John W. Tuthill Lumber Co. v. McMackin , 30 S.D. 336 ( 1912 )

WHITING, J.

The defendant McMacldn entered into a contract for the construction of, and he constructed thereunder, a drainage system, within the limits of defendant and appellant county. This contract was entered into and the work done under the provisions of chapter 134, Laws of 1907, as amended by chapter 102, Laws of 1909, being what is known as the “Drainage Act.” The plaintiff and respondent furnished to McMacldn certain of the materials used by him in the construction of the drainage system, and, not having been paid for the same, it brought this action, seeking a money judgment against McMacldn and a mechanic's lien upon certain funds due and unpaid to McMacldn, and remaining within the control of defendant county. The defendant county demurred to plaintiff’s complaint. This demurrer was overruled, and it is from the order overruling such demurrer that the county has appealed to this court.

As we look at the issues raised upon this appeal, the real question before us for answer is whether or not a materialman who has furnished material used „by a contractor in- the construction of a drainage ditch constructed under the provision's of chapter 134, Laws of 1907, as amended by chapter 102, Laws of 1909, and known as the Drainage- Act, is entitled to a mechanic’s lien, under the provisions of article 2 of chapter 31 of the Code of Civil Procedure, against a special fund, raised in accordance with the provisions of said Drainage Act and due said contractor. S-aid article 2 provides liens in certain cases to subcontractors and laborers upon public improvements. At the time of the passage of the act which afterwards became and is now article 2 of chapter 31 of the -Code of Civil Procedure, there was in this state a drainage. law. Sections 2047-2078, Compiled Laws. We think no one would contend that said article 2. of chapter 31 was broad enough -to give a mechanic’s lien to a subcontractor or material-man who did work or furnished material in the construction of a ditch under the old Drainage Act. Is such lien law so broad in its terms that it gives a lien to such subcontractors and materialmen under our present Drainage Act? The following are the only sections of said law necessary for our consideration in reaching a decision in the matter now before us. These sections read as follows:

“Sec. 7x3. Every person who shall perform any labor or furnish any material for the construction or repair of any work for any county or municipal or public school corporation in this state to any person who shall have made any contract for such work with such corporation, upon complying with the provisions of this article shall have for his labor done or materials furnished a lien upon all moneys in .the control of such corporation due or to become due under such contract.”

“Sec. 721. This article shall apply to and include all cases and contracts under which work and materials shall heretofore have been or shall hereafter be done or furnished to any contractor for the construction or repair of any improvement for any county or municipal or public school corporation, upon any street, public highway or public ground, or upon any land the title to which shall have been at -the time of making the contract or thereafter in such county or municipal or public school corporation and for the purpose of which any appropriation of the funds of such corporation shall have been or shall hereafter be made or raised by such corporation; and this article shall also apply to and include actions and claims now pending for work done or materials furnished under any such contract; provided, that the provisions of this section shall not apply to1 any case where the improvement has been completed before the passage of this article except as to moneys left in the hands of such public corporation and to which the contractor would be otherwise entitled.”

The respondent contends that section 713, supra, is in no manner limited in its application by section 721, and that under the provisions of section 713 it is clearly entitled to a lien against the fund remaining within the control of the appellant corporation. Without >in any manner intimating our views as to whether or not under said section 713 the respondent would be entitled to a lien, we think it is clear that it was the intent and purpose of the Legislature in enacting said section 721 to define the scope of the law of which it forms a part, and that such section limits the application of said law to the specific cases therein mentioned. We cannot agree with respondent’s contention that the clear purpose of the enactment of said section was to make the entire law “retroactive in its application to certain specified cases.” If such had been their purpose, the framers of this legislation would certainly not have included in this section the words, “or shall hereafter be.” The rule for the construction of mechanic’s lien laws, as sustained by the great weight of authority, is that announced in 27 Cyc. 20: “where the question is whether the particular case is within the statute, a strict construction should be given, but where the circumstances are such that there is clearly a right to a lien under the statute, and the question is whether the claimant has taken the proper course to establish his lien, the statute should be liberally construed.” See, also, Nanz v. Park Co., 103 Tenn. 299, 52 S. W. 999, 47 L. R. A. 273, 76 Am. St. Rep. 650; Fidelity Storage Corp. v. Trussed Concrete Steel Co., 35 App. D. C. 1, 20 Ann. Cas. 1157. Applying this rule of strict construction in determining whether- the facts in this case bring -it within the limitations of section 721, is it possible to hold that a subcontractor, supplying material for the construction of a drainage ditch constructed under our Drainage Act, is entitled to a lien upon funds in the hands of a county and clue the contractor? A drainage system is certainly not an improvement upon a street, public highway, or public ground. There is nothing in the Drainage Act which either expressly or by inference makes a drainage system or any part thereof either a public highway or public ground. Is the establishment of a drainage system the construction or repair of any improvement for any county upon any land the title to which shall have been at the time of making the contract or thereafter in such county, and for the purposes of which an appropriation of the funds of such count}'- shall have been or shall thereafter be made or raised by said county?

