Case Name: Palmer & Crawford v. Tingle; Young v. The Lion Hardware Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1896-12-08
Citations: 55 Ohio St. 423
Docket Number: 
Parties: Palmer & Crawford v. Tingle. Young v. The Lion Hardware Company.
Judges: Minshall, J,, dissents.
Reporter: Ohio State Reports, New Service
Volume: 55
Pages: 423–446

Head Matter:
Palmer & Crawford v. Tingle. Young v. The Lion Hardware Company.
Error to the Circuit Court of Putnam county.
Error to the Circuit Court of Clark county.
Mechanic’s, lien — Subcontractors and material men — Rights of ptoperty — Invalidity of act of April IS, 1894 {91 Ohio Laws 185). —Constitutional law.
1. The inalienable right of enjoying liberty and acquiring property, guaranteed by the first section of the bill of rights of the constitution, embraces the right to be free in the enjoyment of our faculties, subject only to such restraints as are necessary for the common welfare.
2. Liberty to acquire property by contract, can be restrained by the general assembly only so far as such restraint is for the common welfare and equal protection and benefit of the people, and such restraining statute must be of such a character that a court may see that it is for such general welfare, protection and benefit. The judgment of the general assembly in such eases is not conclusive.
3. While a valid statute regu'lating contracts is, by its own force, read into, and made a part of such contracts, it is otherwise as to invalid statutes.
4. The act of April 13, 1894, 91 O. L, 135, in so far as it gives a lien on the property of the owner to subcontractors, laborers and those who furnish machinery, material or tile to the contractor, is"unconstitutional and void. All to whom the contractor becomes indebted in the performance of his contract, are bound by the terms of the contract between him and the owner.
(Decided December 8, 1896.)
These two eases were heard and determined together. Both eases involve the constitutionality of the mechanic’s lien statute as amended April 13th, 1894. In the Putnam county case the con tract was made on the 23d day of April, 1894, and was for' the repair of Mr. Tingle’s house at the agreed price of five hundred dollars, which was to be paid by the owner of the house to the contract- or,' a Mr. McComb, by endorsing and delivering to him two notes held by Mr. Tingle against a man by the name of Vale, and Mr. Tingle did endorse and deliver the two notes each for the sum of two hundred and fifty dollars, to Mr. McComb, and he received the notes in full payment and satisfaction of the agreed repairs.' Mr. McComb purchased materials from Palmer & Crawford, a co-partnership, for the purpose of making the repairs, and the materials were in fact used in the making of said repairs. Mr. McComb fully performed his contract, but failed to pay for the materials in the sum of $214.87, and thereupon the partnership, within four months, filed an affidavit, in all respects as required by statute, in the office of the recorder of the county, seeking to perfect a lien upon Mr. Tingle’s house and the land upon which it stands.
The. circuit court upon appeal held the statute unconstitutional, and rendered judgment in favor of Mr. Tingle. The partnership filed its petition in error in this court seeking to reverse the judgment of the circuit court.
In the Clark county case, Mr. Young made a contract with a Mr. Hollenback on the 29th day of June, 1894, by the terms of which Mr. Hollenback was to furnish the materials and labor and erect for Mr. Young upon premises owned by him, a dwelling house on or before the first day of October, 1894, except the foundation., painting and chimneys, for the sum of $1,925.00. The payments were to be $300.00 upon completion of the roof; $300.00 when ready for plastering; $400.00 when the plastering should be completed, and the remainder, $925.00 within thirty days after the completion and acceptance of the house. Mr. Hollenback performed his part of the contract and Mr. Young accepted the house and paid therefor according to the contract. Mr. Hollenback purchased from the hardware company materials for the completion of the house to the amount of $215.97, which materials were of that value, and were used in the completion of the house. After payment had been made in full for the completion of the house, and within four months after the materials were furnished, the hardware company filed its affidavit in due form in the office of the recorder of the county to perfect a lien upon the house of 'Mr. Young for the materials so furnished to Mr. Hollenback for the completion of said house. Mr. Young had no notice of the claim for said materials until after the house was completed, accepted and paid for in full.
