Henry & Coatsworth Co. v. Evans

Barclay, J.

Plаintiff, a sub-contractor, seeks to establish as a lien a demand for materials furnished toward the erection of a building on land of defendant Dickinson.

The exact controversy presented for decision arises from the following undisputed facts : Evans was the original contractor with Dickenson for the erection of certain buildings on land of the latter. Plaintiff, under a contract with Evans, supplied materials used in their construction. Plaintiff ’ s acсount therefor was not paid. Notice of the demand was served on the owner and the account filed in due time as a lien on the property in accordance with the lien law. No defect in the formal steps taken by plaintiff is suggested, but it appears that the owner bad paid the original contractor the full amount of the agreed price for the buildings before notice or knowledge of plaintiff’s demand; and that the cоntractor had applied that amount to discharge other valid claims against the property for labor and materials furnished, reserving nothing for himself. The circuit court rendered a personal judgment for the amount of plaintiff’s demand against the contractor Evans, but denied the claim for a lien against the property. After the usual steps for a review of that ruling, plaintiff brought the case here.

It is necessary to determine in this casе whether payment of the full contract price, in good faith, by the owner to the contractor, in the circumstances above'described, prevents the establishment of a lien against the property by a sub-contractor who has furnished materials for the erection of a building and otherwise complied with the statute.

The law of this state concerning these liens is the product of a gradual development. Its foundations were lаid in our early jurisprudence (Laws of Mo. 1823-24, page 803, chapter 346) and improvements were made thereon from time to time until its present form was reached. R. S. 1879, chap. 47. It is unnecessary to give the details of its history further than to remark that its framers embodied in it some materials acquired from the statutes of other states and some of the products of their own «labor, forming thus a composite structure in many respects unlike the laws elsewhere'on the subject. The points of dissimilarity must be clearly borne in mind to avoid the error of applying to the interpretation of our own statute decisions of courts in other states construing language quite different.

Liens of this kind did not originate under the common law of England. They are founded on principles of natural justice which the civil law recognized more than a thousand years ago by giving workmen and material-men a similar right of compensatiоn ( called jprivilege, which took precedence even over prior mortgages) against property they had improved.

The Missouri statute undertakes to define the facts which shall create such a lien and to provide a remedy for its enforcement. -It should receive a liberal and reasonable construction to effectuate the purposes disclosed by its terms. Dewitt v. Smith, 63 Mo. 263. To arrive at a sound interpretation we must consider the law in all its parts, and ascertain, as best we may, and «give expression to the intent of the legislature. It is our duty to give full effect to that intention when discovered, without attempting to enlarge or to restrict the legislative meaning to harmonize with any views of our own concerning its wisdom or expediency.

The first section of the law in question is as follows (omitting the parts immaterial to this case): Every mechanic, or other person, who shall perform any labor upon, or' furnish any materials for any building, or improvements upon land, under any contract with the owner or his contractor, upon complying ‍‌‌‌‌‌​‌​​​​​​‌​‌‌​‌‌‌​​​​‌​​‌​​‌‌​‌‌​‌​‌​‌​‌‌‌​​‍with the provisions of this article, shall have for his labor done, or materials • furnished, a lien upon such building or improvements, and upon the land belonging to such owner on which the same are situated to secure the payment for such labor done or material furnished. R. S., 1879, ’sec. 3172.

It has been already decided that in no event can a sub-contractor assert a lien against the property' for a greater amount than the reasonable market value of the labor or materials he furnished toward the erection of the building or improvement. Deardorff v. Everhartt, 74 Mo. 37; Schulenburg v. Prairie Home Inst., 65 Mo. 295. But there is nothing in this, or in any other section expressly limiting the aggregate liens to the amount which the owner agreed to pay the original contractor for the completed work.

Yet such limitation, in definite terms, appears to have been thought necessary by the legislatures of other states desiring to express that purpose in their laws. We shall mention some of those statutes to indicate the differences between them and our own in this particular.

The limitation now referred to' has usually assumed one of two forms. In some states the clause conferring the lien is of nearly as broad scope as our own, but the limitation is supplied by another section to the effect that the lien notice by the sub-contractor to the owner shall give the former a claim against, and right to any sum “ due or to become due under the contract” by the owner to the contractor. Such was the law of Colorado when the decision in Jensen v. Brown (1875) 2 Col. 697, was announced. Session Laws Colorado, 1872, p. 150, sec. 6.

The law of Iowa was somewhat similar when Stewart v. Wright (1879), 52 Iowa, 335, was decided, the language, defining the status of a sub-contractor there being as follows : “And from and after the service of such notice, his lien therefor shall have the same force and effect,” etc., “asa lien by the contractor, but shall be enforced against the property only to the extent of the balance due to the .contractor at the time of the service of such notice upon the ownfer, his agent, or trustee.” Iowa Code, 1873, p. 386, sec. 2133.

