Court Opinion

ID: 4144483
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:45:48.310779+00
Date Added: 2024-06-11T14:30:06.138822
License: Public Domain

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        Honorable T. 0. Walton, President,
        Agricultural& Mechanical College
        of Texas
        College Station, Texas
                                      Opinion No. O-1915
        Dear Sir:                     Re: Right of materlalmen who
                                           furnish material for con-
                                           struction of public build-
                                          Ill@.

                  Your letter of January 30, 1940, making inquiry
        of this department with respect to the claim of certain
        parties for material furnished In connection with the'con-
        struction of certain buildings at your institution,re-
        ceived, and the following quotation Is taken therefrom:
                  "On November 7, 1938 a contract was exe-
             cuted by and between Curtis Eleotrlcal Company,
             (Charles E. Curtis, President)of Austin, Tex-
             as, a corporationcreated and operating under
             the State laws of the State of Texas, party of
             the first part and the Agriculturaland Mechanl-
             cal College of Texas of College Station, Texas,
             acting by and through Its Board of Directors,
             party>-ofthe second part. This Is a contract
             for furnishingand Installing electricalwiring
             and equipment in twelve dormitory buildings and
             one dining hall building on the campus of the
             A. & M. College at College Station, Texas, work
             on which was substantiallycompleted in Seotem-
             her, 1939.
                  "We have just received a letter from The
             Okonite Company of Chicago, Illinois,notifying
             us of their claim against the Austin Electrical
             Supply Company for materials furnished the Cur-
             tis Electrical Company for this project. We at-
             tach a copy of The Okonlte Company's letter cov-
             ering this claim in which it quotes a telegram
             from the Curtis Electrical Company by Charles
             E. Curtis, President, guaranteeingpayment of
             the materials sold to the Austin Electrical Sup-
             ply Company for the A. & M. College project.
Honorable T. 0. Walton, President,page 2 (No. O-1915)

    You will note that The Okonlte Company flies
    Its claim against the Curtis Electrical Company
    for the unpaid account against the Austin Elec-
    trical Supply Company for materials furnished
    the former for the A. & M. College project. We
    also attach a copy of the contract provisions
    relating to liens and claims.
         "Will you please advise us at the earliest
    possible moment whether or not we should with-
    hold payment to the Curtis Electrical Company
    for the final estimate on this contract until
    the Curtis Electrical Company furnishes the Col-
    lege a release or waiver of lien or a receipt
    for payment in full from The Okonite Company for
    all materials furnished for the project covered
    by the contract. We know, of course, that where
    claims are filed with the College against the
    contractor,that payment of sufficientfunds to
    Dover the alalms must be withheld unti,lthe
    claims have been satisfied,but we do not how
    whether this applies to claims filed against
    contractorsfor materials furnished to the con-
    tra&or through a third party as appears to be
    the aase in this Instance.
          "We should also like to have you advise us
     whether or not, before making final settlement
     to the contraotoron a contract of this type,
     we should require the contractor to furnish us
     with a certlfioatefrom the County Clerk of
    .this County to the effect that no liens or
     claims have been filed in the County Clerk's
     Office against the contractoror the College
     for materials and/or labor used in conneotlon
     with the contract."
          The letter which you enclose from The Okonlte Com-
pany to you is as follows:
          "Confirmingour telephone advice we at-
     tach copy of our telegram giving $2452.55 as
     the total claim against the Austin Electrical
     Supply Company due Hazard'.~Insulated
                                         Wire Works,
     Division of The Okonite Company, and $92.18 due
     The Okonite Company.
          "The facts in the case are as follows:
Honorable T. 0. Walton, President, page 3 (No. O-1915)