Upon appeal to the circuit court it made a finding of facts and rendered a decree in favor of the hardware company. Thereupon Mr. Young filed his petition in error in this court, seeking to reverse the judgment of the circuit court, and asking that judgment be rendered in his favor upon the findings of fact.
Leasure & Powell for Palmer & Crawford, plaintiffs in error.
Brief of J. P. leasure.
This is an action to foreclose a sub-contractor’s lien. It is admitted by the pleadings that the plaintiff in error took all the formal steps required to obtain a’ lien under section 3185 of the Revised Statutes of Ohio.
It was contended by the defendant in error that section 3184 is in violation of sections 1 and 2 of the Bill of Rights, because
First — That it is class legislation.
Second — That the statute created liabilities against parties without their knowledge or consent.
Third — That it denied to owners of real estate the right to enjoy and possess property and contract in relation thereto as they might deem best.
That section 3184 is not class legislation. Hancock et al. v. Yaden, 6 L. R. A., 576., (Ind. Supreme Court); Cooley’s Constitutional Limitations (5 Ed.) star pp. 390, 391, and foot note 4.
That the statute does not create' liabilities against parties without their knowledge or consent, see Smith v. Parsons, 1 Ohio Rep. 236; Weil v. The State, 46 Ohio St. 450.
In these cases the court held that a statute bearing on the subject-matter of a contract was as much a part of the contract as if written therein.
Until section 3184 is held unconstitutional, how can it be said that there was no contractual relation existing between defendant in error and the plaintiff in error? Has the legislature, by enacting section 3184, denied the owner of real estate the right to enjoy and possess property and contract in relation thereto?
There are no unreasonable restrictions imposed by section 3184 on the right of the owner of real estate to enjoy and possess property and contract in relation thereto.
It will seem that in the absence of fraud the liens that a sub-contractor may obtain against the real estate can never in the aggregate exceed the contract price.
In the court helow it was argued that the statute prevented the owner of real estate from contracting, except for a monied consideration. In answer it may be said that the owner of real estate who wishes to exchange real estate for materials ■ or labor may indemnify himself against any failure of the principle contractor to pay for his materials and labor, by taking an indemnity mortgage for the amount of the contract price on the property exchanged for the labor and materials.
There are no express restrictions or limitations as to time. The effect of the statute, however, is to make it unsafe to pay within four months after the materials are furnished or labor performed.
The owner has his choice, to contract on credit of four months, to pay within four months and take his risk or to demand security from the principal contractor to indemnify him against loss by reason of his failure to pay for the materials and labor.
Similar legislation has been held constitutional in other states. Henry & Coatsworth Co. v. D. W. Evans et al., 97 Mo., 47; 3 L. R. A., 332; Maloy v. LaCruse, 80 Wis., 170; 5 L. R. A., 840; Hunger v. Lenroot, 32 Wis., 541; 32 Minn., 358; 14 Neb., 25; 80 Va., 821; 58 Ind., 17; 15 Neb., 58; 21 Neb., 131; 11 Neb., 147.
Watts (& Moore, for William Tingle, defendant in error.
■ First — That the Mechanic’s Lien Law of 1894, 91 O. L,, 135, is in violation of sections 1 and 2 of the Bill of Rights.
Second— That if such statute is not in violation of the constitution of the state, no lien can be acquired in the case at bar by the “material man,” because of the contract made with the principal contractor, and its execution by the owner of the building.
We will discuss the latter proposition first.
That is, that the right to the lien by the material man or sub-contractor, grows out of the contract between the principal contractor and the owner. Bulloch v. Horn, 44 Ohio St., 420; Harland v. Rand, 27 Pa. St., 511.
The court will' observe the distinction that exists in the cases relied upon by the plaintiffs in error, and those to which we call its attention. The former were determined upon the question that payment had been made to the principal contractor ; the latter upon the right to a lien growing out of the contract between the owner and the principal contractor. It is the plain and obvious duty of one who deals with an alleged contractor to know the relation which he bears to the owner. Failing in this, he furnished lumber and material at his peril. Brown v. Cowen, 110 Pa. St., 588; McElroy et al. v. Bonden et al., 152 Pa. St., 78; Schroeder v. Galland, 134 Pa. St., 277. Phil. on Mech. Liens, section 497.
