the difference between the liens and the amount due on such second installment should be paid to the assignee, though the contractor had filed no lien claim; the statute providing that any claimant who fails to establish a valid lien may recover a judgment for whatever is due him against any party.1

174

A creditor of the contractor who has garnished the owner stands in the same position as an assignee. His rights are superior to the liens of subcontractors if his garnishment took place before their liens attached, and inferior to them if it did not.15 A building contractor cannot, by assigning his interest under the contract, deprive material men, who have no notice thereof, of their right to liens, where the contractor could not recover from the owner without satisfying such liens.176 Where a building contract makes a certificate from the county clerk that no liens are unsatisficu of record an absolute condition of payment of any money under the contract, and does not expressly limit the protection of this provision to the owners of the building, such provision is also for the benefit of persons entitled to mechanics' liens; and an assignment of moneys due under the contract will be subject to the satisfaction of any such liens duly filed after such assignment, and before such certificate is obtained.177

Receivers.

§ 348. The fact that, before suit is brought to enforce a mechanic's lien, the property on which the lien is claimed has been placed in the hands of a receiver, does not destroy the lien, or prevent such suit from being brought, since the result of a foreclosure would not disturb the receiver's possession, but would merely give the purchaser at foreclosure sale the right to intervene in the suit in which the receiver was appointed.178 Where the property has passed into the hands of a receiver appointed in insolvency proceedings, the re

174 Thomas v. Stewart, 30 N. E. 577, 132 N. Y. 580, affirming Thomas v. Sahagian, 10 N. Y. Supp. 874, 57 Hun, 591.

175 See ante, § 336.

176 Jennings v. Willer (Tex. Civ. App.) 32 S. W. 24.

177 Bates v. Bank, 34 N. Y. Supp. 598, 88 Hun, 236, affirming Bates v. Trustees, 27 N. Y. Supp. 951, 7 Misc. Rep. 609.

178 Richardson v. Hickman, 32 Ark. 406. parently not a party to the foreclosure suit.

In this case the receiver was ap

ceiver has power to adjust by agreement the mechanics' liens on the property, without their being reduced to judgment.179 A mechanic's lien may be enforced against the receiver of a railroad who has possession of the road, and is operating it.18

180

§ 349. The appointment, upon a creditor's bill, of a receiver of the estate of one entitled to a mechanic's lien, accompanied by an order to assign, no assignment having, however, been made, and the receiver having made no claim to the debt secured by the lien, will not operate to release the lien; 181 but, where the claimant becomes insolvent before filing his account, his receiver may file the account, and prosecute the claim, because the lien follows the debt.182 Under a statute giving subcontractors a lien upon "filing the notice of lien," a receiver of the contractor appointed in proceedings supplementary to execution before such filing has a right to the money due the contractor superior to the subcontractor's lien.1 And,

179 Demott v. Manufacturing Co., 32 N. J. Eq. 124.

183

180 Central Trust Co. of New York v. Chicago, K. & T. Ry. Co., 54 Fed. 598. In an Iowa case it appeared that the plaintiff had filed a claim for a mechanic's lien upon a railroad. Subsequently an action was brought against the company by certain creditors, in which a receiver was appointed to take charge of the property, and afterwards, in the same action, certain indebtedness created by the receiver was declared a first lien on the road, which was sold in payment thereof. On these facts, the court held that plaintiff was not represented in his character as a lienholder by the receiver, and that, not having been made a party to the action at any time, his lien was not divested by the sale. Snow v. Winslow, 6 N. W. 191, 54 Iowa, 200.

181 Barstow v. McLachlan, 99 Ill. 641.

182 Miller v. Condit, 55 N. W. 47, 52 Minn. 455.

183 McCorkle v. Herrman, 22 N. E. 948, 117 N. Y. 297. It had been previously held at nisi prius that a receiver appointed in supplemental proceedings instituted against a contractor was not entitled to a claim owing to the contractor for the construction of a building, as against one who had prior to the appointment of the receiver furnished materials for the building at the instance of the contractor, although the lien for such materials was not filed until after such appointment. Deady v. Fink (City Ct. N. Y.) 5 N. Y. Supp. 3. And it has recently been held that, the statute having given subcontractors the right to obtain and enforce mechanics' liens against the property for work done thereon or materials furnished, such right is not affected by the appointment of a receiver for an insolvent principal contractor before completion of the subcontracts; and that the receiver will be required to pay in full the claims of subcontractors who have acquired liens to the extent of the amount receivable by him on the contract

