Laird v. Moonan

• Decision Date: 29 July 1884
• Parties: LAIRD AND OTHERS v MOONAN AND OTHERS.
• Court: Minnesota Supreme Court

32 Minn. 358

20 N.W. 354

LAIRD AND OTHERSvMOONAN AND OTHERS.

Supreme Court of Minnesota.

Filed July 29, 1884.

Appeal from an order of the district court, Waseca county, overruling demurrer of defendants Moonan and Ward to the complaint.

Lewis & Leslie, for respondents, Laird and others.

Collester Bros., for appellants, Moonan and others.

VANDERBURGH, J.

The constitutional validity of the provisions of the mechanic's lien law, (Gen. St. 1878, c. 90,) for securing a lien to subcontractors and others furnishing materials or doing work for a contractor or builder in cases arising subsequent to its passage, was recognized by this court in O'Neil v. St. Olaf School, 26 Minn. 332;S.C. 4 N. W. REP. 47; and in Bohn v. McCarthy, 29 Minn. 26;S. C. 11 N. W. REP. 127. As such liens are incumbrances upon the owner's title, they can only be created by his consent or authority; and it is upon this ground that such legislation is supported. The statute annexes the lien as an incident to the contract of the owner with the contractor or builder, and such contract is the evidence of the authority of the latter to charge the building and land with liabilities incurred by him in performing his contract. In O'Neil v. St. Olaf School this court say: “The owner consents to this power conclusively and irrevocably, so far as others than the builder are concerned, by making a contract while such is the law.” Douchy v. Clapp, 12 Cush. 440; Phil. Mech. Liens, § 65.

Previous to the statute of 1878 a subcontractor was obliged to protect himself by seeking his indemnity through the amount due from the owner to the builder by serving notice on him of his account and the amount of his claim. His right to recover was thus made subordinate to the contract with the builder, and the owner was only liable to a subcontractor for the amount remaining due to the original contractor at the time of the service of such notice. The purpose of the amendment of 1878, reducing the statute to its present form, was evidently to extend and more fully protect the rights of subcontractors, laborers, and material-men, and thereby the land and not the amount due the contractor becomes the pledge or security for the payment of their claims. As respects the amount which may thus be secured, their rights are not dependent upon or limited by the amount due the contractor from the owner under the original contract, nor by the state of the accounts between them. It is sufficient that the liens are created through the owner's contract, from which his consent is implied. To avoid the incumbrance of such liens the owner takes the burden (under section 3 of the act) of securing the bond therein provided. Whether the burden of taking such proceedings for his own protection should thus be cast on him, or whether such contractors and laborers should be left to proceed against the amount due, as under the former practice, was entirely a question of legislative policy.

And this is sufficient to dispose of the objection that the law unreasonably limits the exercise of the owner's discretion as to the persons to whom he shall contract with; that is to say, to such as can give bonds or are financially responsible for the contracts they may make in the prosecution of the work. It is strictly in conformity with the policy which allows a lien in any case. It does not take away or affect the rights of the owner any further than it may be necessary for the security of those who are presumed to have added something to the owner's property equal to the expense incurred. Spofford v. True, 33 Me. 292;Taggard v. Buckmore, 42 Me. 81. It is ordinarily understood, from the nature of the case, that under building contracts the work is not to be done wholly by the contractor, and it is a sound and just principle that all those who have by consent of the owner, or in pursuance of contracts with him for that purpose, contributed to increase the value of his property, should have an interest in it until their respective claims for such services have been discharged. Parker v. Bell, 7 Gray, 431.

The same reasons will in great measure apply to a further objection which is urged by appellant, that, under the provisions of section 2, the liability of the owner is not limited to the contract price. It is therein provided that every mechanic or other person, whether journeyman, subcontractor, or laborer, doing or performing any work or furnishing materials for the erection of any building, etc., shall have a lien, etc., “for the value or contract price of such labor and materials,” upon such building, and the land upon which the same is situated, not exceeding the amount designated in that section. But if, in pursuance of section 3, the contractor will enter into a bond with the owner, for the use of all persons who may do work or furnish materials pursuant to this contract with such owner, conditioned for the payment of all just claims for such work or materials as they become due, (which bond is to be in such amount, not less than the price agreed to be paid for the performance of the contract, and with such sureties as shall be approved by the district judge, etc.,) and if such bond is duly filed with the register of deeds, and a notice is kept posted as required by that section, then no lien shall attach in favor of the persons mentioned in section 2. Under the language of this section, the contract price is the minimum security which the magistrate is permitted to approve, and he may, and should, whenever in his judgment the case requires it, exact more. Loveland v. Burnham, 1 Barb. Ch. 65;Leavitt v. Dabney, 40 How. Pr. 281. From the language of these sections, the intention of the legislature is not doubtful. It meant...