Hall v. Baldwin , 45 N.J. Eq. 858 ( 1889 )

The opinion of the court was delivered by

Scudder, J.

Aaron W. Miller erected a dwelling-house for Charles A. Hunt, the contract price of which was $3,290. When the building was completed, the last payment of $1,140 under the contract came due, several materialmen and laborers served notices on the owner, under the third section of the Mechanics* Lien law, to retain the money and pay their claims. The owner paid the money into court, and filed a bill in the nature of inter-pleader. The amount now in court, after deducting costs, and the claims of A. P. Littell & Son, and of J. S. Littell, and their costs, is $689.92.

All of the claimants filed answers, setting up their claims under the statute. The appellants, who were also claimants, by leave of court, filed a supplemental or additional answer, setting forth an assignment to them, by the name of the Chapin-Hall Manufacturing Company, for a valuable consideration, of all the right, title and interest in and to any and all moneys due to him under the contract with Charles A. Hunt for the erection of a house on Thomas street, Newark, N. J.

This was in writing, duly executed by Aaron W. Miller, the builder, and dated February 22d, 1889. Their debt, interest and costs amounted to $600, on September 18th, 1886, when notice was served.

The court determined, that all the several claimants who had served notices o-n the owner, Miller, had not complied with the form of the statute, or established any right to the moneys in court; that Aaron P. Littell, Hiram E. Littell and John S. Lit-tell, had equitable assignments of portions of the fund in court,, for the payment of their claims, by orders drawn by Miller on Hunt for the amount of each claim, respectively, which were entitled to priority of payment out of the fund in court. It also held that the assignment made by Miller to the appellants, Hall, Kent and Parker, subsequent to the final hearing, but before the decision of the cause, which was produced and admitted in open court, was not a lawful assignment of any portion of the fund, and that the relief prayed by the supplemental answer should not be granted.

The contractor, Miller, having filed no answer in the cause, nor made claim to the fund, was adjudged to consent to an equitable distribution of the moneys remaining in court, after the payment of the claims of A. P. Littell, H. E. Littell and J. S. Littell, respectively, among all of the other claimants.

In case of a regular bill of interpleader, the only decree to which the complainant is entitled is, that the bill was properly filed j that he pay the money into court, and be dismissed with his costs. The defendant in that bill may answer and deny his right to such decree. The court, after the decree, proceeds to determine the controversy between the defendants, and for this purpose either directs an action to be brought, or an issue to be tried at law, or a reference to a master. Barton’s Suit in Equity 69; Story Eq. Pl. 297 (a); 3 Dan. Ch. Pr. 1764.

It has, however, become the practice, without regarding this regular form of proceeding, to dispose of all the questions arising upon bills of interpleader according to the nature of the questions and the manner in which they are brought before the court. If ripe for hearing, the court decides them; if not, they are referred to a master, or the court directs an action or an issue. Condit v. King, 2 Beas. 375.

There is no difficulty in a case like the present in proceeding in this way, for the answers are filed and the proof of the respective claims is complete, and there is no question of the complainant’s right to be discharged on payment of the money into court, without further litigation.

But we think, on the proofs offered, that the decree cannot be sustained.

After deciding that the claimants, by informal notices to the owner to retain the moneys in his hands belonging to the contractor, had not complied with the statute, the court had finally disposed of these claims; for it is only by compliance with the statute that they could obtain a lien on the money in the hands of the owner, due to the coiitractor. Unless this be done, they are in no better condition than creditors at large.

The court could not, therefore, proceed to make distribution of the balance of money in hand, in proportion to the amount of the several •claims which had been decreed not to be liens on the fund.

There is no doubt, also, that on the failure of these claimants to establish their liens, the money in court belonged to Miller, the contractor, and he could make a legal assignment of the same, in good faith, to any other creditors whom he chose to prefer. This he did by the assignment to the appellants, Hall, Kent and Parker, before any other lien had attached. This was proved and admitted to be a regularly executed assignment, and it passed all Miller’s right to the fund, for the payment of their claims against him. The appellants are entitled to the amount of their claims under this assignment, and costs on the appeal. If there be any balance it belongs to Miller, and should be paid on his order.

Decree unanimously reversed.