Albright v. Smith

Kellam, J. The former opinion of this court may be found in 2 S. D. 577, 51 N. W. Rep. 590, where the questions then considered as controlling in the case were discussed at length. A re-argument was allowed principally upon the ground, as urged by appellants, that this court had failed to apprehend and give the proper effect to the various amendments by successive legislatures, by which the original law, adopted from Iowa, and appearing as chapter 31 of the Code of Civil Procedure, has become the present chapter of possibly incongruous sections upon the subject of mechanics’ liens. Having patiently reviewed the whole ground as well as we were able, with the assistance of elaborate briefs on both sides, we are satisfied that our former decision of this case was right. The contention between the parties here is as to the meaning and effect of section 5470, Comp. Laws, considered with reference to and in the light of its history, and the bearing upon it of other sections of the law. The original section was section 656 of the Code of Civil Procedure, and, as imported from Iowa, provided that the subcontractor might give notice — 633 — to tbe owner, before or wben be furnished tbe labor or material, of bis intention to do so; afterwards and witbin 30 days, make a settlement with tbe contractor tberefor, and file a statement thereof with tbe clerk, giving a copy of the same to tbe owner, etc.; and this would entitle him to a lien for tbe amount due. Section 5472, a part of tbe same original law, was designed to save tbe lien in cases where tbe subcontractor bad neglected to give tbe notice before or at tbe time of furnishing tbe material or doing tbe labor. It provided that in such case be might, at any time witbin six months after such material was furnished or labor done, make a verified statement of tbe same, give notice to tbe owner, and file such statement with tbe clerk, and be should have a lien, but only to tbe extent of tbe balance due from tbe owner to tbe contractor at the time of tbe service of such notice and statement. Section 5473 provides that if tbe contractor refused to make tbe settlement with tbe 'subcontractor referred to in the said original section 656, Code Civil Proc., tbe subcontractor may make bis own just and true verified statement of tbe labor done or material furnished, giving tbe same to tbe owner, and witbin 30 days filing a copy of tbe same. Section 5474 then provides that such certificate of settlement between tbe contractor and subcontractor shall justify tbe owner in withholding from tbe contractor tbe amount thereby appearing to be due tbe subcontractor. In 1881, by chapter 94, tbe legislature amended section 656, tbe original, as before observed, of our present section 5470, Comp. Laws, by striking out tbe provision as to a settlement between tbe contractor and subcontractor and tbe filing of the same, and provided that, witbin 60 days after furnishing tbe material or doing tbe labor, be should file bis own verified statement of tbe amount due him tberefor, and by adding that a failure to file tbe same witbin tbe time prescribed should not defeat tbe lien, except as .against purchasers and incumbrancers in good faith without notice, whose rights accrued after tbe 60 days, and before any claim for lien was filed, and as against tbe own — 634 — ers, “except tbe amount due tbe contractor at tbe time of filing tbe same.” Tbis left tbe law so as to require tbe subcontractor to give notice to tbe owner tbat be was about to do work or furnish material for tbe contractor, and to make and file bis verified statement of tbe work or material so done or furnished within 60 days, and thus establish bis lien therefor, provided, tbat, if he did not file such statement within tbe time prescribed, then his lien should not be good against tbe subsequent purchasers or incumbrancers named, or against tbe owner, except as to tbe amount still due tbe contractor. But, as observed, it struck out all provision for a settlement between subcontractor and contractor, and for notifying the owner, and filing such settlement, and, it would seem, undermined or made inoperative section 659, Code Civil Proc., (section 5473, Comp. Laws;) for it wiped out and extinguished the entire requirement of settlement, noncompliance with which was tbe only condition upon which such section was to have effect. Section 659 (section 5473, Comp. Laws) was only a sequel to tbe settlement feature of tbe original section 656, and it would seem tbat, when such feature of settlement was dropped out of tbe law, all its incidents went with it; tbat, there being no longer any settlement provided for, tbe notice predicated upon, it also became obsolete. But in 1883, by chapter 84, a more radical change was made concerning tbe rights of subcontractors, by striking out of said old section 656 tbe provision as to notice by tbe subcontractor to tbe owner of bis intention to furnish labor or material.