.The relation of debtor and creditor never existed between Tingle and McComb. McComb, the terms of his contract,- was to be paid in advance. He was so paid.
Palmer and Crawford were bound to know the terms of the original contract, and if so, and they then furnished material, they did it at their peril.
Under the express provisions of our statute, all labor performed or materials furnished, must be performed or furnished by virtue of a contract with the owner of the building.
The terms of the original contract prevail against the principal contractor, and against all who claim through or under him by virtue of the contract. It is only by virtue of such contract that any such rights enured, or could enure to Palmer and Crawford. If they failed to enquire and knew what the original contract was, it was their own neglect and no fault of Tingle, who had the right to contract most advantageously to himself. We are of opinion that this proposition is conclusive of the ease.
Coming' now to call the attention of the court to the first proposition made, to-wit: That the
Mechanic’s Lien Law of 1894 is in violation of sections 1 and 2 of the Bill of Rights, we have the following to suggest:
The statement of counsel that the statute bearing on the subject-matter of a contract, is as much the part of a contract as if written therein, is in the abstract correct, but it is, however, simply begging the question, for if the statute is in violation of the constitution of the state, it can form no part of the contract.
Under section 1 of the Bill of Rights, the right to acquire, possess and protect property is guaranteed to every citizen of Ohio.
Under section 3184 of the statute just quoted, that right is denied to the citizen.
The right to make contracts, beneficial to the person contracting, so long as such contract is not immoral or infringes no prohibitory law, is one of the modes he has to acquire and protect property. This statute prevents a person from making a con tract upon such' terms of payment as might or could enure to his benefit.
That would save to himself any deduction he might secure by reason of an advance payment, or payment in such property, or by such means as he might be enabled to make.
The former statute relating’ to mechanic’s liens, only secure to the material man or sub-contractor, the amount remaining unpaid by the owner at the time that notice' was served, so that the owner could protect himself, and if the principal contractor was fully paid the owner was discharged.
The statute did not interfere with the rights of the parties to contract. Its operation was in the nature of attachment, fastening in the hands of the owner the amount due the contractor, and then giving the sub-contractor the right of the contractor to establish and enforce a lien.
The statute can only be sustained on the theory that the contract between the owner and the principal contractor gives the right to the latter to 'create the lien, and if his right exists then that right would enure to the sub-contractor and material man, and not otherwise.
If these propositions are not tenable, then the legislature of the state can make a contract for a party without his knowledge and consent. Prior to the enactment of this statute such legislation was unknown in Ohio.
This denies to the owner of real estate the right to enjoy and possess property, and contract in relation thereto, as he may deem best and most advantageous to himself. Sprey Lumber Co. v. Sault Sav. Bk. Co., 77 Mich., 199.
Such statute compels the owner to pay the contractor’s debt to the material man, although'by his, the owner’s contract, he has paid in full, and as he contracted to pay. The legislature undertakes to change the terms of the contract, which the owner had the right to make, and to create a liability and burden upon his property, and impair the obligations of the contract that was entered into.
We repeat that such legislation is monstrous. Hocking Valley Coal Co. v. Hiram Rosser, 53 Ohio St., 11; The State ex rel. v. Howard Ferris, 53 Ohio St., 314.
Moioer <& Mower, for L. F. Young, plaintiff in error.
To impair contracts, means to weaken, to lessen, to diminish; while it is true that many decisions relate to contracts made at the passage of the constitution, this is not its full scope. It was intended to protect the citizen in his contractional relation with his fellow citizen.
Liberty includes the right to acquire property and that means the right to make and enforce contracts. Ritchie v. People, 155 Ill., 98, 46 Am. St., 315; Meyer v. Buyer, 12 A. S. R., 66; John Spry Lumber Co. v. Saul Saving Bank, 18 Am. St. R., 396, 77 Mich., 199.
