Kelley v. Bluff Creek Oil Company

Mr. Justice Calvert,

joined by Justice Norvell, dissenting.

The opinion of the majority nullifies the plain, positive and unambiguous thirty-day provision of Article 5472c, V.A.T.S. *191 Moreover, the majority’s construction of the statute clouds its validity in considerable doubt.

The majority refer to the bond filed by respondent as one “for release of the lien” which petitioner attempted to fix under Chapter 2 of Title 90, and state that the object of bonds filed under Article 5472c “is to free land from liens by substitution of a surety on an indemnity bond for the security otherwise afforded the unpaid mechanic, contractor or materialman under Chapt. 2, Title 90, R.S. 1925.” I submit that these statements are much too general and much too broad. There is no language in the Article which provides that the filing of the bond shall operate to release the lien or to free the land from the lien. 1

Any correct analysis of Article 5472c must begin with recognition that there is a difference between constitutional and statutory liens and that the statute Will oner ate differently on them. As between the parties to it compliance or noncompliance with statutory provisions cannot affect the validity of a self-executing lien arising under section 37 of Article 16 of the State Constitution, and if Article 5472c were interpreted as substituting a bond for the lien, or as effecting “a release of the lien,” or as “freeing the land from the lien,” it would be invalid. Strang v. Pray, 89 Texas 525 , 35 S.W. 1054, 1056 ; Farmers’ and Mechanics’ Nat Bank v. Taylor, 91 Texas 78 , 40 S.W. 876, 966 . In the field of constitutional liens Article 5472c should therefore be held to operate only to protect the rights of purchasers or lenders and to provide the mechanic or materialman with additional security for his debt if he complies with the provisions of the statute. How do the provisions of the Article operate on the rights of claimants to statutory liens ? The answer to that question requires a more detailed analysis of its provisions.

The statutory bond is payable to the lien claimant or his assignees and is conditioned that the principal and surety will pay to the obligees “the amounts of the liens so claimed by them with all costs in the event same shall be proven to be liens on such property.” 2 It is then provided in section 2 that when the bond has been filed and the required notice and return have been registered in the Mechanic’s Lien Records, “any purchaser or *192 lender may rely upon the record of such bond, notice and return in acquiring any interest in said property and shall absolutely be protected thereby.”

The obligation of the bond is to pay the amounts of the liens and all costs but only “in the event the same shall be proven to be liens” on the property. As a predicate for liability on the bond it therefore becomes necessary that the claims be “proven” or “established” to be liens on the property. It follows necessarily that if a suit to establish a claim as a lien on the property is barred by any statutory limitation, and a plea setting up the statute is interposed, the claim cannot “be proven to be a lien” on the property.

In Section 4 of Article 5472c the Legislature prescribed, in plain and emphatic language, a definite and limited period for the filing of suits to establish claims as liens on property when the statutory bond is filed. The opening sentence in the Section reads: “No action shall be brought or maintained in any court to establish, enforce or foreclose any lien or claim of lien referred to in such bond unless the same shall be brought within thirty days after the service of notice thereof as herein provided.” That language is as positive in imposing a period of limitation as is the language of any Article of Title 91 (Limitations) of our statutes. The legal right to interpose a thirty-day limitation plea and thus to defeat an effort of the lien claimant to “establish, enforce or foreclose” his lien or claim of lien accrues, under the statute, to the owner of the property, as owner. The right to interpose the plea in a suit on the bond, in which the establishment of the lien is a necessary incident to liability, also accrues to the owner and the corporate signer as principal and surety on the bond. In this case the owner of the property did not plead the thirty-day statutory limitation as a defense, either to the establishment of the lien, as owner, or to his liability as principal on the bond, but the surety on the bond did. The plea of the surety was sustained in and by the trial court’s judgment. The second sentence of Section 4 prescribes a second period of limitation. The sentence reads: “After such 30 days and at any time within one year from the date of such service, the party making or holding such claim of lien may sue upon such bond but no action shall be brought upon such bond after the expiration of such period.” The legal right to interpose a plea of limitation based on the second sentence accrues only to the obligors on the bond (the property owner-principal and the corporate surety) to defeat liability on the bond; it does not accrue to the property owner, as owner, to defeat the lien.

*193 The quoted sentences are too plain and clear to admit of different meanings. Their meaning is not doubtful. They are not conflicting. There is no need or room for construction. They deal with separate causes of action for each of which a separate period of limitation is provided. If a lien claimant fails to sue within the thirty-day period, any suit filed by him thereafter to “establish, enforce or foreclose” his claimed lien is subject to a plea of limitation by the property owner even though no effort is made to recover on the bond. If the lien claimant fails to file his suit within thirty days but sues to recover on the bond within one year from the expiration of the thirty-day period, he must establish his lien as an incident to liability on the bond and his suit is subject to a plea of limitation by the principal and surety, either or both.

