Epeneter v. Montgomery County

Kinne, J. 3 I. As to the claim of Welsháns & Gibson, appellee contends that these defendants have served no notice of appeal. This contention is well founded. They presented their claim to the court below, by way of a cross-petition. The only notice of appeal is given by the plaintiff. While it is true that counsel appearing for the plaintiff, also appeared in the lower court for said cross-petitioners, that fact does not relieve said cross-petitioners from serving notice of, an appeal from the decree of the court below in case they desired to question its correctness in this court. Not having done so, they are concluded by that decree, and their case cannot be considered. 4 II. It is contended by appellants that Refregier’s claim is not valid, because not in form in compliance with the statute. In that part of the affidavit making the claim, this language is used: “That affiant hereby' claims a mechanic’s lien against said Montgomery county, Iowa, and the funds set apart for the erection of said court house, for the sum of two thousand three hundred and fifty dollars, with interest thereon from the sixth day of July, 1891.” It is insisted that the statute gives no right to a lien, either upon the property or the fund, and, having asked for that to which he was not entitled under the law, the claim cannot be recognized as being in compliance with the statute. The requirements of the statute are that, within thirty days from the time the last material was furnished or the last labor done, the claimant must file with the proper officer, an itemized and sworn statement of his demand. Acts Twentieth General Assembly, Chapter 179. This he did. More was not required of him, and he was not called upon to claim a lien as against either the property or the fund; and, by so doing, he effected [167] nothing. Having complied with the statute, the fact that he claimed a lien which the statute did not give, is not fatal to.his recovery. When the proper statement was filed in time, and duly verified, the statute fixed the extent of his remedy. The case is unlike McGillivray v. District Township, 96 Iowa, 629 (65 N. W. Rep. 974), and cases there cited, where the absolute requirements of the law were not complied with. In form, the claim was sufficient. 5 III. In the title of chapter 179, Acts Twentieth General Assembly, and within brackets, appear these words: “Additional to ch. 100 of the Acts of the 16th General Assembly.” Chapter 100, thus referred to, relates to mechanics’ liens. Appellee contends'that the enrolled bill does not contain the words quoted, and that we should not consider them; that the act is in no way additional to, or amendatory of the mechanics’ lien statutes, but is an independent statute, giving relief only to sub-contractors, and should be construed without regard to said mechanic’s lien laws. In the view we take of the case, it is not material to now determine whether or not this statute is to be construed with reference to the mechanic’s lien statutes or not. If, as appellants contend, it is thus to be construed, we do not think appellants can recover in this case. The fact that in a few instances, the county paid the contractor a sum in advance of the time when the estimate was, in fact, made, is no ground for holding the county liable to plaintiff, as in every case such sum so paid was deducted from the ninety per cent, due, as shown by the estimate next following, and it is impossible to discover how this worked any prejudice to plaintiff, as the total sums, in fact paid, were all due the contractor by the very terms of the contract. Now, unless the fact that the defendant county had knowledge of the furnishing'of labor and material [168] by plaintiff and Ms assignors, which was not paid for, would preclude said defendant from paying in accordance with its contract, the payment of these sums in advance of the actual estimate would furnish no ground of complaint to plaintiff and his assignors. The county never paid to the contractor more than the ninety per cent, of the estimate. In the completion of the building, it expended a sum greater than the amount which would still have been due the contractors (including the ten per cent, withheld on estimates made), had they completed the entire work in accordance with the contract. This, under the terms of the contract, heretofore referred to, it had a clear right to do. So that, instead of there being any sum due the contractor, he is indebted to the county. The act under which recovery is sought in this case clearly contemplates that the county shall not be required to pay in any event a sum in excess of the contract price. It provides: “Shall have a valid claim against the public corporation constructing such building, * * * for the value of such services and material, in an amount not in excess of the contract price to be paid for the building. * * * Nor shall any such corporation be required to pay any such claim at any time before, or in any manner different, from that .provided in the principal contract.’’ 6 In nearly all of the cases in this state, decided under the general mechanic’s lien law, wherein the the owner has been held liable to a sub-contractor who filed his lien and served' the statutory notice within the time required, such liability has been based upon one or both of the following grounds: First, that the contract between the owner of the building and the principal contractor gave the owner the right to pay the claims of sub-contractors, and deduct the sum so paid from the amount due the coiitractor; second, that the contract [169] between the owner and the principal contractor did not call for payments from the owner to the principal contractor at certain fixed times, and in certain specified amounts. The doctrine that one has a right to pay in accordance with the terms of his contract was recognized as early as the case of Kilbourne v. Jennings, 38 Iowa, 533. And see