Nash Engineering Co. v. Marcy Realty Corporation
| Decision Date | 18 April 1944 |
| Docket Number | 27977. |
| Citation | 54 N.E.2d 263,222 Ind. 396 |
| Court | Indiana Supreme Court |
| Parties | NASH ENGINEERING CO. v. MARCY REALTY CORPORATION, Inc., et al. WARREN WEBSTER & CO. v. SAME. PHILIP CAREY CO. v. CARSON et al. |
Appeal from Hendricks Circuit Court; Horace L. Hanna Judge.
Walter Myers, Jr., and Obed T. Kilgore, all of Indianapolis, and Hume & Gaston, of Danville, for appellants.
Kivett Chambers & Kivett and James E. Deery, all of Indianapolis, for appellees.
Marcy Realty Corporation, Inc., the owner of real estate in Indianapolis, entered into a contract with Everett A. Carson for the construction of apartment buildings known as the Marcy Village Housing Project. The contract provided against liens and was recorded in compliance with § 43-701 Burns' 1933, § 10505, Baldwin 1934. With Seaboard Surety Company, as surety, Carson executed a bond to secure performance of the contract. Fred W. Fenneman was subcontractor for the plumbing and heating. Each of the appellants sold Fenneman material used in the building. Indiana Heating & Plumbing Company, Inc., was incorporated by Fenneman to do the work required of him under his subcontract. Fenneman did not pay appellants in full. While the owner was still indebted to the contractor in a sum exceeding the amount of its claim, Warren Webster and Company served notice pursuant to § 43-709, Burns' 1933,§ 10512 Baldwin 1934 to establish personal liability of the owner.
Separate actions filed by the appellants were consolidated for trial. The facts were stipulated. Each secured judgment against Fenneman and one also had judgment against Indiana Heating & Plumbing Company. The owner, contractor and surety prevailed below. The three appeals are treated as one. All questions are properly presented upon assignment of error in overruling motions for new trial specifying that the decision is contrary to law. The amounts due as stipulated were fixed by the judgments against Fenneman and his corporation. The liability, if any, of each of the other appellees is the same as that of Fenneman as of the date of the judgment against him.
Three questions are presented and have been ably briefed and orally argued. We shall consider them in the order in which they are stated.
First, does Warren Webster & Company who sold to Fenneman material that was used in the construction of the building, but who performed no labor thereon, come within the purview of § 43-709, Burns' 1933, § 10512, Baldwin 1934, so that by the notice given pursuant thereto it may enforce personal liability against the owner for the unpaid purchase price of the material?
Second, may each of the appellants as unnamed beneficiary of the contract between the owner and contractor recover from the latter the balance of the purchase price of the material sold to subcontractor Fenneman and used by him and his corporation in the construction of the buildings?
Third, if the second question is answered in the affirmative, is the surety also liable to appellants by the terms of its bond?
We are indebted to appellant's counsel for the elision in quoting § 43-709, Burns', supra, § 10512, Baldwin 1934, as follows:
* * *'
This is Section 8 of the mechanic's lien law enacted in 1909, Acts 1909, page 295, under the title of '* * * an act concerning liens of mechanics, laborers, journeymen, contractors and subcontractors and material men * * *.' A similar section has been a part of every mechanic's lien law enacted in this state beginning with a law entitled 'An act giving to mechanics a lien upon buildings', Acts 1834, page 165. Section 8 thereof provides: 'That any journeyman or labourer who may be employed in the construction * * * of any building, or in furnishing any materials for the same, may give to the owner * * * of the * * * buildings * * * on which they may have worked, notice in writing, particularly setting forth the amount claimed to be due, and the services rendered, and that their employer is indebted to him or them * * *.' In the Revised Statutes of 1843 the word 'sub-contractor' is inserted before the word 'journeyman' but there are no other material amendments. R.S. 1843, pp. 776, 777. In 1852 the section was condensed to read as follows: 'Any sub-contractor, journeyman or laborer employed in the construction or repair or furnishing materials for any building, may give to the owner thereof notice in writing, particularly setting forth the amount of his claim, and service rendered for which his employer is indebted to him, and that he holds the owner responsible for the same; and the owner shall be liable for such claim, but not to exceed the amount due from him to the employer at the time of notice, which may be recovered in an action.' 2 R.S. 1852, § 649. In 1867 the section extended the liability to cover work performed or material furnished after the service of the notice and further provided that all persons in like status might participate pro rata in a judgment against the owner if the full sum of their claims could not be collected. Acts 1867, p. 97. From that time on, however, the wording of the section has been substantially as in the present act. Every reenactment has used the disjunctive 'or' as refuting any inference that to recover the plaintiff must have furnished both labor and material.
The principal argument in appellees' brief is that the words 'employer' and 'employed' and the phrases in which they are used indicate a legislative intent that the one who seeks to recover under this section must occupy the status of an employee or servant of the person with whom he contracted to furnish his labor or sell his material. The 1834 act afforded some basis for this contention because it applied only to laborers, a journeyman being merely a laborer or mechanic who has completed his apprenticeship and learned his trade, and the section also then contained the phrase 'buildings on which they may have worked', but this phrase has not reappeared in the section since it was omitted in 1852.
One who contracts with a subcontractor is himself a subcontractor. See Stephens et al. v. Duffy, 1908, 41 Ind.App. 385, 81 N.E. 1154, 83 N.E. 268. Parties to a contract may agree, as they did in the contract we shall later consider, that only he who contracts directly with the principal contractor shall for the purpose of the contract be a subcontractor but obviously this definition is neither controlling nor persuasive as to the meaning of the same word as used for over seventy five years in this statute. Nor does the current use of 'employer and employee' in lieu of the ancient terms 'master and servant' tend to define the word 'employer' as used when this section was in its formative stages from 1838 to 1867.
The present section, to apply it to the facts in this case (with additional elision), reads: 'Any subcontractor * * * employed * * * in furnishing any material * * * therefor (i. e. for a building under construction), may give to the owner thereof * * * notice in writing particularly setting forth the amount of his claim and services rendered, for which his employer is indebted to him' etc. One who is employed in furnishing material is engaged in so doing. The person who contracted with him to furnish the material may, without straining the meaning of the word, be called his 'employer.' The phrase containing 'services rendered' in the 1834 act doubtless was intended to require details of the kind of labor performed and the price per hour or per day. But after the early amendments above mentioned 'services rendered' may also be deemed to mean a bill of particulars for material furnished.
Those to whom this interpretatipon is not acceptable must nevertheless concede that the statute is ambiguous. The ambiguity may therefore be resolved by application of the usual principles of statutory construction.
In oral argument counsel for the owner were driven to the admission that a journeyman or a laborer who furnishes material but performs no labor on the building may, simply because he bears the title of journeyman or laborer, pursuant to this section enforce personal liability against the owner for the value of the material furnished. We can see no rational ground for denying the same benefit to one who bears the title of merchant or manufacturer and who furnishes the material without performing any labor. The courts will avoid, so far as it may be done consistently with the language of an act, any construction that results in an arbitrary or capricious classification denying to one and granting to another group of citizens the benefits of remedial legislation. County Dep't of Pub. Welfare v. Potthoff, 1942, 220 Ind. 574, 583, 44 N.E.2d 494.
At least eight opinions of this court have recognized the right of mere material men to avail themselves of the provisions of this section....
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