Mallory v. La Crosse Abattoir Co.

• Decision Date: 29 September 1891
• Citation: 80 Wis. 170,49 N.W. 1071
• Parties: MALLORY ET AL. v. LA CROSSE ABATTOIR CO.
• Court: Wisconsin Supreme Court

80 Wis. 170

49 N.W. 1071

MALLORY ET AL.

v.LA CROSSE ABATTOIR CO.

Supreme Court of Wisconsin.

Sept. 29, 1891.

Appeal from circuit court, La Crosse county; ALFRED W. NEWMAN, Judge.

Action by Walter S. Mallory, Louis C. Smith, and Alexander B. Scully, copartners, against La Crosse Abattoir Company, to enforce a subcontractors' lien. Judgment for plaintiffs. Defendant appeals. Affirmed.

In 1889 the defendant company erected a packing-house near the city of La Crosse. It contracted with the firm of Nicholas Bros., who were builders of boilers and iron-work in La Crosse, to deliver to it, free on board the cars at the works of the firm in La Crosse, a boiler, together with certain tanks, coolers, and vats to be used in such packing-house. The same were so delivered and used, and were attached to said building so as to become a part of the freehold. The company paid the firm for the articles so furnished the full contract prices. Nicholas Bros. purchased materials of the plaintiffs in Chicago to be used, and which were used, in the construction of such boiler, tanks, etc., amounting to $1,767, about $917 of which sum remains unpaid. Within 60 days after furnishing such materials the plaintiffs gave notice to the defendant company that they claimed a subcontractors' lien on such building, and the land upon which it was erected, for such balance. The plaintiffs also filed a claim for such lien in the proper office, and commenced this action to enforce the same within the terms required by statute. The court found the above facts, and that the proceedings to enforce the lien were regular; also, that when they sold and furnished such materials to Nicholas Bros. the plaintiffs were ignorant that they were entitled to a lien on the property of defendant therefor, and that, when the defendant paid Nicholas Bros. for the articles purchased of that firm, it had no notice that the firm had purchased materials of the plaintiffs as above stated. Upon these facts the court gave judgment for plaintiffs enforcing a lien upon defendant's property, as claimed, for the unpaid balance due the plaintiffs from Nicholas Bros., and interest thereon, together with the costs of the action. Defendant appeals from the judgment.Losey & Woodward, for appellant.

Crosby & Gordon, for respondents.

LYON, J., ( after stating the facts.)

We think the testimony sustains the finding of the court to the effect that Nicholas Bros. furnished the boiler and other fixtures for the abattoir of the defendant company as a principal contractor with that company, and that the plaintiffs furnished the materials in question therefor under a subcontract with Nicholas Bros. We also think it quite immaterial that plaintiffs did not know, when they furnished such materials, that they were entitled to a lien for the unpaid price thereof upon the property of the defendant. Being subcontractors under Nicholas Bros., and having furnished the materials to be used (and which were used) in defendant's building, they may avail themselves of all valid statutory remedies to enforce payment for such materials, whether they knew or did not know the extent of those remedies when they parted with their property. We are further of the opinion that the rights of the plaintiffs to enforce the lien claimed is not impaired or destroyed by the fact that they sold and delivered such materials in another state. The statute is general, and does not restrict the right of lien to cases where the materials are sold and delivered in this state. The case of Birmingham Iron Foundry v. Glen Cove Starch Manuf'g Co., 78 N. Y. 30, which is relied upon to sustain a contrary doctrine, was decided under a statute more restrictive in its terms than ours, and for that reason the case is not a guide to correct judgment in the present case.