         "On May 20, 1939 we received through our
    Dallas office an order from the Austin Electri-
    cal Supply Company for electrical wires and
    cables to be used in connectionwith some work
    being done'at your University by the Curtis~
    Electrical Co. We advised our Dallas office
    that we would have to have an up-to-date flnan-
    ala1 statement from the Austin Electrical Supply
    Company before we would ship the material:
          "On-May 22, 1939, we received the following
     telegram from the Curtis Electrloal Co.:
          "RECARDINO FINANCIAL STATEMENT OF TRE AUSTIN
     ELECTRICAL SUPPLY COMPANY TIDIYSTATE THIS CAN BE
     SUPPLIED WITHINP'EWDAYS. WB BUST HAVE WIRE ‘A&M
     COLLEGE IMMEDIATELYTHEREFORE WE WILL QUARARTEE
     PAYBENT WITHIN CASH DISCOUNT PERIOD. SEE OUR RAT-
     INO LATESTDUN& BRADSTREETBOOK. MAKE SHIPMENT
     TODAY NOTIFY BY WESTERN UNION IMMEDIATELY.
                               CURTIS ELECTRICAL COMPANY
                           BY CHAS. E. CURTIS, PRESIDENT"
          "&I 'thestrength
                      _    of the guarantee
                                      - .    oontained In
     the roregolng  telegram we shlpped the merchandise
     direct to your University and charged same to the
     account of the Austin Electrical Supply Company.
           "We oompleteddelivery of the entire order,
     and the unpaid balance at this time Is $2544.73
     which includes $2452.55 due the Hazard Insulated
     Wire Works, Division of The Okonite Company, and
     $92.18 due The Okonite Company.
          "You should understand that Hazard Insulated
     Wire Works is simply a division of The Okonite
     Company and not a separate oompany or corporation.
         'We have not been able to oolleot this bal-
     ancefrom either the Austin Electrioal Supply Com-
    Pang or Curtis Electrical Co. and we learned last
    Saturday morning that the Curtis Electrical Co.
    has furnished your archlteats final estimates
    on this job with receipts or waivers covering
    all materials, includinga waiver from the Aus-
    tin Eleotrloal Supply Company.
            "We believe that with the Informationwe
                                                             -   .

Honorable T. 0. W&ton, President,page 4 (No. O-1915)

    have given you, you will be in a position to
    demand that the Curtis Electrical Co. either
    furnish you a waiver or reoelpt from us, or
    give you an order to pay us our balanoe. We
    have never heard of any dispute as to this
    balance and we oannot understand why the Cur-
    tis Eleotrloal Co. or the Austin Eleotrloal
    Supply Company have not paid this aooount in
    full long ago, slnoe Mr. chas. E. Curtis, from
    the Informationthat he personallyhas given us,
    Is a partner in the Austin ElectricalSupply
    Company and Is president of the Curtis Electri-
    cal Co.
          "We trust therefore that you will withhold
     payment from the Curtis Electrical Co. In the
     sum of $2544.73 until you are provided with a
     receipt or release direct from us, or until you
     reoeive an order from the Curtis Electrical Co.
     directing you to pay that sum of money to us.
     Unless the matter Is handled In that way, we do
     not feel secure in the payment of our aooount."
          You likewise enclosed the following excerpt from
your contract with the Curtis Electriaal Company for the
constructionof the electricalwork on the buildings Into
which the material furnished by The Okonlte Company was
usedr
          "EXCERPT FROM THE CONTRACT DATED NOV.
         7, 1938, BETWEEN THE CURTIS ELECTRI-
          CAL COMPANY AND THE A. & M. COLLEGE
          OF TEXAS FOR ELECTRICALWORE ON TWELVE
          DORMITORIESAND ONE DINING HALL
          "It being understood that the final pay-
     ment shall be made within ten days after this
     oontract is oompletelyfinished, wlth.the ex-
     aeption of ten per centum of total aontract
     price which (at option of Owner.,,.)shall be
     held for 30 days, for protectionof labor, as
     provided by law; provided, that in each of the
     said cases the Architect shall oertify that all
     the work upon the performanceof whioh the pay-
     ment Is to beoome due has been done to their
     satisfaotion;provided, further, that before
     each payment, if required, the Contractor....
     shall give the Architect good and suffloient
     pv*rlencethat the premises are free from all
Honorable T. 0. Walton, President,page 5 (No. O-1915)

     liens and claims chargeableto the sald.Contract-
     or...., and, further, that If at any time there
     shall be any lien or claim for which, if estab-
     lished, the Owner ....or the said premises might
     be made liable, and which would be chargeable~to
     the said Contractor....,the Owner....shallhave
     the right to retain out of any payment then due
     or thereafter to become due, an amount sufficient
     to completely Indemnify it against such lien or
     claim....,until the claim shall be effectually
     satisfied,discharged or cancelled. And should
     there prove to be any such claim....afterall
     payments are made, the Contractor....shallre-
     fund to the Owner....a11 moneys that the latter
     may be compelled to pay in dischargingany lien
     on said premises made obligatory In consequence
     of the former's default. ,.AndIt Is further un-
     derstood and agreed that the Contractor....shall
     and will pay off and satisfy all claims of,sub-
     contractorsor others for labor or material fur-'
     nished upon said building and which may be found
     to be justly due and owing, whether or not the
     same can be establishedas a lien against said
     property for which said property or the Owner...
     would be liable; it being the true Intent and:
     meaning hereof that the Contractor....shallpay,
     off and satisfy all bills incurred for labor,and
     material In the erection of said building and
     found to be justly due and owing, whether estab-
    ?Hshed as liens or not." (Underscoringours)
           It Is made very plain from the foregoing that the
material furnished by The Okonite Company was furnished to'
the contraator and used In the buildings aovered by its.oon-
tract. The telegram of the Curtis Electrical Company to The
Okonlte Company is certainly sufficient to make It liable for
the payment of this material. When this fact Is .takenin con-
nection with your contraot with the Curtis Electrical Company,
and especially the underscoredportion thereof) we have no'
hesitancy in advising you that you should wlthhold'paymentto
the .CurtisElectrical Company of the final estimates on this
contract until the Curtis Electrical Company furnishes you
a release, or a receipt of payment in full from The.Okon1t.e
Company for its material furnished for the projeot .covered
by the oontract.
          Article 5472a provides:
          "That any person, firm or corporation,or
Honorable T. 0. Walton, President,page 6 (No. O-1915)

