16 S.E. 857 | N.C. | 1892
Lead Opinion
We adopt the following opinion, prepared by the late Chief Justice Merrimon, in this case, with such additions thereto as in our judgment are necessary to a full determination of the questions presented to us on appeal. That opinion is as follows:
“The statute (The Code, §§ 1781 to 1808) entitled ‘Liens,’ is remedial, and its clear purpose is to give contractors, subcontractors and laborers liens upon property as therein prescribed and provided, to secure the payment of money due for labor done or materials supplied on or about the same. To that end its language, phraseology and scope are broad and comprehensive. There are few, if any, express exceptive provisions in it, and, in the absence of them, exceptions and limitations affecting such liens cannot be allowed unless by necessary implication. The 'object is to give a lien on particular property deriving particular benefit in favor of classes of persons whose claims are supposed to have particular merit. All this is made the more manifest by the amendatory statute (Acts of 1887, chapter 67). Moreover, numerous decisions of this Court, interpreting this statute, and the amendments thereto, fully sustain the view here expressed. Chadbourn v. Williams, 71 N. C., 444; Wooten v. Hill, 98 N. C., 48; Burr v. Maultsby, 99 N. C., 263.
“Adverting now to provisions of the statute pertinent to the present case, section 1781 thereof provides, among other things, that ‘every lot, farm, or vessel, or any other kind of property, real or personal, not herein enumerated shall be subject to a lien for the payment of all debts contracted for work done on the same, or material furnished.’ It is further provided that ‘the lieu for work on crops or farms, or materials given by this chapter, shall be preferred to every other lien or incumbrance which attached upon the property subsequent to the time at which the work was commenced or the materials were furnished.’ The Code, § 1782. It is further provided that ‘all subcontractors and laborers who*618 are employed to furnish or do furnish material for the building, repairing or altering of any house, or other improvement on real estate, shall have a lien on said house and real estate for the amount of such labor done or material furnished, which lien shall be preferred to the mechanic’s lien now provided by law, when notice thereof shall be given as hereinafter provided, provided that the sum total of all the liens due subcontractors and material men shall not exceed the amount due the original contractor at the time of notice. The Code, § 1801. In this connection section 1802 provides that ‘ any subcontractor, laborer or material man who claims a lien as provided in the preceding section, may give notice to the owner or lessee of the real estate who makes the contract for such building or improvement at any time before the settlement with the contractor, and if the said owner or lessee shall refuse or neglect to retain out of the amount due the said contractor under the contract as much as shall be due or claimed by the subcontractor, laborer or material man, the subcontractor, laborer or material man may proceed to enforce his lien, and after such notice is given no payment to the contractor shall be a credit on or discharge of the lien herein provided.’ It is further provided in section 1789 that ‘ notice of the lieu shall be filed as hereinbefore provided at any time within twelve months after the completion of the labor, or the final furnishing the materials, or the gathering of the crops, provided that in cases of liens on real estate or any interest therein, given by this chapter, the notice shall be filed in the office of the Superior Court Clerk within twelvemonths after the completion of the labor or the final furnishing of the materials.’ When the claim is so filed within twelve months, the lien relates back to the time, at which the work was commenced or the materials were furnished,’ and is preferred to all liens or incumbrances created to that timp. The Code, § 1782; Burr v. Maultsby, supra, and cases there cited. And this is so, although the subsequent incumbrancer had no notice of the lien thus relating back.
*619 “The clause of the statute (The Code, § 1781) first above recited, declares that1 every lot, farm or vessel, or any kind of property, real or personal, not herein enumerated, shall be subject to a lien for the payment of all debts contracted for work done on the same, or materials furnished.’ This phraseology and the purpose of it are comprehensive. The-lien prescribed attaches, in the case provided for, to any real property whether it be denominated ‘ a lot or farm,’ or a storehouse site, a mill site, a water reservoir site, or the like. The lien arises in favor of and to secure the payment of any and ‘all debts contracted for work done on the same, or materials furnished.’ By the term ‘ material furnished,’ is meant something furnished to be appropriated, used and pertinently applied on the land, devoted to some purpose, no matter what, so that the purpose be lawful. The purpose is to secure the debt contracted for materials furnished on or about or connected with the land in connection with the purpose to which it is devoted, in whole or in part. The debt so contracted becomes a lien, a charge upon the land, and that land may, if need be, be sold, or in some appropriate way applied to the payment of the debt secured by and constituting the' ground of the lien. It makes no difference as to the ownership of the land if the debt for such considerations was lawfully contracted, because the land is benefited by the labor so done on or about it, or by the materials furnished. The-intention is that the land shall be charged by a lien with the cost of the benefits so extended to it, whether the benefits arise from labor done in building or repairing houses, in cultivating the land, building fences, ditching, felling trees, or the like, or from the erection of mills of any kind on it, or from supplying machinery, fixtures or any ‘ material furnished’ for such purpose. This is a just and reasonable-interpretation of the clause of the statute recited. Indeed, it would be difficult to suggest any other fair meaning.
