Great Southern Fire Proof Hotel Company v. Benjamin Jones

• Decision Date: 04 April 1904
• Docket Number: No. 165,165
• Citation: 193 U.S. 532,48 L.Ed. 778,24 S.Ct. 576
• Parties: GREAT SOUTHERN FIRE PROOF HOTEL COMPANY, Petitioner , v. BENJAMIN F. JONES, George M. Laughlin, Benjamin F. Jones, Jr., et al
• Court: U.S. Supreme Court

193 U.S. 532

24 S.Ct. 576

48 L.Ed. 778

GREAT SOUTHERN FIRE PROOF HOTEL COMPANY, Petitioner,

v BENJAMIN F. JONES, George M. Laughlin, Benjamin F. Jones, Jr., et al.

No. 165.

Argued February 29, March 1, 1904.

Decided April 4, 1904.

Messrs. Gilbert Holland Stewart, Henry Gumble, Stewart & Stewart, and Gumble & Gumble for petitioner.

[Argument of Counsel from pages 532-537 intentionally omitted] Messrs. George K. Nash, T. J. Keating, Talfourd P. Linn, Louis G. Addison, John D. McKennan, and Outhwaite, Linn, & Thurman for respondents.

[Argument of Counsel from pages 537-539 intentionally omitted] Mr. Justice Harlan delivered the opinion of the court:

The Great Southern Fire Proof Hotel Company, a corporation of Ohio, made a contract with one McClain for the construction of a hotel building and opera house at Columbus, Ohio.

McClain contracted with Jones & Laughlins, Limited, a partnership association organized under the laws of Pennsylvania, for a certain amount of steel to be used in the buildings which he undertook to erect.

Under that contract Jones & Laughlins, Limited, furnished steel of the value of $43,296.74.

Proceeding under certain statutes of Ohio relating to liens for mechanics and others, Jones & Laughlins, Limited, brought suit in the circuit court of the United States for the southern district of Ohio against the hotel company, to enforce a lien asserted by them on the hotel building and opera house for the balance due on their contract with McClain. Various persons were made defendants because they asserted claims upon or interest in the property. It was a case in which the jurisdiction of that court depended upon diversity in the citizenship of the parties. Upon final hearing the circuit court dismissed the bill on the ground that the statute of Ohio of April 13th, 1894 (91 Ohio Laws, 135), under which Jones & Laughlins, Limited, proceeded, was repugnant to the Constitution of Ohio. 79 Fed. 477. Upon appeal to the circuit court of appeals, that court, being of opinion that the statute was constitutional, reversed the decree of the circuit court. 30 C. C. A. 108, 58 U. S. App. 397, 86 Fed. 370. The case was then brought here upon writ of certiorari, and this court, without considering the merits, reversed the judgments of both courts upon the ground that the record did not affirmatively show a case of which the circuit court could properly take cognizance, so far as the citizenship of the parties was concerned. In the opinion then rendered we said that, under the circumstances, the plaintiffs should be permitted to amend their pleadings as to the citizenship of the parties; and, if a case could be presented within the jurisdiction of the circuit court, the parties should be allowed to proceed to a final hearing on the merits. Great Southern Fire Proof Hotel Co. v. Jones, 177 U. S. 449, 44 L. ed. 842, 20 Sup. Ct. Rep. 690.

Upon the return of the cause the plaintiffs filed an amended bill of complaint, which cured the defect in its original bill as to the citizenship of the parties. The case went to a final hearing upon the merits, and a decree was rendered in favor of the plaintiffs. That decree was affirmed in the circuit court of appeals. Great Southern Fire Proof Hotel Co. v. Jones, 54 C. C. A. 165, 116 Fed. 793. The case is again here upon a writ of certiorari granted upon motion of the hotel company.

The statutory provisions, questions as to the constitutionality of which have been raised in this case, are certain sections of the Revised Statutes of Ohio, as follows:

'Sec. 3184. A person who performs labor, or furnishes machinery or material for constructing, altering, or repairing a boat, vessel, or other water craft, or for erecting, altering, repairing, or removing a house, mill, manufactory, or any furnace or furnace material therein, or other building, appurtenance, fixture, bridge, or other structure, or for the digging, drilling, plumbing, boring, operating, completing, or repairing of any gas well, oil well, or any other well, or performs labor of any kind whatsoever, in altering, repairing, or constructing any oil derrick, oil tank, oil or gas pipe line, or furnishes tile for the drainage of any lot or land by virtue of a contract with, or at the instance of, the owner thereof or his agent, trustee, contractor, or subcontractor, shall have a lien to secure the payment of the same upon such boat, vessel, or other water craft, or upon such house, mill, manufactory, or other building or appurtenance, fixture, bridge, or other structure, or upon such gas well, oil well, or any other well, or upon such oil derrick, oil tank, oil or gas pipe line, and upon the material and machinery so furnished, and upon the interest, leasehold or otherwise, of the owner in the lot or land on which the same may stand, or to which it may be removed.

'Sec. 3185. 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 a description of any promissory note or notes given for such labor, machinery, or material, or any part thereof, with all credits and offsets thereon, a copy of the contract, if it is in writing, a statement of the amount and times of payment to be made thereunder, and a description of the land on which the gas well, oil well, or other wells are situated, or the land on which the house. mill, manufactory, or other buildings, or appurtenance, fixture, bridge, or other structure may stand, or to which it may be removed; 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 desigated 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.

'Sec. 3185a. In all cases where the labor, material, or machinery referred to in §§ 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 subcontractors, 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 § 3184, the court shall ascertain the difference between such fraudulent contract price and a fair and reasonable price therefor, and such subcontractors, material men, and laborers shall have a lien to the amount of such fair and reasonable price so ascertained.' 91 Ohio Laws, 135, 137.

The contention of the hotel company is that the statute under which Jones & Laughlins, Limited, proceeded was repugnant to the Constitution of Ohio; and that the supreme court of Ohio having held in two cases—Palmer v. Tingle, and Young v. Lion Hardware Co. 55 Ohio St. 423, 45 N. E. 313, determined before the bringing of this suit, but after the rights of the parties had been fixed by their contracts—that the statute was inconsistent with the state Constitution, the duty of the Federal court was to follow those decisions, even if, in the exercise of an independent judgment on the subject, it was of opinion that the statute was constitutional. Is that view in harmony with the decisions of this court?

The leading case on this subject is Burgess v. Seligman, 107 U. S. 20, 33, 27 L. ed. 359, 365, 2 Sup. Ct. Rep. 10, 21. In that case, which was in the circuit court of the United States, the rights of the parties depended upon a statute of Missouri which had not been construed by the highest court of the state at the time those rights accrued under it; and the question arose whether the circuit court was entitled to determine for itself what was the true meaning of the statute. In view of some differences in forms of expression in previous cases, the court deemed it wise to re-examine the subject upon both principle and authority, and to announce the rule by which a circuit court of the United States should be guided in case of a conflict of opinion between it and the highest court of the state as to the meaning and legal effect of a local statute upon which the rights of parties depended.

In that case Mr. Justice Bradley, delivering the unanimous judgment of this court, said: 'The Federal courts have an independent jurisdiction in the administration of state laws, co-ordinate with, and not subordinate to, that of the state courts, and are bound to exercise their own judgment as to the meaning and effect of those laws. The existence of two co-ordinate jurisdictions in the same territory is peculiar, and the results would be anomalous and inconvenient but for the exercise of mutual respect and deference. Since the ordinary administration of the law is carried on by the state courts, it necessarily happens that, by the course of their decisions, certain rules are established which become rules of property and action in the state...