In Camden Iron Works v. Camden, 64 N. J. Eq. 723, 52 Atl. 477, It was held by our Court of Errors and Appeals that if a claim filed under our Municipal Liens Act should contain demands known by the claimant to be beyond the actual amount due, or should knowingly omit any credit to which the contractor was entitled, no lien could be enforced.Summary of this case from Pendleton v. Gondolf
E. A. Armstrong and D. J. Pancoast, for complainant. S. H. Grey, for the defendant George Pfeiffer.
Suit by the Camden Iron Works against the city of Camden to enforce a lien under Act March 30, 1892 (2 Gen. St. p. 2078), to secure the payment of laborers, mechanics, merchants, or traders, and persons employed upon or furnishing materials towards the performing of any work in public improvements in cities, towns, township, and other municipalities in this state. Judgment for plaintiff.
E. A. Armstrong and D. J. Pancoast, for complainant.
S. H. Grey, for the defendant George Pfeiffer.
REED, V. C. Mr. George Pfeiffer, Jr., entered into a contract with the city of Camden on June 24, 1899, to construct a municipal waterworks. Some dispute having arisen in respect to the execution of the work and in respect to the amount due by the city, the matters were settled on May 25, 1899, by an agreement, which fixed the amount still due at the sum of $120,000. Of this sum there is still in the hands of the city, to the credit of Mr. Pfeiffer, the sum of $38,759.04. Under date of May 18, 1898, the Camden Iron Works served a notice upon the city of Camden, claiming that Mr. Pfeiffer owed it the sum of $32,228.45. The claim attached to the notice displayed a demand for castings shipped in the sum of $54,971.65, with a credit of $36,307.55, leaving a balance due amounting to $18,664.10. The charges wereat the rate of $22.50 per 2,000 pounds. In addition to this claim there was another for 225 pieces of 30-inch and 34 pieces of 36-inch pipe made and held subject to order, amounting in price to $11,714.70. These two claims, together with interest amounting to $1,324.21, made up the entire amount of the claim, namely, $32,228.45.
The claim for $11,714.70 for pipe not shipped must be disallowed. There were two contracts between Mr. Pfeiffer and the Camden Iron Works,—one for furnishing a stand pipe, and another, dated October 31, 1896, for castings. It is under the contract of October 31, 1896, that the claim for castings not shipped, but held subject to order, must fall. Under that contract the Camden Iron Works agreed to sell such quantities of straight pipes and special castings as Mr. Pfeiffer may desire at the price of $21.64 per ton of 2,240 pounds for all straight pipe, and $24 per ton of 2,240 pounds for all ball joints, and 2 1/4 cents a pound for all special castings, delivered f. o. b. cars at Camden, consigned to such freight station or stations between certain points on the Pennsylvania Railroad as Mr. Pfeiffer should, from time to time, designate. The pipe and castings were to be delivered at such designated stations within 30 days after each written monthly order for the same. The pipes not shipped were never ordered by Mr. Pfeiffer, either verbally or by writing. It appears also that these pipes have been sold to other parties by the complainant. Under the terms of the contract, Mr. Pfeiffer is not liable to pay for them. In respect to the claim for the pipes actually shipped, there is an overcharge in the price charged per ton. The castings included in this claim are "all pipes and special castings," and the prices are fixed by the contract of October 31st Instead of adhering to the prices designated in this contract, charges are made at the rate of $22.50 for 2,000 pounds. There should be a reduction for the difference. Then there must be a reduction for overweight. The contract provides that any overweight in excess of 1 per cent. is not to be paid for. The contract states that the water pipe, hub, and spigot shall be 12-foot lengths. Now, the total weight, divided by the number of lengths, shows an excess in weight of more than 1 per cent. In explanation of this it is said that the pipes as actually cast run from three to four inches over the strict measure. But there is no proof, aside from this general statement, that these did, and that Mr. Pfeiffer, knowing this, accepted them. Nor is there proof of a general usage in the trade, of which Senator Pfeiffer must have had notice, that when the length of cast pipes is stated in a contract it is understood to mean three or four Inches more than the lengths stated. There must be a reduction for this excess in weight. Then it is admitted that there must be a reduction for the tool house of $48.69. I think there should be also a reduction for pipes No. 36 and No. 215, as I think they were defective. So far in respect to the merits of the claim itself.
The defense, however, does not rest upon a claim of overcharge, but it is insisted that the bill to enforce the lien should be dismissed. In support of this insistence it is urged that this claim is not included within the provisions of the act of March 30, 1892, because the complainant does not stand in the posture of a laborer, mechanic, merchant, or trader, and it is only the class of persons mentioned in the first section of the act that can claim the benefit of its provisions. It is perceived that the title of the act is broader than the first section, inasmuch as the title covers, not only the class mentioned, but also persons employed upon or furnishing materials towards the performing of any work in public improvements, etc. I am of the opinion that the term "mechanic, merchant, or trader" is broad enough to include the Camden Iron Works, who furnished material towards the performance and completion of this contract.
It is secondly insisted that the bill should be dismissed upon the ground that the lien as filed was for an amount so greatly in excess of that due the lienor as to exhibit a fraudulent purpose. If I were satisfied that the excess in the claim so filed was introduced into the claim for the purpose of tying up the money due to Mr. Pfeiffer, and to coerce him into making a settlement upon the claimant's terms, I would not hesitate a moment to dismiss the bill. If any creditor willfully files a claim for an amount in excess of what he knows is due to him, he has perverted the purpose of the statute, and no court could assist him in his fraudulent purpose. But a claim which may seem to a judge to be without legal foundation may seem to a creditor and his lawyer to be valid, or to have at least a chance of judicial establishment; and because the attorney may have been mistaken, and the claim turns out to be partially invalid, it does not follow that the whole claim should be branded as fraudulent, and the lien discharged. I do not think the present claim was fraudulently padded. So far as the excessive price charged, counsel relies upon the agreement previous to October 31, 1896, and in respect to the charges for the manufactured and unshipped castings upon a general understanding that he could go on and manufacture in advance of specific orders. But, while I do not regard the claim as fraudulently made, I do think it was made without that care which should attend the filing of a lien under the statute. The effect of it was to tie up moneys which belonged to Senator Pfeiffer in the hands of the financial officers of the city of Camden, thus depriving him of the interest and use of the same. For this reason I think interest upon the claim should be disallowed, at least from the time of the filing of the mechanic's lien. Unless counsel can agree upon theamount which a calculation in accordance with the views herein expressed will produce, I will refer it to a master.