The right to make contracts is inherent and inalienable, and any attempt to unreasonably abridge it, is opposed to the constitution. Braceville Coal Co. v. People, 147 Ill., 66, 37 A. S. R., 206, note; Low v. Rees Printing Co., 41 Neb., 127, 43 A. S. R., 670; Stale v. Goodwill, 25 A. S. R., note, 881.
An agreement to keep a lot free from liens between the owner and the principal contractor pre eludes principal contractor, sub-contractor, or any other person from'filing liens. Fidelity Life v. Jackson, 163 Pa., 168, 43 Am. St. R., 789, Nice v. Walker, 153 Pa., 123; Taylor v. Murphy, 148 Pa., 337.
A mechanic’s lien is a creature of statute, the lien of the sub-contractor and material man is always in strict subordination to the liens of the original contract between the owner and his immediate contractor. Dinsley v. Greene, 54 Cal., page 533, 74 Cal., 273, 43 Am. St. R., 900, 31 Cal., 333.
The constitutionality of mechanic’s lien laws generally, we concede. But no law has been decided constitutional like this amended feature, to-wit: To compel the owner to respect a conti act with one he knows not. The mechanic’s lien laws that have been decided constitutional when the owner has not knowledge, seeks the unpaid funds due or to become due to the principal contractor or sub-contractor.
But in this action it is sought to make the owner, after having fully paid the contractor, pay material man of .the contractor and not of the owner. There ■ can be no privity between the owner and the material man, unless he has notice or knowledge of the same before the contractor is paid.
The rule that if the court can construe a law to be constitutional, it should do so is well established; but can the court construe that part of the act that requires the owner to pay an unknown material man the contract with another man when he has paid the contractor? The legislature cannot make a man an agent without the authority of the principal. The principal makes the agent either by express or implied authority.
"We insist that the owner without notice of the person from whom the contractor obtains his material has a far superior equity over him who furnished material without any notice of the relation between contractor and contractee.
This court in the ease of E. D. Stark v. W. J. Simmons, 54 Ohio St., 435, decided (under the law before amended) that the owner having a valid claim against the contractor overdue without knowledge that the contractor had a hired laborer could be compensated pro tanto for such claim, upon the principle that no money was due the contractor, although the contractor had no express agreement that it should be taken out, he had a superior equity.
And if this amendment to the Mechanic’s Lien Law should by the court be found constitutional then the principles laid down in the case of Wm. Gimbert v. Jennie Madden et al., apply, 2 Ohio Nisi Prius Reports, 346.
1. Material men have no claims against the owner not founded on the contract of the principal contractor with the owner.
2. The law presumes in the absence of fraud that they (the material men) had notice of the terms of the original contract.
3. If the contractor becomes the agent of the owner the agency is special and the powers are limited by it.
4. That the material man contracting' with the principal contractor furnishes the material with an implied assent to the terms of the original contract between such contractor and the owner.
Any other construction would require the plain tiff to pay twice for the same thing without notice, as the plaintiff in this case would be compelled upon any other construction.
Wm. H. Griffith; and Eagan <& Eagan, for The Lion Hardware Co., defendant in error.
Said law is alleged to be unconstitutional, as violating article I, section 1, article II, section 28, and article I, section 10, of the constitution of Ohio; and also, article I, section 19, of the constitution of the United States.
It is vigorously contended in the plaintiff’s brief that the law in question violates section 28, article II, of the constitution.
It is a sufficient answer to the claim of the plaintiff in error to say that the law of the land where a contract is made enters into the contract and forms a part of the same, the parties thereto by their own choice making the provisions of the law thus entering into their contract obligation upor themselves. Smith v. Parsons, 1 Ohio, 236.
What we have said in this connection applies as well to section 10, articLe I, of the Federal Constitution and section 19, article I, of the Ohio Constitution. Weil v. The State, 46 Ohio St., 150; Gimbert v. Heinsath et al., 11 O. C. C., 339; The Van Oleve Glass Co. v. Wamelink, 1 Nisi Prius Reports, 203.
