First National Bank in Graham v. Sledge

616 S.W.2d 954, 1981 Tex. App. LEXIS 3638
CourtCourt of Appeals of Texas
DecidedMay 7, 1981
DocketNo. 18400
StatusPublished
Cited by4 cases

This text of 616 S.W.2d 954 (First National Bank in Graham v. Sledge) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank in Graham v. Sledge, 616 S.W.2d 954, 1981 Tex. App. LEXIS 3638 (Tex. Ct. App. 1981).

Opinion

[956]*956OPINION

HUGHES, Justice.

Guy E. Meacham, the owner of two lots in Young County, Texas, and the First National Bank in Graham, the assignee of certain mechanic’s and materialmen’s notes and liens given to the original contractor, Bart Harris, have appealed the judgment of the trial court awarding full recovery (plus interest, costs and attorney’s fees) of the claims asserted by Harris’ subcontractors who furnished labor and materials in constructing improvements on the lots owned by Meacham.

We affirm.

Most of the facts have been stipulated to by the parties. Meacham was the owner of Lots nos. 44 and 48 in the Rolling Hills Estates — Second Addition to the City of Graham, Texas. In April 1973 Meacham entered into two mechanic’s and material-men’s lien contracts with Harris pursuant to which Harris was to construct one house on each of the two lots at a price of $23,-383.00 each. Simultaneously, Meacham executed two mechanic’s and materialmen’s notes. (Meacham has not paid any part of the amounts due on the notes.) Soon after Meacham and Harris had contracted, Harris assigned the notes and liens (without endorsement) to the First National Bank in Graham as security for advances of money to be subsequently made to Harris during construction of the houses. This assignment was filed of record.

The house on Lot no. 48 was completed by Harris in October 1973 with $20,500.00 having been advanced by First National. The construction of the house on Lot no. 44 was not completed but was abandoned by Harris on or about October 30, 1973. At the time of Harris’ abandonment, $22,500.00 had been advanced to Harris by First National.

Harris filed bankruptcy on or about October 30, 1973 and received a discharge in bankruptcy. The mechanic’s and material-men’s notes were abandoned by the bankruptcy court.

Harris had separately subcontracted with Emmett M. Sledge, B. J. Brown, Ed. C. Davis, Don McCluskey and Bob Brown (the “subcontractors”) to furnish labor and/or materials for either or both of the lots. As of November 1, 1973 each of the subcontractors had filed a “Statement Securing Mechanic’s and Materialmen’s Lien Against Owner” (including attached invoices) in the mechanic’s and materialmen’s lien records of Young County, Texas. Meacham had received one copy of each of the subcontractors’ affidavits by November 2, 1973.

In May 1974 First National filed a suit against the subcontractors (and Meacham as a nominal party) seeking declaratory judgment that the liens of the subcontractors were no longer of any force and effect and an adjudication removing the “Statements”, purporting to secure mechanic’s and materialmen’s liens, as clouds upon the title to said lands. First National alternatively plead for an adjudication that the subcontractors’ liens were inferior to the rights held by First National.

The subcontractors filed a cross-action against Meacham and First National seeking the establishment of their statutory liens in the total amount of $3,687.12 in regard to Lot no. 48 and in the total amount of $2,797.09 in regard to Lot no. 44. They also prayed for foreclosure of such liens, personal judgment against Meacham, attorney’s fees, costs and interest.

Upon motion submitted by First National and Meacham, the trial court discharged the liens asserted by the subcontractors and in lieu thereof accepted a tender of funds into the registry of the court in an amount twice the sum of the claims asserted by the subcontractors.

The subcontractors moved for summary judgment against Meacham. This motion was granted by the trial court but the judgment was reversed and the case was remanded for trial in an appeal to this court. (The opinion was not published.)

After a trial on the merits the trial court determined that First National should take nothing in its declaratory judgment action. It also ordered that: The subcontractors recover their claims in the amount of $3,687.12 plus interest as to Lot no. 48; the [957]*957subcontractors recover their claims in the amount of $2,797.09 plus interest as to Lot no. 44; the subcontractors recover $2,500.00 in attorney’s fees from Meacham; all costs were to be paid by Meacham and First National. (The amounts awarded the subcontractors were to be taken from the funds deposited into the registry of the court.)

Appellants’ first five points of error assert that the subcontractors have not complied with the statutory requisites necessary to perfect their liens. They rely heavily on the doctrine of the “Law of the Case” arguing that as a result of this court’s disposition of the previous summary judgment appeal, it is now established as a matter of law that the subcontractors are not entitled to judgment. We must point out that we decided no questions of law or fact in our previous decision. We held only that the trial court erred in rendering summary judgment because the subcontractors had failed to show that they were entitled to judgment as a matter of law. We expressly stated: “Our opinion is based solely on the rules governing summary judgments in effect at the time of trial; we express no opinion as to the merits of the cause.” First National Bank in Graham, et al. v. Emmett M. Sledge, et al., Docket No. 17946 (Tex.Civ.App.—Fort Worth, March 23, 1978) (unreported). We overrule Meac-ham’s fourth and fifth points of error.

In Texas, a subcontractor (as that term is defined in Tex.Rev.Civ.Stat.Ann. art. 5452 (1980)) must rely on the rights bestowed upon him by the Hardeman Act (art. 5452 et seq.) in order to collect funds due from the owner to the original contractor. The subcontractor is a derivative claimant. By filing a lien affidavit and notifying the owner, pursuant to art. 5453, the subcontractor can impose upon the owner the duty of withholding funds due the original contractor. Arts. 5463 and 5469 impose the withholding requirements. Art. 5469 requires the owner to retain 10% of the contract price or the value of the work. Art. 5463 authorizes the owner to retain amounts sufficient to pay claimants meeting the notice requirements of Art. 5453. Subparagraph 2 of art. 5463 provides in part:

“The owner shall in no case be required to pay, nor his property be liable for, any money, other than that required to be retained by him under the provisions of Article 5469 hereof, that he may have paid to the contractor before he is authorized under this Article to retain the money....”

Appellants’ first three points of error allege that the trial court’s order of recovery in favor of the subcontractors for the amount of their asserted liens was erroneous because: (1) the lien affidavits filed by the subcontractors were not in conformity with the law; (2) the subcontractors could not perfect liens by sending only one copy (as opposed to two copies) of their respective lien affidavits to Meacham; and (3) the subcontractors could not perfect their liens by sending a copy of the lien affidavit to Meacham in normal or regular mail as opposed to certified or registered mail.

The fact that the subcontractors sent their copies of the lien affidavits to Meacham by way of regular mail rather than certified or registered mail is insignificant because the parties stipulated that Meacham actually received a copy of the lien affidavits. Art. 5456(2) specifically renders the method of delivery immaterial whenever any written notice has actually been received.

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616 S.W.2d 954, 1981 Tex. App. LEXIS 3638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-in-graham-v-sledge-texapp-1981.