*620 “In the present case the defendant Howland contracted with the town of Durham to supply it with water for public •and'domestic purposes, and with that view and to that end he acquired certain land situate four or five miles from the ■town for the purpose of constructing a water reservoir, and the right-of-way for pipes under ground through which to convey the water to the town. In connection with this water •reservoir, much machinery, pipes and other material were necessary. He contracted with the plaintiff to supply him with a large quantity of suitable pipe and other things to be used on and about the land for the purpose of this reservoir and to effectuate the end contemplated by it. The contract did not recite in terms that the pipe and other things, so supplied by the plaintiff, were to be used for the express purpose of the reservoir and water supply; but it appears that the plaintiff knew of il, and it savors of trifling to suggest that it was not well and distinctly understood and intended by the parties that the goods were furnished for such purpose. The contract and the goods supplied suggested the purpose, and it was not necessary to recite or declare it in terms. It was sufficient that it certainly •appeared. Lanier v. Bell, 81 N. C., 337, is not inconsistent with what is here said, as seems to be supposed.
“ The plaintiff furnished the pipes and other things to the ■defendant for the purposes of the reservoir and water supply to be made by and through means of it. The defendant Howland failed to pay a large part of the debt he contracted to pay the plaintiff for the materials so furnished by it. In view of the facts, at once upon supplying such materials not paid for, a lien upon the land mentioned, and the property connected with it permanently for the purposes to which it was devoted, arose in favor of the plaintiff. Its debt at once became a charge upon the land, to be perfected by filing its claim in that respect in the office of the Superior Court Clerks as above pointed out. And this filing might be done at any*621 time within twelve months next after furnishing the materials-above mentioned. It was done within that time. This lien, so perfected, related back to the time when the materials-began to be furnished. The statute so provides. The Code,. §§ 1781,1789; Burr v. Maultsby, supra. The enterprise of supplying the town with water was that of the defendant How-land ; the property was his; it did not in any sense belong to the town; it had not taken on any quality or been placed in any condition that rendered it exempt from lien as contemplated by the statute. It belonged to a private individual,
“The statute (The Code, §§ 1890, 1891) prescribes how the plaintiff might enforce his lien. Upon his judgment he is-entitled to have execution against the property, which shall-direct the officer to sell the right, title and interest which the-owner had in the premises or the crops thereon at the time of filing notice of the lien, before such execution shall extend to the general property of the defendant. The property to-which the lien attaches is specially devoted to the satisfaction of the plaintiff’s debt, and hence it must be sold before-his other property may be resorted to for the like purpose.
“It appears that the defendant, the Durham Water Company, was incorporated in the Fall of 1886, and invested with appropriate corporate powers for the purpose of supplying-the said town with water, and that the defendant Howland,, on the first day of January, 1887, sold and assigned his contract with the said town to it, and likewise sold to it all the property he had acquired for the purpose of making such-water supply, and this property embraced that to which the plaintiff’s lien attached. It is earnestly contended that therefore the plaintiff acquired no lien, first, because the defendant Water Company (a quasi public corporation)acquired title, by its purchase, to the said property, and the-latter is devoted to public purposes, and hence is not the subject of such lien; and, second, because the plaintiff’s lien, if indeed he ever had any, was secret — notice of it and the-*622 plaintiff's debt and claim had not been filed in the office of the Superior Court Clerk until the 19th day of July, 1887, after the said company purchased the property.
“ As appears from what has been said above, the plaintiff did have a lien for its debt upon the property (the land and fixtures made part of it) which the defendant company purchased from its co-defendant Howland; that although the plaintiff’s claim was not filed until the 19th of July, 1887, the lien related back to the time when the plaintiff began to supply the materials, which time antedated the purchase of the defendant company. If it be granted that the defendant ■company was, in a sense, a public corporation, and its property was devoted to a proper public purpose, it did not and ■could not buy the property it did buy from its co-defendant discharged of the plaintiff’s lien without its assent. It did not assent, and hence the company took the property charged with and subject to- the lien. No public corporation — not the State itself — Could purchase property for public purposes charged with a lien in favor of the plaintiff, and thereby discharge such lien, unless with the plaintiff’s assent, or by proper condemnation of the property, and compensation to him to the extent of his interest. The lien was a lawful and valuable incident to and security for the plaintiff’s debt, and it could no more be deprived of it, as contended, than it •could be of the debt itself. It was the misfortune or folly of the company that it purchased property for public purposes ■subject to a lien. It ought to have been more cautious and better advised.