- So tbat, so far as tbe subcontractor’s rights, as defined by tbis section, are concerned, no prior or contemporaneous notice is necessary, because tbe provision l-equiring it was deliberately dropped out by tbe amendment of 1883, and no subsequent notice drawn from tbe sendee of a copy of the settlement is required, because tbe entire provision for a settlement upon which such subsequent notice depended, and of which it was an incident, was repealed by tbe amendment of 1881. — 635 — Tbe section, as so amended, is section 5470, Comp. Laws, tbe one we are now considering, and gives tbe subcontractor a lien for tbe amount due bim, if, witbin 60 days after tbe material shall bave been furnished or tbe labor performed, be file in tbe clerk’s office a just and .true account thereof, etc. It further expressly provides that, if be fail to file such account witbin said 60 days, bis lien shall be good only to tbe extent of tbe amount due tbe contractor at tbe time be does file such account, thus making still plainer, if possible, tbe intent of tbe legislature that, if be did so file tbe account witbin tbe time named, be should bave a lien for tbe full amount due bim, without regard to tbe state of tbe account between tbe owner and tbe contractor. In this case it is conceded that tbe respondents, as subcontractors, did file their account witbin tbe 60 days prescribed, and in our opinion no other or different notice was required from them. Appellants cite a number of cases from Iowa construing their lien law, and urge tbe familiar rule that, in adopting tbe Iowa law, we adopted tbe construction which tbe courts of that state bad given it; but this case did not arise under tbe borrowed law, but under a law so amended and changed, as we bave endeavored to show, as to make it a distinctly different law, to which tbe Iowa cases are to such extent inapplicable. Another point raised by tbe appellants, which we feel required to notice briefly, is that respondents as subcontractors ’ were bound to take notice of tbe terms of tbe building contract between tbe owner and tbe contractors, one of which was, as found by tbe referee, that payments should be made thereon as tbe work progressed. But assuming, not only that respondents should be charged with notice of this agreement between tbe owner and tbe contractors, but that they bad actual knowledge of it, and furnished tbe material in question in view of it, we do not perceive bow it could affect tbe questions in this case. Such agreement only fixed tbe time when payments should become due from tbe owner to tbe contractors. Tbe distinctive feature of — 636 — the lien law is, as we construe it, that the subcontractor looks for his security, not to the money earned by the contractor, but to the property itself. It is true that the subcontractor’s rights are subordinate to the terms of the contract between the owner and contractor; that is, he could not furnish and have a lien for brick for the construction of a building which the owner had contracted to have built of wood, nor could he, we think, do labor or furnish material, and have a lien therefor, in excess of what the owner was to pay for the building. Whether the law under consideration does, or whether the legislature could enact a valid law which would make the owner’s property chargeable with the payment of subcontractors’ liens, exceeding in the aggregate the contract cost, are questions not presented in this case. We do not think there is anything in the facts found as to when or how payments become due that would preclude respondents from asserting their lien. Lastily, it is contended that if the statute means what we construe it t(o mean, it is obnoxious to the constitutional objection that it impairs the obligation of the contract between the owner and the contractor. If this question were now presented for the first time for judicial examination and settlement, we confess we might hesitate; but the question has several times been directly presented to different courts. In Laird v. Noonan, (Minn.) 20 N. W. Rep. 354, the question was distinctively discussed. The opinion says: "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.” With this meaning of the law declared, it was held valid. In Bardwell v. Mann, (Minn.) — 637 — 48 N. W. Rep. 1120, tbe same objection was made against the lien laws of 1889. The question was again discussed, with the same result. In Colpetzer v. Trinity Church, (Neb.) 37 N. W. Rep. 931, the court took the same position with reference to the effect and the validity of the lien laws of that state. While that • case involved facts not existing in this, and which appellants argue are sufficient to impair its force as an authority here, still the syllabus, which is by the court, plainly states the general doctrine which the opinion was intended to declare, and in the body of the opinion the court cites with approval Laird v. Noonan, supra. In these several opinions many eases are cited bearing with more or less directness upon the points involved. The other questions discussed upon the reargument were quite fully considered in the opinion written by Judge BenNEtt, and the disposition then made of them is still satisfactory to us. Our former judgment is affirmed, all the judges concurring.