Source: https://www.law.cornell.edu/supremecourt/text/291/352/
Timestamp: 2019-04-21 20:15:03+00:00

Document:
The statute challenged by the appellants was enacted in March, 1918, and is framed for the protection of subcontractors, materialmen, laborers, and journeymen who have had a part in the making of buildings or of structures akin thereto. Laws Miss. 1918, c. 128; Mississippi Code 1930, §§ 22742281.
The statute of Mississippi was framed in a genuine endeavor to make these equities prevail. Neither owner nor builder is commanded to give a bond, though decisions are not lacking that such a command will be upheld. 3 Cf. Gant v. Oklahoma City, 289 U.S. 98, 53 S.Ct. 530, 77 L.Ed. 1058; Brazee v. Michigan, 241 U.S. 340, 36 S.Ct. 561, 60 L.Ed. 1034. All that the statute does by force of section 3 is to standardize the form, at least in some particulars, when bonds are freely given, and to define the consequences attaching to the standard thus prescribed. The form shall include a clause for the protection of materialmen and laborers; the consequences shall include the exemption of the owner from the burden of a lien, and a like exemption of the builder. U.S.F. & G. Co. v. Parsons, supra. The security of the bond becomes a substitute for the security of the building contract and of the moneys due thereunder. No arbitrary restraint of liberty of contract is laid upon the owner. His personal liability toward materialmen and laborers is not greater by a dollar than it was at the beginning. To the contrary, it is less. By force of the new security he is relieved of the burden of a lien, yet he has priority of interest in the proceeds of any suit upon the bond. See section 3, quoted ante. No arbitrary restraint of liberty is laid upon the builder. Upon the giving of a bond he is charged with a liability in favor of materialmen and laborers, a liability consistent with fair dealing between men in that relation, but he is relieved of the duty of holding present and future payments as a fund impressed with a trust and devoted to specific uses. U.S.F. & G. Co. v. Parsons, supra. Indeed, this very builder took advantage of that privilege, making an assignment of the contract and its proceeds to a bank; and because of the bond the assignment was upheld. Hartford Accident & Indemnity Co. v. Natchez Investment Co., 155 Miss. 31, 53, 119 So. 366. Plainly he is in no position to complain that the statute is invalid in its application to himself. Indeed, owner and builder do not declare themselves aggrieved, but through silence and inaction, if not otherwise, evince submission and consent. The only other person whose interests are affected is the surety on the bond. If the statute is valid in its application to owner and builder, to obligee and principal, there can be no privilege of the surety to contract on better terms. The secondary obligation must follow the primary one and conform to its restraints. The surety has the alternative either to write its indemnities and guaranties upon the only terms permitted to obligee and principal, or to renounce the writing altogether. The business of insurance is one peculiarly subject to supervision and control. German Alliance Insurance Co. v. Lewis, Supt. of Insurance of State of Kansas, 233 U.S. 389, 34 S.Ct. 612, 58 L.Ed. 1011, L.R.A. 1915C, 1189; National Insurance Co. v. Wanberg, 260 U.S. 71, 43 S.Ct. 32, 67 L.Ed. 136; Hardware Dealers Mutual Fire Insurance Co. v. Glidden Co., supra. The Fourteenth Amendment does not make it necessary that materialmen and laborers shall be deprived of fair protection to the end that sureties for profit may be given an opportunity to diversity their bonds.

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