Duplan Silk Co. v. Spencer

Citations

• 115 F. 689
• 53 C.C.A. 321
• 1902 U.S. App. LEXIS 4238

Syllabus

<p>1. Building Contract — Construction.</p> <p>A provision of a building contract that the owner may, in case of default by the contractor, proceed to finish the building himself, and, to that end, use materials brought by the contractor on the ground for the purposes of the building, being accountable to the contractor for any excess of the unpaid contract price over the cost of completion, is not one for a forfeiture, which must be strictly construed against the owner, since it does not involve the taking of any property of the contractor by way of penalty or punishment, but is in the interest of both parties, and is to be fairly construed to effect its purpose.</p> <p>8. Same — Lien op Owner on Materials Delivered.</p> <p>Under such a provision,' materials brought by the contractor upon the owner’s premises, and appropriated to the building contracted for, are to be considered as so far delivered into the possession of the owner as to make them a security for advances made by him on the contract, and to vest in him a qualified right of property in the same, consistent with the right of the owner to use them in the fulfillment of his contract.</p> <p>8. Bankruptcy — Property Passing to Trustee — Validity op Liens.</p> <p>The owner of a building in course of erection by a contractor, given by the contract a general lien on all materials which are delivered on the premises for the fulfillment of the contract, who makes advances to the contractor upon an oral agreement that materials previously so delivered shall stand as security therefor, does not thereby make a new contract which can be held to give him an unlawful preference under the bankrupt law; but its effect is merely to render specific a previous general lien, and his possession is such that the property cannot be disposed of by the contractor, or levied upon by his creditors, and It will not, therefore, pass to the latter’s trustee in bankruptcy by virtue of Bankr. Act 1898, § 70; nor will his failure to r