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of July, 1892, qualified, and gave a bond in the sum of $50,000 for the faithful performance of his duties. His antecedent bond had been for $100,000. There was no new contract between Robertson and his sureties and Bonney after the appointment, and Bonney continued to deposit as before. In the ensuing fall, at the general election, Bonney was re-elected to the office of treasurer for the term commencing in January, 1893. did not qualify, however, under the election, until the ensuing August. He continued to discharge the duties of the office, and still kept his deposits in the bank as before, and at the date of the failure, in 1893, had on deposit upward of $18,000. All these various facts were set up in the answers filed by the sureties, to which the plaintiff in error demurred. The demurrer was overruled, and judgment entered for the sureties. The treasurer brings the case here by error.

C. S. Libby and G. K. Hartenstein, for plaintiff in error. Thomas, Hartzell, Bryant & Lee, for defendants in error.

The

BISSELL, J. (after stating the facts). judgment is right, and the sureties are not liable on their undertaking. No principle is more firmly settled than that a surety cannot be held beyond the express term of his contract. Unless he be obligated by the specific terms of his engagement, his liability cannot be extended by implication. The rule is universally applied both in actions at law and in suits at equity, and rests upon the most salutary principles. Where the terms of the undertaking are at all ambiguous, the courts are always at liberty to look both to the recitals of the instrument and all the circumstances surrounding the parties when the contract was entered into, and may likewise consider the subject-matter of the instrument, and therefrom determine the scope and object of the intended guaranty. Le Roy v. Servis, Caines, Cas. 1; French v. Carhart, 1 N. Y. 96; Bank v. Myles, 73 N. Y. 335. A like principle is expressed in other cases. In many of them, where the courts have undertaken to determine whether the sureties of a treasurer or deputy should be held liable for defaults occurring after the term for which he had been elected or appointed, whether by public, municipal, or private corporations, they have resorted to the acts of parliament, the statutes, and the proceedings of the boards of directors of private corporations, to ascertain the nature of the office held by the principal, the term for which he was elected or appointed, and therefrom deduced the conclusion that, even though the duration of the termn was not expressed in the instrument, it was to be taken by the court as within the contemplation of the parties, and therefore presumably was regarded by them as the limit of their security. It is therefore entirely proper for the court to consider the situation and circumstances of these parties as they existed when this bond was given. The instrument

perhaps lacks an exact recital, which in soine of the decisions has been regarded as the key for the proper interpretation of the instrument, but it contains what will indicate the purpose and intention of the parties as clearly as a definite recital of the term for which Bonney had been elected. The condition recites that Bonney, as treasurer, has and does deposit money belonging to the county and state with the bank; and the bond was given, therefore, for the purpose of securing him as treasurer against the loss of any funds which he might deposit. By the demurrer, the plaintiff admits Bonney was treasurer when the bond was given, acting as such under a statute by virtue of which his term of office expired on the 7th of July, 1892. We may therefore rightfully conclude that the bond was executed for the purpose of securing Bonney against loss during the time for which, as treasurer, he should receive and deposit money in the Chaffee County Bank. The recital and the situation of the parties fully warrant this conclusion. The expiration of the term on the 7th of July, 1892, is conceded. The legal effect of this appointment seems to be thoroughly established. All agree, if the bond was an official one, it would only be a guaranty against defaults happening during the term for which the bond was given. The principle would be totally unaffected by the circumstance of a re-election of the same incumbent to the same office for another term. Under such circumstances, the election would be regarded as one to another office. Though the individual might be the same, he would in law, with reference to his bond and his sureties and his defaults, stand in the same light and occupy the same legal position as though he had been another, and elected as a successor to the first. Bank v. Root, 2 Metc. (Mass.) 522.

