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Homes v. Guest

Decided: April 13, 1973.

RUSLAINE HOMES, A NEW JERSEY CORPORATION, PLAINTIFF,
v.
MARION D. GUEST AND PATRICIA A. HAFER, JOHN SCARPA AND CHELSEA TITLE AND GUARANTY COMPANY, A NEW JERSEY CORPORATION, JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS



Staller, J.c.c.

Staller

The defendants have moved to set aside, and to have declared invalid, the lien claim filed by the plaintiff corporation under the provisions of N.J.S.A. 2A:44-75.

The defendants negotiated with the plaintiff, a builder, for the construction of two duplex homes. As a result of the negotiations, an agreement was entered into on April 16, 1972, between the defendants, designated as owners of the lands upon which the structures were to be erected, and the plaintiff, as building contractor. Thereafter on May 23, 1972, a further contract was executed by the defendants, designated as owners, and the building contractor. The difference between the two contracts was the completion date, the position of the structure on the land and the amount of consideration, it having been reduced by $600 in the second agreement. In both contracts, it was provided that the contract was to be "recorded" in the office of the Clerk of Cape May County prior to the commencement of any work being done. Both contracts, with specifications, were filed in the Clerk's office on May 26, 1972; and the builder then commenced to build, continuing to work thru the next several

weeks and months until August 2, 1972. Then on August 17, 1972, building contractor filed the lien claim, sought herein to be set aside.

Although the agreement executed by the defendants referred to them throughout as owners, the title had not, at that time, been conveyed. The defendants had an agreement to purchase the lands from one Scarpa; and settlement was had under that agreement of sale of the lands on June 10, 1972, at which time title was conveyed to them just 18 days after the date of the second agreement and 15 days after the date of filing.

During the time of construction, plaintiff paid subcontractors out of funds either received on account from the defendants or out of funds which plaintiff borrowed to meet payments to such subcontractors, who looked to the contractor because of the filed contract.

Defendants contend that the lien claim is invalid, not by reason of any improper procedure in its filing or suit thereon but because, at the time the contract was signed and filed, the defendants were not the record owners of the land as required by the statute; and this defect in the filed contract renders the subsequent filing of the lien claim nugatory.

The Mechanics Lien Act with respect to the filing of building contracts at N.J.S.A. 2A:44-75 sets forth.

If a building is erected, constructed, completed, altered, repaired, or added to in whole or in part under a written contract, signed by the record owner of the estate or interest in the land which is to be charged with a lien under this article, the building and the land on which it stands shall, to the extent of the estate or interest so charged, be liable to the lien of the contractor alone for labor performed or materials furnished pursuant to the contract, if the contract or a duplicate thereof, together with the specifications accompanying the contract or a copy or copies thereof, are, before the labor is performed or materials furnished, filed with the proper county clerk. The plans need not be filed, whether or not referred to in the contract. The filing of such contract shall be in lieu of filing a mechanics notice of intention under this article. [Emphasis added]

The defendants rely solely upon Woodbridge Lumber Co. v. Varacska , et al., and Nielsen v. Varacska , et al., a decision of Circuit Court of New Jersey for Middlesex County in 1937, reported in 194 A. 392. Here the plaintiffs, apparently materialmen or mechanics or both, brought suit upon a lien claim against William and Julia Varacska as owners, and against the builder, who filed no answer; and judgment was taken against him by default. The owners Varacska answered that the contract had been filed and therefore the plaintiffs could not assert a lien claim against them. The plaintiffs moved to strike that portion of the answer on the ground that the filing of the contract was ineffectual to protect the premises against mechanics lien claims because it was not signed by the record owner. It had been signed by William Varacska but not by his wife, Julia. The court refused to strike the Varacska answers, in effect holding that the contract though signed by only one of the record owners was indeed effectual to bar the plaintiffs; and the materialmen must look to the contractor, the Varacska's lands being free from claims of all others.

The holding in Woodbridge Lumber Co. does not support the contention asserted by defendants here. However the language of that decision is most significant to a consideration of the construction of the ...


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