Nos. 502 and 503 | D.C. Cir. | Dec 2, 1895
delivered the opinion of the Court:
1. We will consider first the appeal of John E. Herrell & Company.
The facts in regard to their connection with the work are these: Vaughn, the builder, had contracted with one R. E. Cozzens to do the brick work on Donovan’s houses and to supply the brick for the purpose. Cozzens was a bricklayer, but not a dealer in brick ; and he applied to Herrell & Company, who were dealers in brick, to furnish to him the necessary brick for the work. John F. O’Neill, the member of the firm of Herrell & Company with whom Cozzens had his negotiation, testified that his firm would not furnish any brick to Cozzens, unless he paid for them in advance ; but that nevertheless he bargained with the latter to let him have the brick upon his giving an order upon Vaughn for payment therefor and procuring the acceptance of the order by Vaughn. The order and acceptance were as follows:
“Washington, D. C., March 20, 1894.
“ Mr. Wm. A. Vaughn.
“Sir: You will please pay John E. Herrell & Co. the amount of bill that may be rendered by them for the brick to used in the construction of two houses on 31st street
$200 to be paid when 2nd floor joists are on;
$300 “ “ “ roof is on;
$200 “ “ “ (house) plastered;
Balance at completion of houses, and charge the same to my account.
“ Respectfully yours,
(Signed) “ R. E. Cozzens.
(Written across the face: “Accepted March 20, 1894.
(Signed) “ Wm. A. Vaughn.”
O’Neill, in his testimony, says, that 'he had a contract with Vaughn to furnish the brick ; and the strenuous attempt in the argument before us is to show that Herrell & Company were immediate subcontractors with Vaughn. But O’Neill distinctly admits that the only contract whatever which he had with Vaughn was the contract evidenced by the order and acceptance that have been set forth. It may be proper to add, too, that he stated to Donovan, both orally and in writing, that his firm had a contract with Vaughn to furnish the brick ; that Vaughn was not paying them as he had agreed to do; and that Donovan had said that he would see to it, and see that they were paid.
The question then presented on behalf of Herrell & Company is, whether in this condition of things they were subcontractors of Vaughn in immediate contractual rela'tions with him such as that they were thereby entitled to hold and claim a lien upon the property of Donovan under the Mechanics’ Lien law..
We are very clearly of opinion that they were not so entitled. In the case of Leitch v. Emergency Hospital, 6 App. D. C. 247, we held that subcontractors of a subcontractor were not entitled to claim a lien under the Mechanics’ Lien law in force in this District; and that only subcontractors in the first degree — that is, persons in immediate contractual relations with the builder or principal contractor — were entitled by the law to hold such lien. We
An ingenious and able argument has been made to show that Herrell & Company were, in the sense of the law and of that case, immediate subcontractors of Vaughn. But the writing produced, and which is distinctly admitted to have been the only contract, or evidence of contract, between Vaughn and the firm of Herrell & Company, to our mind conclusively negatives this contention. That writing does not show any contract on the part of Herrell & Company to furnish bricks to Vaughn; it show's no liability on the part of Herrell & Company which Vaughn could be entitled to enforce. As between Vaughn and that firm, it is an ordinary and well known contract of guaranty, by which Vaughn guaranteed to Herrell & Company the performance by Cozzens of a contract between the latter and that firm. The money to be paid by Vaughn was the money of Cozzens or the money that was to come to Cozzens, under the contract between Cozzens and Vaughn; and that money was to be paid to Herrell & Company, in a certain contingency, as the money of Cozzens, and to be charged to Cozzens in the account between the latter and Vaughn. There is no contract here between Vaughn, on the one side, and Herrell & Company on the other, whereby the latter were under any obligation to deliver brick to Vaughn, or whereby Vaughn was under any primary or direct obligation to pay Herrell & Company. The contract was that Vaughn wmuld pay Herrell & Company if Herrell & Company would .furnish brick to Cozzens and enter into contractual relations with Cozzens to enable the latter to carry out his contract with Vaughn. These are not the contractual relations required to give one a right of lien under the Mechanics’ Lien law'.
Nor is there here any question of novation, or of anything being taken out of the contract between Vaughn and Cozzens, and made the subject of contract between Vaughn
We think that Herrell & Company did not become immediate subcontractors of Vaughn, and therefore that the court below did not err in denying their right to a lien under the law. Their remedy is against Cozzens on the primary contract, or against Vaughn on the acceptance.
2. The appeal of Allen S. Johnson is next to be considered.
Johnson, as stated, was the surety on Vaughn’s bond, which required the discharge of all liens on Donovan’s property preparatory to the final payment. Johnson was also a subcontractor for the heating and tinning of the buildings. Of course, as surety in the bond, he was precluded from filing any lien as subcontractor, unless he was in some way discharged from his contract of suretyship. He claims to have been so discharged by the act of Donovan in making his alleged premature payments to Vaughn before payments became due under the contract; and it is argued on his behalf that this conduct of Donovan was a violation of the contract between the latter and Vaughn, such as to discharge the surety.
