Interior Distributors, Inc. v. Promac, Inc. ( 1975 )

VAUGHN, Judge.

A second-tier subcontractor who furnishes labor or materials is entitled to a lien upon funds owed to the first-tier subcontractor with whom he dealt. G.S. 44A-18(2). The lien is perfected by giving notice to the contractor who is obligated to the first-tier contractor. Upon receipt of that notice the obligor must retain any funds subject to the lien. G.S. 44A-20. If the funds held are less than the amount of valid lien claims filed with the obligor, the parties are entitled to share the funds on a pro rata basis. G.S. 44A-21.

Here plaintiff, a second-tier contractor, contends that the other two second-tier contractors, Shaw and Boyce, are not entitled to share in the funds because their written notices to the obligor, which were given earlier than that of plaintiff, are not in the form prescribed by G.S. 44A-19. We need not decide whether the information given in the notices was in substantial compliance with that required by G.S. 44A-19. The obligor acknowledged the claims, withheld additional payment to the defaulting contractor and agreed to distribute the funds so withheld to the second-tier contractors on a pro rata basis. On the facts of this case and as between these parties, plaintiff has shown no priority or right to recover a greater percentage of his debt than have Boyce and Shaw.

The judgment of the District Court directing payment of the three second-tier subcontractors on a pro rata basis is affirmed.

Affirmed.

Judges Morris and Clark concur.