National Brick & Supply Co. v. Baylor

299 F.2d 454

• Court: Court of Appeals for the D.C. Circuit
• Decided: February 1, 1962
• Docket: Nos. 16338, 16339
• Status: Published

Opinions

EDGERTON, Circuit Judge.

Areawide Building Corporation contracted with appellees, the trustees of Mount Joy Baptist Church, to make alterations and additions to the church building, payment to be made in installments as the work progressed. Areawide abandoned the work after several payments had been made. Article 10 of the contract provided: “Should the Contractor neglect to prosecute the work properly, or fail to perform any provision of the contract, the Owner, after seven days’ written notice to the Contractor, may. without prejudice to any other remedy he may have, * * * terminate the contract and take possession of all materials, tools, and appliances and finish the work by such means as he sees fit, and if the unpaid balance of the contract price exceeds the expense of finishing the work, such excess shall be paid to the Contractor * * Not long after the church learned that Areawide had abandoned the work, the church exercised its right to terminate the contract.

Appellants are subcontractors suing to enforce mechanic’s liens. They filed these liens within three months after Areawide abandoned the work and are entitled to share in any sums the church may owe Areawide, the prime contractor. D.C.Code § 38-103 (1961). The District Court ruled that the church’s expense of finishing the work exceeded the balance due from the church to the prime contractor and therefore appellants could not enforce their liens.

After Areawide abandoned the work, but before the church learned that fact and terminated the contract, one Bortolussi, a subcontractor trading as Washington Heating & Plumbing Company, who had nearly completed his work and received most of his pay, filed a mechanic’s lien¹ for the value of radiation equipment in place. He afterwards removed the equipment.²

The removal was tortious. Bortolussi was chargeable with notice of the terms of the contract between Area-wide and the church.³ That contract cannot be thought to authorize either the contractor or a subcontractor to remove and not replace materials, particularly when, as in this case, the “trim-draw” progress payment had been made in reliance on the presence of the equipment. By filing a lien,⁴ Bortolussi recognized the church’s superior right to immediate possession.⁵ He testified that he removed the equipment with Areawide’s permission. But this is not here material, because Areawide could not bind the church.

The church was entitled to require Bortolussi to replace what he had wrongfully removed or pay damages. Instead of demanding that he do so, the church made a new contract with him by which it undertook to pay him and did pay him for replacing the equipment.⁶ There is no showing that he was insolvent or that, for any reason, the church could not have enforced its rights against him if it had tried to do so. In the absence of some such showing, the amount that the church paid Bortolussi for doing what he was already bound to do should not be regarded as a part, because it was not a reasonably necessary part, of “the expense of finishing the work”. The church is therefore not entitled, as against the appellant lien holders, to deduct the amount in question from the unpaid balance due from the church to Areawide. It results that there is a balance in which appellants are entitled to share. D.C.Code § 38-106 makes it the owner’s duty to retain for subcontractors who have filed liens, payments that become due to the contractor. Under the lien law, appellant subcontractors are entitled to the benefit of the contract between Areawide and the church. Cf. Riggs Fire Ins. Co. v. Shedd, 16 App.D.C. 150, 158 (1900).

The District Court rightly held that the lienors were not entitled to satisfy their liens out of sums which the church paid Areawide before the liens were filed and before the church learned that Areawide had abandoned the contract.

The judgment is vacated and the case remanded to the District Court for further proceedings consistent with this opinion.

Vacated and remanded.

1 . He later released this lien. He after-wards filed a second lien which the District Court found untimely. No appeal was taken from that decision.

2 . The equipment seems to have been subject to a conditional sales contract between Bortolussi and his supplier.

3 . D.C.Code § 38-107 (1961) entitles subcontractors to demand from the owner a statement of the terms of the prime contract. “The subcontractor should acquaint himself with the terms and conditions of the building contract. * * * In the absence of anything to the contrary, we must assume that the plaintiff possessed this information.” Winter v. Hazen-Latimer Co., 42 App.D.C. 469, 474 (1914).

4 . D.C.Code § 38-101 (1961).

5 . Cf. Carey v. Cyr, 150 Me. 405, 113 A.2d 614 (1955); Van Winkle v. Crowell, 146 U.S. 42, 50-51, 13 S.Ct. 18, 36 L.Ed. 880 (1892).

6 . The District Court said “This contract was not for work which had already been performed * * But this is contradicted by the court’s earlier finding that “Bartolussi removed certain materials, some of which had been installed, from the job site” and by the record. The new contract was to finish the job, which involved not only new work but also replacing the materials which had been installed and afterwards removed.