It only remains, then, to determine whether, by the terms of the engagement into which the parties entered, they so expressly and precisely contracted as that the sureties must be held liable for Robertson's subsequent default. We do not so conclude. There is nothing in the express language of the instrument which compels any such deduction. The contract undoubtedly guaranties Bonney, "as treasurer of said county, against the loss of any funds which he may have now or at any future time on deposit in the Chaffee County Bank." We are not at liberty, however, to infer any intention on the part of the sureties to give or continue an indefeasible guaranty to protect the treasurer for all time against the loss of any money which, as treasurer, he might deposit in the Chaffee County Bank. No such absolute agreement was entered into and there is no language in the instrument which compels this construction. Such bonds are given because of the necessities springing from the official positions which individuals hold, and the absolute liability which they are under for the public moneys which may come into their hands. These bonds are executed

partly because of the exigencies of public business, partly from personal considerations, and from the many diverse but persuasive motives which influence human conduct under such circumstances. An intention to become a guarantor for all time may not be inferred. It is totally contrary to the well-known general purpose and intentions of sureties on this class of obligations, and it may not be presumed that a re-election was in contemplation or in the minds of the parties when they signed the bond. Re-elections or re-appointments are far from being certainties in public affairs, and the changed conditions which result in this Western country in very short periods of time rebut any such expectation. Wherever the question has been discussed, the courts have always given great weight to the consideration of the time for which the party may be bound, and the estimate which he is liable to put on the liability likely to devolve on him during that period, and his inability to know what may be cast on him at some future and later date. If any other rule were adopted, there would seem to be no necessity for an absolute continuity of the term; but a re-election after an interregnum, and a resumption of deposits, followed by a default, would apparently revive the liability of the sureties, and make them guarantors for the later deposits, contrary to any actual or apparent intention of the parties. Taking the principle on which the cases rest, we think it may be safely said that the general construction of the courts is against this doctrine. Hassell v. Long, 2 Maule & S. 363; Mayor v. Dennis, El., Bl. & El. 660; Perpin v. Cooper, 2 Barn. & Ald. 431; Insurance Co. v. Clark, 33 Barb. 196; Association v. Nugent, 40 N. J. Law, 215; Hubert v. Mendheim, 64 Cal. 213, 30 Pac. 633; Chelmsford Co. v. Demarest, 7 Gray, 1; Thomas v. Summey, 1 Jones (N. C.) 554; Banner v. McMurray, 1 Dev. 219.

The facts pleaded by the defendants constituted a good defense, and, if established, would relieve the sureties from any liability to respond for the default of the bank happening after the expiration of the term of office which the treasurer was filling when the undertaking was given. The demurrer was properly overruled, and final judgment must be entered in favor of the defendants in error. The judgment will be affirmed. Affirmed.

(6 Colo. A. 541) SAYRE-NEWTON LUMBER CO. et al. v. UNION BANK OF DENVER et al. (Court of Appeals of Colorado. Sept. 9, 1895.) MECHANICS' LIENS-CONSTRUCTION OF CONTRACTSUBCONTRACTORS.

1. By agreement between a contractor and one for whom, and on whose land, he was to erect buildings, $5,000 was deposited in a bank as an escrow, to be held until the time for filing liens by subcontractors should expire, when the money was to be paid to the contractor, unless there should then be pending and unsettled me

chanics' liens against the buildings, in which case the bank should retain the amount of such liens from the fund, and pay over the balance to the contractor as the liens should be discharged. Held, that lien claimants could not reach such fund; their sole remedy being against the property.

2. A contractor turned over to claimants certain building contracts which he was unable to complete, among them a contract with W., claimants to manage the work, collect the money as it became due, and disburse the same for materials and labor. W. paid the full contract price to claimants, who applied it to an indebtedness to them from the contractor on other contracts, and subsequently filed liens against W.'s premises for materials. Held, that under Sess. Laws 1889, p. 247, providing that claims of subcontractors shall not be a lien on the property to any greater extent than the indebtedness of the owner to the contractor, claimants were not entitled to any lien.

