172 Conn. 1 | Conn. | 1976
This appeal involves an interpretation of portions of Public Acts 1975, No. 75-418, to determine whether the trial court had jurisdiction to rule on an application to determine whether the mechanic’s lien for which a bond had been substituted should be declared invalid or reduced in amount when the bond was substituted by agreement of the parties rather than pursuant to the provisions of § 8 (a) of the act.
The facts are not in dispute: On April 15, 1974, the defendant caused a mechanic’s lien to be placed on the land records of the town of Hartford against property owned by the B. C. Development Corporation, Inc. By agreement of the parties, the lien was released upon the substitution of a bond for claimed indebtedness amounting to $31,525, for which the named plaintiff acted as principal, and the plaintiff Aetna Casualty and Surety Company as surety. The principal and surety thereafter applied to the Superior Court for the discharge or reduction of the bond, pursuant to Public Acts 1975, No. 75-418, § 8 (b). On September 9, 1975, the Superior Court ordered a reduction of the bond to $10,000. From that order the defendant has appealed to this court.
A review of the events which led to the enactment of Public Acts 1975, No. 75-418, § 8, is in order. In 1975, following a line of cases decided by the United States Supreme Court, including Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556, rehearing denied, 409 U.S. 902, 93 S. Ct. 177, 34 L. Ed. 2d 165; Lynch v. Household Finance Corporation, 405 U.S. 538, 92 S. Ct. 1113, 31 L. Ed. 2d 424, rehearing denied, 406 U.S. 911, 92 S. Ct. 1611, 31 L. Ed. 2d 822; and Sniadach v. Family Finance Corporation, 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349, which greatly expanded the requirements of due process of law in creditor proceedings, the constitutionality of Connecticut’s mechanic’s lien statutes was raised before this court. See Roundhouse Construction Corporation v. Telesco Masons Supplies Co., 168 Conn. 371, 374, 362 A.2d 778, cert. denied, 429 U.S. 889, 97 S. Ct. 246, 50 L. Ed. 2d 172. In Roundhouse, this court, after reviewing the history of mechanic’s liens in Connecticut, dating back to the Public Acts of 1836, chapter 76, concluded (p. 385) “that the absence of a statutory provision for a hearing for the . . . [alleged debtors] ‘at a meaningful time and in a meaningful manner’; Armstrong v. Manzo, 380 U.S. 545, 552, 85 S. Ct. 1187,14 L. Ed. 2d 62; has deprived them of their constitutional rights to due process of law as those rights have been recently enunciated by the United States Supreme Court.”
The General Assembly, responding to the Roundhouse decision, enacted remedial legislation. See 18 Conn. H. Proe., pt. 10, 1975 Sess., p. 4922. Although Public Acts 1975, No. 75-418, significantly reformed a number of our mechanic’s lien statutes, we are concerned only with § 8 of the act,
Section 8 (b) of the act, however, is entirely new and “allows for an application for a hearing to determine whether the lien for which a bond was substituted, should be declared invalid or reduced in amount.” 18 Conn. H. Proc., pt. 10, 1975 Sess., p. 4925. In relevant part, it provides: “Whenever a bond has been substituted for any lien pursuant to this section: (1) The principal or surety on such bond . . . may make application ... to the superior court or the court of common pleas . . . or to any judge thereof, that a hearing be held to determine whether the lien for which such bond was substituted should be declared invalid or reduced in amount.” (Emphasis added.) Public Acts 1975, No. 75-418, §8 (b).
We do not agree. In our view, the phrase “any lien pursuant to this section” refers to mechanic’s liens as distinguished from other types of liens on real estate. Every presumption must be indulged which favors the jurisdiction of the court. Brewster v. Brewster, 152 Conn. 228, 233, 206 A.2d 106. A reading of the pertinent statutes reveals that the legislative intent in enacting both § 8 (a) and its predecessor § 49-37 was to enable the owner or other person having an interest in the property to obtain release of the mechanic’s lien so long as the lienor’s rights are not thereby prejudiced. The lienor’s rights are considered adequately protected if the landowner demonstrates a good-faith intention to contest the lien and substitutes a bond with surety in its place. Thus, while the statutory provisions are designed to facilitate the transfer of the property by dissolution of the lien, they are also intended to ensure the continued existence of assets out of which the lienor may satisfy his claim if he should later prevail and obtain a judgment on the merits of the mechanic’s lien. See, generally, 53 Am. Jur. 2d, Mechanics’ Liens, § 19.
On the facts of this ease, all objectives of the statutes were met. After the defendant placed a lien against the property of the B. C. Development
The liability of a principal and a surety on a bond continues to depend upon the validity of the underlying lien. Biller v. Harris, 147 Conn. 351, 355, 161 A.2d 187; Hartlin v. Cody, 144 Conn. 499, 508, 134 A.2d 245. This is true whether the lien was dissolved in strict conformance with the statutes or whether it was released by private agreement. The fact that the court was not involved in the proceedings does not bar a review of the lien which the defendant continues to assert as the underlying basis for the substituted bond.
A contrary rule would give the lienor greater rights than those prescribed by the statute, and would deny the right of a principal or surety to challenge the validity of the underlying lien as authorized by the statute. It would also have the effect of denying a due process hearing as indicated by our holding in Roundhouse, supra, 374. The construction urged by the defendant would discourage the substitution of bonds by agreement because of a fear of waiving defenses to the underlying lien. Moreover, it would lead to public mischief by compelling judicial intervention when not needed nor desired. No such bizarre results can be ascribed to the legislature in view of the objectives of the statutes and the right to a due process hearing enunciated in Roundhouse.
There is no error.
In this opinion the other judges concurred.
Public Acts 1975, No. 75-418, “An act concerning mechanic’s liens,” provides in relevant part: “See. 8. Section 49-37 of the general statutes is repealed and the following is substituted in lieu thereof: (a) Whenever any mechanic’s lien has been placed upon any real estate pursuant to sections 49-33, 49-34 and 49-35 of the general statutes, the owner of such real estate, or any person interested therein, may make an application to any judge of the superior court or of the court of common pleas that such lien be dissolved upon the substitution of a bond with surety, and such judge shall order reasonable notice to be given to the lienor of such application. ... If such judge is satisfied that the applicant in good faith intends to contest such lien, he shall, if the applicant offers a bond, with sufficient surety, conditioned to pay to the lienor or his assigns such amount as a court of competent jurisdiction may adjudge to have been secured by such lien, with interest and costs, order such lien to be dissolved and such bond substituted therefor and shall return such application, notice, order and bond to the clerk of the superior court for the county wherein such lien is recorded; and, if the applicant, within ten days from such return, causes a copy of such order, certified by such clerk, to be recorded in the town clerk’s office where such lien is recorded, such lien shall be dissolved. . . . (b) Whenever a bond has been substituted for any lien pursuant