Horne-Wilson, Inc. v. . Wiggins Bros., Inc.

Brogden, J. 1. Can the assignee of a valid claim of a laborer and materialman file, perfect and enforce a lien upon the land upon which said labor and material was performed and furnished? 2. Does tbe complaint state a cause of action against tbe trustee in tbe deed of trust and tbe purchaser at tbe sale thereunder? C. S., 2440, provides that any laborer or materialman may furnish to tbe owner “an itemized statement of amount owing to such laborer . . . and any person may furnish to such owner ... an itemized statement of tbe amount due him for materials furnished for such purposes. Upon tbe delivery of such notice to such owner or bis agent tbe person giving such notice is entitled to all tbe liens and benefits conferred by law,” etc. C. S., 2441, provides that all sums due to a laborer or materialman, “as shown in tbe itemized statement rendered to tbe owner, shall be a lien on tbe building . . . without any lien being filed before a justice of tbe peace or tbe Superior Court.” In tbe ease at bar tbe complaint and tbe exhibit declares that Oarri-gan, tbe materialman bad an entire contract for tbe fixed sum of $1,400 for work and labor, and that “said claim was duly assigned to tbe plaintiff.” Tbe demurrer, of course, admits this allegation, but challenges tbe legal sufficiency of tbe assignment upon tbe ground that only Carri-gan, tbe materialman, could perfect tbe lien upon tbe premises, as tbe lien was personal to tbe laborer or materialman. and could not be perfected or enforced by bis assignee. Tbe general trend and policy of tbe law, as interpreted and pronounced in this State, has recognized and sanctioned tbe assignments of all ordinary business contracts. Tbe legislative sanction for such assignments is contained in C. S., 446. Commenting upon said statute, McIntosh, North Carolina Practice & Procedure, p. 199, says: “As a general rule, all ordinary business contracts are assignable, and actions for tbe breach may be in tbe name of tbe assignee, unless such assignment is prohibited by law, or would be in contravention of some principle of public policy, or tbe performance of tbe contract involved tbe element of personal skill or credit. Tbe general test of assignability has been giyen, as to whether tbe claim would survive to or against tbe personal *88 representative of the decedent.” Casket Co. v. Wheeler, 182 N. C., 459, 109 S. E., 378. Manifestly, the contract between Carrigan and Kelly or the valid claim that Carrigan held against Kelly for labor and material was assignable, and by virtue thereof, the relationship of debtor and creditor was established between the plaintiff and Kelly. The recent decisions of this Court interpret a lien for labor and material as a sort of statutory security for the payment of a debt. Thus in Trust Co. v. Porter, 191 N. C., 672, 132 S. E., 806, the Court said: “The general rule is that the assignment of a debt carries with it the security.” That case was dealing with rights of the assignee of the claims of laborers and materialmen to recover upon a surety bond. The Court said: “Undoubtedly, the laborers, had they not assigned their claims, would have been entitled to maintain an action on said bond, and we think it must be held, in keeping with the general trend of authorities on the subject, that the claiips of laborers and materialmen may be assigned without losing the protection of the bond given and intended for their benefit.” In like manner a statutory lien is designed and intended for the benefit of laborers and materialmen, and hence it is hardly conceivable that the law would penalize the right of assignment by withdrawing the security and protection set up and established for the payment of the debt so assigned. The defendants rely upon Zachary v. Perry, 130 N. C., 289, 41 S. E., 533. The Court said: “Only Robinson, the original contractor, could file the notice of lien, and then only after he had completed the work and completed his contract, and within the time provided by law. But he abandoned his contract, and therefore himself could file no lien.” In arriving at the meaning of the Zachary case it must be observed that it involved transactions occurring prior to the enactment of the statute authorizing the filing of liens upon the property of a married woman. The point in the case is that the acceptance of the order by the feme covert did not bind her land, and hence no lien could be asserted or enforced. Consequently, as the married woman had contracted no valid debt, the lien was not available. Moreover, the intimation that the lien was wholly and exclusively personal to the contractor, was not pertinent to the proposition of law upon which the decision rested. The decision in Trust Co. v. Porter, supra, to the effect that a lien is security for a debt, and that the assignment thereof carries the security with it, is supported by the overwhelming weight of authority in other jurisdictions, notably: Minnesota, Michigan, South Dakota, New Jersey and Massachusetts. See Kinney v. Duluth Ore Co., 60 N. W., 23; Sanduskey Grain Co. v. Borden Condensed Milk Co., 183 N. W., 218; Hill v. Alliance Building Co., 60 N. W., 752; West Jersey Homopathic *89 Hospital v. Gibbs, 143 Atl., 316; Wiley v. Connelly, 60 N. E., 784. The contrary view is asserted by the Nebraska Court in Noll v. Kennedy, 56 N. W., 722, and West v. Detroit Fidelity & Surety Co., 225 N. W, 673. It is to be observed, however, that in Nebraska tbe statute requires tbe claimant to file bis claim in tbe office of tbe register of deeds and until and unless tbis is done tbe “right to a lien is lost.” Our statute confers tbe lien immediately upon tbe filing of notice of claim with tbe owner. Hence tbe difference in statutory regulation perhaps explains tbe divergence of judicial ruling. Manifestly, no cause of action is stated in the complaint against Carswell, trustee. There is no allegation in the complaint that notice was given to him before the fund was disbursed. Norman v. Hallsey, 132 N. C., 6, 43 S. E., 473; Harris v. Cheshire, 189 N. C., 219, 126 S. E., 593. However, a cause of action is stated against the defendant, Wiggins Brothers, Incorporated. Oarrigan began furnishing labor and material before the second deed of trust was registered. Therefore, when bis assignee, in apt time, duly filed a lien, as the court says, the “lien relates back to the time the work was commenced or the materials were furnished and does not impair or affect encumbrances existing prior to that time, but only those subsequently created.” Burr v. Maultsby, 99 N. C., 263; McAdams v. Trust Co., 167 N. C., 494, 83 S. E., 623; Harris v. Cheshire, 189 N. C., 219, 126 S. E., 593. Consequently the plaintiff under approved principles of procedure was entitled to bring an independent action in the Superior Court to reach the surplus proceeds arising from the sale of property under power contained in the first deed of trust. Skinner v. Coward, 197 N. C., 466, 149 S. E., 682. Tbe other questions raised by the demurrer are not sustained, and tbe judgment as rendered is Affirmed.