Court Opinion

ID: 7824868
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:04:28.297848+00
Date Added: 2024-06-11T16:30:49.920593
License: Public Domain

Robert L. Brown, Justice, dissenting. I would reverse. By its decision today the majority disregards the law of corporations and the concept of distinct legal entities. The salient facts are undisputed: 1. The owner contracted with a corporation, Ray & Ray Metal Buildings, Inc. to do the work. The contract was signed on behalf of Ray & Ray Metal buildings by Tom Hollman as authorized agent. This corporation was duly licensed as a contractor in Arkansas. 2. A separate corporation, Steel Building Manufacturers, Inc., contracted with the supplier, Pierce and Company, for the materials in dispute. Tom Hollman signed on behalf of SBM as agent. SBM actually did the contracting work for the owner — not Ray & Ray Metal Buildings. SBM was not a licensed general contractor in Arkansas. 3. The owner was not notified by SBM that he would be liable for materialman’s liens as required by Ark. .Code Ann. § 18-44-115(1987). That notice would have identified a different corporation, SBM, as the actual contractor. As an unlicensed contractor, SBM was required to give the notice. 4. The owner paid Ray & Ray Metal Buildings one time for the materials. Based on the chancellor’s decision, he will have to pay the supplier again. In the face of these facts, the chancellor found: 5. Plaintiff, as subcontractor, contracted with Ray & Ray Metal Buildings, Inc. to deliver materials in the form of concrete for the construction of the building on the Seyller property. In making this finding, the chancellor erred. A separate corporation, SBM, contracted with the subcontractor which was Pierce and Company — not Ray & Ray Metal Buildings. The majority engages in contorted reasoning when it holds that a common agent for the two corporations somehow causes a contract made by one corporation to bind the other. That simply is not the law, absent some intent and action by the second corporation to be so bound. We take a radical step today when we say a common agent by one action binds two corporations, without any corporate suggestion that this was intended and when the owner was not so advised. The clear purpose of the notice statute is to let an owner know of liability for materials when unlicensed commercial contractors are doing the work. Also, an owner might well refuse to deal with a new contractor revealed in the notice which is different from the contractor retained to do the job. The statutory notice requirement should have been followed in this case, and it was not. I would relieve the owner of further liability. Holt, C.J., joins.