It is furthei* claimed by the plaintiff in error that said law is unconstitutional, as violating section 1, article I, of that instrument, of said constitution of Ohio. And it has been urged in cases in other statés that such a law is obnoxious to a constitutional provision that private property shall not be taken without due process of law. But the law in question is not obnoxious on either score, as it does not either prevent the acquisition, possession, enjoyment or protection of property, or deprive its owner thereof without due process of law. Mallary v. La Crosse Abattoir Co., 80 Wis., 170.
If the mere inconvenience of the owner is a sound argument for the unconstitutionality of the law, then such argument would be equally good as against the constitutionality of every mechanic’s lien law ever enacted in Ohio in favor of sub-contractors, laborers and material men, because they have all tended to inconvenience. the owner of property improving the same by contract. Owners of real estate have also been put to great inconvenience by other laws of the state relating to the mode of construction of and materials for building’s, prohibiting buildings of a certain character within fire limits ; requiring fire escapes, proper ventilation, sewerane, light, and air, seats for female clerks in stores, and many other regulations; for many provisions whereof reference is made to section 8023, Revised Statutes of Ohio. Every one of .these provisions is a restriction either upon the acquisition, or the possession, or the protection, or the enjoyment of real estate, and many of them are enforced by drastic means. Spokane Manufacturing Co., v. McCheesney, 21 Pacific Rep., 198; Henry v. Evans. 97 Mo., 479; Hunter v. Truckee Lodge, 14 Nev., 32; Taylor v. Murphy, 23 Atl. Rep., 1134; John Spry Lumber Co. v. Sault St. Marie, etc., 43 N. W. Rep., 778.
The manifest intent of the present law is to' preserve the contract price for the building as a fund for the satisfaction of the claims of sub-contractors, material men and laborers.
Manufacturing Company v. Falls, 90 Tenn., 471: Laud v. Noonan, 32 Minn., 358.
Moreover the rule of construction adopted by the Supreme Court of Ohio as to mechanic lien laws is a liberal one, on the ground that such laws being remedial in their nature should be liberally construed in favor of those claiming under them. Davis v. Hines, 6 Ohio St., 475; Thomas v. Huesman, 10 Ohio St., 158; and Bullock v. Horn, 44 Ohio St., 420.
Outlvwaite & Linn and Henry Cumble, for The Lion Hardware Co., .defendant in error.
It is claimed that these provisions are in violation of the constitution of the United States, and of the state of Ohio, for the reasons—
Fvrst — That the law deprives the owner of property of the right of possessing and protecting the same.
Second — It deprives the owner of property of the same without due process of law.
Thwd — It impairs the obligation of contracts, and
Fourth — That the law denies to certain classes, to-wit: owners of buildings, or other structures described in the law, the equal protection and benefit of law as guaranteed by article I, section 2, of the constitution of the United States, and by the constitution of Ohio.
The first three objections to the constitutionality of the legislation in question may be considered together.
The rule that all contracts are subject to the conditions ■ and obligations imposed by existing laws is too well settled to be controverted. It has been the established law ever since the Dartmouth College case in 4th Wheaton. Parsons v. The State, 1 Ohio Rp., 236; Weil v. The State, 46 Ohio St., 450; Cooley, 346; Streubel v. Mil. & Miss. R. R., 12 Wis., 67; Denny v. Bennett, 128 U. S., 495; Edwards v. Kearsey, 98 U. S., 595; Jones on Liens, vol. 2, page 286; McMurray et al. v. Brown, 91 U. S., 266.
