The contractor shall be entitled to recover upon a lien filed by the contractor only such amount as may be due to the contractor according to the terms of the contract, after deducting all claims of subcontractors under the contractor who have filed liens for work done and materials furnished, and during the pendency of the action, the owner may withhold from the contractor the amount of money for which the lien is filed unless the lien was asserted as a result of the owner's failure to pay the contractor for work done and materials furnished, and in case of judgment against the owner or the owner's property upon the lien, the owner shall be entitled to deduct from any amount due or to become due by the owner to the contractor the amount of the judgment. If the amount of the judgment exceeds the amount due by the owner to the contractor, or if the owner settles with the contractor in full, the owner shall be entitled to recover back from the contractor any amount paid by the owner, in excess of the contract price, and for which the contractor was originally the party liable.

History: Laws 1880, ch. 16, § 12; C.L. 1884, § 1530; C.L. 1897, § 2227; Code 1915, § 3328; C.S. 1929, § 82-211; 1941 Comp., § 63-211; 1953 Comp., § 61-2-11; 2007, ch. 212, § 4.

The 2007 amendment, effective June 15, 2007, eliminated the requirement that the contractor defend an action brought by a subcontractor and prohibited the owner from withholding money if the lien was asserted as a result of the owner's failure to pay the contractor for work done and materials furnished.

Contractor obligated to owner for judgment, expenses of defense. — Owner, who was held liable for the lien, was entitled to judgment over against contractor for such amount, together with his expenses incurred in defending the action, since under this section the contractor was obligated to defend the action at his own expense. Skidmore v. Eby, 1953-NMSC-098, 57 N.M. 669, 262 P.2d 370.

Recovery limited to contract. — Under this section, a contractor is entitled to recover upon a lien filed by him only such an amount as may be due him according to the terms of his contract. Nickle v. Coulter, 1916-NMSC-054, 22 N.M. 105, 159 P. 673.

Separate finding erroneous where contractors, owners jointly liable. — In action by subcontractors to enforce lien by assumpsit, on a joint liability of the contractors and owners, it was error to find separately against the owners for sale of the property, and a general judgment for the money against the contractors. Rupe v. N.M. Lumber Ass'n, 1885-NMSC-020, 3 N.M. (Gild.) 393, 5 P. 730.

Supplier, not contractor, held indispensable party. — There is nothing in this section which makes the contractor an indispensable party. The tests of indispensability are whether the plaintiff is the owner of the right sought to be enforced, and whether he could release and discharge the defendant from the liability upon which the action is grounded. The supplier, as plaintiff, meets these tests, without the addition of the contractor. Crego Block Co. v. D.H. Overmyer Co., 1969-NMSC-117, 80 N.M. 541, 458 P.2d 793.

Contractor is not indispensable party in suit involving lien foreclosure. Crego Block Co. v. D.H. Overmyer Co., 1969-NMSC-117, 80 N.M. 541, 458 P.2d 793.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 53 Am. Jur. 2d Mechanics' Liens §§ 160, 163, 170.

Rejection of work because not in compliance with principal contract as affecting right of subcontractor or materialman to lien, 16 A.L.R. 981.

Preexisting indebtedness of contractor to owner as affecting right of subcontractor, materialman or laborer to mechanic's lien, 68 A.L.R. 1263.

Payment in property other than money, mechanic's lien as affected by agreement for, 81 A.L.R. 766.

"Contractor," who is, within provisions limiting liens for material or labor to contractor to amount earned but unpaid on contract, or give such liens by subrogation, 83 A.L.R. 1152.

Bankruptcy of contractor or subcontractor, effect upon mechanics' liens of their subcontractors, laborers and materialmen, 98 A.L.R. 323.

Subcontractor, lien for labor and materials furnished to, against money due to principal contractor for public improvement, 112 A.L.R. 815.

Amount of owner's obligation under his guaranty of subcontractor's or materialmen's account, as deductible from amount otherwise due principal contractor, as against claims of other subcontractors or materialmen, 153 A.L.R. 759.

Amount for which mechanic's lien may be obtained where contract has been terminated or abandoned by consent of parties or without fault on contractor's part, 51 A.L.R.2d 1009.

Subcontractor's lien, provision against mechanic's lien in contract between principal contractor and subcontractor as affecting, 76 A.L.R.2d 1087, 75 A.L.R.3d 505.

Right of subcontractor who has dealt only with primary contractor to recover against property owner in quasi contract, 62 A.L.R.3d 288.

Effect of bankruptcy of principal contractor upon mechanic's lien of a subcontractor, laborer or materialman as against owner of property, 69 A.L.R.3d 1342.

Release or waiver of mechanic's lien by general contractor as affecting rights of subcontractor or materialman, 75 A.L.R.3d 505.

Vacation and sick pay and other fringe benefits as within mechanic's lien statute, 20 A.L.R.4th 1268.

Timeliness of notice to public works contractor on federal project, of indebtedness for labor or materials furnished, 69 A.L.R. Fed. 600.

56 C.J.S. Mechanics' Liens §§ 100, 106, 115, 123, 391 to 396.