“ It is said the lien was a secret one, and the company could not know of it. The answer is, that in the present state of the law it should have made diligent inquiry before purchasing the property as to laborers’ and material men’s liens upon it. Private persons must do so; they fail to do so at their peril. And corporations, public or private, are upon no better footing. There is neither statute, nor precedent, nor any*623 principle of justice that places them on a footing different from natural persons. The Legislature has provided by statute {The Code, § 1789) that notice of the plaintiff’s claim may be filed at any time within twelve months after the completion of the labor or the final furnishing of the materials. This provision has been repeatedly held to be valid. Burr v. Maultsby, supra, and cases there cited.”
In addition to what was said by the late Chief Justice, we proceed further: It is found by the jury that the contract was made between the plaintiff and the defendant Howland as alleged in the complaint, and that material was furnished by plaintiff to said defendant under said contract to the amount and value, as ascertained by the verdict. This contract, being a single one, covering-all the material furnished, we hold that the lien attaches for all the said material delivered, up to and including the last item, notwithstanding the fact that, pending the execution of the contract, and before the delivery of all the material, the defendant Howland assigned his interest in the said contract and became a subcontractor under his assignee, and this without notice to the plaintiff, who continued to deliver the material to Howland, who, as subcontractor, used it in the completion of the water-works for Durham. The Code, § 1782; Burr v. Maultsby, 99 N. C., 263, and cases there cited. Under any view of the law than that taken by us, how easy it would be to evade the provisions of this act, passed for the benefit of mechanics and material men, and avoid the lien upon the property. The defendant Howland, a private person, makes his contract wdth the city of Durham to supply it with water; he purchases land and makes contracts for the purchase of other lands; he secures rights-of-way and other easements; he purchases pipes and other material for carrying out his contract, property which he uses in the construction of the water-works, and on which a lien attaches by virtue of the statute.
It was manifestly the business of the assignee to inform itself in the matter. It had assumed the liabilities of its assignor under his contract with the town of Durham. It received the benefit of the material which lie was receiving from plaintiff; it was put upon notice as to his liabilities for labor and material by the lien laws of the State. If the Durham Water Company is such a corporation as is authorized to receive fare or tolls, the way is plain to the plaintiff, under section 671 of The Code, to sell the franchise of the defendant company with all its rights and privileges, so far as relatéá to the receiving of fare and tolls, and all of its property, under execution or other appropriate means of carrying the judgment into effect.
The word toll in the sense used in the statute is a tax paid •for some use or privilege or other reasonable consideration (Century Dictionary), and the definitions in all the books are substantially the same. Pare is a rate of charge for the carriage of passengers. A water-rate, that which the defendant company may charge, is a tax or compensation for the furnishing of a supply of water.
The plain purpose and intent of section 671 of The Code, the Act of 1820, as amended after the decision in the case of State v. Rives, 5 Ired., 297, was to afford a remedy against that class of quasi public corporations where the franchise ought not to be separated from the plant or property for reasons of public policy. The words originally used in the Act of 1820 were, “if the judgment or decree be against a rail
The franchise of the water company is inseparable from its-plant or property. The public necessity requires that they should be sold together, for, in this case, the purchaser will take cum onere and the public be protected. Foundry Company v. Water Company. Fed. Rep., vol. 52, No. 1, p. 43, and cases there cited.
It may not be inappropriate for us to suggest that to avoid all possible risk of temporary suspension of the operation of this important work, it would be proper, in this ease, to appoint a receiver under section 379, subsection 2 of The Code, to carry the judgment into effect.
There is error. So much of the judgment appealed from as declares the plaintiff’s lien void and denies its right to enforce the same must be reversed and an appropriate judgment entered giving it effect. To that end let this opinion be certified to the Superior Court. It is so ordered.
Dissenting Opinion
dissenting: The plaintiffs’ appeal is from the refusal of the Court below to adjudge that, to secure the payment of the amount recovered from the defendant How-land, the plaintiffs have a lien “ upon all the property, rights of property, privileges and franchises of every nature whatsoever belonging to said Howland, under and by virtue of his aforesaid contract with the town of Durham, or which, by his aforesaid assignment, was transferred to the Durham Water Company, and also upon all lands, buildings, reser
Entertaining the highest respect for the views of my brethren, I think, nevertheless, that they have fallen into error. My own views of the points involved in the controversy may be summarized in the following propositions:
1. The plaintiff company sustained the relation to the defendant Howland and his assignee, the Durham Water Company, of material man, and while, as between the original contracting parties (the plaintiff and Howland) the debt for material furnished for a private building might, within twelve months, be made a lien, relating back as contended, the lien in favor of a subcontractor under the statute (The Code, § 1802) attaches only from the time of giving notice to the contractor, and only as to. any unpaid balance due to the subcontractor when the notice is given. Section 1781 applies to controversies between the owner of the land and the builder or contractor, and provides for subjecting the land to liability for work doue or material furnished by such builder or contractor and. in his favor, provided notice is filed within twelve months from the completion of the labor ■or the “ final furnishing of the material.” The Code, §§ 1782 and 1789.
