Prince v. Neal-Millard Co.

53 S.E. 761, 124 Ga. 884, 1906 Ga. LEXIS 652
CourtSupreme Court of Georgia
DecidedFebruary 19, 1906
StatusPublished
Cited by35 cases

This text of 53 S.E. 761 (Prince v. Neal-Millard Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Prince v. Neal-Millard Co., 53 S.E. 761, 124 Ga. 884, 1906 Ga. LEXIS 652 (Ga. 1906).

Opinion

LuMPKiN, J.

(After stating the facts.) In the civil law certain creditors were declared to be privileged. Among these were persons who had contributed to the preservation, repair, enlargement, or creation of an improvement on land. Domat says: “Architects and other undertakers, workmen, and artificers, who bestow their labor on buildings or other works, and who furnish materials, and in general all those who employ their time, their labor, their care, or furnish any materials, whether it be to make a thing, or-to repair it,, or to preserve it, have the same privilege for their salaries, and for-what thejr furnish, as those who have advanced money for these kinds of works, and which the seller has for the price of the thing sold.” Domat’s Civil Law (Cushing’s ed.), 683, §1744. At common law there was no lien in favor of a mechanic or materialman doing work or furnishing materials for the improvement of land or buildings. The earlier statutes passed for this purpose generally ■gave a lien to persons having direct contractual relations with the-owner, but not to persons furnishing materials or performing labor for the contractor. Other statutes were in time passed extending-the right to assert a lien to persons who did not have a direct contractual relation with the owner, but furnished labor or materials for the improvement of the real estate through contracts with the contractor. As stated by Judge Lurton in Jones v. Great Southern etc. Co., 86 Fed. 379, “This was accomplished in two ways: (1) By giving to creditors of the contractor a derivative lien, whereby they were substituted to the rights of the contractor as they existed when notice was given of the claim. Such statutes were in the nature of mere garnishee or attachment proceedings, and were subject to nb criticism as doing injustice to the owner. Pa3fment in advance was a defense under such statutes, for the contractor’s creditors could stand in no better situation than he did. So, if he had, no lien, his creditors had none, as their utmost right was to be substituted to. [887]*887the contractor’s place. (2) Or by statutes which gave to those who furnished such labor or materials to the contractor a direct or independent lien upon the building and land of the owner.” On account of the fact that two leading commercial States respectively adopted substantially these two lines of legislation, which others have followed, resulting in decisions apparently conflicting, the two methods have frequently been referred to as the “New York system” and the “Pennsylvania system.” The one gives a lien to the subcontractor by way of subrogation, made effectual by notice; the other gives a direct lien to the materialman or laborer, which has sometimes been said to result from an agency created by statute, and sometimes from an implied agency vested in the original contractor. Another statement is that the contract is made in view of the law which, if valid, enters into it, rather than that there is the creation, strictly speaking, of an agency, unless the statute so declares. The Supreme Court of Missouri decided That the statute of that State created no agency, and that the owner was not bound by the price agreed upon between the contractor and materialman, but only for the market value of the materials. Deardorff v. Everhartt, 74 Mo. 37. See, on this subject, Merrigan v. English, 9 Mont. 113, 5 L. R. A. 837, 838; Hunter v. Truckee Lodge, 14 Nev. (on rehearing) 33-46; 20 Am. & Eng. Euc. L. (2d ed.) 350. Phillips on Mechanic’s Liens (3d ed.), §57, after referring to the two systems (of which he says the Pennsylvania system was the first), adds: “The plan of conferring on them a right of lien for all sums which may be due them, irrespective of payments already made by the owner to the' ' contractor, has not met with much favor in later legislation. The tendency has been rather to confine their right to what may be owing by the owner at the time of notice to him of their claims.”

In considering the general nature of a lien given to mechanics and materialmen furnishing labor or material to the contractor under the law of Tennessee, though not discussing the constitutionality of the law, it was said in Central Trust Co. v. Condon, 31 U. S. App. 387, 67 Fed. 84: “A subcontractor’s lien under the statute is not dependent on the principal contractor’s having perfected his lien. Green v. Williams, 92 Tenn. 220, 21 S. W. 520. It is independent of and superior to his lien, and is only limited by the-amount due to the principal contractor at the time of the service of notice by the subcontractor on the railroad company.” In [888]*888Central Trust Co. v. Richmond Co., 31 U. S. App. 675-688, 68 Fed. 90, the ease dealt with was one arising under a statute of Kentucky; and it was said that “The clear purpose of the Kentucky statute was to make the liens of the contractor and subcontractor independent, direct liens, the latter limited only by the amoirnt of the original contract price. The lien of the subcontractor does not spring out of the lien of the contractor, and is not derived therefrom or subordinate thereto.” Though Pennsylvania is treated as the parent of the direct lien system, Judge Lurton (in the decision above- referred to) declares that “the state of the decisions in Pennsylvania is quite peculiar.” 86 Fed. 377-8. Thus in Waters v. Wolf, 162 Pa. St. 153, a contractor agreed neither to have a lien nor to create one in favor of others. A subcontractor who had not consented to the stipulation asserted a lien. The court held that the act of 1891, which provided that the owner should make no contract with the contractor which would operate to defeat the rights of subcontractors and materialmen to file liens, and that they should have a lien notwithstanding any stipulation to the contrary between the owner and the contractor, was unconstitutional as interfering with the right of “acquiring, possessing, and protecting property.” On the subject of stipulations against liens and the conflicting decisions as to them, see 20 Am. & Eng. Enc. Law (2d ed.), 363, and notes.

In general, direct lien laws have been held constitutional, although certain extreme laws or provisions in laws seeking to protect mechanics and materialmen have been held unconstitutional. Boisot on Mech. Liens (3d ed.), §§22-24; Phillips on Mech. Liens (3d ed.), §§30, 33a; Hightower v. Bailey, 108 Ky. 198, 49 L. R. A. 255; Smith v. Newbauer, 114 Ind. 95, 33 L. R. A. 685. The two conflicting views as to the constitutionality of an act which gave to subcontractors, laborers, and those who furnished machinery or material to the contractor an independent lien will be clearly seen by comparing Overton on Law of Liens, 578, §553; John Spry Lumber Co. v. Sault Savings Bank Co., 77 Mich. 199; Palmer v. Tingle, 55 Ohio St. 423; and, on the other hand, the exhaustive opinion in Jones v. Great Southern Hotel Co., 86 Fed. 370. For an instance of extreme provisions held unconstitutional, see Randolph v. Builders’ & Painters’ Supply Co., 106 Ala. 501, 17 So. 721. Two provisions of that act were specially attacked: first, that persons declared to be entitled to a lien should also have a lien for attorney’s [889]*889fees; and second, a declaration that the fact that a person furnishing materials was not notified in writing not to furnish such materials, by the person in whom the title was vested at the time such materials were furnished, should be prima facie evidence that they were furnished by and with the consent of the owner. This was held to be an unconstitutional interference with property, under the guise of fixing a rule of evidence.

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Bluebook (online)
53 S.E. 761, 124 Ga. 884, 1906 Ga. LEXIS 652, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prince-v-neal-millard-co-ga-1906.