executor might recall the stock, he would have no right to recall it unless it should be needed for the payment of debts; and an agreemfmt to transfer it back for any other purpose would not be binding upon the title, but would be merely executory. Bac. Abr. "Legacies," L'; Andrews v. Hunneman, 6 Pick. 125. The statutes of the state confirm such disposition of the assets of an estale against claims not presented to commissioners because not arising in time, like this claim, and leave such claimants to pursue the legatees and not the executor. Section 2209 makes the legatees liable, so far as they have received assets, for what there is not enough in the hands of the executor to pay; and section 2214 exonerates the executor so far as he has The estate is to stand as it was when the claim arose. Then the whole title to those 400 shares had passed from the executor to the residuary legatee. They are not wanted by anyone for the payment of claims, for they create a claim against other estate instead of being assets for that purpose. They were not in the hands of the executor for the purposes of this assessment. Bowden v. Johnson, 107 U. S. 251; S. C. 2 Sup. Ct. Rep. 246. The demurrer must be sustained as to these 400 shares, and overruled as to the 30 shares. Although the assets in, the hands of the residuary legatee may, as between the legatees themselves, be ultimately liable for this claim, the creditor may in equity follow the assets into whose hands soever they may come. Bac. Abr. "Legacy," H; Davis v. Weed, 44 Conn. 569; Rev. Laws Vt. § 2209. The demurrer of all the defend. ants who are alleged to have received assets must now be o?erruled. Demurrer sustained as to 400 shares of stock, and overruled as to 30 shares of stock; defendants to answer over as to the latter by the fifteenth day of November next.
HOWARD IRON Co.
v. COUNCIL BLUFFS CO. and others.!
(Uircuit Oourt, 8. D. Iowa, W D. September Term, 1885.)
.nfECHANrc'S LIEN-CONTRACT TO FURNISH PIPES FOR CITY' WATER-WORKSPAH'fIKS TO BILL TO ENFORCE LIEN.
Complainant made a contract in writing with the American Oonstruclion Company, of New York, and Council Bluffs CityWater-wol'ks Company, to furnish certain pipes to be used in the construction of the water-works at Council Bluffs, the construction company agreeing to pay the price fixed in the contract; and the water-works company guarantying the faithful performance of tlle contract by the construction cllmpany, and agreeIng to that end to deposit in bank, as security forsnch performance, $10,000. The American Construction Company had procured the right to construct water.works under certain city ordinances, and had assigned all its· rights to the water-works company, and JReported by Robertson Howard, Esq., of the St. Paul bar. See note at end of case.
HARRISON & H. I. CO. V. COUNCIL BLUFFS CITY W. W. CO.
all the work done and material furnished was furnished to the water-works company as the real party in interest. Complainant sought to a mechanic's lien on the pipes for the balance due him for the pipes, etc., furnished and used in the construction of the city water-works. Held, on demurrer for defect of parties, that the American Coristruction Company was not a necessary . party, but that tile city of Council Bluffs was a necessary party defendant.
2. SAME -
2129. lIe/d, further, that the deposit of $10,000 as agreed in the contract prevented complainant from acquiring any lien under the provisions in Code Iowa, § 2129. Whether any lien could be established on the water-works of the city is not now decided.
LlEN DEFEATED BY TAKING COLI,ATERAL SECURITY -
SAME-ExEMPTION OF PUBLIC PROPEHTY.
Demurrer to bill.