3. The plaintiff could look in any event only to Howland, to whom it sold the material, and could not sell the franchise or sequester the profits of the defendant company for the satisfaction of Howland’s debt, which was not a lien upon land,-pipes, &c., used for the purpose Of furnishing water, and the statute cannot be construed as creating a lien upon a franchise if none attaches to the property.
After passing laws for the protection of laborers, mechanics and material men at successive sessions from 1868 to 1873, the Legislature made no further additions to or alterations in the statutes bearing upon this subject.till the enactment cf chapter 44, Laws of 1880. If the claims of subcontractors and material men furnishing them were superior to those of the original contractors before 1880 (under The Code, § 1781 to § 1800), why was the Legislature of 1880 guilty of the folly of providing that it should be preferred to “ the mechanic’s lien now provided by law.” If the enactment of that statute was necessary (as the Legislature seemed to think) in order to give such material men, as well as subcontractor, adequate protection against the mechanic to whom he furnished material, then we must look to its provisions alone for the adjustment of the rights previously unprotected, and proceeding upon that obviously fair construction of the law, we find in support of it the explicit proviso to section 1801 that “the sum
Howland transferred the benefits and burdens of the original contract to his co-defendant company, and from and after January 1, 1887, became subcontractor, but still leaving his individual arrangement with the plaintiff intact, finished the work and received payment in negotiable bonds of the Water-works Company, which were payable to bearer and were secured by a mortgage on the franchise and property of said company. Up to the time when the plaintiff filed a lien on the reservoir of the company with the acre of land on which it was located, the line of piping, passing three feet under ground through the lands of various persons who cultivated the soil above the pipe-ditch and through seven miles of public street, under the said contract with the town of Durham, and also on the franchise of the defendant company, the company had no notice that plaintiff was furnishing Howland pipe and castings, and no information from whom he was purchasing it. When the notice was at last given, on July 19, 1887, the jury find that the defendant Durham Water-works Company had paid to the plaintiff in discharge of its indebtedness, under the agreement of January 1, 1887, fifty thousand dollars of its first mortgage bonds, transferrable by delivery. When the notice was given, therefore, the contractor stood in the same relation
As against Howland, if he had- contracted directly with the plaintiff to furnish pipe to be placed in a private house on his own land, it is admitted that the sale of his land to a third person, before notice of the lien filed, would not have defeated the lien or prevented its relation back under sections 1781 to 1800. This is the only point settled in Burr v. Maultsby, 99 N. C., 263, which is cited to sustain the opinion of the Court. Neither in that case, nor in any other heretofore decided by this Court, has it been held that the responsibility of a contractor for material furnished a subcontractor extended beyond his indebtedness, when he received notice of the claim of the material man or attached at all to his property, when notice was given after settlement with the subcontractor.
Secret liens have never been favored by the law, and nothing but the clearest expression of the legislative purpose should be construed to extend their operation in derogation of common law and common right. Jones on Liens, sections 170, 1854, 1856. It is conceded that the intent of the Legislature to give to mechanics, as original contractors, a lien which may have relation back and affect the rights of subse
But I maintain further, that if it be admitted that, ordinarily, where the rights of individuals only are involved, the Legislature intended to create a secret lien in favor of subcontractors or material men who deal directly with them, still, unless the Legislature has explicitly so declared, property devoted to the use of the State, or conveyed for corporate purposes to a public corporation, such as a town, or a company organized to furnish water to a town, is not subject to-such secret lien. We will search in vain in our statute law for any such expression of such legislative intent.