Stewart v. Wright, 52 Iowa, 355 (3 N. W. Rep. 144). In that case it is said: “The single question' to be determined upon the demurrer was whether the payments, made in good faith, without notice, and in strict accord with the contract, protect the defendant from again paying to the sub-contractors the amounts of their respective liens. This question was undoubtedly correctly determined by the court below. Any other rule, followed to its logical conclusion, would effectually prevent a person from complying with a contract which all the world must admit he has a right to make and perform. * * * Counsel for appellant argue this case upon the theory that the sub-contractor is not bound to take notice of the terms of the contract between the owner and the principal contractor. The argument seems to be that the owner must act at his peril, and cannot make payments according to the terms of his contract, without making inquiry as to'whether there may not be sub-contractors who may thereafter file liens and give him notice. But this last clause of section 7, above quoted, charges sub-contractors with notice of the terms of the contract. ” In the same case it is said that the statute “recognizes contracts as binding, and does not alter their terms, much less provide that a man may not pay his contractor in advance, if he so agrees.” This case is followed in Roland v. Railway Co., 61 Iowa, 380 (16 N. W. Rep. 355). In Lumber Co. v. Osborn, 72 Iowa, 474 (34 N. W. Rep. 215), it is said: “It will be observed that the payments were made in strict accord with the contract, [170] and prior to the filing of the lien, or service on the defendant of a notice that a lien was claimed. This being so, the defendant is not liable to any greater extent than the amount for which judgment was rendered, unless he had knowledge, or was bound to know that the plaintiff had furnished materials which were used in the construction of the building.” The case then discusses the question of the defendant’s knowledge. It appeared that he knew that his contractor obtained the lumber of others, but did not know from whom; and it was held that he was not bound' to institute an inquiry as to who had furnished the lumber. It is then said: “The defendant was bound to pay in accordance with the contract. If he failed to do so, he would have become liable for all damages sustained thereby by the contractors, who could possibly have abandoned the job for this reason earlier than they did. It is exceedingly doubtful if the defendant could have excused himself from paying in accordance with the contract, by claiming that the lumber was not paid for, and that he might become liable to sub-contractors, when there was no provision in the contract authorizing him to protect himself against mechanics’ liens.” In Parker v. Scott, 82 Iowa, 271 (47 N. W. Rep. 1073), in speaking of the owner, it is said: “He was bound to make monthly payments, and had the right to pay according to the terms of his contract.” In Merritt v. Hopkins, 96 Iowa, 652 (65 N. W. Rep. 1015), the right to pay in accordance with the terms of the contract is recognized. The court says: “It is to be remembered that this case does not come within that class of cases in which it was held that the owner may pay the contractor according to the strict terms of his contract.” The following are of the other class of cases where we have held the owner liable: Winter v. Hudson, 54 Iowa, 336 (6 N. W. Rep. 541); Gilchrist v. Anderson, 59 Iowa, 275 (13 [171] N. W. Rep. 290); Fay v. Orison, 60 Iowa, 136 (14 N. W. Rep. 213); Andrews v. Burdick, 62 Iowa, 718 (16 N. W. Rep. 275); Martin v. Morgan, 64 Iowa, 272 (20 N. W. Rep. 184); Othmer v. Clifton, 69 Iowa, 656 (29 N. W. Rep. 767); Lumber Co. v. Woodside, 71 Iowa, 360 (32 N. W. Rep. 381); Hug v. Hintrager, 80 Iowa, 364 (45 N. W. Rep. 1035). Now, the doctrine that a sub-contractor is bound by the terms of the contract between his principal and the owner, has always been held in this state. Kilbourne v. Jennings, 38 Iowa, 533; Jones & M. L. Co. v. Murphy, 64 Iowa, 165 (19 N. W. Rep. 898); Martin v. Morgan, 64 Iowa, 270 (20 N. W. Rep. 184); Stewart v. Wright, 52 Iowa, 335 (3 N. W. Rep. 144); Blanding v. Railroad Co., 88 Iowa, 233 (55 N. W. Rep. 81). [171] Prom the holding in these cases, it is clear that the obligation of a sub-contractor to take nbtice of the terms and conditions of the contract between his principal and the owner, makes said contract bind-upon the sub-contractor, as to its terms and times of payment. Such being the fact, if, notwithstanding such obligation, the sub-contractor may recover from the owner who has paid the contractor in accordance with the terms of the contract, and prior to the time said sub-contractor might file his claim for a lien, and serve his notice on the owner, then the sub-contractor is, in effect, avoiding the obligation imposed on him by the principal contract. We do not think such should be the construction of the law. If the sub-contractor is bound by the terms of the original contract, if, when he enters into contractual relations with the principal contractor, he must take notice of, and be governed by, the provisions of his principal’s contract with the owner, of which there can be no doubt, then such sub-contractor must be held to assent to the payment to the contractor, in accordance with the terms of the contract, and he cannot, thereafter, be heard to say that, as to him, such [172] payments were not properly made; and the fact that in such a case the owner may know that sub-contractors have furnished labor or material for the building, which has not been paid for, constitutes no reason for his withholding payments from the principal contractor, which are due by the terms of the contract, in the absence of a provision therein, permitting such owner to pay sub-contractors out of the funds due the principal contractor. In other words, we hold that, the owner may make such a contract as he