Jones v. Great Southern Fireproof Hotel Co.

• Decision Date: 06 April 1897
• Citation: 79 F. 477
• Parties: JONES et al. v. GREAT SOUTHERN FIREPROOF HOTEL CO. et al.
• Court: U.S. District Court — Southern District of Ohio

79 F. 477

JONES et al. v. GREAT SOUTHERN FIREPROOF HOTEL CO. et al.

United States Circuit Court, S.D. Ohio.

April 6, 1897

Outhwaite & Linn, for plaintiffs.

Ricketts Black, Souffer, Mash & Lenz and Booth, Keating & Curtis, for defendants.

SAGE District Judge.

The complainants sue to foreclose a mechanic's lien asserted by them, as subcontractors, upon the hotel building of the respondent the Great Southern Fireproof Hotel Company, for certain materials furnished towards the erection of said building between the 16th of April, 1895, and the 29th of January, 1896, under and by virtue of a written contract by and between them and William J. McClain, principal contractor for said company in the erection of its building. The lien is asserted under and by virtue of section 3184, St. Ohio, as amended and section 3185 of the Revised Statutes as supplemented, April 13, 1894 (91 Ohio Laws, 135.) Section 3184 provides that 'a person who performs labor, or furnishes machinery or material for constructing, altering or repairing' any structure mentioned in the section including a house, mill, manufactory, or other building 'by virtue of a contract with, or at the instance of the owner thereof or his agent, trustee, contractor or sub-contractor, shall have a lien to secure the payment of the same upon such' house, mill, manufactory or other building, 'and upon the interest, lease-hold, or otherwise, of the owner in the lot or land, on which the same may stand or to which it may be removed.'

The supplement to section 3185, designated as 3185a, provides that 'in all cases where the labor, material or machinery referred to in sections 3184 and 3185, shall be furnished by any person other than the original contractor with such owner, or his agent, or trustee, the lien shall not exceed the actual value of the labor, material or machinery so furnished, and the aggregate amount of liens for which the property may be held shall not, in the absence of fraud or collusion between the owner and original contractor, exceed the amount of the price agreed upon between the owner and original contractor for the performing of such labor and the furnishing of such material and machinery. Provided, if it shall be made to appear that the owner and contractor, for the purpose of defrauding sub-contractors, material-men, or laborers, fixed an unreasonably low price in the original contract for any work or material for which a lien is given under section 3184, the court shall ascertain the difference between such fraudulent contract price and a fair and reasonable price therefor, and such sub-contractors and material-men and laborers shall have a lien to the amount of such fair and reasonable price so ascertained.'

Section 3185 provides that 'such person, in order to obtain such lien, shall, within four months from the time of performing such labor, or furnishing such machinery or material, file with the recorder of the county where the labor was performed, or the machinery or material furnished, an affidavit containing an itemized statement of the amount and value of such labor, machinery, or material,' and other items and particulars not necessary to be here quoted, 'and the same shall be recorded in a separate book to be kept therefor, and shall operate as a lien from the date of the first item of the labor performed, or the machinery or material furnished upon or toward the property designated in the preceding section, and the interest of the owner in the lot or land on which the same may stand, or to which it may be removed, for six years from and after the date of the filing of such attested statement. If an action be brought to enforce such lien within that time the same shall continue in force until the final adjudication thereof; and there shall be no homestead or other exemption against any lien under the provisions of this chapter.'

The respondents demur to the bill for insufficiency. The demurrer was argued solely upon the question of the constitutionality of the act of April 13, 1894; there being no objection to the bill on other grounds. The supreme court of Ohio in Young v. Hardware Co., 45 N.E. 313, held that the act of April 13, 1894, 'in so far as it gives a lien on the property of the owner to subcontractors, laborers, and those who furnish machinery, material, or tile to the contractor, is unconstitutional and void. All to whom the contractor becomes indebted in the performance of his contract are bound by the terms of the contract between him and the owner. ' Much time in the argument was given to the discussion of the proposition that this court should follow that decision, without examining into the merits of the question, and that proposition is elaborately presented in the brief for the respondents. The material was furnished and delivered by complainants, and used in the construction of the hotel of respondents, before the decision of Young v. Hardware Co. was announced. In Burgess v. Seligman, 107 U.S. 32, 2 Sup.Ct. 21, the supreme court of the United States said:

'When contracts and transactions have been entered into, and rights have accrued thereon, under a particular state of the decisions, or when there has been no decision of the state tribunals, the federal courts properly claim the right to adopt their own interpretation of the law applicable to the case, although a different interpretation may be adopted by the state courts after such rights have accrued. But even in such cases, for the sake of harmony and to avoid confusion, the federal courts will lean towards an agreement of views with the state courts, if the question seems to them balanced with doubt. Acting on these principles, founded as they are on comity and good sense, the courts of the United States, without sacrificing their own dignity as independent tribunals, endeavor to avoid, and in most cases do avoid, any unseemly conflict with well-considered decisions of the state courts. As, however, the very object of giving to the national courts jurisdiction to administer the laws of the states, in controversies between citizens of different states, was to constitute independent tribunals, which it might be supposed would be unaffected by local prejudices and sectional views, it would be a dereliction of their duty not to exercise an independent judgment in cases not foreclosed by previous adjudication.'

In Carroll Co. v. Smith, 111 U.S. 556, 4 Sup.Ct. 539, the supreme court said:

'That the decision of the highest court of a state, construing the constitution of the state, is not binding upon this court, as affecting the rights of citizens of other states in litigation here, when it is in i conflict with previous decisions of this court, and when the rights which it affects here were acquired before it was made.'

To the same effect is Anderson v. Santa Anna Tp., 116 U.S. 356, 6 Sup.Ct. 413. In Louisville Trust Co. v. City of Cincinnati, 22 C.C.A. 334, 76 F. 296, the circuit court of appeals of this circuit held that:

'Where a contract or obligation has been entered upon before there has been any judicial construction of the state statute upon which the contract or obligation depends, by the highest court of the state, a federal court, obtaining jurisdiction of the question touching the validity, effect, or obligation of such a contract, will, while leaning to an agreement with the state court, exercise an independent judgment as to the validity and meaning of such contract, and will not necessarily follow opinions of the state court construing such statute, if such decisions be rendered after the rights involved in the controversy originated.'

Counsel for respondents attempt to distinguish these cases, and especially Louisville Trust Co. v. City of Cincinnati, from the case now under consideration, but I am not able to see that there is any material difference. It is true that in Louisville Trust Co. v. City of Cincinnati, the question was whether the statute was applicable, and not whether it was valid. The gist of the federal cases cited is that, under the circumstances stated, the ...