“ In the absence of special statutory provision on the subject, it would seem,” says Judge Dillon (2 Mun. Corp., 576 [446] ) “ to be a sound view' to hold that the right to contract and the power to be sued gives the creditors a right to recover judgments, that the judgments should be enforcible by execution against the strictly private property of the corporation, but not against any property owned or used by the-corporation for public purposes, such as public buildings, hospitals and cemeteries, fire engines and apparatus, waterworks and the like, and that the judgments should not be deemed liens upon real property except when it may be taken in execution Y
The town of Durham, though not a party to this action, cannot afford to be an indifferent observer, if the plaintiff should succeed in making good some of its demands. But whether the municipality is before the Court or not, we must take notice of the admitted facts that the reservoir and land
The first contention of the plaintiff is that though the defendant company could sell nothing but the franchise, an individual, where he has induced a city to give an easement in its streets and other privileges by agreeing to devote a reservoir and land on which it is constructed, with the pipes laid in ditches, to the purpose of supplying the town with water, could subsequently subject said land and piping, as distinct property, to a lieu filed after the works were in operation by a manufacturer who furnished the pipe. No matter,, therefore, what expense a municipality might incur in procuring water, if it deal with an individual instead of a corporate contractor, the public would be left dependent upon the solvency or honesty of the contractor, because separate sales of the land on which the reservoir is located, and the other property, would necessitate new arrangements for a water supply. Is it possible for a city to provide for the wants of its citizens and the protection of the public against fire, without organizing a corporation as a contractor or incurring the risk of failure and disappointment? It appears as. a fact in this case that the plaintiff had notice of the purpose for which the pipes and castings were to be used. Plaintiff knew that the land bought for the reservoir was held and used for the purposes of a public corporation acting for the people in its governmental capacity under an agreement with Howland. They should therefore have looked more closely to their security, certainly when the contractor made default in paying monthly according to his agreement, though it is not incumbent on the Courts to point out how the debt could have been secured. This case presents a widely different state of facts, as already intimated, and questions of law easily distinguishable from those passed upon in Burr v.
At the time when the plaintiff agreed to furnish. Howland the piping, they knew that it was to be used in fulfilling the' contract with the municipal corporation, and they knew that the land on which the reservoir is located was to be used for the purpose to which it was devoted. If the State of North Carolina had authorized the Governor to contract with a person or corporate body for a supply of water for the protection of public buildings in Raleigh, and incidentally for the-use and protection of the people of the whole city, would it be contended that the piece of land covered in part by the ponded water, and on which the reservoir and the pumps for throwing the water into it are located, would be at all times subject to be sold separately from the privileges, to satisfy judgments for debts of the individual contractor, when, if the contractor had been a body corporate, the principle announced in Gooch v, McGee, supra, would have protected it from every species of liens upon its land or other property, except as incident to a lien upon the franchise ? It would not be contended that Burke Square, upon which the Governor’s Mansion was completed less than three years ago, could be sold to satisfy the lien of one who furnished material for the Mansion to a contractor
If the lien did not attach to the reservoir, or land, or piping, •or right to lay it in the ditches, as separate and distinct pieces of property belonging to Howland, so as to subject •each to sale separately, it is clear that it could not attach to the franchise of the Water Company. So soon as that company bought from Howland, and he assigned his contract with the city to it, on January 1, 1887, he entered into an .agreement with the purchasing company to finish the work, •and, as to all labor done and material furnished subsequently, was a subcontractor. I cannot, for the reasons given, concur in the position maintained by the late Chief Justice, and adopted by the Court, that the land acquired by Howland for a reservoir and the right-of-way for piping over the land of private persons is subject to the lien and liable to be sold to satisfy the plaintiff’s judgment. I see no difference in principle between allowing the lien on the right-of-way in the streets of the town and on the connecting piping and reservoir outside of its limits, on which the people are ■dependent for their supply of water.
But while giving its sanction to the argument of the late Chief Justice, that a piece of land bought by a private individual and used for a site for a reservoir to furnish a supply •of water to the State capítol under a contract with the State, would be subject to the lien of a material man dealing with -such individual, and liable to be sold to satisfy his claim, 1 understand that the Court,now add the suggestion that a Better, but not an exclusive remedy would be the sale of the •franchise under section 671 of 1 he Code, or the appointment
Admitting that the Water-works' Company could sell its-franchise privately, and that as a company receiving tolls- and fares its franchise is subject to sale under execution in accordance with the provisions of the statute, I still maintain that no lien was created on the franchise held by the defendant company by the service of notice by the plaintiff as a material man, after the claim of the subcontractor had been paid in full, and that the defendant company owes no debt for which its earntngs can be taken by a receiver, for the-reasons already given.
If a lien was created at all, then, by the express terms of the statute, it attached not to the franchise, but to the “ house- and real estate” on which the material was used. How,, then, can this Court, in order to give adequate redress for the plaintiff, attach the lien, in derogation of common right, to the company’s franchise for the security of Howland’s, debt?