In other states this limitation has been expressed as a proviso in the seсtion defining the right of lien, or as a distinct part of the statute. Thus the law of 1851, applicable to New York City, contained the following as part of the sentence creating the lien : “But such owner shall not be obliged to pay for, or on account of such house, other building or appurtenances, in consideration of all the liens authorized by this act to be created, any greater sum or amount than the price stipulated and agreed to be paid therefor in and by such contract,” i. e., the contract between the owner and original contractor. Laws of N. Y., 1851, pp. 953, 954, sec. 1.

In Illinois it was provided that no claim of any sub-contractor, etc., should be a lien “except so far as the owner may be indebted to the contractor at the time of giving such notice of such claim, or may become indebted afterward to him as such contractor.” R. S., 1874, Ill., ch. 82, sec. 33.

Kansаs’ laws added this condition to the right of lien: “ Provided that the owner shall not be liable to such sub-contractor ‍‌‌‌‌‌​‌​​​​​​‌​‌‌​‌‌‌​​​​‌​​‌​​‌‌​‌‌​‌​‌​‌​‌‌‌​​‍for any greater amount than he contracted to pay the original contractor.” Laws of Kansas, 1872, p. 295, sec. 2.

In Connecticut it was declared that “No such lien shall attach to any building or its appurtenances, or to the land on which the same may stand, in favor of any person, to a greater amount in the whole than the рrice which the owner agreed to pay for such building and its appurtenances.” G. S. Conn. 1875, p. 360, sec. 12.

Such limitations, in one or another form, have been in force at different times in many states. Some of them have been changed by later laws. They are mentioned here as types of the forms that have been thought effective to limit the sub-contractor’s lien to the amount due under the owner’s original contract when the láw-makers so intended.

The case at bar turns, of course, on the proper construction of our own law. The latter contains no such language as has been quoted from other states, nor anything substantially similar. The question then arises whether our legislature intended a like limitation to be supplied by construction. If so, the expression of that intent is singularly unfortunate and obscure when it evidently might have been very plain. The terms of section 3172, above given,' are сlear and comprehensive in relation to the question before us. They contain nothing suggestive of any implied condition upon, or limitation to the right of lien therein defined.

The words of a law are to be taken in their ordinary, usual and natural meaning. When the legislature says that a mechanic or material-man “ shall'have a lien” (certain facts occurring), we are to assume that it means it. We certainly should not suppose that it intendеd thereby to say that such a lien should only exist when the owner had not already fully paid the contractor, and in no event for more than the original contract price. Such a ruling, in effect, would require more facts to be established as essential to such a lien than those mentioned by the law-makers. It is not our province to make such additions to the statute. If a law is constitutional it is our duty merely to interpret and declare it exaсtly as made by the legislative department on which the responsibility for its wisdom and policy rests. We cannot properly add to it a meaning not intended by its terms.

Let us now consider such parts of the context to the section already quoted as may throw light on the supposed intentions of the legislature as to its scope.

The section requiring notice by the sub-contractor, in cases like this, should perhaps be noted. It is this: “ Section 3190. Sub-contractors and others to give notice. Every person, except the original contractor, who may wish to avail himself of the benefit of the provisions of this article, shall give ten days’ notice before the filing of the lien, as herein required, to the owner, owners or agent, or either of them, that he holds a claim against such building or improvement, setting forth the amount and from whom the same is due.”

This section noticeably omits any qualification of the'language of section 3172 regarding the facts necessarv to the right of lien. It is undoubtedly intended to provide a measure of protection to the owner by warning him of such claims, so that he may retain from the original contractor, enough of the contract price to indemnify himself against loss. Rut the subcontractor may file his claim for a lien (on notice as above) at any time within four months after the indebtedness accrues. R. S. 1879, sec. 3176. It is hence evident that any payment by the owner to the contractor, before the time expires for receiving the sub-contractor’s notice, will not defeat the latter’s right of lien unless we are to interpolate into this section other facts not mentioned as essential by the law-makers, namely, that such notice must be given before full settlement with the original contractor, or that such notice shall only give the sub-contractor a right to claim the sum then due, or thereafter becoming due to the contractor (as is the law in some other states). This' we cannot do.

The other provision's of that chapter do not enlighten the present controversy except section 3191 which is as follows : “In all cases where a lien shall be filed, under the provisions of this article, by any person other than a contractor, it shall be the duty of the contractor to defend any action brought thereupon, at his own exрense ; and, during the pendency of such action, the owner may withhold from the contractor the amount of money for which such lien shall be filed ; and in case of judgment against the owner or his property, upon the lien, he shall be entitled to deduct from any amount due by him to the contractor the amount of such judgment and costs, and, if he shall have settled with the contractor in full, shall be entitled to recover back from the contractor any amount so paid by the owner for which the contractor was originally the party liable.” R. S. sec. 3191.