In addition to the case referred to by the brief of Messrs. Griffith and Hagen & Hagen, we call attention to the following citations: Blauvelt v. Woodworth, 31 N. Y., 285; Glacius v. Black, 67 N. Y., 563; Gunney et al. v. Walsham, 16 R. I., 698; 43 Cal., 515; Abbott v. Miller, 49 Me., 409; Taylor v. Murphy, 148 Pa. St., 337; Wheeler v. Miller, 18 Pa. St., 52; 52 Minn., 358; Cole Manufacturing Co. v. Falls, 90 Tenn., 471; Paine v. Tillinghast, 52 Conn., 532; Overton on Liens, 532; 16 R. I., 698; 9 Mont., 133; 14 Neb., 24; 15 Neb., 58; 45 Ind., 96; 162 Mass., 592; 80 Va., 821; 85 Mo., 357, and other case cited in sections 1304, 1305 and 1305, Jones on Liens. Davis v. The State, 3 Lea (Tenn.) 380; 12 Heisk., 633; 3 Lea, 380; 14 Lea 520; 87 Tenn., 214; 16 Lea, 71; 10 S. W. Rep., 353; 86 Tenn. 272; Cooley’s Const. Lim., 482; Hing v. Crowly, 113 U. S., 708; Barbier v. Connolly, 113 U. S., 31; Lehman v. McBride, 15 Ohio St., 573; City of Cincinnati v. Steinkamp, 54 Ohio St., 284; Kelly v. The State, 6 Ohio St., 269; McGill v. State, 40 Ohio St., 328; State v. Powers, 88 Ohio St., 54; Railroad Tax Cases; 13 Fed. Rep., 722; County of Santa Clara v. S. P. R. R., 18 Fed. Rep., 385.
There are upon the statute books of Ohio, many laws which apply only to certain classes, the constitutionality of which has never been doubted. The exemption of the homestead, or of a sum in lieu thereof in favor of the head of the family, the exemption of a portion of wages and of certain goods and chattels from execution, apply only to a portion, of the citizens, but the power of the legislature to enact such a law has never been questioned. Denny v. Bennett, 128 U. S., 494.
The law regulating the rate of interest is another law of the same class. Bardier v. Connolly, 113 U. S., 32.
The mechanic’s lien operates alike upon all persons and property under the same circumstances and conditions. It affects alike all persons similiarly situated, and is not obnoxious to the constitution of either Ohio, or of the United States. Overton on Liens, 533; Rodgers v. Goodwin, 2 Mass., 475; Cooley on Const. Lim., 81 et. seq.

Opinion:
Burket, J.
The constitutionality of the amendment of the Mechanic's Lien Law.as passed April 23rd, 1894, 91 O. L. 135, is challenged in each of the cases. In the first case payment was made under the contract in full before the work was done; in the second case payment was made under the contract as the work progressed, and a final payment in full upon the completion and acceptance of the building, and before any mechanic's lien was filed, or notice given the owner. The section of the statute under which a right to a lien in these cases is claimed is as follows:
"Section 3184. A person who performs labor, or furnishes machinery or material for constructing, altering or repairing- a boat, vessel or other watercraft, or for erecting, altering, repairing or removing a house, mill, manufactory, or any furnace or furnace material therein, or other building, appurtenance, fixture, bridge,, or other structure, or for the digging, drilling, plumbing, boring, operating, completing or repairing of any gas well, oil well or any other well, or performs labor of any kind whatsoever, in altering, repairing or constructing any oil derrick, oil tank, oil or gas pipe line, or furnishes tile for the drainage of any lot .or land by virtue of a contract with or at the instance of the owner therefore or his agent, trustee, contractor or sub-contractor shaLl have a lien to secure the payment of the same upon such boat, vessel, or other water-craft, or upon such house, mill, manufactory or other building or appurtenance, fixture, bridge or other structure, or upon such gas well, oil well, or any other well, or upon such oil-derrick, oil tank, oil or gas pipe line, and upon the material and machinery so furnished, and upon the interest, leasehold or otherwise, of the owner in the lot for and on which the same may stand, or to which it may be removed."
The former statute on this subject provided that a lien might be taken by a person who should perform labor or furnish machinery or material by virtue of a contract with the owner or his authorized agent; while the statute here in'question provides that such lien may be taken by any person who performs labor or furnishes machinery or material, or tile for drainage, by virtue of a contract with, or at the instance of the owner or his agent, trustee, contractor or sub-contractor.
It is claimed by those opposing the statute, that in so far as it undertakes to give a lien on the owner's property for labor, machinery, materials or tile not supplied under any contract with him, or with his agent, and not at the instance of either, it is unconstitutional.
