Boise-Payette Lumber Co. v. Challis Independent School District No. 1 , 46 Idaho 403 ( 1928 )

The following was prepared as the opinion of the court. It did not receive the approval of a majority, and is filed as a dissenting opinion.

The qualified electors of Independent School District No. 1 of Custer County, at an election therefor, authorized a bond issue in the sum of $45,000 for the construction of a schoolhouse. Funds realized from the bond issue, together with other money available for the same purpose, amounted to $47,858.18. The district acquired a site for $500, paid $250 for building stone and agreed to pay an architect $2,315.85. With $44,792.33 in the treasury, the district entered into a contract with one Taylor to pay him the sum of $34,275 for the construction of the schoolhouse. At the same time the district made and entered into a contract to pay $8,900 for the installation of a heating plant in the schoolhouse. With the letting of the construction and heating contracts, there remained in the treasury of the district, available for other purposes, approximately $1,617.33. According to the findings, ". . . . thereafter on divers days additional contracts were let in connection with" the building "all of which contracts total an amount approximately $2,200 in excess of" the money available. Taylor failed to pay the Boise-Payette Lumber Company for all materials sold him for the construction of the building, and it filed a claim of lien for $1,997.74. The National Park Lumber Company, having sold Taylor certain materials for the construction of the building, also filed a claim of lien for $661.25, the amount remaining unpaid. In actions by these lumber companies to foreclose their liens, the court made findings of fact and conclusions of law on which it entered judgment directing the foreclosure of the two liens in the sum of $430.36, the amount remaining in the building fund, awarding to each lien claimant the proportion of the $430.36 that its claim bore to the total amount of the two claims. Each of the lumber companies and the district have appealed. This opinion relates to the action of the Boise-Payette Company.

While the constitution (sec. 3, art. 8) prohibited the school district from incurring any indebtedness in excess of the income or revenue provided for such purpose without the assent of its qualified electors, the electors had authorized a bond issue with which to realize money for the construction of this schoolhouse, and the total sum agreed to be paid for the construction and heating of the building was well within the amount of money available for those purposes. The district had not exceeded its powers, and the contract with Taylor was valid. The district, no more than an individual, could thereafter so deplete its building fund as to be relieved from the performance of its contract. The fact that "thereafter on divers days additional contracts were let . . . .," the obligations of which, added to that of the prior valid contracts, exceeded the amount the district had available for the construction of the schoolhouse, did not render void the prior contracts that were valid when they were made. Surety it is not the law that one, who has a valid contract with a school district, is required, at his peril, to prevent the district from thereafter exceeding its powers, incurring other obligations, allowing its funds to be lost or otherwise depleted. The constitutional limitation is for the observance of the district as well as those with whom it contracts. The district could not, by depleting its funds, relieve itself from complying with its valid obligation. (Myers v. Independent School Dist., 104 Okl. 51, 230 P. 498;Gentis v. Hunt, 121 Okl. 71, 247 P. 358; Sauer v. SchoolDist., 243 Pa. 294, 90 A. 150.) This holding is not in conflict with Mittry v. Bonneville County, 38 Idaho 306,222 P. 292, because, in that case, the obligation of the contract on which the action was instituted, together with that of another contract executed at the same time "and as a part of the same transaction," exceeded the amount of money then in the fund.

It is contended that a public building cannot be sold under execution and that, therefore, a lien cannot attach to and be enforced against a schoolhouse. Without doubt that is the law in most states. It is the general rule that, in the absence of statute, one cannot have a lien on a public building. (Storey Fawcett v. Nampa Meridian Irr. Dist., 32 Idaho 713,187 P. 946.) An excellent discussion of this rule and an extended citation of authorities is contained in Hutchinson v.Krueger, 34 Okl. 23, Ann. Cas. 1914C, 98, 124 P. 591, 41 L.R.A., N.S., 315. See, also, First National Bank of Idaho v.Malheur County, 30 Or. 420, 45 P. 781, 35 L.R.A. 141; 40 C. J. 957; 18 Rawle C. L. 881, and note in 26 A.L.R. 329. And the foregoing authorities recognize the rule that a lien may be enforced against a public building where the statute specifically provides therefor. In the absence of a constitutional restriction, the legislature has the power to subject a schoolhouse to execution sale. In expressly and positively providing for a lien on schoolhouses, and that "all the provisions of this chapter respecting the securing and enforcing of mechanics' liens shall apply thereto, as far as applicable," the legislature established the public policy of the state with respect to the subject. The lien statute is specific and is expressly directed to a particular subject. Even though it be said to conflict with a general statute, under which it is claimed public property cannot be sold, the lien statute was of later enactment, and it must be held to have been the legislative intent that it control and limit the former. (36 Cyc. 1130; 25 Rawle C. L. 1010, sec. 250; 23 Cal. Jur. 743, sec. 119. See, also,Heaton v. Panhandle Smelting Co., 32 Idaho 146, 179 P. 510; Inre Drainage District, No. 3, 40 Idaho 549, 235 P. 895.) As was said by Chief Justice Baldwin, in National Fireproofing Co. v.Town of Huntington, 81 Conn. 632, 129 Am. St. 228, 71 A. 911, 20 L.R.A., N.S., 261, "The right and the remedy must stand or fall together." It is obvious that a lien on public property is valueless unless the property can be sold to satisfy it. Laborers' and materialmen's liens were allowed on the waterworks of a city in Chamberlain v. City of Lewiston,23 Idaho 154, 129 P. 1069. A materialman's lien was allowed on a schoolhouse in Gem State Lumber Co. v. School Dist. No. 8,44 Idaho 359, 256 P. 949. In neither of these cases was this question raised. It was held by this court in Storey v. Nampa Meridian Irr. Dist., supra, that a mechanic's lien does not attach to public property unless expressly provided by statute; and that, because the statute does not expressly provide for a lien against the property of an irrigation district, its property is not subject to mechanics' liens. This decision would seem to be authority for holding that a lien may be foreclosed on a schoolhouse.

