TCA § 65-10-105 — Lien of subcontractors against contractor

When any principal contractor, by which is meant one who contracts directly with the railroad companies, shall refuse to pay any subcontractor, mechanic, laborer, or other person employed by the principal contractor for the performance of any of such work or the delivery of materials for the purposes provided for in § 65-10-101 , such subcontractor, mechanic, laborer, or other person so employed by the principal contractor may elect to give notice, in writing, to the railroad company, setting out the work done or material furnished, and the amount claimed therefor, and, thereupon, the amount that may be due or owing from the railroad company to the principal contractor, not exceeding the sum claimed, shall be bound and liable, in the hands of the railroad company, for the payment of the amount so claimed, and shall constitute a first lien in favor of the claimant, superior to all other liens upon the company's railroad, and shall continue in force for a period of ninety (90) days from the date of service of such notice, and until the termination of any suit commenced within that time to enforce it. Acts 1883, ch. 220, § 3; Shan., § 3574; mod. Code 1932, § 7996; T.C.A. (orig. ed.), § 65-1005. Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Railroads, § 59. NOTES TO DECISIONS 1. Subcontractor's Lien. 2. Contractors with Construction Company. 3. Fraudulent Judgment of Contractor. 1. Subcontractor's Lien. Liens of subcontractors and furnishers are independent of those of the contractor, and are not dependent upon contractor's having perfected his lien; they are independent of and superior to his lien, and are limited only by the amount due the principal contractor at the time of the service of notice on the railroad company. Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Central Trust Co. v. Condon, 67 F. 84, 1895 U.S. App. LEXIS 2725 (6th Cir. Tenn. 1895). A bill may be treated as one to enforce a subcontractor's lien, where a subcontractor, within the time limited after service of notice of lien on the railroad company, filed a bill against such company, making the principal contractor and all other parties holding liens or mortgages on the road parties, in which bill he claimed a principal contractor's lien, but alleged that, owing to the dealings between the principal contractor and the railroad company, it was doubtful whether the complainant and others engaged in the construction of the road were principal contractors or subcontractors, and asked that their liens be declared first liens, or for such other or different relief as might seem meet. Central Trust Co. v. Condon, 67 F. 84, 1895 U.S. App. LEXIS 2725 (6th Cir. Tenn. 1895). The principal contractors filed a bill in behalf of all creditors to establish their lien as principal contractors, and did not dispute the claims of their subcontractors. This did not relieve the latter from proving their liens in statutory manner as against other subcontractors entitled to share in the funds, which are insufficient to pay all. A subcontractor who thus established his lien is entitled to payment in full if the funds admit. McDonald v. Charleston, C. & C. R. Co., 37 S.W. 1034, 1896 Tenn. Ch. App. LEXIS 53 (1896). 2. Contractors with Construction Company. Where a construction company organized and dominated a railroad company, and received all its assets in consideration of constructing or building a railroad, the railroad company and the construction company are one and the same, the construction company being the mere arm or agency by which the railroad company built the road and floated its stocks and bonds; and, in such case, persons furnishing labor and materials under contract with the construction company for the construction of the railroad are entitled to a mechanic's lien thereon as principal contractors of the railroad company and the construction company jointly, and they are not to be treated as subcontractors and limited in their rights as such. McDonald, Shea & Co. V. Railroad, 93 Tenn. 281, 24 S.W. 252, 1893 Tenn. LEXIS 55 (1893). 3. Fraudulent Judgment of Contractor. Fraudulent judgment procured by contractor against railroad company is of no evidential force in favor of subcontractors, when their claims are contested by the holders of prior mortgage bonds of the railroad company in a foreclosure suit, although this section provides that the amount due or owing from the railroad company to the principal contractor shall be bound and liable for the payment of subcontractors. Central Trust Co. v. Bridges, 57 F. 753, 1893 U.S. App. LEXIS 2205 (6th Cir. Tenn. 1893); Central Trust Co. v. Condon, 67 F. 84, 1895 U.S. App. LEXIS 2725 (6th Cir. Tenn. 1895). Collateral References. Effect of bankruptcy of principal contractor upon mechanic's lien of a subcontractor, laborer, or materialmen as against owner of property. 69 A.L.R.3d 1342.