Bullock v. Horn

• Decision Date: 29 June 1886
• Parties: BULLOCK v. HORN.
• Court: Ohio Supreme Court

7 N.E. 737

44 Ohio St. 420

BULLOCK v. HORN.

Supreme Court of Ohio.

June 29, 1886

Error to district court, Lorain county.

The action is brought to reverse a judgment of the district court of Lorain county reversing the judgment and decree of the court of common pleas of that county. In the last-named court the plaintiff in error, a carpenter, brought his action to recover upon an account for labor performed upon the dwelling of the defendant in error, and to have the same declared a lien upon the premises under the laws relating to mechanics' liens. From the findings of the court of common pleas the following facts appear:

In May 1883, the defendant entered into a contract with one Asa Bullock to erect a dwelling-house on premises owned by defendant. Bullock was to be paid one-third when the building was inclosed, one-third when the plastering was finished, and the balance when the building was completed. Between the twelfth day of June and the twenty-fifth day of August, 1883 the plaintiff performed work upon the building at the instance of the contractor, (Asa Bullock,) which is the basis of the account. On the last-named date the house was completed and accepted. On that day, the amount due plaintiff being wholly unpaid, he demanded payment of the contractor which was refused. On the eleventh day of September following, the plaintiff filed with the defendant an itemized account of the amount and value of his labor, with all credits, pursuant to the statute. At that time there remained unpaid on the contract a sum in excess of the amount due plaintiff. The account of plaintiff was acknowledged by the contractor to be correct, and the defendant was notified of that fact. Shortly after, the plaintiff filed with the county recorder a proper affidavit, and took all the steps necessary to complete his lien upon the premises. On the third day of September, 1883, the defendant purchased in good faith, for full consideration, of a lumber company, a valid account against the contractor for an amount in excess of the plaintiff's claim. The defendant was at the time a stockholder in the lumber company. At the time of the purchase the defendant knew the plaintiff had performed labor for the contractor upon the house, but did not know whether he had been paid or not, and the first knowledge he had of plaintiff's claim was on the eleventh day of September. It does not appear that the account of the lumber company was for material furnished for the building upon the premises in question, nor that it in any way had relation to the same. This claim he pleads in the court of common pleas as a set-off.

E. G. & W. H. Johnson , for plaintiff in error, cited--

Phil. Mech. Liens, 26, 61, 89, 92, 210; Develin v. Mack , 2 Daly, 94; Hoyt v. Miner , 7 Hill, 525; Mandeville v. Reed , 13 Abb. Pr. 173; Gilman v. Gard , 29 Ind. 291; Mitchell v. Evans , 2 Brown, 329; Buchanan v. Smith , 43 Miss. 90; Collins v. Central Bank , 1 Ga. 435; Tuttle v. Montford , 7 Cal. 358; Shaver v. Murdock , 36 Cal. 293; Jorda v. Gobet , 5 La. Ann. 431; Baldwin v. Wood , 11 La. Ann. 453; Fourcher v. Day , 6 La. Ann. 60.

Metcalf, Webber & Johnson , for defendant in error, cited--

Hade v. McVay , 31 Ohio St. 231; Copeland v. Manton , 22 Ohio St. 398; Dunn v. Rankin , 27 Ohio St. 132; Phil. Mech. Liens, 92, 304, 305; Miner v. Hoyt , 4 Hill, 193; S. C. 7 Hill, 525; Owens v. Ackerson , 1 E. D. Smith, 691; Cheney v. Troy Hospital Ass'n , 65 N.Y. 282.

SPEAR J.

It is not claimed in this case that the defendant's assignor, the lumber company, had, by virtue of its claim against the contractor, any lien upon the premises, nor is it denied that the plaintiff had complied with the law entitling him to recover against the defendant, and to a lien. The only question is as to the right of set-off in favor of the defendant, and against the plaintiff. The proposition may be stated thus: Can the owner of premises, having knowledge that a mechanic has performed work upon a building thereon, under employment of the principal contractor, set off against a claim for work so done a claim against such contractor not arising out of the contract under which the building is constructed, or in any way having relation thereto, and acquired by such owner after the labor was performed by the mechanic, but before the owner had notice that the mechanic had not been paid?

The question is to be determined by a consideration of the several sections of our law relating to mechanics' liens. Without quoting at length from these sections, their effect, so far as they apply to the question here, may be stated. Sections 3184 to 3192, Rev. St., provide for the taking of a lien upon the premises by the contractor. Sections 3193 and following give the right to a lien to any subcontractor, laborer, or mechanic, who, under employment of the head-contractor, performs labor or furnishes material for the improvement, and who has not been paid. He may file with the owner a sworn and itemized account of the amount and value of the labor or material, with all credits and set-offs, and upon receiving such notice the owner shall detain in his hands all subsequent payments from the principal contractor upon the contract in an amount sufficient to satisfy the claim. Within five days after receiving such account the owner is required to notify the contractor; and if, within five days thereafter, he does not notify the owner of his intention to dispute or commence an action to adjust the account, he is deemed to assent to its correctness, and therefore such subsequent payment shall be applied by such owner to the amount. If the contractor neglect to pay within five days after such assent to the correctness of the account, the owner shall pay, when due, the whole, or, in case other claims have been filed, a pro rata amount, as the case may be, out of subsequent payments owing to the contractor, and, on his failure for 10 days, the subcontractor, workman, or material-man may recover agaisnt the owner, in an action for money had and received, when due, the whole or a pro rata amount, as the case may be, not exceeding in any case the balance due to the principal contractor. In addition to this remedy, the workman or material-man, by complying with subsequent provisions, may have a lien upon the premises which shall date back from the date of performing the first item of labor, or of the first material furnished, which shall have the same operation, effect, and duration, and be subject to the same obligations, with respect to the owner, as the lien of the head-contractor in similar cases. Such lien shall take precedence over any lien already taken or to be taken by the contractor, and an assignment or transfer by such contractor of his contract with the owner, as well as proceeding in attachment, or otherwise, against such contractor, to subject or incumber his interest in such contract, shall save and be subject to the claim of every laborer, mechanic, or material-man who has furnished labor or material towards the erection or repair of the structure.

The statute is highly remedial in its character, and should receive such liberal construction as will carry out the purpose of the legislature in its enactment. The labor of the workman and the material of the material-man having contributed to the erection of the structure,-having, indeed, created, in part, the very property on which the lien is sought to be attached,-the purpose of the law is to give to such parties the right, where the contractor refuses to pay, to be paid for their labor and material out of the fund which has been earned under the contract, and out of the structure, and the land upon which it stands; such claim, as to amount, not to be in excess of the claim of the contractor, as measured alone by the contract and his performance of it.

In giving a construction to this statute, by fair inference it may be assumed that the rights of the workman and material-man, as against the owner, are based upon the latter's contract with the contractor, and while they are subordinate to the contract, and are to be worked out through it, those parties have the right to rest in security upon it and the means provided by law to secure its application to their demands. In the absence of fraud, they are presumed to have notice of the terms of the original contract. Hence, if the original contract showed that payment had been made in advance to the contractor, or if it contemplated the allowance, by the contractor,...