Board of Education v. Salt Lake Pressed Brick Co.

44 P. 709, 13 Utah 211, 44 P.R. 709, 1896 Utah LEXIS 26

• Court: Utah Supreme Court
• Decided: March 26, 1896
• Docket: No. 640
• Status: Published

Opinion

Zane, C. J.:

It appears, from the evidence in this record, that the defendant, Francis M. Wright, on the 1st day of August, 1892, made a written contract to erect for the plaintiff a public school building for' $46,500, of which $7,026.67 remained unpaid upon its completion. To this remainder the Salt Lake Pressed Brick Company, the Utah Stove and Hardware Company, Bothwell & McConaughy, and other defendants, who bad furnished materials to Wright, which had been used in the erection of the building, or had performed labor for him thereon, respectively made claim. Under these circumstances, the plaintiff filed its interpleader against the defendants, and deposited the amount in dispute with the clerk, and asked the court to require the defendants making the claim to litigate their rights among themselves. To the plaintiff’s complaint, various defendants filed answers and cross complaints. On the various issues formed by the pleadings, the court heard evidence, and decreed that the costs should be paid, in the first instance, from the fund in the hands of the clerk; that Mason & Co. should be paid $625, and the remainder should be paid to Bothwell & McCon-aughy. From this decree, the Salt Lake Pressed Brick Company and the Utah Stove and Hardware Company have appealed.

The evidence in the record sufficiently establishes the respective claims of the appellants as against the contractor, Wright, and that the claims of the appellants were for materials and labor furnished in the erection of the schoolhouse- mentioned, and that the claim of Bothwell & .McConaughy was for labor and materials, and for money advanced and paid by them for materials and labor upon the order of Wright. We are now called upon to determine the relative rights of the appellants and Bothwell & McConaughy with respect to the fund in dispute. The appellants insist that they acquired a lien on the fund under an act of the legislature to secure liens to mechanics and others. Laws 1890, p. 24. Section 1 of this act provides: “That whoever shall do work or furnish materials by contract, express or implied, with the owner of land, * * * for the construction * * * of any building * * * upon such land, * * * shall have a lien upon such land, building, * * * or other improvement, for the amount and value of the work done, or materials so furnished, to the extent of the interest or claim of such owner thereto, at the time of the commencement to do such work, or to furnish such materials.” Other- sections of the act give a prior lien upon the land and buildings or improvements for work done or materials furnished under contract with the principal contractor, or, in other words, it gives such lien to subcontractors. The purpose of this law was to secure persons furnishing materials or labor in the erection of buildings or making improvements, by giving them a lien on the land, building, and improvements thereon; and the act provides a remedy by action to enforce the lien. When the property is not subject to such lien there can be no action to enforce it. The appellants claim that, by serving the notice of intention to hold and claim a lien upon the land and improvements, and by filing it in the office of the recorder of the county, in pursuance of section 12 of the act, they acquired a lien on the fund in question, under section 15. Upon serving the notice and filing the statement mentioned above, section 15 makes it the duty of the owner to retain in his hands the money due the subcontractor, and declares that it shall be deemed enjoined until the right of the party so claiming, if the same be contested, shall have been legally adjudged, or until such lien shall have been ended by expiration of time, or shall have been otherwise 'satisfied. Unless the notice of intention to claim the lien, and a statement containing a description of the property upon which it is claimed, and a statement of indebtedness as required, are first filed in the recorder’s office, the owner is not required to retain in his hands the money due the contractor; and when he is required to hold it until the claim, if contested, is legally adjusted, or the lien is lost by expiration of time, or until otherwise satisfied, this duty to retain money due the contractor depends upon the right to the lien upon the property. It is not -an independent remedy.