    trust estate, furnishingany material, appara-
    tus, fixtures,machinery or labor to any con-
    tractor for any public improvements$n this
    State, shall have a lien on the moneys, or
    bonds, 'orwarrants, due or to beoome due to
    such contraotorsfor such lmpr+vements;pro-
    vided, such person, firm, corporation,or
    stock assoolatlon,shall, before any payment
    is made to suoh oontraotor,notify in writing
    the officials of the State, county, town or
    municipalitywhose duty it Is to pay such con-
    tractor of his olalm."
            Article 5472b provides:
          "That no public official, when so notified
     in writing, shall pay all of said moneys, bonds
     or warrants, due said contractor,but shall re- ,.
     taln enough of said moneys, bonds orewarrants
     to pay said alaim, In case It Is establish.edby,
     judgment In a court of proper jurisdiction."
          The foregoing Articles govern the fixing of claims
for materials furnished in the constructionof permanent lm-
provements in this State. It has been held that these statu-
tes must be given a liberal and not a strict oonstruotlon.
smith v. Texas Co., 53 S. W. (2) 774.
          Certainly,these statutes under the above rule of
oonstruotlonare sufficientto protect any person, firm or
corporationwho furnished material to a contractorunder alr-
aumstanoessuoh as these here under consideration. Wilson vs.
Hlnton et ux, 1.16 S. W. (2) 365. These statutes were lntend-
ed to give additional security to the party furnishingthe
material, and should be construed to accomplish such end.
          As to the second question you ask you are advised
that It Is the opinion of this department that you should not
require the contractorto furnish you with a certificatefrom
thenCounty Clerk of your county to the effect that no liens
or claims have been filed in the County Clerk's office against
the contraotoror the college for material and labor furnish-
ed in oonneotionwith the contract. The contract was for a
public Improvement,and a party who furnishesmaterial or
labor would have to proceed under the above Articles to se-
oure a lien on the funds of the contractor. And there is no
provision in said statutes providing for the filing with the
County Clerk of their claims. Furthermore,it has been
Honorable T. 0. Walton, President, Page 7 (No. O-1915)

specificallyheld that no lien can be fixed against public
property. 29 C. J. 483, &!22, from which we quote, sustains
this view:
          "PUBLIC PROPERTY.--Upon grounds of neces-
     sity and public polioy, buildings, grounds, lm-
     provements and works used for and devoted to
     public purposes are not within the operation
     of nor subject to mechanics' or materialmen's
     liens, unless, of course, they are expressly
     made subject thereto by law. Indeed the Con-
     stitution provides that
               "'The property of oounties,
          cities and towns, owned and held
          only for public purposes, such as
          publia buildings and the sites
          therefor. Fire engines and the
          furniture thereof, and all property
          used, or Intended for extlngulsh-
          lng fires, publla grounds and all
          other property devoted exoluslve-
          ly to the use and benefit of the
          public shall be exempt from forced
          sale and fran taxation, . . .I
         "Accordingly,It has been heid that a me-
    chanic's lien cannot be fixed on a aourthouse
    and public square, a city hall, a school build-
    ing, a lot In a cemetery dedicated and held for
    sepulture, or public works such as highways;
    ,streetsand pipe lines s 0 + *"
          Since there can be no lien created against public
property, we can see no reason for requiring a certificate
of the contractor that~no such liens have been recorded be-
fore payment is made to him,
          Trusting that the above answers your questiona,
we are
                                  Very truly yours,
APPROVED FEB 9, 1940          ATTORREY GENERAL OF TEXAS
                                     Grover Sellers
                                         Grover Sellers
                                             Assistant