Merrigan v. English

• Decision Date: 05 October 1889
• Parties: MERRIGAN v. ENGLISH et al.
• Court: Montana Supreme Court

9 Mont. 113

MERRIGAN

v.ENGLISH et al.

Supreme Court of the Territory of Montana.

Oct. 5, 1889.

Appeal from district court, Lewis and Clarke county.

The plaintiff, John Merrigan, brought this action to foreclose a mechanic's lien. The complaint shows the following facts, omitting all technical matter of pleading: The defendant Lydia J. English was and is the owner of the premises which the plaintiff seeks to make subject to his lien, and prior to July 20, 1888, entered into a contract with the defendant Crawford, who thereby agreed to erect a building upon the premises referred to; that Crawford commenced work under said contract on the 20th day of July, 1888, and himself entered into a contract with the plaintiff, Merrigan, who thereby agreed “to do all the plastering to be done in said building, and to set a mantel therein, and to furnish the plaster and cement necessary therefor,” the consideration for said contract being the sum of $278; that the said plaintiff “completed said contract, and did and performed said work and labor in the plastering of said building, and the setting of said mantel, and the furnishing of said plaster and cement, as above specified, on the 27th day of October, 1888;” that he (the plaintiff) has been paid for said work the sum of $55, and no more; that said work, etc., was reasonably worth the said sum of $278; that the plaintiff commenced work under his contract upon the 7th day of September, 1888, and completed said work on the 27th day of October, 1888; that the defendant the Home Building & Loan Association claim a lien upon said premises, which lien, if any, is by mortgage, and is subject to the lien of the plaintiff; and that the plaintiff, on the 31st day of October, 1888, filed his notice of lien, setting forth in detail the facts of said filing. Then follows the prayer. The above will show all the facts material in the case, because it is not claimed that there has been a defect in pleading; the issues being sharply drawn upon the points given below, and which go directly to the plaintiff's cause of action. To this complaint a demurrer was interposed in behalf of the defendants English and the Home Building & Loan Association. The demurrer was overruled, and each of said defendants last named filed a separate answer. The answer of the defendant English is, in effect, as follows: It denies that she is indebted to the plaintiff in any sum; denies that Crawford was her agent, or had any authority to make any contract with the plaintiff for her or in her name; denies that the account set forth in the complaint, or the lien based thereon, constitutes any lien upon the premises; denies that the plaintiff has acquired any lien upon said premises by reason of the facts set forth in the complaint; and, as affirmative defense, alleges and sets forth the contract made by her with the defendant Crawford, and that by said contract the said Crawford agreed to do and perform the work described in the complaint; and that the premises in question are, and were, at all times mentioned in the complaint, the homestead of the defendant, who is the head of a family. The answer of the defendant corporation, in addition to the matter set forth in the answer of the defendant English, pleads as a defense a bond and mortgage for the sum of $1,000, which mortgage is a lien upon the premises in question, and was duly recorded in the proper office on the 1st day of September, 1889. The plaintiff moved for judgment upon the pleadings. The motion was granted. Judgment was entered for the plaintiff. From this judgment, and from the order overruling the demurrer, the answering defendants appealed. Many points were raised in the court below. Those considered in this court are those which are mentioned in the brief of appellants, and they are as follows: First, that the plaintiff is a subcontractor, and has no lien; second, that the premises are the homestead of the defendant English, and are therefore not subject to the lien of the plaintiff, because they are exempt from any lien except that of a laborer or mechanic, (see sections 322 and 323. subd. 1, Comp. St.;) third, that the plaintiff's lien, if any, is subject to the mortgage of the defendant corporation; fourth, that there were certain denials in the answers which raised issues of fact.

Massena Bullard, for appellants.

Shelton & Botkin, for respondent.

BACH, J., (after stating the facts as above.)