3. In the absence of a statutory provision therefor, a subcontractor in the third degree is not entitled to a mechanic's lien.

Error to district court, Arapahoe county. Action by the Union Bank of Denver against Wimbush & Powell and the Denver Land & Security Company, praying that a certain fund in the hands of the latter be applied on notes due plaintiff. The Sayre-Newton Lumber Company and other lien claimants were made defendants, and original proceedings were thereafter filed by the Sayre-Newton Lumber Company for the enforcement of mechanics' liens, in which answers and cross complaints were filed by the various defendants. The several actions were consolidated, and from the decree all the lien claimants bring error. Affirmed.

Reginald Heber Smith, for plaintiff in error Sayre-Newton Lumber Co. J. Warner Mills, for plaintiffs in error Hallack Paint, Oil & Glass Co., and West Side Planing Mill Co. S. D. Walling, for defendants in error.

THOMSON, J. On May 18, 1889, W. E. Sweet contracted with Wimbush & Powell to construct for them fifteen houses and one stable upon lots situated in Berkley, for which they were to pay him $39,506. Afterwards, on September 28, 1889, the parties entered into a supplemental agreement concerning the same subject-matter, as follows: "This agreement, made between William E. Sweet of the first part, and Henry A. Wimbush and Arthur W. Powell, partners under the firm name of Wimbush & Powell, of the second part, supplemental to their agreement dated May 18, 1889, witnesseth: In order to provide an assurance to the second party against mechanics' liens, it is agreed that the first party, at the time of receiving payment upon any building, shall procure and deliver to the second party a waiver by the material and labor men of their lien, and all right to lien thereon except as to laborers or mechanics working by the piece or by the day, and as to them he will exhibit his book, showing the payment of wages. As a further assurance it is agreed that the $5,000 last falling due

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under said agreement of May 18th shall, when due, be paid over to the Denver National Bank as an escrow to be held until the time provided by the law for filing liens by subcontractors of all degrees shall have expired. At the end of said period the same shall be paid over by said bank to the said party of the first part, unless there shall at that time be pending and unsettled mechanics' liens against one or more of the buildings mentioned in said agreement. case there shall be such unsettled liens, said Denver National Bank shall retain the amount of all such liens and 50 per cent. additional from said $5,000, and pay over the remainder to said Sweet; and the moneys so retained by said check shall be paid over to said Sweet as such ljen and liens are settled and discharged." On July 5, 1889, Sweet borrowed from the Union Bank of Denver $4,000, and on August 2, 1889, $2,000, to be used in the construction of the buildings; for each of which sums, at the time of receiving it, he made his note to the bank, due in 90 days, with interest from date at 10 per cent. On October 17, 1889, there had been paid on these notes sums aggregating $2,104.44. On November 7, 1889, for the purpose of securing the balance due, Sweet executed to the bank the following instrument: "Whereas I am indebted to the Union Bank of Denver upon two promissory notes, both past due, to the amount of four thousand dollars, with interest, and desire to secure the payment thereof, now I, William E. Sweet, hereby sell, assign, transfer, and set over to said Union Bank five thousand dollars, which is to become due to me from Wimbush & Powell, under my building contract with them, dated May 18, 1889, and set aside as an escrow to be held and paid out by the Denver National Bank pursuant to my supplemental agreement with said Wimbush & Powell, dated September 28, 1889, and this shall be taken and considered as my order to said Wimbush & Powell and to the Denver National Bank to pay over the said moneys when payable according to the terms of said supplemental agreement, to the said Union Bank. Wm. E. Sweet." On November 11, 1889, Sweet's health having failed, so that he was unable to give his personal attention to the work, he entered into an agreement with the Sayre-Newton Lumber Company, by the terms of which he turned over to the lumber company, for completion, certain uncompleted contracts, among which was that with Wimbush & Powell; the company to control and manage the work, collect the moneys due and to become due on account of it, and disburse the same in payment for such material and labor as had been furnished and might be necessary for the completion of the contracts, including the payment of Sweet's notes to the Union Bank. Wimbush & Powell had some kind of an agreement with the Denver Land & Security Company,