If payment of the contract price to the original contractor were a defense to the lien demand of a sub-contractor (as is asserted by respondents), no such “judgment against the owner or his property” could lawfully be recovered by a sub-contractor after such full settlement. Yet this section assumes that such judgment may properly be obtained and enforced. For that reason it gives the owner a right of action “ to recover back from the contractor any amount so paid.” Reading it in connection with ‍‌‌‌‌‌​‌​​​​​​‌​‌‌​‌‌‌​​​​‌​​‌​​‌‌​‌‌​‌​‌​‌​‌‌‌​​‍section 3172 we think the conclusion irresistible that the legislature used the broad language conferring the right of lien with a full appreciation of its effect, and accordingly provided by section 3191 for some of its practical applications. .We consider these two sections as exсluding the inference of any legislative intent to limit the lien of subcontractors to the amount fixed by the contract of the owner with the original contractor.

But it is insisted that this construction of the law would give it an unconstitutional force and effect. We have found difficulty in dealing with this objection because of its generality. The only specific clauses of either state or federal constitution with which any clash is suggested are the federal prohibition against depriving any person of property “ without due process of law” (U. S. Const. Amend. 14) and the section of the Missouri Bill of Rights securing to all “the enjoyment of the-gains' of their own industry.” Sec. 4.

A statute like ours, creating a lien on improved property for the reasonable value of the ' labor and materials furnished to permanently improve it, and providing a mode for its enforcement upon adequate notice to all parties in interest, with an opportunity for a trial of every issue, in court, “as in ordinary civil actions and proceedings in circuit courts” (R. S., section 3179), certainly does not deprive the owner of such improved property thereof “without due process-of law.” It is unnecessary to discuss that contention further in view of the definite rulings that have been made construing that part of' the federal constitution. Davidson v. New Orleans, 96 U. S. 97; Sheppard v. Steele, 43 N. Y. 52; State v. Addington, 77 Mo. 110.

It is further urged that such a construction of the liеn law would violate the Missouri Bill of Rights, quoted above. An argument is predicated thereon against the justice and policy of the statute. It is claimed that it abridges the right of the owner to make such contracts as he pleases and to enjoy the benefits thereof.

That hardships may occasionally result to landowners from the application of the' law to particular cases is possible. That hardships would result to others without suсh law is equally clear. If the owner engages a contractor to erect a house for five thousand dollars and the latter uses in the structure labor and materials worth ten thousand, obtained on credit from others, .it is obvious that some one must sustain the loss occasioned by such folly or fraud. Without this statute, the loss would often fall on the sub-contractors whose labor and materials have enhanced the value of the property. Under its provisions the latter can enforce payment (from the property) for the reasonable value of their labor and materials in the building, not exceeding the prices they agreed to accept for the same. The owner can then recover of the contractor any excess he may thus be obliged to pay beyond the original contract price. A hardship to the owner will only result in event the contraсtor be insolvent and hence unable to respond to such recovery. In that case the legislature has seen fit to say that the loss should fall on the owner, who selected the contractor and has the benefit of the improvements, rather than upon the sub-contractors who supplied the materials and labor. It is an application to such transactions of the familiar legal principle that when one of two innocеnt parties must suffer a loss by reason of the fault of a third, that loss should be borne by him who gave the third person power to commit the fault. International Bank v. German Bank, 71 Mo. 197. The aim seems to be to protect those whose material or labor has enhanced the value of property against the business misfortunes or possible ^frauds of any middle-man at whose instance they furnished the same. It is made the interest of the, owner, for the protection of his property from liens, to see that all valid debts of that nature are discharged by those who incur them. The law-makers considered that, by the exercise of ordinary prudence, the owner would be in a better position to guard against loss under this law than sub-contractors would be without the law. The owner may stipulate with the contractor to defer payment until the time has passed for filing other liens, or to pay the sub-contractors himself, or he may take seсurity or other suitable steps that circumstances may require for the protection of himself and of those whose labor and materials enter into the building upon its credit.

On the other hand, if the original contract price were the limit of the liability of the property for its improvement, no sub-contractor could be sure of securing a lien, when supplying materials or labor, without first ascertaining not only the contract price, but also the amount of all other outstanding sub-contracts. Even then he would assume the further risk of conflict with sub-contracts afterwards made by the chief contractor, which the latter might, if he saw fit, satisfy first on the contract account. Thus would difficulties and uncertainties in the operation of the law exist which we think the legislature did not intend.