On part of those who are upholding the statute, it is claimed that the statute is constitutional, and that by operation of law its terms become woven into the contract between the owner and the contractor, and that the owner having thereby-agreed to pay the debts made by the contractor in completing the building-, has no cause for complaint.
As to which claim is right must be determined by the constitution, aided by general rules of law.
The preamble to the constitution is as follows: "We, the people of the state of Ohio, grateful to Almighty God for our freedom, to secure its blessings and promote our common welfare do establish this constitution." It is worthy of notice that the constitution is established to secure the blessings of freedom, and to promote the common welfare. As the constitution must be regarded as consistent with itself throughout, it must be presumed that the laws to be passed by the general assembly under the powers conferred by that instrument, are to be such as shall secure the blessings of freedom and promote our common welfare.
To make this more emphatic, the first section of the Bill of Rights provides that, "All men are, by nature, free and independant, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and seeking and obtaining happiness and safety." And by the second section it is provided that "All political power is inherent in the people. Government is instituted for their equal protection and benefit. "
The usual and most frequent means of acquiring- property is bjr contract, and one of the most valuable and sacred right' is the right to make and enforce contracts. The obligation of a contract when made and entered into, cannot be impaired by act of the general assembly. Article 2, section 28.
The word "liberty," as used in the first section of the Bill of Rights does not mean a mere freedom from physical restraint or state of slavery, but is deemed to embrace the right of man to be free in the enjoyment of the faculties with which he has been endowed by his Creator, subject only to such restraints as are necessary for the common welfare. People v. Marks, 99 N. Y., 377; 52 Am. R., 34; Bertholf v. O'Reilly, 74 N. Y., 15; 30 Am. R., 323; Matter of Jacobs, 98 N. Y., 98; 50 Am. R., 636.
Contracts and compacts have been entered into between men, tribes and nations during all time from the earliest dawn of history, and the right and liberty of contract is one of the inalienable rights of man, fully secured and protected by our constitution, and it may be restrained only in so far as it is necessary for the common.welfare, and the equal protection and benefit of the people. That such restraint of the right and liberty of contract is for the common public welfare, and equal protection and benefit of the people must appear, not only to the general assembly, by force of popular clamor, or the pressure of the lobby, but also to the courts, and it must be so clear, that a court of justice in the calm deliberation of its judgment, may be able to see that such restraint is for the common welfare and equal protection and benefit of the people. People v. Gillison, 109 N. Y., 389; 4 Am. S. Rep., 465.
The statute in restraint of the liberty to contract as to interest on money, is valid for the reason that all can see that it is for the common welfare.
Many other like cases of restraint as to contracts are to be found in our statutes, but all of them, in so far as they are valid, depend for their validity upon the same principle. It was the infringement of the liberty of contract that induced this court in State v. Lake Erie Iron Co., unreported, to hold the statute unconstitutional which required corporations to pay their employees at least twice in each month. Our exemption laws can be sustained only on the ground, that while they in a slight decree limit the liberty of contract, such limitation is for the general welfare of the whole people, and does not interfere with their equal protection and benefit.
In such cases courts can see that the slight restraint of the liberty of contract, is for the common welfare of the people, but no court can see that it is for the common public welfare that the liberty of contract should be taken away from the owner of a building, to enable the seller of materials to collect their value from a man who never purchased them, and has already fully paid the one with whom he contracted for all that he has received. There can be no public necessity for making the contractor the agent of the owner, to enable the seller of materials to collect his pay from one who does not owe him, and with whom he has no contract.
• An agent can have no interest-adverse to his master, but this statute attempts to create an agent for the owner out of the contractor who is opposed to him in every interest. It is an attempt to make the contractor serve two masters, himself and the owner. This can not be done. For this we have the highest authority.
The owner has the right to acquire his building upon the best terms possible, and if he can by making a contract to pay in advance, or by ex change of securities or other property, acquire his • building cheaper than by contracting to pay after four months from its completion, he has the alienable right to so acquire it, and to be protected in its enjoyment, and it is not within the power of the general assembly to compel him to pay a higher price for his building, for the protection of laborers and furnishers with whom he has no Contractual relation.
