Laird v. Moonan

20 N.W. 354, 32 Minn. 358, 1884 Minn. LEXIS 168
CourtSupreme Court of Minnesota
DecidedJuly 29, 1884
StatusPublished
Cited by39 cases

This text of 20 N.W. 354 (Laird v. Moonan) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laird v. Moonan, 20 N.W. 354, 32 Minn. 358, 1884 Minn. LEXIS 168 (Mich. 1884).

Opinion

Vanderburgh, J.

The constitutional validity of the provisions of the mechanic’s lien law, (Gen. St. 1878, c. 90,) for securing a lien to subcontractors and others furnishing materials or doing work for a contractor or builder in cases arising subsequent to its passage, was recognized by this court in O’Neil v. St. Olaf’s School, 26 Minn. 329, and in Bohn v. McCarthy, 29 Minn. 23. As such liens are incumbrances upon the owner’s title, they can only be created by his consent or authority; and it is upon this ground that such legislation is supported. The statute annexes the lien as an incident to the contract of the owner with the contractor or builder, and such contract is the evidence of the authority of the latter to charge the building and land with liabilities incurred by him in performing his contract. In O’Neil v. St. Olaf’s School, this court say: “The owner consents to this power conclusively and irrevocably, so far as others than the builder are concerned, by making a contract while such is the law.” Donahy v. Clapp, 12 Cush. 440; Phil. Mech. Liens, § 65.

Previous to the statute of 1878, a subcontractor was obliged to protect himself by seeking his indemnity through the amount due from the owner to the builder, by serving notice on him of his account and the amount of his claim. His right to recover was thus made subordinate to the contract with the builder, and the owner was only liable to a subcontractor for the amount remaining due to the original contractor at the time of the service of such notice. The purpose of the amendment of 1878, reducing the statute to its present form, was evidently to extend and more fully protect the rights of subcontractors, laborers, and material-men, and thereby the land, and not the amount due the contractor, becomes the pledge or security for the payment of their claims. As respects the amount which may thus be secured, their rights are not dependent upon or limited by the amount due the contractor from the owner under the original contract, nor by the state of the accounts between them. It is sufficient that the liens are created through the owner’s contract, from which his consent is implied. To avoid the incumbrance of such liens the owner takes the burden (under section 3 of the act) of securing the bond therein provided. Whether the burden of taking such proceedings for his own protection should thus be east on him, or whether sub[361]*361contractors and laborers should be left to proceed against the amount due, as under the former practice, was entirely a question of legislative policy.

And this is sufficient to dispose of the objection that the law unreasonably limits the exercise of the owner’s discretion as to the persons whom he shall contract with; that is to say, to such as can give bonds or are financially responsible for the contracts they may make in the prosecution of the work. It is strictly in'conformity with the policy which allows a lien in any ease. It does not take away or affect the rights of the owner any further than it may be necessary for 4he security of those who are presumed to have added something to the owner’s property equal to the expense incurred. Spofford v. True, 33 Me. 283; Taggard v. Buckmore, 42 Me. 77. It is ordinarily understood, from the nature of the ease, that under building contracts the work is not to be done wholly by the contractor; and it is a sound and just principle that all those who have, by consent of the owner, or in pursuance of contracts with him for that purpose, contributed to increase the value of his property, should have an interest in it until their respective claims for such services have been discharged. Parker v. Bell, 7 Gray, 429.

The same reasons will in great measure apply to a further objection which is urged by appellant, that, under the provisions of section 2, the liability of the owner is not limited to the contract price. It is therein provided that every mechanic or other person, whether journeyman, subcontractor, or laborer, doing or performing any work or furnishing materials for the erection of any building, etc., shall have a lien, etc., “for the value or contract price of such labor and materials,” upon such building, and the land upon which the same is situated, not exceeding the amount designated in that section. But if, in pursuance of section 3, the contractor will enter into a bond with the owner, for the use of all persons who may do work or furnish materials pursuant to his contract with such owner, conditioned for the payment of all just claims for such work or materials as they become due, (which bond is to be in such amount, not less than the price agreed to be paid for the performance of the contract, and with such sureties as shall be approved by the district judge, etc.,) [362]*362and if such bond is duly filed with the register of deeds, and a notice is kept posted as required by that section, then no lien shall attach in favor of the persons mentioned in section 2. Under the language of this section, the contract price is the minimum security which the magistrate is permitted to approve, and he may, and should, whenever in his judgment the ease requires it, exact more. Loveland v. Burnham, 1 Barb. Ch. 65; Leavitt v. Dabney, 40 How. Pr. 277. From the language of these sections, the intention of the legislature is not doubtful. It meant to give a lien, to the class of persons named therein, for the value of their labor or materials furnished under and in performance of the builder’s contract, except on the condition that the statutory bond should be provided for their security. It necessarily follows that, unless such bond is filed, the owner must adjust the terms of his contract, and the mode of payments thereunder, at the risk of additional payments to the lienholders. Doe v. Monson, 33 Me. 430; Hunter v. Truckee Lodge, 14 Nev. 24, 4 ; Lonkey v. Cook, 15 Nev. 58; Phillips, Mech. Liens, § 57; Colter v. Frese, 45 Ind. 96; Sodini v. Winter, 32 Md. 130; White v. Miller, 18 Pa. St. 52; Sheppard v. Steele, 43 N. Y. 52.

In Atwood v. Williams, 40 Me. 409, the laborer’s lien was enforced, though the contractor had been previously paid. That the legislature may impose such a condition and liability upon the land-owner is hardly a debatable question. It is no greater hardship than that subcontractors and laborers should be obliged to protect themselves against irresponsible contractors and employers by requiring security as a condition of rendering service or furnishing material. Speaking on this subject, in White v. Miller, supra, the court say: “As soon as owners of lots cease to be their own builders, they put it in the power of persons employed by them to occasion losses to mechanics and material-men which they ought not to bear, and it was to remedy this mischief that the legislature established the principle that materials and labor are to be considered as having been furnished on the credit of the building, and not of the contractor. The principle is not only a just but convenient one.”

It is clear, we think, that full effect could not be given to the legislative intention if the lienholder’s interest was necessarily limited to [363]*363the amount clue upon the owner’s contract. If the amount has been unduly reduced by payments to the contractor, it is the owner’s own fault.

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Bluebook (online)
20 N.W. 354, 32 Minn. 358, 1884 Minn. LEXIS 168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laird-v-moonan-minn-1884.