The testimony and findings of fact bring the case within the provisions of section 3315, Rev. St., as amended by chapter 333, Laws 1889, (Sandb. & B. Ann. St. § 3315.) If, therefore, the amended section 3315 is a valid law, the plaintiffs are entitled to the lien which the judgment gives them. Hence the controlling question in the case is whether the amended section is or is not a valid law. Under the lien laws as they existed before the enactment of chapter 333 of 1889, the property upon which a lien was claimed by a subcontractor could only be held liable to the amount of the owner's indebtedness to the principal contractor at the time notice of the claim for the lien was served upon such owner, or which might thereafter accrue. There was an exception in the statute to the effect that if the contract price was unreasonably low the property should be charged in an amount equal to the fair value of the labor and material used in the building or improvement thereon. Section 3315, Rev. St. Such was the statute until the enactment of chapter 333 of 1889. That act attempts to sweep away the restrictions upon the liability of the owner of the property to a subcontractor. As is said in Hall v. Banks, (Wis.) 48 N. W. Rep. 385: “That chapter repeals the above restriction upon the liability of the owner, and makes him absolutely liable to subcontractors who comply with the requirements thereof, for the amount of their claims, without regard to the contract price for the building, or the sum the owner may be indebted to the contractor when notice of the subcontractor's claim for a lien is served, or at any other time.” The amended section contains the further provision that the principal contractor shall, at his own expense, defend any suit brought to enforce a subcontractor's lien; that the owner of the property may withhold from the principal contractor the amount for which such lien is filed; and that if judgment is recovered enforcing the lien, and the owner shall have settled with the principal contractor in full, such owner “shall be entitled to recover back from the principal contractor any amount so paid by the owner for which the principal contractor was originally liable.” The theory of the law giving to laborers and material-men specific liens upon the property upon which their labor was performed, or their materials used, seems to be that, because the value of such property has been enhanced thereby, it is just that the property should be specifically charged with the sums expended thereon for those purposes. The reason of the law extends to expenditures on the property by subcontractors as well as by those who contract directly with the owner. The only difference is that in the latter case individual liability of the owner is added. When the statute restricted the lien of a subcontractor to the amount which the owner of the property owed the principal contractor when the claim for a lien was served upon such owner, and to any indebtedness of the owner to such principal contractor accruing after such service, there was no room to question its perfect fairness and justice to the owner of the property sought to be charged with the lien. But when these restrictions for the protection of the owner were swept away, and his property subjected to a lien charge for the amount of any claim of a subcontractor against the principal contractor for labor or material used in the building or improvement, without regard to the state of the account between such principal contractor and the owner, it must be conceded that there is much room to question the reasonableness and justice of the statute which thus adds to the responsibility of the owner. But statutes which the courts may think are opposed to a sound public policy, or which may operate unjustly in certain cases, may not always be invalid. Before they can be so declared, it must clearly appear that they violate some fundamental principle of constitutional law. Is any such principle violated by the amended section 3315? True, that section may operate to charge a lien upon property for the claim of a subcontractor which the owner of the property never agreed to pay, and which is in excess of the sum which he agreed to pay the principal contractor for the improvement which is the basis of the lien. Were this all of the statute, its injustice would be obvious. But the statute contains the further provisions above mentioned, the effect of which is to make the owner merely the surety of the principal contractor for the payment of his indebtedness to a subcontractor for work performed upon or materials furnished for the improvement. If a subcontractor's lien is enforced by judgment under the statute, and the judgment is collected by a sale of the property, or paid by the owner to save his property, the statute gives such owner a remedy by action against the principal contractor for all sums so paid by the owner in excess of the amount unpaid the principal contractor on the contract price for the improvement. It was entirely competent, no doubt, for the defendant company, in the absence of any statute on the subject, to bind itself, not only to pay Nicholas Bros. a stipulated price for the fixtures purchased of that firm, but also to bind itself to stand as surety of the firm for the payment of its indebtedness to a subcontractor for materials furnished to be used in the manufacture of the purchased articles. Instead of contracting in that form, the defendant agreed to pay Nicholas Bros. a certain sum for those articles; and the statute adds to the contract the incident--writes in it, so to speak, the stipulation--that the defendant shall thereby become such surety, but at the same time giving it a remedy by action against Nicholas Bros. to recover any sum it has been compelled to pay beyond its indebtedness to that firm.

It was said by DIXON, C. J., in Streubel v. Railroad Co., 12 Wis. 67, that “the power of the legislature, as to all future transactions, to regulate and control contracts by prescribing the manner in which they shall be made, * * * by declaring what future voluntary acts of parties in relation...