The trial court concluded "that the allowance of any claim of the plaintiff as against the defendant school district in excess of its proportion of" the sum remaining in the building fund "would exceed the revenues legally provided for the said district for the construction of its schoolhouse and such excessive allowance would be in contravention of art. 8, sec. 3, of the constitution. . . . ."

The school district contends that the lien statute, C. S., sec. 7340, which provides that "Every person, who performs labor, or furnishes material for any original contractor . . . . to be used in the construction . . . . of any building . . . . for any . . . . school district, has a lien upon such building . . . ." conflicts with this provision of the constitution, which is that "No . . . . school district . . . . shall incur any indebtedness or liability in any manner, or for any purpose, exceeding in that year the income and revenue provided for it for such year, without the assent of two thirds of the qualified electors thereof."

This provision of the constitution prohibits a school district from incurring an indebtedness or liability, for any purpose, in excess of the revenue provided. As a result of the vote of the electors, the district had provided some $47,858.18 to be expended in the construction of a new schoolhouse. For this purpose the district was not prohibited from incurring any indebtedness or liability in the construction of the schoolhouse within that sum. Of the amount then available for building the schoolhouse, the district, by its contract, obligated itself to pay the contractor "$34,275.00 and the liens were filed for materials furnished to enable the contractor to perform his contract. By operation of the lien statute, those who furnished labor or materials for use in the construction of the building became entitled to liens on the building for the value of their labor and materials. Under the contract, read in the light of the lien statute, the liability of the district to the contractor was to pay him the amount specified in the contract less such sums as were necessary to satisfy liens claimed against the building. As it was necessary for the district to satisfy liens against the building, its liability to the contractor decreased accordingly, (C. S., sec. 7350.) The lien statute operated to give those who furnished labor or materials in the construction of the building security for the payment of such labor or materials, and made such liens preferred and prior to the obligation of the district to the contractor. And, as decisive of the constitutional question presented, the lien statute does not authorize the imposition of any liability or indebtedness against a school district. On the contrary, it provides that one who furnishes materials for any original contractor for use in the construction of a building " . . . . for any . . . . school district has a lien on such building . . . ." This court said, in Chamberlain v. City of Lewiston,supra, a proceeding to foreclose liens against the waterworks of a municipality, that "The lien statute operates in rem and not in personam; it creates no personal charge against the owner of the property, but rather a charge against the property to the extent of its value."

Since the lien statute, in that case, created no personal charge against the city of Lewiston, in this case, it cannot operate to impose any "liability or indebtedness" against the school district, and is, therefore, not in conflict with article 8, section 3 of the constitution. The constitutional provision is directed against the incurring of an indebtedness or liability; it has neither deprived the legislature of the power to provide for such a lien on a schoolhouse nor to authorize the sale of the building for its satisfaction. It may be inadvisable to provide for the imposition of liens on such public buildings, but that is a legislative question.

It is contended that the court erred in not foreclosing the lien for the full amount of the claim. The trial court should have found the amount in which appellant was entitled to a lien. In view of the assignments, it is not improper to observe that in such a case the burden is on a lien claimant to show that the materials, for which the lien is claimed, were used in the construction of the building, for a lien claimant is not entitled to a lien for any materials not so used. (40 C. J. 457, sec. 644.) While it has been held that a materialman has a lien for such materials as scaffolding, which "does not actually go into the building, but which may practically be used and consumed and destroyed in the course of the work," (Chamberlain v. City of Lewiston, supra), the lumber company was not entitled to a lien against the schoolhouse for materials furnished the contractor and used in the construction or repair of other buildings.

Judgment of foreclosure should be entered in favor of the lumber company and against the school district in the amount the lumber company was actually entitled to recover in that proceeding without regard to the amount then in the treasury of the district. It was also entitled to its costs. (C. S., sec. 7352.)

The foregoing applies also to the case of National Park Lumber Company against the school district.

I am authorized to say that Mr. Justice Givens concurs with the views I have expressed.