Gibbs v. Tally

California Supreme Court Dec 22, 1900 No. L. A. No. 746Published

Before: Chipman

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Holding. The court held that an owner's failure to file a valid bond under Section 1203 of the Code of Civil Procedure renders them liable to laborers and materialmen for damages, capped at twenty-five percent of the contract price. The court further held that such claims are assignable and that the burden of proving payment of a debt rests on the defendant.

Issues

Whether Section 1203 of the Code of Civil Procedure is constitutional.
Whether a bond that does not inure to the benefit of laborers and materialmen satisfies the statutory requirements.
Whether the right of action under Section 1203 is assignable.
Whether the burden of proving nonpayment of a debt lies with the plaintiff or the defendant.

Disposition. modified and affirmed

Quotations verified verbatim against the opinion

“It would seem reasonable that the damages should not exceed what would be allowed on the bond if filed, namely, twenty-five per cent of the contract price, and to this extent, at least, we think the section will sustain the action.”

Synopsis

Mechanic’s Lien—Bond.—Under Code of Civil Procedure, section 1203, requiring a bond, in ease of a building contract, it by its terms to inure to the benefit of persons performing labor and furnishing materials for the contractor, one given to “T. [the owner], legal representatives or assignees,” and not in terms inuring to the benefit of anyone else, is insufficient.

Mechanic’s Lien—Failure to Take Bond.—Under Code of Civil Procedure, section 1203, requiring a bond, in case of a building contract, in an amount equal to at least twenty-five per cent of the contract price, inuring to the benefit of persons performing labor and furnishing materials for the contractor, and providing as limit of damages, in case of a bond, the value of labor and materials furnished, not exceeding the amount of the bond, and declaring that any failure to comply with the provisions of the section shall render the owner and contractor liable to materialmen and laborers entitled to liens on the property, the measure of damages, in the absence of a bond, is the amount of the claim for labor or material, no(t exceeding twenty-five per cent of the contract price.

Mechanic’s Lien—Failure to Take Bond.—Under Code of Civil Procedure, section 1203, giving action for damages “to any and all materialmen, laborers and subcontractors entitled to a lien,” if bond is not filed where there is a building contract, the claimant who sues first and obtains judgment is entitled to recover up to the limit of the owner’s liability, unless other claimants intervene, or, having brought actions, have them consolidated with his.

Mechanic’s Lien—Failure to Take Bond.—Though a material-man, suing the owner of a building for failure to have a bond of the contractor filed, alleges nonpayment of the claim for materials furnished, it is enough for him to prove the debt, and defendant has the burden of proving payment.

Mechanic’s Lien—Failure to Take Bond.—Under Code of Civil Procedure, section 1803, giving action for damages to a laborer or materialman against the owner of the property who, in case of a contract to build thereon, does not take a bond for their benefit, and providing that action on the bond, if one is taken, shall not affect the laborer’s lien nor any action to foreclose it, except that there shall be but one satisfaction of the claim, action for failure to take bond is not affected by the bringing of an action to foreclose the lien.1

Mechanic’s Lien—Failure to Take Bond.—A claim under Code of Civil Procedure, section 1203, for damages by a laborer against the owner of property who, in ease of contract to build thereon, does not take a bond from the contractor, is within Civil Code, section 1458, declaring “a right arising out of an obligation is the property of the person to whom it is due, and may be transferred as such.”

CHIPMAN, C. Action to recover damages from the owner of a building for failure to compty with section 1203 of the Code of Civil Procedure relating to liens of mechanics and others. Plaintiff had judgment, from which defendants appeal on the judgment-roll, including a short bill of exceptions.

1. Appellants challenge the constitutionality of the above section of the code. The question has been recently decided here adversely to appellants’ contention: Carpenter v. Furrey, 128 Cal. 665, 61 Pac. 369.

2. Appellants contend that a sufficient bond was filed. A bond did in fact accompany the contract, and was filed with it. This bond was signed by the contractor, Parsons, and by two sureties, but it was given to the owner of the property being improved, “Mrs. Mary A. Tally, legal representatives or assigns,” and was “not by its terms made to inure to the benefit of any and all persons who perform labor or furnish materials to the contractor, or any person acting for him or by his authority,” as the statute requires. The bond was not such a one as the law prescribes, and was not available to anyone except the owner, to whom it was given, and the [623]result, so far as any laborer or materialman is concerned, was the same as if no bond at all had been filed. Under section 1203, as it stood when first enacted (Stats. 1885, p. 147), the- bond would have been available to laborers and materialmen as well as to the owner, but the section was repealed by act of March 15, 1887 (Stats. 1887, p, 152), and there was no provision of the code on the subject until the new section was enacted in 1893 as we now have it (Stats. 1893, p. 202). Plaintiff could not sue the sureties on this bond, for they are liable only so far as they are bound by the terms of the bond, and the bond does not make them liable to anyone but the owner, her representatives and assigns. It must follow that there was no such bond as is required by the code.

3. It is claimed that, if it be conceded that the bond does not comply with the statute, the action cannot be maintained because of the uncertainty as to what is the measure of damages in such a case. When a bond is filed, the section provides that “any person shall have an action to recover upon said bond, against the principal and sureties, or either of them, for the value of such labor or materials, or both, not exceeding the amount of the bond,” etc. After providing as to filing a bond and its terms, etc., the statute reads as follows: “Any failure to comply with the provisions of this section shall render the owner and contractor jointly and severally liable in damages to any and all materialmen, laborers and subcontractors entitled to liens upon the property affected by said contract.”

Gibbs v. Tally

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