The owner’s liberty of action is not invaded by the statute. He need not employ an intermediary to erect his building. ' But if he does, the lаw ingrafts upon his act certain consequences. It enters into, and forms part of his agreement so far as regards the subject-matter to which the statute relates. By virtue of the law the contractor is invested with a power to charge the property for the reasonable value of the labor and materials supplied to it by sub-contractors. The right of lien arises from the statute which applies, by its own force, to every transaction that parties, by their voluntary action, . bring within its terms. No one is deprived thereby of the “gains of his own industry.” The legislative purpose is quite the contrary. It is rather to prevent one man from enjoying, without compensation, the gains of another’s industry in circumstances which the law-makers regard as imposing a duty on the former to see that the latter is paid therefor.

The principle controlling this branch of the case has been frequently reсognized and approved in other jurisdictions in its application to this subject and others. Briefly stated it is that contracts must be construed and interpreted according to existing laws when made in relation to the subject-matter of those laws within their jurisdiction. Murray v. Brown, 91 U. S. 266. A familiar illustration of the principle is found in the admiralty. A bottomry bond or mortgage on a vessel may be validly executed, yet the mariner’s lien for subsequent ‍‌‌‌‌‌​‌​​​​​​‌​‌‌​‌‌‌​​​​‌​​‌​​‌‌​‌‌​‌​‌​‌​‌‌‌​​‍wages will have priority over either, because the law to that effect is assumed to have entered into every such instrument when made. 1 Conkling’s Admr. (2 Ed. ) 112.

•Many other illustrations are at hand but we will abbreviate the statement of them by merely citing the cases in which they appear. Spofford v. True, 38 Me. 283; Langston v. Anderson, 69 Ga. 65; Treusch v. Shryock, 51 Md. 173; Winslow v. Urquhar, 39 Wis. 260; Vreeland v. O'Neil, 36 N. J. Eq. 399; Sims v. Bradford, 12 Lea. 434; Atwood v. Williams, 40 Me. 409.

In the matter before us the mechanic’s lien law is assumed to be in contemplation of all parties making a building contract. There is hence no injustice in treating them as having accepted the consеquences fixed by that law.

We conclude that there is no constitutional objection to the enforcement of a lien by a subcontractor in such a case as that at bar. The result we have reached is supported by decisions from some other states commenting on the effect of statutes like ours. Laird v. Moonan, 32 Minn. 358; Ballou v. Black, 21 Neb. 147; Ainslie v. Kohn, 16 Ore. 371; Loukey v. Cook, 15 Nev. 58: Merritt v. Pearson, 58 Ind. 386; S. V. R. R. Co. v. Miller, 80 Va. 821; Jensen v. Brown, 2 Col. 697 Hill v. Witmer, 2 Phila. 72.

We have given due consideration to the decision of the Kansas City court of appeals in Henry v. Hinds, 18 Mo. App. 497, wherein a different cоnclusion was reached. Though entertaining great respect for that court and for the able writer of that opinion, we find ourselves unable to adopt their views of the question presented by the present appeal. We believe the effect of that decision would be to introduce into the statute an implied restriction of the sub-contractor’s right of lien which the legislature did not intend should be placed upon it. We, therefоre, do not accept it as a precedent for the decision of this case.

The supreme court of California also has announced a different interpretation of a statute similar to our own in Renton v. Conley (1874), 49 Cal. 187, and earlier cases mentioned therein. That decision has been expressly disapproved in Nevada. Although the same statute had been reenacted there the supreme court declined to follow such a construction of it. Hunter v. Truckee Lodge, 14 Nev. 32. Since that decision was rendered, the legislature of California has made several changes in that law, the most comprehensive being found in the Acts of 1884 ( extra session), p. 143.

From the nature of these amendments it appears probable that the law-makers of that state do not regard that ruling as a correct construction of the intention they endeavored to express, with regard to this subject, in the original statute. At all events, we do not agree with the views contained in that decision. We consider them as at variance with the language and meaning of our law for reasons that have been already stated in this opinion. ■

It follows that the judgment of the trial court should be reversed and the cause remanded with directions to set aside the finding in favor of ‍‌‌‌‌‌​‌​​​​​​‌​‌‌​‌‌‌​​​​‌​​‌​​‌‌​‌‌​‌​‌​‌​‌‌‌​​‍defendants on the issue of the lien, and thereupon to enter proper findings and a judgment on the agreed case in accordance with this opinion.

With the concurrence of all the judges it is so ordered.

Case Details

Case Name: Henry & Coatsworth Co. v. Evans

Court Name: Supreme Court of Missouri

Date Published: Oct 15, 1888

Citation: 97 Mo. 47

Court Abbreviation: Mo.