But we fail to see wherein there was any violation of contract by Donovan. At most, the partial payments made by him were merely equitable subdivisions of the payments stipulated to be made; and the work which they represented had all been actually performed. These payments injured no one. No rights of other persons had intervened when they were made. The payments, in fact, were for the benefit of Vaughn, the principal in the bond ; and they did not, and could not, prejudice the rights of Johnson as surety. The conduct of Donovan throughout seems to have been honest, straightforward and liberal; and it deserves credit and commendation, rather than that he should be charged with a violation of duty.
This, we think, fully disposes of Johnson’s claim, and of the argument on behalf of it. But on his behalf another proposition has been earnestly advanced and strenuously argued, to which, as it seems to be a frequently recurring proposition, it seems proper that we should give some consideration. This proposition is to the effect, that claimants of liens under the mechanics’ lien laws are entitled to disregard the contract between the owner of property and his builder or contractor; that the right of lien is independent of contract, and arises exclusively by operation of the statute whenever labor is done or materials provided for a building ; that consequently, the liens of laborers, material men, and subcontractors, may be enforced to the full extent of the value of the property, within the limitation of the contract price, regardless of any payments made or stipulated to be made by the owner of the property to the builder or contractor; and that, whatever may be the express terms of the contract between the owner and the builder, whatever may be the times or terms of payment stipulated or the the amount of payment that has actually been made before any notice is given, the owner of the property remains liable, until the end of the period limited by the statute for the filing and enforcement of liens, to pay to subcontractors, to the whole extent of the original contract price, the amount of any liens that may be filed within that period. And it is asserted, as a logical conclusion from this proposition, that any and all provision in the contract between the owner and the builder for the payment of any money what
The conclusion stated is undoubtedly a legitimate deduction from the proposition advanced; and the proposition, therefore, demands from us the careful consideration which so startling a conclusion warrants.
The appellant, Johnson, of course, has no more standing in court to sustain this proposition than any of the other positions taken by him. By his suretyship upon the bond he guaranteed the execution of the contract, which, even upon the extraordinary theory here advanced, is only a rash contract, and certainly not an illegal one; and he cannot repudiate for his own benefit the contract which received validity and effect only through his suretyship.
But the question is one which, as we have said, seems to be of frequent recurrence ; and we think that it is proper to set it at rest as far as we may.
It is insisted that the subcontractor is not bound by the contract between the owner of the property and the builder; that his lien is independent of the builder and superior to any claim by the latter; that it is payable, therefore, independently of any liability of the owner to the builder; and that, inasmuch as the aggregate claims of the subcontractors may amount to the whole contract price stipulated between the owner and the builder, the owner is never safe in making any payment, or agreeing to make any payment, to the builder, until it is ascertained that all liens are discharged or satisfied.
The vice of thi's argument is in the grave misapprehension which it involves of the statement found in the decisions under the mechanics’ lien laws, that the lien given by these statutes is independent of contract. Undoubtedly it is a correct exposition of the law to say that the lien given by the laws is independent of contract. But this does not mean that the, lien can arise without pre-existing contract.
Similarly, in the same sense, it is not correct to say that subcontractors, with reference their right of lien, are not bound to any extent by the contract between the owner and the contractor. On the contrary, that contract is the chart by which not only the contractor, but all subcontractors, shall be bound, not as between themselves perhaps, but certainly with regard to the owner of the property. Could it reasonably be said that, if an owner has contracted with his builder for a structure of stone, the latter may contract with subcontractors to give him brick or wood ? So far as the builder is the agent of the owner with reference • to the subcontractors, he cannot exceed the authority given to him. The subcontractors are bound to know his authority; and they cannot hold the owner, by way of lien or otherwise, where he did not authorize the work for which it is desired to hold him. The statutory lien is independent of contract; but the contract between the builder and the owner contains the limitations under which, and with reference to which, the right of lien may be exercised. The subcontractor can have no greater right against the owner than has the contractor himself, ex
It is in the means of the enforcement of his contract rights, and not in the contract rights themselves, that the subcontractor is independent of the principal contractor, and that his lien is independent of the principal contractor’s lien, and even superior to it. But the contract rights of all the parties are to be measured by their relative rights, powers, and duties, as determined by their several agreements between themselves, with special reference to the primary contract between the owner and the builder, to which all other contracts must conform.
