Delaware General Assembly

CHAPTER 169

Masters, Apprentices and Employees

AN ACT Prohibiting Architects, Engineers, Contractors, Subcontractors and their Agents from paying out, using or appropriating moneys and funds received for the erection, construction, alteration, completion and repair of buildings and for additions thereto before first paying in full or pro rata all claims due to Surveyors, Engineers and Persons Furnishing Labor and Material.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:

Section I. That all moneys or funds whatsoever received by an architect, engineer, contractor or sub-contractor for the erection, construction, completion, alteration or repair of any building or for additions to a building, are hereby declared to be trust funds in the hands of the architect, engineer, contractor or sub-contractor. It shall be unlawful for any architect, engineer, contractor or sub-contractor of his, her or its agent to pay out, use or appropriate any of said moneys or funds until the same have first been applied to the payment of the full amount of all claims due and owing by such architect, engineer, contractor or sub-contractor to surveyors, engineers and to all persons, firms, corporations or partnerships furnishing labor and material, including fuel, to such architect, engineer, contractor or subcontractor for the erection, construction, completion, alteration or repair of, or for additions to, such building, whether or not the said labor or material enter into or become component parts of the building or addition thereto.

Section 2. Any architect, engineer, contractor, sub-contractor or his, her or its agent who pays out, uses, appropriates or consents to the paying out, use or appropriation of any such moneys or funds prior to paying in full all the claims of surveyors, engineers and all persons, firms, corporations or partnerships furnishing labor or materials, including fuel, as aforesaid, or prior to paying all such claims pro rata to the full extent of the moneys or funds received for the aforesaid purposes, shall be guilty of a misdemeanor and upon conviction thereof, shall be sentenced to pay a fine not exceeding one thousand dollars or be sentenced to imprisonment for a term not exceeding three years or both.

Section 3. The failure of an architect, engineer, contractor or sub-contractor to pay in full or pro rata from time to time the full extent of the moneys and funds received by him, her or it all of the claims of surveyors, engineers and of all persons, firms, corporations or partnerships furnishing labor and material, including fuel, as required by this act within thirty days after the receipt of any moneys or funds for the erection, construction, completion, alteration or repair of any such building or any addition thereto, shall be prima facie evidence of the payment, use or appropriation of the trust moneys and funds for purposes other than the payments of claims of surveyors, engineers and of all persons, firms, corporations or partnerships furnishing labor and material, including fuel.

Section 4. All acts and parts of acts inconsistent with the provisions of this act, are hereby repealed.

Approved April 25, 1933.