Lead Opinion
AVERY, J., dissenting. In June, 1886, the defendant Howland contracted in writing with the defendant town of Durham to construct a system of waterworks for said town to supply water for public and domestic purposes. On 3 November, 1886, the plaintiff contracted to sell to Howland the necessary materials, and the same were supplied and used for constructing said waterworks, and the delivery thereof, which was included in the contract, began on 4 December, 1886, and was completed on (616) 7 May, 1887.
In the latter part of 1886 the Durham Water Company was incorporated, and on 1 January, 1887, Howland assigned his contract with the town to the said Durham Water Company, and the company assumed the duties, liabilities and obligations of Howland to said town under the contract aforesaid.
On 19 July, 1887, Howland having failed to pay plaintiff a large part of his indebtedness for materials furnished, the plaintiff filed its claim for the same in the office of the clerk of the Superior Court of Durham, in order to secure a lien as allowed by The Code, secs. 1782-1808. *384 It was admitted that this claim was sufficient in form and comprehensiveness, but it was contended that it was not sufficient to create the lien as claimed by plaintiff. On the day the claim was filed, the plaintiff gave the defendants notice of Howland's indebtedness to it and the filing of its claim and its alleged lien, and demanded of said defendant company that it retain out of the amount due, or to become due from it to the said Howland, on account of the said waterworks, so much as was necessary to pay plaintiff's claim.
The court below adjudged that the lien filed by plaintiff was of no force and effect, and that the same be vacated and set aside, and it was further adjudged that the Durham Water Company recover its costs of plaintiff, and also that plaintiff pay all the cost connected with the filing of the lien. And it was further adjudged that plaintiff recover of the defendant Howland the sum of $16,975.73, with interest, etc. Both parties appealed. We adopt the following opinion, prepared by the late Chief Justice Merrimon, in this case, with such additions thereto as in our judgment are necessary to a full determination of the questions presented to us on appeal. That opinion is as follows:
"The statute (The Code, secs. 1781 to 1808) entitled `Liens,' is remedial, and its clear purpose is to give contractors', subcontractors' and laborers' liens upon property as therein prescribed and provided, to secure the payment of money due for labor done or materials supplied on or about the same. To that end its language, phraseology, and scope are broad and comprehensive. There are few, if any, express exceptive provisions in it, and, in the absence of them, exceptions and limitations affecting such liens cannot be allowed unless by necessary implication. The object is to give a lien on particular property deriving particular benefit in favor of classes of persons whose claims are supposed to have particular merit. All this is made the more manifest by the amendatory statute (Laws 1887, chap. 67). Moreover, numerous decisions of this Court, interpreting this statute, and the amendments thereto, fully sustain the view here expressed.Chadbourn v. Williams,
"Advertising now to provisions of the statute pertinent to the present case, section 1781 thereof provides, among other things, that `every lot, farm, or vessel, or any other kind of property, real or personal, not herein enumerated, shall be subject to a lien for the payment of all debts contracted for work done on the same, or material furnished.' It is *385 further provided that `the lien for work on crops or farms, or materials given by this chapter, shall be preferred to every other lien or incumbrance which attached upon the property subsequent to the time at which the work was commenced or the materials were furnished.' The Code, sec. 1782. It is further provided that `all subcontractors and laborers who are employed to furnish or do furnish material (618) for the building, repairing or altering of any house, or other improvement on real estate, shall have a lien on said house and real estate for the amount of such labor done or material furnished, which lien shall be preferred to the mechanic's lien, now provided by law, when the notice thereof shall be given as hereinafter provided, provided that the sum total of all the liens due subcontractors and material men shall not exceed the amount due the original contractor at the time of notice.' The Code, sec. 1801. In this connection section 1802 provides that `any subcontractor, laborer or material man who claims a lien as provided in the preceding section, may give notice to the owner or lessee of the real estate who makes the contract for such building or improvement at any time before the settlement with the contractor, and if the said owner or lessee shall refuse or neglect to retain out of the amount due the said contractor under the contract as much as shall be due or claimed by the subcontractor, laborer or material man, the subcontractor, laborer or material man may proceed to enforce his lien, and after such notice is given no payment to the contractor shall be a credit on or discharge of the lien herein provided.' It is further provided in section 1789 that `notice of the lien shall be filed as hereinbefore provided at any time within twelve months after the completion of the labor, or the final furnishing of the materials, or the gathering of the crops, provided that in cases of liens on real estate or any interest therein, given by this chapter, the notice shall be filed in the office of the Superior Court clerk within twelvemonths after the completion of the labor or the final furnishing of the materials.' When the claim is so filed within twelve months, the lien relates back to the time at which the work was commenced or the materials were furnished, and is preferred to all liens or incumbrances created to that time. The Code, section 1782; Burr v. Maultsby, supra, and cases there cited. And this is so, although the subsequent incumbrancer had no notice of the lien thus relating back.
