Linn v. O'Hara , 2 E.D. Smith 560 ( 1855 )

Woodruff, J.

The proceeding in which the present appeal is prosecuted, was commenced in the district court upon an alleged lien, under the law known as the mechanics’ lien law, and under the following circumstances :

On the 3d day of July, 1851, the defendant, being an owner of a lot of ground in Thirty-first street, in this city, made a written agreement with one William Henderson, by which the latter agreed to blast out the rock and clear a place for a cellar, and also for a privy and sewer, for the sum of one hundred and twenty dollars, the same to be completed by the 25th day of the same month—“ no payments to be made until completed, except what should be considered necessary by lath parties.”

In pursuance of this agreement, Henderson began the work and employed the plaintiff as a laborer therein. After the contractor had made some progress, and had received $35 on account, he quitted the work; and the reason therefor alleged by the claimant herein, and testified to by the contractor on the trial, was that he found that he had been deceived by the defendant, who had, prior to the making of the contract, misrepresented to him the condition of the lot of ground, and the nature of the excavation, in respect to the quantity of rock which the lot contained.

Thereupon, the laborers employed by the contractor filed notices with the county clerk to create liens for the amount or value of their labor; and now claim to recover such amount or value by the proceeding instituted in the court below; and judgment being rendered against the owner, he prosecutes his appeal to this court. •

It is not claimed that under the agreement made by the owner with the contractor, any sum whatever is payable to the latter. The work specified in the agreement was never completed, and payment therefore has never become due.

The right of the claimant to maintain this proceeding is alleged upon the sole ground that the owner practiced a fraud upon the contractor to induce him to enter into the agreement. That the agreement was therefore not binding upon the latter, but he had a right upon discovery of the fraud to refuse to go on with the work, and to sue for and recover for the value of the labor actually expended upon the lot, which in his testimony he states was worth $200.

How far the proof in this case established the alleged fraud, and whether, under the circumstances proved, the fraud was of such a nature as justified the contractor’s failure to perform his agreement,—and whether the contractor did not discover the fraud, if any, long before he abandoned the work, but nevertheless affirmed the contract by continuing his labor until the time for the completion had expired,—are questions which would admit of some discussion. But taking the case as favorably to the claimant as it can be stated, and admitting all the facts to be as alleged by him, I apprehend that this proceeding cannot be sustained.

The statute authorizing the creation of liens in favor of mechanics and others, and the foreclosure thereof, does not apply to such a case. (Laws of 1851, ch. 513, 953). By the first section of that act, the persons who may require a lien are de-. dared to be “ Any person who, by virtue of any contract with the owner, or who in pursuance of an agreement with any such contractor, shall in conformity with the terms of such contract, performs work and labor, &c., in building, &c—and the same section provides that the owner shall not be obliged to pay in consideration of all the liens authorized, any greater sum than the price stipulated to be paid in and by such contracts.

The second section provides that a person performing labor, &c., in pursuance of a written contract, shall produce it or give the best evidence thereof in his possession; and shall recover no more than the price stipulated to be paid to him in such contract.

And the third section, that a person performing labor, &c.,. without a written contract, shall produce like evidence to establish the value thereof.

In the case before us, there was a written contract between the owner (the defendant) and his contractor for the work. That contract was not performed;—no moneys have ever,become due thereon. It has been repeatedly decided that if no money has become due from the owner to the contractor, the owner cannot be compelled to pay anything to the laborer or sub-contractor. It is therefore plain that if the written contract which was given in evidence is of any force or effect whatever, the claimant was not entitled to recover.

But that agreement was of force to bring the parties within the express terms of the first section of the statute. There was an agreement with the owner, in pursuance of which and in conformity with the terms whereof, the work was begun and prosecuted so far as it progressed ; and that was the contract, the only contract, made by the owner, and the only contract in which any price was stipulated to be paid for the work. This is the very case described in the first section of the statute, and yet the claimant does not show a case in which by reason of that contract, the owner can be required to pay anything more than he has paid. And therefore, regarding the work as done under or in pursuance of a contract with the owner, the claimant cannot recover.

