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Mitchell v. Wrightstown Community Apartments Inc.

Decided: June 30, 1949.

JOSEPH MITCHELL, PLAINTIFF-APPELLANT,
v.
WRIGHTSTOWN COMMUNITY APARTMENTS, INC., AND ANOTHER, DEFENDANTS-RESPONDENTS



Jacobs, Eastwood and Bigelow. The opinion of the court was delivered by Bigelow, J.A.D.

Bigelow

The plaintiff appeals from a summary judgment of the Burlington County Court dismissing his complaint which was framed upon the Mechanics' Lien Law. The judgment was based upon the court's determination that the plaintiff had waived his right to a mechanic's lien. The motion for summary judgment included a further reason upon which the court did not pass, namely, that the complaint is sham.

The complaint is in two counts, of which the first sets forth that the plaintiff had contracted with the defendant landowner, the Wrightstown Community Apartments, Inc., to erect certain garden-type apartments for the agreed price of $600,000, and that "differences in cost and extra work" brought the amount to $758,962.

The basis of the cause of action is the alleged refusal of the owner to make payments in accordance with the contract. The apartments were being erected with money advanced by the Hudson County National Bank upon mortgage guaranteed by the Federal Housing Administration. Article 4 of the contract provides that the contractor shall apply to the owner about the first day of each month for payment for the work of the preceding month.

"The sum to which the Contractor shall be entitled upon any such payment shall be the total of the purchase price of uninstalled materials stored on the mortgaged property in a manner acceptable to the Commissioner plus the cost of the portions of the work acceptably completed, as approved by the Commissioner, computed in accordance with the amounts assigned to the several items in the Payment Breakdown, hereto annexed marked Exhibit A, less 10% and less

prior advances. * * * The contractor shall only be entitled to payment in the amount approved by the Lender and the Federal Housing Commissioner with respect to said application."

In the Payment Breakdown, the work is divided into 32 items, to each of which is allocated a certain sum, for instance, masonry $49,139, rough carpentry $65,518. The monthly application or requisition for payment would show, for instance, that 50 per cent. of the rough carpentry was completed and that the contractor was entitled to 50 per cent. of the amount allocated to that item, less 10 per cent. A breach of contract is alleged as follows:

"The defendant, Wrightstown Community Apartments, Inc., breached said contract on October 16, 1948, by refusing to advance any more moneys thereunder, in accordance with its provisions, whereupon plaintiff was unable to purchase materials, pay for labor, or pay his subcontractors, and was prevented thereafter from completing said work under said contract."

The complaint further shows that the indebtedness is a lien on the land and building, and that the Hudson County National Bank is made a defendant because it holds a mortgage which would be cut off by a sale under plaintiff's lien claim.

The second count is exactly the same as the first, except that it alleges that Wrightstown Community Apartments agreed to pay plaintiff reasonable worth instead of a stipulated sum.

The complaint credits defendants with payments on account and the value of the work remaining to be done at the time of the breach, and demands judgment for the balance, $220,188, with interest from October 16, 1948.

As I have already pointed out, the summary judgment rested on the plaintiff's waiver of his lien. The waiver is ...


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