"The clause of the statute (The Code, sec. 1781) first above (619) recited, declares that `every lot, farm or vessel, or any kind of property, real or personal, not herein enumerated, shall be subject to a lien for the payment of all debts contracted for work done on the same, ormaterials furnished.' This phraseology and the purpose of it are comprehensive. The lien prescribed attaches, in the case provided for, toany real property, whether it be denominated `a lot or farm,' or a *386 storehouse site, a mill site, a water reservoir site, or the like. The lien arises in favor of and to secure the payment of any and `all debts contracted for work done on the same, or materials furnished.' By the term `material furnished,' is meant something furnished to be appropriated, used and pertinently applied on the land, devoted to some purpose, no matter what, so that the purpose be lawful. The purpose is to secure the debt contracted for materials furnished on or about or connected with the land in connection with the purpose to which it is devoted, in whole or in part. The debt so contracted becomes a lien, a charge upon the land, and that land may, if need be, be sold, or in some appropriate way applied to the payment of the debt secured by and constituting the ground of the lien. It makes no difference as to the ownership of the land if the debt for such considerations was lawfully contracted, because the land is benefited by the labor so done on or about it, or by the materials furnished. The intention is that the land shall be charged by a lien with the cost of the benefits so extended to it, whether the benefits arise from labor done in building or repairing houses, in cultivating the land, building fences, ditching, felling trees, or the like, or from the erection of mills of any kind on it, or from supplying machinery, fixtures or any `material furnished' for such purpose. This is a just and reasonable interpretation of the clause of the statute recited. Indeed, it would be difficult to suggest any other fair meaning.
(620) "In the present case the defendant Howland contracted with the town of Durham to supply it with water for public and domestic purposes, and with that view and to that end he acquired certain land situate four or five miles from the town for the purpose of constructing a water reservoir and the right of way for pipes under ground through which to convey the water to the town. In connection were necessary. He contracted with the plaintiff to supply him with with this water reservoir much machinery, pipes and other material a large quantity of suitable pipe and other things to be used on and about the land for the purpose of this reservoir and to effectuate the end contemplated by it. The contract did not recite in terms that the pipe and other things, so supplied by the plaintiff, were to be used for the express purpose of the reservoir and water supply; but it appears that the plaintiff knew of it, and it savors of trifling to suggest that it was not well and distinctly understood and intended by the parties that the goods were furnished for such purpose. The contract and the goods supplied suggested the purpose, and it was not necessary to recite or declare it in terms. It was sufficient that it certainly appeared. Lanier v. Bell,
"The plaintiff furnished the pipes and other things to the defendant for the purposes of the reservoir and water supply to be made by and through means of it. The defendant Howland failed to pay a large part of the debt he contracted to pay the plaintiff for the materials so furnished by it. In view of the facts, at once upon supplying such materials not paid for, a lien upon the land mentioned, and the property connected with it permanently for the purposes to which it was devoted, arose in favor of the plaintiff. Its debt at once became a charge uponthe land, to be perfected by filing its claim in that respect in the office of the Superior Court clerks, as above pointed out. And this filing might be done at any time within twelve months next after (621) furnishing the materials above mentioned. It was done within that time. This lien, so perfected, related back to the time when the materials began to be furnished. The statute so provides. The Code, secs. 1781, 1789; Burr v. Maultsby, supra. The enterprise of supplying the town with water was that of the defendant Howland; the property was his; it did not in any sense belong to the town; it had not taken on any quality or been placed in any condition that rendered it exempt from lien as contemplated by the statute. It belonged to a private individual.
"The statute (The Code, secs. 1890, 1891) prescribes how the plaintiff might enforce his lien. Upon his judgment he is entitled to have execution against the property, which shall direct the officer to sell the right, title and interest which the owner had in the premises or the crops thereon at the time of filing notice of the lien, before such execution shall extend to the general property of the defendant. The property to which the lien attaches is specially devoted to the satisfaction of the plaintiff's debt, and hence it must be sold before his other property may be resorted to for the like purpose.
"It appears that the defendant, the Durham Water Company, was incorporated in the fall of 1886, and invested with appropriate corporate powers for the purpose of supplying the said town with water, and that the defendant Howland, on 1 January, 1887, sold and assigned his contract with the said town to it, and likewise sold to it all the property he had acquired for the purpose of making such water supply, and this property embraced that to which the plaintiff's lien attached. It is earnestly contended that therefore the plaintiff acquired no lien, first, because the defendant water company (a quasi public corporation) acquired title, by its purchase, to the said property, and the latter is devoted to public purposes, and hence is not the subject of such lien; and, second, because the plaintiff's lien, if indeed he ever had any, was secret — notice of it and the plaintiff's debt and claim had not *388 (622) been filed in the office of the Superior Court clerk until 19 July, 1887, after the said company purchased the property.