The Drainage Act in its main features provides in substance as follows: Upon a petition signed by one or more owners of real estate whose lands will be affected by -the establishment of the drainage system, and which petition sets forth that the construction of the drainage ditch or ditches will be conducive to public health or practicable for the drainage of agricultural land, the county commissioners of the county wherein it is proposed to establish such drainage system, are required to proceed, with the aid of certain other officials and persons, to determine the necessity for and practicability of the proposed system. To this end public hearings are provided for, and right of appeal given. The petitioners are required to give a bond to secure the expenses of the preliminary investigations. The county commissioners may make an assessment against the lands within the drainage district to cover expenses' of preliminary investigations and to pay damages for any property that will be taken or damaged by the drainage system. All assessments shall be in proportion to the benefits to be derived by the several tracts of land within the drainage district. If the commissioners determine in favor of the construction of such system, they shall enter into a contract or contracts for construction of same, and may provide in such contract for the payment of the construction either in cash or in draiiíáge warrants or assessment certificates. -For the purpose of covering the costs of preliminary investigation, damages, and construction of the system, the commissioners, if they so elect, may issue bonds payable out of money assessed against the lands within the drainage district, or, without the issuance of such bonds, they may issue warrants payable out of moneys collected on drainage assessments, or may issue assessment certificates; and they may pay for the expenses, damages, and construction with the money derived from the sale of such bonds or with such warrants or certificates. (In passing we would state that the contract set forth in the complaint herein provided for the payment to be made either in warrants or assessment certificates.) The property owners may unite in a written stipulation, agreeing upon a division of the costs of constructing a drainage system, and, upon the filing of such stipulation with the county commissioners the commissioners may proceed as they otherwise would under a petition. The care of the ditch is intrusted to the county commissioners, but all expenses for such care and maintenance, including the expenses of the commissioners and other officers, is borne by the land within the district. The title of the right of way may be procured, but the statute does not provide that title in fee shall be procured, nor does it state in whose name any title, shall be taken, and we doubt if the statute contemplates the acquiring of anything more than an easement, which easement would become appurtenant to and vest in the owners of the dominant estates. Though the statute provides for the giving of a name to each separate drainage district, there is no provision making such a district a corporate entity.

Even if under the statute the title to the right of way for the ditch was taken by and vested in the county, is the esablishment of such ditch an improvement to the land comprised in the bed of such ditch, or is it an improvement to the land outside of the ditch and comprised within the drainage district? Certainly the latter, and in this land the county has no interest.

The respondent relies upon the authority of the case of Bates County v. Mills, 190 Fed. 522, 111 C. C. A. 354, and has quoted freely from same. This was also, an action brought upon a drainage contract, under a law somewhat similar to our Drainage Act. All that was held in that case was that a contractor could sue the county. The law before the court in that case specifically provided that the contract should be made for and on behalf of the county. No question of right to mechanics’ lien arose in that case, and we are therefore unable to see wherein the holding of the federal court throws much light upon the-question presented to us. Even if it be conceded that the contract entered into by the county commissioners is the contract of the county, and even if it should be conceded that under such contract the contractor would have a right of action against the county, yet it would not follow that, under section 721, supra, a subcontractor would have any lien against any property or fund in control of the county. In the Bates County Case, attention is called to the fact that the proceedings in in the establishment of a drainage system are somewhat analogous to those followed in establishing paving and sewer districts. While it is true that the method of procedure is somewhat analgous, yet the analogy extends no farther than in the method of procedure. Even if it should be held that the methods followed in the establishment and construction of drainage systems were, in every respect, analogous to those followed-in laying out paving'and sewer districts, it does not follow that drainage systems would come under the limitations of section 721 simply because paving and sewer work do come under same. There is, as will be noticed, a specific provision for a lien for work or materials furnished fo.r improvements upon streets and highways. It is well also to notice some ‘of the fundamental differences between a drainage sys.tem, such as contemplated by our statute, and improvements upon streets and highways. In the establishment of a-public street or highway, or in an improvement thereon, the main purpose in view, 'is the conferring of a benefit upon the public to whom is given the free use of such streets and highways. There flows an incidental benefit to certain property, and it is owing to the peculiar benefit received by the adjacent property that the law often requires that the expense of opening or improving the highway be borne solely by such property. Frequently, however, such highways are established by the use of the public funds, and they are almost invariably kept in repair by such fund. In the case of a drainage system, while the law recognizes that there must be a certain element of public benefit, as otherwise there would be no constitutional authority for taking land for right of way, yet the principal purpose in view is the benefit which will flow to the property within the district. It is not contemplated that, when the system is established, the public shall have any other than an incidental interest -therein or benefit thereform. The public has no direct right whatsoever in such drainage system. It has no right ■to enter thereon, no right to use the water thereform, or to receive any other than the mere incidental benefit flowing from increase of taxes or improved sanitary conditions.- The county, at its own expense, is not authorized to improve the same or keep it in repair. The establishment of a drainage system is, in its nature, as much a private enterprise as is the establishment of a water power system, or as would be the establishment of an irrigation system. Let us suppose that there was a statute providing- that, upon the petition of one property owner owning real estate- riparian to a stream of water, proceedings could be instituted -to have all of ■the lands riparian to such stream incorporated into an irrigation district; such law providing that, upon the presentation of such a ■petition, some certain officer or body of officers should investigate the necessity of such district, and, if they found the -same would be a public benefit, should proceed to the establishment of such district and the laying out of a complete irrigation system therein. Suppose such law provided for the establishment of a complete system of ditches for the distribution of the waters of said stream throughout such district and for the condemnation of land for right of way of the ditches, the expenses for all of which should be borne by the lands benefited thereby. Would the mere fact that into the hands of a certain officer or officers was given the passing upon the petition and the looking after this work, in any manner make such an enterprise one for the city, county, or other municipal district of which such person or body of men might be officers, when the public, as such, would have absolutely no direct rights in such irrigation system and be entitled to no direct 'benefits therefrom? We think not. It seems to us clear ■that enterprises of this kind, which merely for. convenience of and to safeguard the rights of all parties are placed under the charge of and are carried out by public officers are no more public in their nature, and give to the municipality no more right or title in and to the lands improved, than would such municipality have in the same providing that such an enterprise should be established under sanction of law through the united efforts of the property owners without the intervention of any municipality or officer theerof.

The order overruling the demurrer to the complaint is re-thereof.