The counsel for the claimant appears conscious of this difficulty, and hence he places his ground of claim upon the alleged fraud, and he argues that by reason of the fraud, the contract is a nullity, and therefore the rights of all the parties are the same as if there had been no contract whatever beyond a mere paroi employment of the contractor by the owner, to excavate for just so long a time as the contractor did devote to the work. This is wholly unwarranted. So far as the rights of the parties rest in express contract, the employment was to excavate the entire cellar, privy and sewer, and not to work thereat by the day or for any number of days. Setting aside the contract as fraudulently obtained, it would not leave the owner and contractor under my contract with each other for the doing of the work.

But it-is insisted, further, that the contractor had, by reason of the fraud, a right to repudiate the contract altogether, and then sue and recover for the value of the labor, &c., as upon a quamktm mwwt. I do not think it necessary to express an opinion in this case upon the question whether a party who has been induced by fraudulent representations to enter into a contract, can recover in an action for worh and labor, upon any other basis than that furnished by the terms of the special contract. It has been held in England that he cannot, and that if he sues for work and labor, such an action is in affirmance of the contract itself, and must be governed thereby. But if he seeks to recover upon the ground of fraud, he should repudiate the contract when the fraud is discovered, and sue for damages for deceit. (Selway v. Fogg, 5 Mees. & W., 83).

The question when and in what case a party may waive a tort and bring assumpsit to recover the value of whatever was obtained from him by such fraud, has been much discussed, and in this State is not fully settled.

But whatever may be the rights of the contractor in this respect, I am clear that his laborers and sub-contractors have no right to repudiate the contract between him and the •owner. They cannot rescind it, and even if the contractor has the right to waive his claim for damages for the fraud, and sue for the value of the work and labor, they have no power to exercise that option in his behalf, and their doing so would not relieve the owner from the contractor’s claim for damages for fraud, as such. The, liability of the owner is upon the express contract for the price fixed, or, according to the agreement, for damages for the fraud/ which latter the -contractor may wavoe and recover the value of the work and labor done and performed. If this latter alternative be conceded, the case presented does not come within the letter or the spirit of the lien law. That, no where provides that where an owner fraudulently procures work to be done, by reason whereof he becomes liable in damages for the fraud thus practiced, the laborers and sub-contractors of the individual defrauded may have a lien, and may recover to the extent or amount of the damages to which such owner would be liable, and yet this is the argument contended for.

So if it be conceded that the contractor may elect to waive the tort, and sue for the value of the work done, the very proposition admits also that he may not make such election. He may sue for the deceit, and non constat that he will not. His employees cannot make that election for him. They cannot say there was no contract because of the owner’s fraud, and there was an implied contract because the contractor, the only person defrauded, may, if he pleases, waive the fraud, and recover for work and labor as such.

I cannot resist the conclusion that this proceeding and the judgment therein are founded in error regarding the applicability of the lien law to such a case as the present. There is no especial hardship in this—there are multitudes of cases in which money is due, and yet in which the legislature have not provided any special and extraordinary means of compelling payment; and the plaintiff is in no worse condition than the creditors in such cases. It is only to be said that the legislature have not given to the laborer, in a case like the present, a right to acquire a lien. If- it were needful, I think many reasons could be given why it would be unwise to do so, some of which might well be. illustrated by the case before us; in which a contractor having failed to perform his contract, becomes in substance his own witness, not merely to excuse his default, but to prove a fraud on the part of the owner, by which he compels the payment of much more than the whole contract price, for the benefit of himself. But it is unnecessary to pursue that branch of the subject.

There are other grounds assigned for a reversal, but the reasons above given, dispose of the whole case, and in my opinion call for a reversal of the judgment.