Hess v. Denman Lumber Co.

LEVY, J.

(after stating the facts as above).' The lumber company undertakes to hold'the owner of the building personally liable for the unpaid balance of the account for material furnished to the contractor. The suit is based upon the alleged neglect to take a bond of the contractor as required by Acts 1915, p. 223. As applicable here, article 5623 of the act reads:

Any “owner * * * shall cause to be executed a written contract for such erection, repair or improvement and cause the same to be filed with the county clerk of the county where the property is situated, and shall also cause to be executed and filed with the said county clerk before the work is begun, a good and sufficient bond by said contractor, conditioned as hereinafter provided; and when said bond and contract shall be so executed and filed the said owner, railroad company, its agent or receiver, shall in no case be compelled to pay a greater sum for or on ■ account of labor performed, or material, machinery, fixtures or tools furnished, than the price or sum stipulated in the original contract between such owner and contractor.”

It is further provided by article 5623a that—

The bond that the owner of the building “shall take from every contractor” shall be conditioned for “the true and faithful performance of the contract, and the payment of all subcontractors, workmen, laborers, mechanics arid fur-nishers of material by the undertaker, contractor, master mechanic or engineer. The said bond to be njade in favor of the owner, subcontractors, workmen, laborers, mechanics and fur-nishers of material as their interest may appear, all of whom shall have the right to sue upon said bond, * * * and it shall guarantee the payment of such claims, regardless of whether or not they are secured by any lien.”

This law is by its express terms cumulative of the law authorizing any person furnishing material or d,oing labor on any house or building to secure and fix a lien on the house within 90 days, as the statute provides. As a rule, where a valid law imposes the duty on a person, where there has been a negligent breach of that duty pecuniary consequences are recoverable by law by the party injured for a breach or failure to perform that duty. And the pertinent question arises of whether or not the owner of the building can be held liable in tort, as pleaded, for the failure to procure a bond from the contractor for payment of the contractor’s obligation to materialmen. It cannot be said that the act in question undertakes to regulate the occupation of a contractor by requiring him to give a bond before he can lawfully pursue the business. Nor does the act forbid any person from contracting with the contractor that has not given a bond. If it had been so, probably the Legislature would be within its authority in enacting the law under police powers.

But the law requires the owner to contract with the contractor to give a bond. It is compulsory contract purely. We think that it is beyond the power of the Legislature to require an owner to contract with the contractor to give a bond, as done in this very act, because it is interference with the law of the liberty of contract. If the owner does contract to have the contractor give a bond, he is at liberty to do so' as a subject-matter of contract; but if the owner does not so contract, a personal judgment cannot be rendered against him for not requiring the bond of the contractor..

The material here was sold to the contractor in the ordinary course of trade, and the relation of creditor and debtor did not exist between the materialman and the owner. The owner of the building paid the contractor all that was due him after waiting a reasonable time after the completion of the building, and he had no notice of the claim of the materialman. Why should the owner be required to pay twice for the material? The materialman had the legal right under the same law to fix a lien for his claim, and he neglected to do so. He was not by the law deprived of any remedy to enforce payment for the money due him for material furnished the contractor.

The lien law is justified upon the ground that the material for which the lien is sought has been converted into a part of the realty and has increased the value of the realty by becoming a part thereof; but the feature of the act requiring a compulsory contract on the part of the owner and contractor to give a bond is quite a different thing. The owner of the building is under no legal relation to the materialman selling to the contractor so as to render him personally liable for the debt of the contractor. And the economic advantage to the owner, if any, of having the lien satisfied by the bond would not justify the exercise of the police power requiring him to make a compulsory contract with the contractor. The cases cited by the appellee do not, we think, control the case, and we do not follow them. This case we intend to be expressly limited to that part of the act in question applying to individuals, and not corporations and municipalities.

The judgment is reversed, and judgment is here rendered in favor of the appellant.