Laird v. Moonan

• Decision Date: 29 July 1884
• Citation: 20 N.W. 354,32 Minn. 358
• Parties: William H. Laird and others v. Patrick Moonan and another
• Court: Minnesota Supreme Court

20 N.W. 354

32 Minn. 358

William H. Laird and others v. Patrick Moonan and another

Supreme Court of Minnesota

July 29, 1884

Appeal by defendants from an order of the district court for Waseca county, Buckham, J., presiding, overruling their demurrer to the complaint. The action was to enforce a mechanic's lien, under Gen. St. 1878, c. 90, § 2, for materials furnished by plaintiffs to one Berndt for use and used by him in a building he was erecting on land of defendant Moonan under a contract with that defendant.

Order affirmed.

Collester Bros., for appellants.

Section 2 is unconstitutional, as in effect forfeiting the owner's property, unless he pays, in some cases, to persons with whom he never contracted, a sum in excess of the price for which he contracted with another to build his house, and though he may have paid that other the full contract price, or the full value of the building. Though an owner contract for a building to be paid for in advance, and pays accordingly, he is yet required to pay for it again. This is beyond the power of the legislature. Stewart v Wright, 52 Iowa 335.

Lien laws that have been held constitutional are such as limit the liability of the owner to the contract price. Such is that of New York, considered in Blauvelt v. Woodworth, 31 N.Y. 285, cited in Bohn v. McCarthy, 29 Minn. 23; and such are the lien laws of California, Iowa and other states. To be constitutional, a mechanic's lien law must at least limit the owner's liability to the contract price, or there must be such provisions as to notice that the owner may protect himself otherwise than by the indemnity bond provided in section 3. Glacius v. Black, 67 N.Y. 563. But section 2 gives the subcontractor or laborer a lien "for the value or contract price of such labor or materials." An owner may contract for a house at $ 1,000, -- all it is worth. The contractor may have the house built by another, agreeing to pay $ 2,000, and the owner must pay this price or lose his property -- and this though he may have agreed to pay, and paid, his contractor in advance. And in all cases the owner must pay the subcontractor in full regardless of any equities between himself and the principal contractor, or any defences to the latter's claims.

Section 3, which provides for exacting a bond by the owner from the contractor, etc., so far from relieving the owner, imposes a condition harsh, unreasonable and sometimes impossible, and would sometimes work embarrassment and even damage, by compelling an owner to employ an unskilful builder who could give a bond, instead of a skilful one who could not, or by preventing him from contracting with his debtor for building a house in payment of the debt. This is an unwarrantable infringement of the owner's freedom to contract.

Lewis & Leslie, for respondents.

OPINION

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's School, 26 Minn. 329, and in Bohn v McCarthy, 29 Minn. 23, 11 N.W. 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's 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." Donahy 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 subcontractors 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 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. 283; Taggard v. Buckmore, 42 Me. 77. 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 429.

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...