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SITE IMPROVEMENTS v. CENTRAL AND WESTERN CHESTER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (11/30/81)

SUPERIOR COURT OF PENNSYLVANIA


filed: November 30, 1981.

SITE IMPROVEMENTS, INC., APPELLANT,
v.
CENTRAL AND WESTERN CHESTER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

COUNSEL

Russell B. Bershad, Philadelphia, for appellant.

Michael Minkin, Philadelphia, for appellee.

Cercone, President Judge, and Hester and Johnson, JJ.

Author: Cercone

[ 293 Pa. Super. Page 2]

This is an appeal from an order sustaining a preliminary objection in the nature of a demurrer to a complaint on a mechanic's lien. The demurrer asserted as a defense the filing and proper indexing of a waiver of liens.*fn1 We now reverse and remand.

[ 293 Pa. Super. Page 3]

Appellee is the owner of the premises and building against which appellant, the subcontractor, filed its mechanics lien. K. P. Properties is the equitable owner of the property by virtue of an installment land sale contract between it and appellee. The Raymon Corporation of Marlton, New Jersey was the general contractor. The parties to the waiver of liens agreement were the Raymon Corporation and K. P. Properties. It was executed on November 6, 1978 and filed with the prothonotary of Montgomery County on November 21, 1978. We now consider whether the lower court incorrectly sustained appellee's preliminary objections based on the finding that the waiver of liens was properly indexed by the Montgomery County prothonotary.

In arriving at its decision on the demurrer the lower court considered as evidence a copy of a docket entry of the filing of this lien waiver and a copy of the filed agreement itself. The docket entry which the court considered, part of the judgment index, listed the Raymon Corporation as plaintiff and K. P. Properties as defendant. Based on this single docket entry the court concluded that the waiver of liens had been properly indexed.

Section 402 of the Mechanic's Lien Law of 1963, 49 P.S. § 1402, reads:

[ 293 Pa. Super. Page 4]

A written contract between the owner and contractor or a separate written instrument signed by the contractor, which provides that no claim shall be filed by anyone, shall be binding; but the only admissible evidence thereof, as against a subcontractor, shall be proof of actual notice thereof to him before any labor or materials were furnished by him; or proof that such contract or separate written instrument was filed in the office of the prothonotary prior to the commencement of the work upon the ground or within ten (10) days after the execution of the principal contract or not less than ten (10) days prior to the contract with the claimant subcontractor, indexed in the name of the contractor as defendant and the owner as Page 4} plaintiff and also in the name of the contractor as plaintiff and the owner as defendant. The only admissible evidence that such a provision has, notwithstanding its filing, been waived in favor of any subcontractor shall be a written agreement to that effect signed by all those who, under the contract, have an adverse interest to the subcontractor's allegation.

Act of August 24, 1963, P.L. 1175, No. 497, art. IV, § 402; 49 P.S. § 1402. (Emphasis added). In Houser v. Childs, 129 Pa. Superior Ct. 565, 196 A. 547 (1938) this Court held that it was incumbent upon the property owner to see that a waiver of liens agreed to between him and the contractor is properly filed and indexed. Any failure in such filing and indexing is attributable to the owner and invalidates the waiver as against the subcontractor. As we stated there:

An owner desirous of taking advantage of [the provision of the Mechanic's Lien Law] . . . is bound to see that the contract as filed is properly and correctly indexed against the contractor by the prothonotary in the judgment index . . . . So far as subcontractors are concerned, he has only himself to blame if he . . . neglects to make sure that the prothonotary correctly indexes the contract . . . .

Id., 289 Pa. Super. at 567, 196 A. at 548. Cf. Lisk Plumbing & Heating Co., Inc. v. Schons, 283 Pa. Superior Ct. 344, 423 A.2d 1288 (1981) (Opinion per Van der Voort, J. with Spaeth and Hoffman, JJ. concurring in the result.).

Section 402 of the Mechanic's Lien Law of 1963, 49 P.S. § 1402, specifically states that a waiver of liens must be indexed listing both the owner as plaintiff and the contractor as defendant as well as listing the contractor as plaintiff and the owner as defendant.*fn2 Section 402 creates an exception to the general provisions of the statute and must therefore be read strictly. Cf. Houser v. Childs, supra. Furthermore, the clause containing the indexing requirements

[ 293 Pa. Super. Page 5]

    is written in the conjunctive, without the interposition of punctuation,*fn3 and appears unambiguous on its face. The foregoing leads us to the conclusion that in order for a subcontractor to have constructive notice of a waiver of liens agreement between the contractor and the owner the waiver must be indexed both against the owner and against the contractor as defendants.

In the light of our reading of Section 402 of the Mechanic's Lien Law of 1963, we are of the mind that the lower court erred in finding that the waiver of liens was properly indexed. All the court had before it was a copy of the judgment index listing the contractor as plaintiff and the owner as defendant. Under the prior law,*fn4 this indexing of the waiver of liens would have failed entirely as against a mechanic's lien filed by a subcontractor without actual notice. The indexing considered by the court only partially complied with the Mechanic's Lien Law of 1963. Missing is any indication whatsoever that the waiver of liens was also indexed with the owner listed as plaintiff and the contractor as defendant. Clearly the lower court erred; based on this information alone the court should not have sustained the demurrer.*fn5 We reverse the order sustaining appellee's preliminary objection and remand for further proceedings not

[ 293 Pa. Super. Page 6]

    inconsistent with this opinion,*fn6 because the court improperly concluded, based on what it had before it, that the waiver of liens was properly indexed so as to bar appellant subcontractors mechanic's lien.

Reversed and remanded for further proceedings not inconsistent herewith.


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