapter 351, Acts of Assembly, 1895-96 (p. 379) was in effect. At the time the questions in this case arose, the matter was governed by section 6435 of the Code of Virginia.
“Although the above statute deals with the subject of the former Act, it is not a revision or amendment of the former Act, but as said by the revisors in their note:
“ ‘This is a new section dealing with the effect of assignments. It is taken in part from section 3844 of the West Virginia Code (Hogg, 1913). Assignments are not prohibited, but are made subordinate to the mechanics’ hen. It is intended that no assignment made by a general or subcontractor shall in any way affect the rights of other parties arising under the mechanics’ hen law’.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Schrieber, Sons & Co. v. Citizens Bank
38 S.E. 134 (Supreme Court of Virginia, 1901)
Thomas & Co. v. McCauley
130 S.E. 396 (Supreme Court of Virginia, 1925)
Nicholas v. Miller
30 S.E.2d 696 (Supreme Court of Virginia, 1944)

Cite This Page — Counsel Stack

Bluebook (online)
32 S.E.2d 72, 183 Va. 302, 1944 Va. LEXIS 154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anderson-v-white-va-1944.