whereby it was to advance the money for the erection of these buildings; and the money which was to be paid into the Denver National Bank in pursuance of the supplemental agreement between Sweet and Wimbush & Powell was to be retained and held by the security company. It is not very material what the arrangement was by which this company became the custodian of the $5,000, instead of the bank, because it is entirely clear that it was the same fund which was assigned by Sweet to the Union Bank. On the 17th day of January, 1890, the SayreNewton Lumber Company filed in the office of the recorder of Arapahoe county two mechanic's lien statements, one against lots 12, 13, and 14, block 36, and the other against lots 12, 13, and 14, block 8, both in Berkley, and upon which two of the houses provided for in Sweet's contract with Wimbush & Powell were erected. On the 20th day of January, 1890, the Hallack Paint, Oil & Glass Company filed in the same office its mechanic's lien statement against the 15 tracts upon which were the 15 houses mentioned in the contract. On the 3d day of February, 1890, the West Side Planing Mill Company filed its lien statement against two of these tracts. The claim of this company was subsequently assigned to the Hallack Paint, Oil & Glass Company. On the 8th of February, 1890, the Union Bank of Denver filed its complaint against Wimbush & Powell and the Denver Land & Security Company, praying for a decree that the amount due upon Sweet's notes be paid to it out of the $5,000 which had been assigned to it, and which was in the hands of the security company. The Sayre-Newton Lumber Company, the Hallack Paint, Oil & Glass Company, the West Side Planing Mill Company, and other lien claimants, were made parties defendant to the proceeding. The SayreNewton Lumber Company answered the complaint. The paint, oil and glass company and the planing mill company joined in a cross complaint setting forth their respective lien claims, alleging the assignment by the latter company of its claim to the former, and praying appropriate relief. The other lien claimants filed answers and cross complaints. On the 7th day of March, 1890, the Sayre-Newton Lumber Company commenced original proceedings for the enforcement of its liens, in which answers and cross complaints were filed by the various parties defendant. All these several causes were united, and the consolidated case was, pursuant to a stipulation among the parties, referred to E. P. Harman, Esq., to try the issues of fact and law, and report a finding and judgment. A trial was accordingly had. and from the evidence adduced the referee found that there was due from Wimbush & Powell $41.50, and from the Denver Land & Security Company $5,000; that the SayreNewton Lumber Company was not entitled to a mechanic's lien on either of the tracts

embraced in its statement; and that neither the West Side Planing Mill Company nor the Hallack Paint, Oil & Glass Company was entitled to a mechanic's lien. The referee also found that none of the other claimants was entitled to a lien. The referee's judg ment was that the $5,000 and the $41.50 be paid into court, out of which should be paid the costs of reference, the amount due the Union Bank and its costs, and the costs of the Denver Land & Security Company; that the lien claimants pay the costs incurred by them respectively, and that the SayreNewton Lumber Company pay the residue of the costs. The judgment of the referee was made the judgment of the court. From this judgment the Sayre-Newton Lumber Company and the Hallack Paint, Oil & Glass Company have prosecuted error to this court.

The first objection which is made goes to the judgment in favor of the Union Bank. The source from which this objection comes precludes its consideration. The fund out of which the bank's claim was adjudged was set apart for the protection of Wimbush & Powell against a possible default of Sweet in the discharge of his obligation to material men and laborers, the consequence of which might be the incumbrance of the buildings and grounds with mechanics' liens. The agreement for the withholding of this money was made after an amendment to the mechanic's lien law, which we shall notice again, had gone into effect, and which provided that payments made by the owner to the principal contractor before the expiration of the time within which subcontractors might file their liens should be at his own risk, and should not be a set-off against the claim of a subcontractor who might perfect a lien in compliance with the act.