The majority, under guise of construing the statute, have simply written one of the plain, clear and unambiguous provisions, in no way in conflict or inharmonious with the other, out of the statute. It has been written out on the ground that the majority can think of no sound reason why the Legislature should have required two suits, with different periods of limitation, when one suit encompassing the subject matter of both and with but one period of limitation would serve the purpose as well or better. I respectfully suggest that this type of construction does violence to what have heretofore been regarded as sound rules of statutory construction. See Weaver v. Robison, 114 Texas 272 , 268 S.W. 133 ; Simmons v. Arnim, 110 Texas 309 , 220 S.W. 66 ; Fire Ass’n. of Philadelphia v. Love, 101 Texas 376 , 108 S.W. 158 ; Texas Highway Commission v. El Paso Bl’d’g. & Const. Trades Council, 149 Texas 457 , 234 S.W. 2d 857 ; Col-Tex. Refining Co. v. Railroad Com. of Texas, 150 Texas 340 , 240 S.W. 747 . In Fire Insurance Ass’n. v. Love, 101 Texas 381, 108 S.W. 160 this court said: “It is not permissible for a court, no matter what its opinion might be of the policy of the enactment or of the justice of its effect, to substitute its own opinions with regard to such matters for the plain and clearly stated intention of the legislative department.”

There are a host of other decisions by this court to the same effect.

Perhaps the rule is no where more appropriately stated as applied to the instant case than in Weaver v. Robinson, supra, where it is said ( 268 S.W. 133, 141 ) :

“Some may ask why the Legislature has prescribed this meth *194 od of advertisement rather than the one used by the land commissioner. Some may think the latter’s method the better one. Some may say there is no reason why sold land should not be offered for sale again before it has been forfeited. But, when the Legislature has spoken in plain language, there is no room for construction. Nor, under the circumstances, are the courts to be concerned with the policy of the enactment or the justice of its effect.”

The emergency clause of the Act does not strengthen the majority’s action. On the contrary it lends weight to the conclusion that the Legislature meant precisely what it so plainly said in requiring both suits and had sound reason for saying it. The emergency clause reads as follows:

“The fact that a great many claims or liens are filed under the provisions of said Chapter in amounts known to be unjust and for the purpose of creating apparent clouds and liens on titles when, in fact, none exist, delaying property owners in financing temporary loans with long time loans and often bringing about foreclosures which, otherwise, would not be necessary, create an emergency etc. * * *”

If, as the Legislature found, a great many claims were being filed in amounts “known to be unjust” and for the purpose of creating liens when, in fact, “none exist,” the requirement that suit be filed promptly to “establish, enforce or foreclose” the claimed lien and thus to establish the bona tides of the claimant becomes understandable. By filing the bond the landowner casts on the lien claimant the burden of demonstrating by prompt action that his claim is not unjust on penalty of losing not only the protection the bond might otherwise afford but the lien itself. Moreover, by the filing of the suit the principal and surety on the bond are put on notice that the claim of the mechanic or materialman is made in good faith and that they must prepare to defend against it. If by suit brought within the statutory thirty-day period the claimant demonstrates that his claim is made in good faith and thereby preserves his lien he must still bring suit on the bond within one year if he wishes to look to the surety for payment. This interpretation of the statute works no hardship on the lien claimant. As to statutory liens, the Legislature having given the lien in the first instance has the same power to take it away. By the thirty-day provision of Article 5427c the Legislature has expressly and clearly taken away the lien when the statutory bond is filed and notice is served if suit to establish, enforce or foreclose the lien is not promptly filed. *195 If the suit is filed within the prescribed period the claimant has the security of the bond to which he may look for satisfaction of his claim if he files suit thereon within one year.

The real purpose of the statute appears to have been to facilitate the free sale, exchange or mortgaging of property and to protect those who acquire the property or an interest therein. The interpretation here given the statute aids in accomplishing that purpose. When the statutory bond has been filed one wishing to purchase the property or to lend money on it will know that he may do so safely if no suit is filed by the claimant of a statutory lien within the prescribed time. If the suit is filed he will know that he is protected by the bond.

There are no rights of third persons involved in this case. The only question to be determined relates to rights of parties to the asserted debt and lien. The testimony adduced on the trial is far too meager to determine whether the lien asserted by petitioner is, in whole or in part, a constitutional lien. Ball v. Davis, 118 Texas 534 , 18 S.W. 2d 1063 . But whether the lien asserted is constitutional or statutory it is my opinion that any right of recovery on the bond was lost by failure of petitioner to file suit, within thirty days after notice of filing of the bond, to establish, enforce or foreclose the lien.

I agree with the holding of the majority that the case should be remanded to the trial court for trial of petitioner’s right to a judgment against Bluff Creek for the amount of his claimed debt, and as well with their holding that in spite of the assignment of the claim petitioner owned such an interest therein as to justify the bringing of suit in his own name and thus to satisfy the requirement that suit on the bond be brought within one year. But because no suit was brought to “establish, enforce or foreclose” the claimed lien within thirty days, as plainly required by Article 5472c, I would hold that the lien was lost and that therefore there can be no recovery on the bond under count one of the plaintiff’s petition.

Opinion delivered January 8, 1958.

Rehearing overruled February 19, 1958.

. —Contrast the language of Article 5472b-1 in which it is provided that the ¡bond filed thereunder “shall release and discharge all liens fixed or attempted to be fixed by the filing of said claim or claims.”

. —Emphasis added throughout. The bond in this case is conditioned to pay the amount of the lien claimed and all costs “in the event such lien shall be established against such property, and in the event such lien be not legally established, then this bond shall be of no force and effect.”