sees fit, so long as it is legal, and may make any provisions as to the time and manner of payment he chooses, and such contract he has the absolute right to comply with, in all respects, regardless of his knowledge of sub-contractors, and that they have furnished labor or material which has gone into said building, and has not been paid for, unless he has, by the terms of his contract, reserved the right to discharge the claims of sub-contractors from the fund which would otherwise be due to the principal contractor. If this be not so, then the right to contract, without let or hindrance, so long as the thing contracted to be done is legal, is a barren right, — is a right to be exercised only subject to the will of the legislature, which may ingraft upon the contract of parties, obligations to third parties (sub-contractors), which said contracting parties never dreamed of. In our judgment, the legislature has no such power of interference with the right of private contract; and it cannot thus create obligations against one party, and in favor of another, in plain violation of the contract. This view, we think, is the proper and just one as to the meaning and effect of the mechanic’s lien law when applied to a case where the facts are like those in the record before us. We are aware that this is a step in advance of former holdings, where the question of the knowledge of the owner [173] as to sub-contractors and their claims has been deemed material. As we have said, such knowledge is immaterial when the contract provides- as to the times payments shall be made thereunder, and they are so made, and there is no provision in the contract for the owners using money due the contractor in discharging his obligations to the sub-contractors. We therefore hold that the defendant county had the right to pay the contractors in accordance with the terms of the contract, regardless of sub-contractors or their claims. This holding is also in accord with the provision of the section heretofore set out from the chapter giving a remedy to sub-contractors, as against public corporations, for labor done or material furnished for buildings erected by such corporation. [173] IY. Claim is made that the county, in its contract with Richards & Co. recognized the fact that there would be sub-contractors, and the following provision is relied upon: “The remaining percentage, together with all other sums due on this contract on the completion and acceptance of the entire contract, and as soon thereafter as the party of the second part is assured against the existence of any mechanic’s lien on said buildings.” It appears from the amended abstract, which is not denied, that all that part of the contract relating to mechanics’ liens was in print; that a printed form was used; and appellee contends such provisions are not to be given force and effect, because inconsistent with the written provisions of the contract, and because no lien is allowed by statute. We need not discuss that claim. The contract must be construed in all its parts, and, when this is done, we do not think there is any ground for claiming that, by this provision, any duty was enjoined upon the county to hold that ten per cent, for the benefit of sub-contractors. The contract also provided [174] that, in case the contractors should fail to complete the building, the county should have the right to do so at the contractor’s^ expense, and “in such a case the expense of all materials and the cost of all work so provided by said party of the second part, 'shall be deducted from any sums due on said contract, and, in case of any deficiency, the parties of the first part shall, on demand, pay the same to said party of the second part.” Under this authority, the county proceeded to complete the building, and, in so doing, expended more than was due said contractors, and more than would have been due them had they themselves completed the work according to their contract. This provision of the ' contract was as binding upon these sub-contractors as was the provision heretofore considered. They were bound to know - when they entered into contract relations with Richards & Co., touching the work, that such a contingency might happen, and, if it did, that the county had a right to consume the ten per cent, reserved in the completion of said building, if necessary. These provisions also related to the matter of payment under the contract, in certain contingencies. Viewing the entire contract, we do not discover that the county was under any obligations to sub-contractors to set apart this fund of ten per cent, for their benefit, and then go on and complete the building at a cost including what the county had already properly paid, exceeding the entire contract price, and thereby be compelled to pay an amount in excess of the contract price. Acts Twentieth General Assembly, Chapter 179. The county made no agreement in its contract to pay sub-contractors, and charge the sums so paid, up to Richards & Co.; nor did it reserve the right so to do. [174] V. Claim is made, that the county must have had notice that there were sub-contractors as early as [175] February 9, 1891, as at that date Richards & Co. filed a bond with the treasurer of the county to procure the release of .the claim filed by the terra cotta company, and to protect all other persons who might thereafter be entitled to file claims against the county for labor done, or materials furnished for said building, under Richards & Co. But we have held that the county had a right to pay in accordance with the terms of the contract, and to complete the building, and charge the costs thereof against any sums due Richards & Co., regardless of the claims of sub-contractors, which may have been known to the county. We have considered every question raised, which seems to us material, in view of the conclusions we have reached, and are content with the decree entered by the district court; and it is affirmed.