The tendency of land-owners to enter into contracts at a figure so low that the original contractor could make no profit unless he refused to pay his employes, has led to the enactments of laws for the protection of wage-earners. There are two systems generally adopted throughout the United States,-one known as the “New York System;” the other as the “Pennsylvania System.” The former gives to the subcontractor a lien by way of subrogation, as it is termed by the text writers, which is accomplished by a notice given to the owner by the subcontractor, which notice specifies the probable value of the services to be performed, or of the materials to be furnished, and the owner is thereupon entitled to withhold from the contractor money due to the latter to such an amount as will meet the demand. These are the general features of the New York system, and such was the system prevailing in this territory prior to March, 1887, as will appear from an inspection of sections 820 to 824, inclusive, of the Revised Statutes. The other, or Pennsylvania, system, gives a direct lien to the laborer or subcontractor, either by an agency created by the statute, or by an implied agency vested in the original contractor. An interesting discussion of this subject will be found in the very able opinion of the learned Chief Justice BEATTY upon the petition for rehearing in the case of Hunter v. Lodge, 14 Nev. 24-33 et seq. The case is one which bears directly upon all the points raised by the demurrer in this action, and especially upon the most prominent distinction between the two systems. The distinction referred to is this: Under the New York system the subcontractor cannot recover more than is due from the owner to the contractor,- that is to say, he is bound by the original contract; while under the other system the original contract, or payment to the original contractor, is no defense to a claim of a subcontractor. In order to fully understand the lien law of this territory in force at this time, and at the time this action was commenced, we must study the law prior to the act of March, 1887, and the effect and purpose of that act. The old law will be found in sections 820 to 848 of the Revised Statutes of 1879. Section 820 gave to “every mechanic, builder, lumberman, artisan, workman, laborer, or other person who shall do or perform any work or labor upon, or furnish any material, machinery, or fixtures for, any building,” etc., a lien “upon such building,” etc., “to secure the payment of such work or labor done, or material, machinery, or fixtures furnished.” Sections 821 and 822 prescribe certain rules with which a subcontractor must comply in order to avail himself of the lien given to him by section 820; and they refer more particularly to a notice which the subcontractor was required to give to the builder before performing any labor or furnishing any material, and to the manner of filing the notice of lien, and the time within which such filing must be made. Section 823 gave the owner of the building the right to withhold from the contractor sufficient money to meet such claims of subcontractors as had been duly filed; and it made the owner the surety of the contractor to that extent. Thus it will be seen the New York system, or the system generally known as that of “equitable subrogation,” was the law regulating the liens of mechanics in this territory prior to the act of March, 1887. Section 824 is not material to this discussion. It provided that the notices required by sections 821 and 822 might be served by the sheriff or constable. Section 825 contained the law regulating the filing of such notice of lien by any person other than a subcontractor. By the act of March 9, 1887, section 820 was slightly amended, and as amended will be found in section 1370 of the Complied Statutes. The amendment referred to is quite immaterial as far as this case is concerned. The same act amended section 821, and then repealed sections 821, 822, 823, and 824; which sections, it will be remembered, were those containing the regulations which applied specifically to subcontractors. Undoubtedly, it was rather in artistic to amend section 821, and then repeal it. The repeal of the old section was effected by the amendment thereof, because the amendment provided that “section 821 shall read as follows,” etc., and inasmuch as section 821 was a law applying to a particular class, and 825 the rule applying generally, it would have been more logical to repeal 821 without any attempt to make it a general rule, and then so to amend section 825 that it might contain the general provision in terms agreeable to the legislative will. However, there is no difference in the result; for section 821 repealed by implication section 825 as far as that section conflicted with the new law, the repeal to the extent indicated was accomplished by the act of March, 1887, which in direct terms repealed all laws and parts of laws in conflict with the provisions of that act. Section 821 will be found in section 1371 of the Compiled Statutes, and section 825 will be found in section 1372 of the same volume. Returning to the law as it existed prior to the amendment of March, 1887, it will be observed that section 820 was intended to give, and did give, to every person performing work and labor, or furnishing materials, etc., a lien for the same. The words of the section are broad enough for that purpose. Sections 821 to 824 further prove it, for they provide what a subcontractor must do...