Kyle v. Graham

Opinion by

Head, J.,

The plaintiff asserts his right to enforce a mechanic’s lien against the defendant owner for the price of material which he furnished in the spring of 1909 to a certain building then being constructed for the owner by Van Asdlen, a contractor. The material was furnished at the instance of the contractor and delivered in the early part of February. The owner had entered into a written contract with Van Asdlen in the fall of 1908 for the construction of this building. The contract was dated on September 30 and contained no provision on the subject of mechanics’ liens. On October 7, following, an additional contract in writing was entered into between the owner and contractor by the terms of which the latter covenanted, promised and agreed "that no liens shall be filed against the property of the said party of the second part for any work or materials furnished for the erection of said dwelling, either by the party of the first part as principal contractor or by any subcontractor, in accordance with the Act of Assembly of April 24, 1903, P. L. 297, sec. 1.” This contract or stipulation was filed in the office of the prothonotary-within ten days after the execution of the principal contract and some months before any material was furnished by the plaintiff. If it became effective according to its terms, and if the protection thereby secured to the owner was not afterwards forfeited or waived by him in favor of the present plaintiff, the latter could not, in the face of that stipulation, successfully assert the right to maintain a lien against the defendant’s property.

The able counsel for the appellant attacks the validity and effectiveness of this contract to bar the plaintiff’s right on a number of grounds. All of his objections have been considered and disposed of in the opinion filed by the learned court below entering judgment for the defendant. Except as to one of the several objections urged we have not thought it necessary to attempt to elaborate the reasons which are stated in that opinion supporting the conclusion there reached.

Having thus in the manner indicated taken the steps theretofore recognized by the law as sufficient to protect his property from a mechanic’s lien, either by the general contractor or any subcontractor under him, has the defendant lost the right to claim the benefit of that protection by reason of his subsequent arrangement with the general contractor to which we shall now advert?

On October 8, the day following the execution of the contract last referred to, and after it had been duly filed in the prothonotary’s office, the defendant entered into another written stipulation with his general contractor. This paper was not filed and did not become public until perhaps a year later, long after the plaintiff subcontractor had furnished the material for which he now seeks a lien. This paper recited the previous contract between the parties providing that no mechanic’s lien should be entered by any one and the filing thereof in the prothonotary’s office. It then went on to state that upon a reconsideration of the situation of the general contractor, the owner was willing, upon the happening of certain conditions therein specified, to permit him to file a lien “for any unpaid balance of the said contract price; ” or, in other words, to waive the protection theretofore provided, in favor of the general contractor to the extent of permitting him to secure himself against nonpayment of the contract price. The paper went on to expressly declare “It is further understood, however, that this agreement shall not affect subcontractors nor interfere with the agreement on file in relation to them.” It is urged upon us that the execution of this paper practically destroyed what had been accomplished by making and filing the agreement of the day before because the right of a subcontractor to file a lien is a necessary incident of the like right of the general contractor. Inasmuch therefore as the agreement of October 8 restored to the general contractor a right of lien, albeit conditional and only to secure the contract price, it is argued that the right of the subcontractor was thereby revived and that the first contract became inoperative.

The soundness of this position is to be tested by ascertaining the intention of the'legislature as declared in sec. 15 of the Act of June 4, 1901, P. L. 431, as amended by the later Act of April 24, 1903, P. L. 297. By the former act the legislature, as it in terms declared, intended to “furnish a complete and exclusive system in itself so far as relates to liens for labor or material commenced to be furnished after its approval.” Long before the adoption of this act the right of an owner to make an agreement with his general contractor to prevent the filing of any liens was recognized both by the courts and the legislature, and it was held that such agreement was effective not only as against the general contractor who signed it, but also as against subcontractors.

Section 15 of the act of 1901 first declares “The right to file a claim may be waived by agreement between the claimant and the party with whom he contracts.” From this it is apparent that the right of any particular claimant is not necessarily bound up with the rights of all those in his class so that all must stand or fall with any one of them. This provision makes no distinction between the general contractor and the subcontractor. If either saw fit to waive his right to file a claim, such waiver would not necessarily disturb the right of the other; and so amongst subcontractors, it could not be successfully argued, that because one had waived his right to file a claim the rights of the others were thereby impaired or affected.

The section then proceeds to deal with the situation where a contract on the subject of hens has been entered into between the owner and contractor and declares, “If the legal effect of the contract between the owner and the contractor is that no claim shall be filed by any one, such provision shall be binding.” Having concluded that the learned judge below was right in dismissing all other objections to the validity of the agreement entered into on October 7 and filed, we must still further conclude that when that agreement was filed it was binding not only on the general contractor but on every subcontractor who might thereafter, at his instance, furnish material or perform labor in or about the building.

The section then goes on to provide that in order to be binding upon a subcontractor, either actual notice of the agreement must be brought home to him or the contract must be filed in the office of the prothonotary of the county where the structure is situate “prior to the commencement of the work upon the ground or within ten days after the execution of the principal contract.” When this provision has been complied with, as it was in this case, the subcontractor is visited with at least constructive notice ,of its terms. But notwithstanding the fact that a valid and effective provision against the filing of any liens had thus been made, the statute then clearly recognizes that such protection may be waived in favor of any particular claimant and declares in terms what shall be the evidence of such a waiver. There is nothing at all in this portion of the section to indicate any legislative intent that if the owner saw fit to waive the general protection against liens — which he had secured in the manner previously provided — in favor of one claimant, he would thereby lose it as to all others. On the contrary, it seems to us that the fair construction of the language used leads to the conclusion that it was within the legislative intent that the owner, who had secured protection against all, might, at his option, release it or waive it in favor of one and yet insist upon its benefits as against all other claimants. The section declares: “The only admissible evidence that such a provision (a binding provision against the filing of claims by any one) has, notwithstanding its filing, been waived in favor of the claimant, shall be a written agreement to that effect, signed by all those who, under the contract, are interested antagonistically to the claimant’s allegation.” The waiver contemplated must be in favor of “the claimant,” that is the particular claimant in any given case. Mere proof that there had been a waiver in favor of some other claimant surely would not satisfy the demand of the statute.

As we have said, a study of this entire section leads to the conclusion that the owner may enter into a contract with the general contractor to the effect that no lien shall be filed by any one and that such an agreement is binding on every subcontractor. Further, that although all subcontractors stand alike in the absence of such a contract, any one of them may for himself waive his own right of lien without affecting that of others in his class. And conversely, that when by the operation of such a contract all' subcontractors have been shut out from the right of lien, the owner may, in favor of one of them, waive or surrender the protection thus secured without destroying his right to claim it against all others. It may be urged this construction of the language of the statute may result at times in a situation where one of a number of mechanics or material men can file a lien when the right is denied to all others. Even if this be true it does not follow that any injustice would be done to those excluded. The preference they are ordinarily permitted to enjoy they owe entirely to the liberality of the statute. When the same statute declares that under designated conditions, of which they must have notice before they part with their property, this preference shall not exist, on what ground can this favored class justly complain?

It seems to us therefore that the learned court below was correct in holding that the plaintiff’s right to maintain a lien and have a judgment in the action of scire facias begun thereon was barred by the agreement of October 7, duly filed in the prothonotary’s office, and that this right was not revived or restored by the subsequent arrangement entered into between the owner and contractor, giving to the latter a conditional and qualified right of lien to secure payment only of the contract price. The assignments of error are therefore overruled.

Judgment affirmed.