For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Proctor, J.
The primary issue on this appeal is whether the statutory provisions governing mechanics' liens (N.J.S. 2A:44-64 et seq.) permit the plaintiffs to establish a lien for installing sewers, pursuant to a contract with a developer, underneath streets laid out on a subdivision map.
Defendant, Willete Associates, owned a large tract of vacant land in Middletown Township, Monmouth County, which it planned to develop by the construction of single family dwellings to be known as Willete Acres.*fn1 After obtaining the township's approval to subdivide the tract into 106 lots, with streets to run through the development in accordance with the filed map (N.J.S.A. 40:55-1.1 et seq.), defendant contracted with the plaintiff, NA-JA Construction Corporation, for the construction of storm and sanitary sewers throughout the development. The other plaintiff, J.R. Christ Construction Co., Inc., was also involved in this project although it did not contract directly with defendant. Both NA-JA and J.R. Christ Construction Co., Inc. are apparently wholly owned by James R. Christ. According to the terms of the contract sewer mains were to be laid underneath the streets shown on the map. Small laterals were to be run
from the mains to just inside the curb lines of the various building lots. At the time the contract was executed the streets shown on the map had not yet been completed or opened to public use.
The contract between NA-JA and the defendant was signed on August 13, 1963, and construction was commenced in the latter part of that month. Notices of intention to supply materials or perform labor, prerequisite to the establishment of a mechanic's lien (N.J.S. 2A:44-71 to 74), were filed by J.R. Christ Construction Co., Inc. on July 22, 1963, and by NA-JA on August 28, 1963. According to the plaintiffs, when work on the project ceased on May 26, 1964, the cost for work and materials totalled about $350,000. However, of this total only $800 was allocable to the small laterals running from the sewer mains to each lot.
Plaintiffs claim they are owed $264,204.59 and on June 22, 1964, they filed a mechanic's lien claim for that amount in the Monmouth County Clerk's office pursuant to N.J.S. 2A:44-91. On July 2, 1964 they began a suit in the Law Division of the Superior Court, as provided in N.J.S. 2A:44-97, to enforce this claim.
Between the time the lien claim was filed and the time suit was commenced, defendant obtained a surety bond in favor of the plaintiffs for double the amount of the lien claim (N.J.S. 2A:44-117). A judge of the county court then ordered that defendant's land and buildings be released from any liens arising from plaintiffs' claim (N.J.S. 2A:44-118). This procedure is designed to keep a defendant's land from being tied up in litigation while at the same time assuring that adequate funds will be available if a plaintiff succeeds in establishing a mechanic's lien.
Defendant moved to strike the mechanic's lien claim and discharge the bond, and plaintiffs countered with a motion for summary judgment. After both motions were consolidated for hearing the trial court held that the installation of the laterals could give rise to a lien but that no lien could result from the installation of the sewer mains under public streets.
He then ordered that the surety bond be reduced to $1,600, double the cost of the laterals running from the mains to each lot. We certified plaintiffs' appeal on our own motion prior to argument in the Appellate Division.
The relevant portion of N.J.S. 2A:44-66, which governs the creation of mechanics' liens, provides:
"Except as otherwise provided in this article, the property herein enumerated shall be liable for the payment of any debt contracted or owing to any person for any of the purposes herein specified, which ...