Apparently antagonistic to this view, and seeming to j ustify the proposition of the appellant, is the case of The Central Trust Company v. N. I. & B. Railroad Co. 68 Fed. Reporter, 90, recently decided in the Sixth Federal Circuit under the mechanics' lien laws of the State of Kentucky, or x'ather the special mechanics’ lien law of that State enacted with refex-ence to railroads, canals, and other works of public improvement.
The statute in question pi'ovides that all persons who perform labor, or who furnish labor, matex'ials or teams by contract with the owner, or by subcontx'act thereunder, shall have a lien which shall be prior and supei'ior to all other liens theretofore or thereafter ci-eated ; that the liens should in no case be for a greater amount in the aggregate than the contract price of the original contractor, and should the aggregate exceed the original price there should be a pro rata disti'ibution ; and that no lien should attach unless the pei'son who pex-formed the labor or furnished the labor, material, or teams, should, within sixty days after the last day of the last month in which any labor was performed, or labor or material furnished, file a statement setting forth the amount due, &c. With this statute in force, a railroad
It will be remarked that the statute construed in that case deals with railroads and other public works, and with corporations and franchises, over which the State had plenary power, and for which it could impose any terms which it
The statute does not purport to deal with the rights of natural persons who are owners of property and contract for the construction of buildings thereon. There seems to be another statute of the State of Kentucky for that purpose. It appears to us, therefore, that the decision cited should not be held to be applicable beyond the special case with which it deals. Any construction of it which would extend its application to cases such as that now before us, we would feel ourselves constrained to reject. Such a construction of our own law would immediately raise the question of the constitutionality of our statute; and it is the rule of law that statutes should always be construed so as to give them effect and validity, rather than that they should receive a construction that would make them invalid or doubtful. Sedgwick on Statutory and Constitutional Law, chap. 6 ; Potter’s Dwarris on Statutes, chap. 5.
We think the ruling of the Supreme Court of Pennsylvania in a similar matter in the case of Schroeder v. Galland, 134 Pa. St. 279, is consonant with sound sense and good logic. That court said :
“ It cannot be questioned for a moment that a subcontractor, who undertakes the construction, in whole or in part, of a building, under a contract with the principal contractor, is absolutely bound by all the plans and specifications expressed in the original contract of the owner with the builder. He must conform to the original contract in all matters, and in the minutest detail, precisely as the builder would be obliged to do. It is most obvious that he cannot depart in any respect either from the designs, the dimensions, the materials, the plans, shapes, and sizes, that are expressed in the original contract; and the reason is most manifest. He is the representative of the builder. * * * He cannot furnish stone when the .contract requires marble, or bricks when stone is required or designated, or one kind of stone when another kind is expressed, or wood
“There is no hardship to subcontractors in enforcing a provision prohibiting liens against them, because they are not bound to know by necessity, all the terms of the contract made by their principal in any event, and they therefore know of the prohibition. But the owner has no opportunity of protecting himself, because he cannot know to what persons the contract, or portions of it, may be sublet. * * *
“ It would be passing strange for us to hold that the right of a subcontractor for part of a building is of so sacred a character that it shall not be bound by the express limitations of a written contract under which, and by force of which, his own contract must be performed. His right of lien has no existence at common law or in equity. It is a creature of statute alone; but the statute confers on him no special prerogative to transcend the most familiar principles of the law, and to claim privileges which are denied to all other citizens in the determination of their contract rights.”
In this case of Schroeder v. Galland, the question was Avhether a waiver of lien and a guarantee against all liens by the principal contractor in his contract with the owner
In accordance with this doctrine was the decision of the Supreme Court of the District of Columbia, in the case of Whelan v. Young, 21 D. C. 51, and also the decision in the case of Monroe v. Hannan, 18 D. C. 197 ; and we desire to give our unqualified approval to the conclusions reached in both of those cases. Conformable to the principle of those decisions have been the usage and custom, and the common understanding of our community, both before and since their promulgation ; and a different doctrine would tend to revolutionize our industrial system, and to cause great hardship, inconvenience and annoyance, without corresponding benefit. In fact, the establishment of the theory advanced on behalf of the appellant would have the effect to check industrial enterprise, to fetter unduly and perhaps unconstitutionally, the freedom of contract and the free use of property, and ultimately to defeat the very purpose for which the law was enacted. We cannot think that this was the intention of Congress in the enactment of the Mechanics’ Lien law; and the statute therefore should not receive a construction, strained and unnecessary, which would make it unreasonable, oppressive and intolerable.
The question has also been raised on behalf of the appellant, Johnson, whether the fund in court should not be distributed ratably, and not in accordance with the priorities assumed to attach to the respective claims of the lien holders from the dates of the filing of their notices in the clerk’s office. But as Johnson, in view of what we have said, has no legal right to raise this question, and no one of those
For the reasons stated, we are of opinion that the decree of the court below was entirely right, and that it should be affirmed with costs. And it is so ordered.