To enable the contractor, by force of this statute, to enlarge the price to be paid by allowing liens to be taken on the property for labor and materials, would be as unjust as to authorize the owner by statute, to enlarge the building, without a corresponding increase in payment.
But it is urged that the act is constitutional, for the reason that the statute itself must be read into the contract, and that thereby the owner agreed that the contractor may obtain labot and materials for which a lien may be taken against the owner's property. This begs the question, and assumes the constitutionality of the statute. If the statute is valid it must be read into the contract, but if invalid it binds neither party, and does not become a part of the contract.
It is further urged that the owner has the means of protecting himself against loss by taking a bond, or withholding payment for four months, or collecting his loss from the contractor, and that statutes in restraint of liberty of contract, are in such cases constitutional. There are eases which so hold; notably, Mallory v. LaCross Abattoir Co., 80 Wis., 170. But even in that case it was held that the means of protection must be adequate. It cannot be said that the means suggested would be adequate under the statute in question to pro teet the owner against loss, as he would likely have to pay a higher price in case he should delay payment, or require a bond, or undertake to pay for the labor and material himself. And as to the collecting- from the contractor, there would be no necessity of taking a lien in case of his solvency, and in case of his insolvency, the loss would fall on the owner.
The suggested means of protecting the owner from loss are therefore not sufficient to compensate him for the loss of his liberty to contract to the best advantage, and besides there is no public necessity for singling out owners, and laying such heavy burdens upon them for the benefit of a favored class attempted to be created by this statute, and to do so would not be for the general welfare, and equal protection and benefit of the people.
It is also urged by the friends of the statute, that it is beneficial in this, that it drives all the small and insolvent contractors out of business, and leaves the contracting business in the hands of those who are rich enough to guarantee their contracts. But it is not for the general welfare that small and financially weak contractors should be driven out of business. As well might poor laborers and small furnishers be driven out of business, and thus leave the whole business of building and furnishing to the rich, and give them a monopoly of the whole trade, and drive the weak and poor into starvation. Liberty and the common welfare demand that all rich and poor alike should have an equal chance, and to be treated alike, and laws should be enacted for their equal protection and benefit.
With liberty and the equal protection of the laws, the weak and poor of to-day, become the rich and influential of the future. And it is a narrow, unworthy, and unpatriotic policy, to attempt to drive the poor and weak out of business for the benefit of the rich and influential. One of the principal virtues of the statute claimed by its friends, is, that it has driven all the poor and weak contractors out of business. This result instead of being commended, is to -be deplored.
There are some eases in other states in which statutes, somewhat similar, have been upheld, usually upon the theory that the statute enters into the contract, and is therefore agreed to by the owner, but as an unconstitutional statute cannot enter into a contract without the assent of the parties, those cases are not to be regarded as sound, and we refuse to follow them.
A statute of Michigan similar to the one here in question, was held unconstitutional by the Supreme Court of that state, for reasons which seem sound. Sprey Lumber Co. v. Sault St. Marie Savings Bank, 77 Mich., 199; 43 N. W. Rep., 778; See also Taylor v. Murphy, 148 Pa. St., 337; 23 Atl. Rep., 1134.
The conclusion is that the statute in question, in so far as it attempts to give a lien for materials, machinery, tile or labor obtained by the contractor, is unconstitutional and void.
The following eases throw some light upon the question: Hocking Coal Co. v. Rosser, 53 Ohio St., 12; State ex rel. v. Ferris, 53 Ohio St., 314; Harding v. The People, 160 Ill., 459; Godwill v. Minor, 33 W. Va., 179; 25 Am. S. Rep., 863; Frorer v. The People, 141 Ill., 171, 31 N. E. Rep., 395.
It follows that the Putnam county case should be affirmed, and that the Clark county case should be reversed, and judgment entered upon the finding of fact in favor of Mr. Young.
Judgment accordingly.
Minshall, J,, dissents.