This is plaintiff's motion for summary judgment on the issue of liability under R.R. 4:58-3, the amount of damages being reserved for trial, and arises out of a statutory lien claim action instituted by the materialman of a subcontractor under N.J.S. 2 A:44-75 et seq.
There is no dispute of fact, it appearing that on December 22, 1950 the defendant Forest Hill Apartments, Inc., as owner, and Doral Construction Corp., as contractor, entered into a written agreement under the terms of which the contractor agreed to erect certain apartment house units on premises of the owner on Victor Place and Davey Street, in the Town of Bloomfield, Essex County, New Jersey, also known as F.H.A. Project No. 031-42179, pursuant to the contract and specifications annexed thereto, which were duly filed in the office of the Essex County Clerk as No. 10 on January 5, 1951; that plaintiff furnished concrete, stone and allied materials to William Macchio, a subcontractor of Doral Construction Corp., at his request, for which materials Macchio agreed to pay the sum of $4,466.35; that plaintiff furnished the materials which were used in the construction, and in accordance with the terms of the general contract and delivered at the site of the work; on November 20, 1951, plaintiff filed a stop notice in the office of the Essex County Clerk, and duly served a copy thereof upon defendant, Forest Hill Apartments, Inc., and Doral Construction Corp. by registered mail, return receipt requested, on November 21, 1951; no notice of dispute was served upon plaintiff and there was due and owing to the contractor from the owner-defendant more than $4,466.35 at the time of the filing of the stop notice.
By leave of court the United States of America was granted leave to intervene and filed a complaint on October 17, 1953, charging that the United States Commissioner of Internal
Revenue had assessed withholding and federal unemployment taxes against William Macchio, the subcontractor, in the sum of $52,939.06, notice of levy, together with a warrant for distraint and notice of tax lien being served upon Forest Hill Apartments, Inc. and Carroll Management Corp. by the District Director of Internal Revenue at Newark, New Jersey, on April 17, 1953, demanding that the funds in its hands belonging to William Macchio be turned over to the United States, and on June 5, 1953 the said District Director filed in the office of the Register of Deeds of Essex County a notice of lien claimed by the United States upon all the property and rights belonging to Macchio.
Plaintiff contends that defendant is liable for the entire amount of the indebtedness (which is $4,466.35 in the present case, and $11,294.27 in a companion case brought by the Union Building & Construction Corp. involving the same state of facts), charging a violation of N.J.S. 2 A:44-85 by reason of payments to the contractor by the owner after receipt of the stop notice, and disputes the Government's claim to priority of its tax lien. Neither defendant owner nor the contractor made any payments to the subcontractor, Macchio, after receipt of the stop notice, and as the amount due him at that time under the terms of the filed contract, and retained by the owner, was $9,015.32, determination of the question of priority must be dispositive of the case.
Title 26, United States Code, section 3670 reads as follows:
"If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, penalty, additional amount, or addition to such tax, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person."
Title 26, United States Code, section 3671 reads as follows:
"Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list was received by the collector and shall continue until the liability for such amount is satisfied or becomes unenforceable by reason of lapse of time."
Title 26, United States Code, section 3672 reads in ...