By the terms of the agreement, if, when the time had elapsed, no liens were on file, Sweet was entitled to the money. If liens were then on file, Sweet was entitled only to any surplus which might remain after deducting the amount of the liens and 50 per cent. in addition. The intention of the parties to the agreement appears upon its face. It was to save Wimbush & Powell harmless in case any fanure of Sweet in his payments should result in mechanics' liens upon their property. The lien claimants had no interest in this fund. Their rights were fixed by the statute, and that provides but one kind of lien available to them, and but one manner of enforcing it. The lien is against the real estate, and it is enforced by a sale of the real estate. There is no way by which a party, in A proceeding to enforce a mechanic's lien, can reach a fund. His sole remedy is against the property. The assignment to the bank was, except as to Wimbush & Powell, an absolute transfer of the fund. It was subject to a right in them to apply the money in discharge of mechanics' liens, but it was subject to nothing else. If the fund was improperly subjected to the payment of the debt due the bank, Wimbush & Powell were the only

parties having the right to complain; and, as they are not complaining, we cannot inquire into the judgment.

Sess.

The ruling of the referee in rejecting the several mechanics' liens of the plaintiffs in error is next assailed. The two liens of the Sayre-Newton Lumber Company will be first looked into. On April 18, 1889, the mechanic's lien law of 1883 was in force. Gen. St. 1883, p. 662. On that day an act of the legislature, amending this law, was approved, and went into effect 90 days later. Laws 1889, p. 247. It made important changes in the law as it then stood. It repealed all acts and parts of acts in conflict with it, but provided that it should not be construed to affect existing rights. The law of 1883 was available for the purpose of protecting rights which had accrued prior to the taking effect of the act of 1889, but rights subsequently acquired could be preserved and enforced only in conformity with the provisions of the new law. By the law as amended, whoever should do work or furnish materials for the construction of an improvement upon land, by contract with the owner, or with the principal contractor or a contractor under him, was entitled to a lien. The evidence showed that there had been paid to Sweet, before he relinquished the contract, about $17,000, and to the lumber company, after it took charge, $17,211.34, and that the total amount of its disbursements on account of material and labor was $13,955.70, leaving an overplus in its hands of $3,255.64, out of which, however, it was entitled to $2.905.79, on account of material furnished in the construction of four of the houses, including the two against which it asserted liens. But, after making this deduction, it still had $349.85 more than was due. Upon the face of these figures the claims for which the liens were filed had been fully paid, and there was nothing to support a lien. The argument by which it is sought to avoid this conclusion is deserving of notice. It is, in effect, as follows: The agreement between the lumber company and Sweet, in pursuance of which it completed the contract, constituted it Sweet's agent. By contract with Sweet, or with itself as Sweet's agent, it had furnished material for the construction of the buildings. It was therefore acting in the double capacity of agent for Sweet and contractor under him. As Sweet's agent, it col· lected the money from Wimbush & Powell, and paid for labor and material elsewhere obtained; and as Sweet's agent it settled with itself as subcontractor, and paid itself out of the money collected. It had contracts with Sweet to furnish material for buildings other than those in which Wimbush & Powell were interested, and upon which Sweet owed it money; and it collected from itself, as Sweet's agent, the money which had been received from Wimbush & Powell upon their contract, and paid it to itself upon these other contracts, leaving its claims against the four houses of Wimbush & Powell undischarged.