"As appears from what has been said above, the plaintiff did have a lien for its debt upon the property (the land and fixtures made part of it) which the defendant company purchased from its codefendant Howland; that although the plaintiff's claim was not filed until 19 July, 1887, the lien related back to the time when the plaintiff began to supply the materials, which time antedated the purchase of the defendant company. If it be granted that the defendant company was, in a sense, a public corporation, and its property was devoted to a proper public purpose, it did not and could not buy the property it did buy from its codefendant discharged of the plaintiff's lien without its assent. It did not assent, and hence the company took the property charged with and subject to the lien. No public corporation — not the State itself — could purchase property for public purposes charged with a lien in favor of the plaintiff, and thereby discharge such lien, unless with the plaintiff's assent, or by proper condemnation of the property, and compensation to him to the extent of his interest. The lien was a lawful and valuable incident to and security for the plaintiff's debt, and it could no more be deprived of it, as contended, than it could be of the debt itself. It was the misfortune or folly of the company that it purchased property for public purposes subject to a lien. It ought to have been more cautious and better advised.
"It is said the lien was a secret one, and the company could not know of it. The answer is, that in the present state of the law it should have made diligent inquiry before purchasing the property as to laborers' and material men's liens upon it. Private persons must do so; they fail to do so at their peril. And corporations, public or private, are upon no better footing. There is neither statute, nor precedent, (623) nor any principle of justice that places them on a footing different from natural persons. The Legislature has provided by statute (The Code, sec. 1789) that notice of the plaintiff's claim may be filed at any time within twelve months after the completion of the labor or the final furnishing of the materials. This provision has been repeatedly held to be valid. Burr v. Maultsby, supra, and cases there cited."
In addition to what was said by the late Chief Justice, we proceed further: It is found by the jury that the contract was made between the plaintiff and the defendant Howland, as alleged in the complaint, and that material was furnished by plaintiff to said defendant under said contract to the amount and value, as ascertained by the verdict. This contract, being a single one, covering all the material furnished, we hold that the lien attaches for all the said material delivered, up to *389
and including the last item, notwithstanding the fact that, pending the execution of the contract, and before the delivery of all the material, the defendant Howland assigned his interest in the said contract and became a subcontractor under his assignee, and this without notice to the plaintiff, who continued to deliver the material to Howland, who, as subcontractor, used it in the completion of the waterworks for Durham. The Code, sec. 1782; Burr v. Maultsby,
Can it be possible that by the formation of a corporation and (624) the assignment to it of his contract he may divest the lien which had already attached, and without notice to the plaintiffs of his assignment, continue to receive material, and use the same for the completion of the work, free from all lien in favor of the material man, who, in ignorance of the transfer, was relying upon the laws providing him a lien, and furnishing the material without further security?
It was manifestly the business of the assignee to inform itself in the matter. It had assumed the liabilities of its assignor under his contract with the town of Durham. It received the benefit of the material which he was receiving from plaintiff; it was put upon notice as to his liabilities for labor and material by the lien laws of the State. If the Durham Water Company is such a corporation as is authorized to receive fare or tolls the way is plain to the plaintiff, under The Code, sec. 671, to sell the franchise of the defendant company with all its rights and privileges, so far as relates to the receiving of fare and tolls, and all of its property, under execution or other appropriate means of carrying the judgment into effect.
The word toll in the sense used in the statute is a tax paid for some use or privilege or other reasonable consideration (Century Dictionary), and the definitions in all the books are substantially the same. Fare is a rate of charge for the carriage of passengers. A water-rate, that which the defendant company may charge, is a tax or compensation for the furnishing of a supply of water.
The plain purpose and intent of The Code, sec. 671, the Act of 1820, as amended after the decision in the case of S. v. Rives,
The franchise of the Water Company is inseparable from its plant or property. The public necessity requires that they should be sold together, for, in this case, the purchaser will take cum onere and the public be protected. Foundry Company v. Water Company, 52 Fed., 43, and cases there cited.
It may not be inappropriate for us to suggest that to avoid all possible risk of temporary suspension of the operation of this important work, it would be proper, in this case, to appoint a receiver under section 379, subsection 2, of The Code, to carry the judgment into effect.
There is error. So much of the judgment appealed from as declares the plaintiff's lien void and denies its right to enforce the same must be reversed and an appropriate judgment entered giving it effect. To that end let this opinion be certified to the Superior Court.