MECH.LIENS-22

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where a contractor's property has been put into the hands of a receiver, a material man who has furnished him with materials, and who has released his lien on the building for which it is furnished, has no lien on the fund in the receivers' hands, arising from payments made for the construction of such building.184

from the owner of the property. In re Christie Manuf'g Co. (Sup.) 36 N. Y. Supp. 923.

184 Griffin v. Booth, 38 N. E. 551, 152 Ill. 219, affirming 50 Ill. App. 217.

(338)

§ 350. Since a mechanic's lien is to some extent an involuntary incumbrance and a secret lien, it seems eminently fitting that the owner should be notified of the lien before it is enforced. Accordingly, the statutes of many states require such notice, although the statutory provisions in regard to it are very diverse. In some states, such notice must be served by all lien claimants; in others, only

1

1 Bassett v. Bertorelli, 22 S. W. 423, 92 Tenn. 548; Rumsey Manuf'g Co. v. Baker, 35 Mo. App. 217; Tingley v. White, 23 Atl. 100, 17 R. I. 533.

by subcontractors and material men. Sometimes the notice must be given before the work is begun, and sometimes after it is completed. In regard to the form and contents of the notice the same diversity exists. In some states it may be oral; in others it must be in writing. Sometimes it is a copy of the claim filed; sometimes it is of a very different form. But beneath all this superficial contrariety there are some underlying general principles. Notice of lien is not process; nor is it the foundation of the action to foreclose the lien,2 although, when it is required by statute, it is a prerequisite to such suit. The object of the notice is to keep the owner from paying the account twice, and to give him an opportunity to investigate the merits of the demand before he decides whether he will pay it, or will permit his property to be subjected to a lien."

When Notice Necessary.

$351. The general principle on which the statutes requiring notice of mechanics' liens are based is that notice should always be given in cases where the owner, not being in privity of contract with the lien claimant, would not otherwise know what, if anything, was due to such claimant. Thus, notice is usually required from subcontractors, from material men in the second degree, and from persons furnishing materials under a contract with one who is not the

2 School Town of Princeton v. Gebhart, 61 Ind. 187.

3 McMillan v. Phillips, 40 N. W. 349, 5 Dak. 294.

7

4 Brooks v. Railway Co., 101 U. S. 443; Lamont v. La Fevre, 55 N. W. 6S7, 96 Mich. 175.

5 Miller v. Hoffman, 26 Mo. App. 202.

6 McAlpin v. Duncan, 16 Cal. 126; Greeley, S. L. & P. R. Co. v. Harris, 20 Pac. 764, 12 Colo. 226; Sayre-Newton Lumber Co. v. Park, 36 Pac. 445, 4 Colo. App. 150; Hooker v. McGlone, 42 Conn. 95; Prescott v. Maxwell, 48 Ill. 82; Butler v. Gain, 21 N. E. 350, 128 Ill. 23; Nesbitt v. Dickover, 22 Ill. App. 140; Hewitt v. Truitt, 23 Mo. App. 443; Whiteside v. Lebcher, 17 Pac. 548, 7 Mont. 473; Strawick v. Munhall, 21 Atl. 151, 139 Pa. St. 163; Pool v. Sanford, 52 Tex. 621; Sens v. Trentune, 54 Tex. 218.

7 Walker v. Hauss-Hijo, 1 Cal. 183; New Ebenezer Ass'n v. Gress Lumber Co., 14 S. E. 892, 89 Ga. 125; Shaw v. Manufacturing Co., 33 N. E. 870, 144 Ill. 520; Neeley v. Searight, 15 N. E. 598, 113 Ind. 316; Parker v. Dillingham, 29 N. E. 23, 129 Ind. 542; Moores v. Heinn, 9 La. Ann. 549; Strąwick v. Munhall, 21 Atl. 151, 139 Pa. St. 163; Shelby v. Hicks, 5 Sneed (Tenn.) 197.