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It would have the right to collect the money due upon these outside contracts from Sweet himself, notwithstanding he received it from Wimbush & Powell; and, as it was Sweet's agent, and stood in his shoes, it had the same ight to collect the money from itself, and apply it in the same way, without reference to the source from which it was derived. The reason why it was entirely regular and proper to proceed in this way is given thus: "Under the lien statute the owner pays the contractor at his peril, for where the money passes into the contractor's hands it is his. If honest, he will pay his subcontractors. If he don't, the owner must still settle with them, for he took this risk under the law when he paid him contrary to the statute. The rights of this lumber company were very different, as his agent under the assignment, from its rights as a subcontractor. Any money coming into its hands as agent must be disbursed by it as he directed. The proof shows that the company did receive from the Berkley contract the sum of $3,255.64 in excess of disbursements on same contracts, but it is shown, too, that Sweet, being indebted to it on the other six contracts, directed it to apply said excess as a credit on the amount owed by him to the company under the other contracts. By this application, which he certainly had a right to make of his own money, the lumber company was not paid the sum of $2,905.17, due on four of said houses." Whatever we may think of this argument as an exposition of the law, it is certainly lucid enough. We can readily see how it was that Wimbush & Powell, although they fully paid for all material used in these houses, received no credit for their payments, but were subjected to process to compel them to pay the amount over again.. The assumption of special directions from Sweet is not sustained by the evidence. Without inquiring how closely a court of equity will scrutinize a transaction between a party as principal and himself as agent, where the rights of others are involved; and considering this as if it had taken place between Sweet himself and the company, we shall proceed to inquire what foundation there is in the statute for its claims. It is plain from counsel's language that he takes it for granted that whatever rights the lumber company had were governed by the amendatory act of 1889. He assumes, as a proposition which is not subject to question, that Wimbush & Powell paid the principal contractor, Sweet, or his agent, the lumber company, at their own peril; and that when they did so they took the risk of being compelled to pay the money again at the suit of some unpaid subcontractor. This idea is evidently derived from the amendment of 1889. The law of 1883 is otherwise. It is not clear from the evidence whether these lien claims should have been asserted under the amendatory or the amended act, but it is entirely certain that the statements before us do not conform to the requirements of the former. By

the terms of the act of 1889 the lien statement must set forth the name or names of the owner or owners of the property. Compliance with this, as with any other, requirement of the law, is essential. Without it, there is no lien. Neither of these statements contains, or purports to contain, the names of the owners of the property. The amendment also provides that, in order to preserve a lien for work performed or materials furnished by a subcontractor, there must be served upon the owner of the property, his agent or trustee, at or before the time of filing the statement with the recorder, a copy of such statement; or, if neither the owner nor an agent can be found in the county, an affidavit to that effect must be filed with the statement. There is no allegation or pretense that anything of that kind was done in this case. The act of 1889 was therefore not complied with in the making of these statements, and if, as counsel seems to understand, the rights of the lumber company were governed by that act, the statements are worthless, and no lien was acquired by them. In form, however, they are in substantial conformity with the provisions of the act of 1883; and, if the rights of the lumber company accrued in time to entitle it to avail itself of that act, it is by its terms that the relief to which the company is entitled must be measured. That law expressly provided that claims of subcontractors should not, in any event, be a lien upon the property to any greater extent than the indebtedness of the owner to the contractor. Therefore. whatever the owner might, in good faith, pay to the contractor, he was entitled to credit for as against any subcontractor who might afterwards assert a lien. The money paid could not be diverted into some other channel to the prejudice of the owner. When the lumber company, as the agent of Sweet, received full payment from Wimbush & Powell for all the material furnished to their buildings, they were to that extent discharged from liability; and if it used the money received in payment of an indebtedness from Sweet to it on account of other buildings, and thereby lost its right to liens upon them, it must take the consequences.

The evidence showed that Wimbush & Powell had paid the full contract price for the construction of their buildings, unless it might be the sum of $41.50. What this debt arose out of, whether it was part of the originally agreed amount, or was incurred on account of something not provided for by the contract, is not clear. In the assignment of errors and in the argument it seems to be conceded that the contract price was fully paid. The right of the lumber company to a judgment is throughout based upon grounds entirely different from any failure of Wimbush & Powell to pay the contractor, and no objection is anywhere suggested to the disposition made of the $41.50 by the referee. We shall therefore treat the case as the parties have treated it, and, concluding with

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