This brings us to the question, had the parties a right to a lien upon this house and land devoted to a public use? If such is the law, such corporations might be deprived of the means essential to the purpose of their creation. While the allowance and enforcement of the lien claimed might not deprive the school board of all the means essential to the education of the children of the city, it might result in much, embarrassment to the corporation and to the cause of education. We hold that a mechanic’s lien cannot attach to the house and grounds upon which it is claimed, because they were required for public purposes. Board v. Neidenberger, 78 Ill. 58. The ¡¡>7,020.67 was due from the board of education to the contractor, Wright; but whether the appellants and Both-well and McConaughy, having furnished material and labor unde a contract with Wright, or having advanced money upon his request, to pay for such labor and materials, might be substituted, under the circumstances of this case, to the rights of the contractor, or, in other words, whether in equity the doctrine of subrogation may be apjffied to their claims, and the court might distribute this fund among them pro rata, it is not necessary for us to decide, in view of the effect we are disposed to give to the assignment made by the contractor to Both-wcll & McConaughy, bearing date August 3, 1892. The referee found that, at the time of the execution of the contract to erect the building, the contractor, Wright, executed a bond to the board of education in the sum of $23,250, binding him to perform the building contract, and that Both well & McConaughy were sureties thereon; and further, “that as a consideration for signing said bond, and to protect the said Botbwell & McConaughy against loss as sureties on said bond, and to secure the payment to them for lumber and materials to be furnished the said F. M. Wright for said school building, and to secure a repayment to them of any and all sums of money necessary to be advanced the said F. M. Wright by said Botbwell & McConaugby, by reason of having become sureties on said bond, the said F. M. Wright, on or about August 3, 1892, assigned and transferred to said Botbwell & McConaugby, by a written assignment, all moneys to become due him, under bis contract with the said board of education, for the erection of the Nineteenth ward schoolhouse on said premises; that said written assignment was filed with the board of education on the 14th day of January, 1893, and was, on or about the 9th day of March, 1893, duly accepted by said board of education, and thereafter all warrants for money were drawn to the order of the said Botbwell & McConaugby by said board of education.” The referee further found that Bothwell & McConaugby, in pursuance of a contract with Wright, made on August 2, 1892, furnished to him materials that were used in the construction of the schoolhouse, and for which they have not been paid, amounting to $7,001.95, and that the prices charged therefor were reasonable; that the money paid out by Both-well & McConaugby, as Wright’s bondsmen, in completing the building, and payments guarantied for such labor and materials, amount to the sum of $3,048.50, in addition to the $7,001.95, and above all amounts paid to them. Upon an examination of the evidence, wé are disposed to find that the above findings are supported by the weight of the evidence.

The appellants' insist that the assignment upon which Bothwell & McConaugby claim their right to the fund in dispute was ineffectual and invalid. The consideration upon which it was made consisted of the execution of the bond for the faithful performance of the building contract by Wright, the payment to Bothwell & McConaughy for lumber they might sell to Wright, and the repayment to them of all sums necessary to advance to- Wright to enable him to complete the building according to his contract. It is apparent that these considerations are valuable and lawful. At the time of the assignment, Wright had not commenced the building, the payment for which was to become due from time to time as its construction progressed, and which he assigned to Both-well & McConaughy. The claims depended upon the performance of a contract. It is true that the demands assigned did not exist at the time of the assignment. The question is, did the assignment pass the claims as they arose to Bothwell & McConaughy? In equity we think it did. We hold that such an assignment is valid in equity. Field v. City of New York, 6 N. Y. 179; Norton v. Whitehead, 84 Cal. 263, 24 Pac. 154; Hendricks v. Robinson, 2 Johns. Ch. 283. In the case of Field v. City of New York, one Bell had assigned all bills that might thereafter become due to him, for job printing or stationery, to the amount of $1,500. In its opinion the court said: “There was, indeed, no present, actual, potential existence of the thing to which the assignment or grant related, and therefore it could not and did not operate, eo instanti, to pass the claim which was expected thereafter to accrue to Bell against the corporation; but it did, nevertheless, create an equity, which would seize upon those claims as they should arise, and would continue so to operate until the object of the agreement was accomplished. On this principle, an assignment of freight to be earned in future will be held and enforced against the party from whom it becomes due. * * * Whatever doubts may have existed heretofore on this subject, the better opinion, I think, now is that courts of equity will support assignments, not only of choses in action, but of contingent interests and expectations, and of things which have no present actual existence, but rest in possibility only, provided the agreements are fairly entered into, and it would not be against public policy to uphold them.”

The referee found that the parties stipulated that the referee’s fees, reporter’s fees, and the clerk’s costs should be paid in the first instánce out of the fund, and recovered as costs by the prevailing party, and stated, as a conclusion of law, that Bothwell & McConaughy, who recovered the fund, and were entitled to recover their costs against the parties who had answered and filed cross complaints setting up their claims to the fund, and who had offered evidence upon the issues on the trial4 and against whom the issues were decided by the court, should pay the costs finally, and the decree was entered accordingly. To that finding, conclusion of law, and decree the appellants excepted, and assigned them as error. The fund — $7,026.67—was not sufficient to pay the claim of Bothwell & McConaughy. They were entitled to the entire fund, and if the costs were paid out of it, they would be decreed to pay the costs, though successful, and the other litigants, though, they were defeated, would mot. Tn other words, though they lost their case, they would, in effect, recover their costs against the parties whom the court decided in favor of. Other errors are assigned upon this record which we are of opinion should also be denied. The judgment of the court below is affirmed.

Bartch and Miner, JJ., concur,