SHIRAS, J. In substance the bill in this cause sets forth that on the twelfth of April, 1882, the complainant made a contract in writing with the American Construction Company, of New York, and the Council Bluffs City Water-works Company; whereby c(\mplainant agreed with the construction company to furnish certain cast-iron pipes and castings to be used in the construction of the water-works at Council Bluffs, the construction company agreeing to pay therefor the prices fixed in the contract, and the water-works company guarantying the faithful performance by the construcbion company of the obligations imposed upon it by the terms of the contract, and to that end the water-works company bound itself "to deposit, as security for the full performance of said obligation, the sum of ten thousand dollars in the hands of the Commercial Bank of St. Louis, the sum to be applied in payment to said iron company of any sum the said construction company may fail to pay," etc. It further appears from the allegations of the bill, and the amendment tnereto, that the American Construction Company had procured the right to construct water-works in Council Bluffs under the provisions of certain ordinances passed by the city council of that city, and had assigned and transferred all its rights and obligations in this particular to the water-works company, and it is averred that in fact all the work done and materials furnished under the written contract with complainant were, in fact, furnished to the water-works company as the real party in interest. The bill further charges that complainant furnished the materials provided for in its contract, and that the same were used in constructing the water-works at Council Bluffs, owned by the respondent, the Council Bluffs City Water-works Company, the same being furnished for that purpose, and that there remained due to complainant thereon the sum of $5,429.02, for which amount complainant prays against tbe water-works company, and further prays that a mechanic's lien in its favor b6 established and enforced upon the real estate of the water-works company, with the buildings and ei'ections thereon,
Sapp et Pusey, for complainant. Wright, Baldwin et Haldane, for respondent.
including the reservoirs, and 'also upon the mains, distributing pipes, hydrants, and all other property of defendant constituting part and parcel of its system of water-works in said city of Council Bluffs. To this hill the water-works company, H. P. M. BirkentJine, and the Farmers' Loan & Trust Company, as trustee in a mortgage exe· cuted by the water-works company upon its property to secure certain bonds, are made parties defendant. On part of the water-works company a demurrer to the bill was filed, and the cause is now before the court upon the questions presented by the demurrer. The first ground of demurrer is that of a defect of parties defendant, in that neither the American Construction Company nor the city of Council Bluffs is made a party to the proceeding. While it is true that in the contract l;lntered into by complainant for the furnishing of the material the American Construction Company was the principal contracting party, and would therefore ordinarily be a necessary party to any suit brought to enforce its provisions, yet, by the averments of the bill, and tIle amendment thereto, it is charged that the construction company sold and transferred all its rights in the proposed system of water-works at Council Bluffs to the water-works company, and that the latter company became the real and only party interested in tbe construction of said works, and that all the materials were furnished for the use and benefit of that company, which became bound for the payment thereof. The complainant does not seek a judgment against the construction company in this proceeding, nor does it seek a lien upon any property owned by that company. Neither the property nor the rights of that company will be affected by any judgment or decree rendered in this proceeding. The complainant seeks only a remedy against the water-works company and its property, and the question thus arising can be fully passed upon without the presence of the construction company as a party to the proceeding. Upon this ground the demurrer is not well taken. Whether the city of Council Bluffs should be made a party defendant presents a more difficult question for solution. In the case of Williams v. Bankhead, 19 Wall. 563, the supreme court, in considering the question of parties to proceedings in chancery, laid down the following general propositions: "The general rule as to parties in chancery is that all ought to be made parties who are interested in the controversy, in order that there may be an end of litigation. But there are qualifications of this rule out of public policy and the necessities of particular cases: First. Where a person will be directly affected by a decree he is an indispensable party, unless the parties are too numerous to be brought before the court, when the case is SUbject to a special rule. 'Where a person is interested in the controversy, but will not be directly affected by a decree in his absence, he is not an indispensable party, but should be made a party if possible, and the court will not proceed to a decree without him if he can be reached. Thirdly. Where he is not interested in the controversy between the immedi:ote litigants, but has an interest in the subject-matter which may be conveniently
HARRISON & H. I. CO. ,. COUNCIL BLUFFS CITY W. W. 00.
settled in the suit. and thereby prevent further litigation. he may be a party or not, at the option of complainant."
From the statement already made of the prayer in the bill it is apparent that complainant seeks to have a lien in its favor established upon the mains and other pipes extending along and under the streets and alleys of the city. If the decree asked by complainant should be granted, and the property be sold under such a decree, the purchaser would become the owner of the mains and distributing pipes, which are beneath the streets of the city, placed there under ihe authority of the city. Are such pipes placed in the streets and highways of the city to subserve a public purpose, to-wit; that of furnishing a supply of water to the city and its inhabitants for public and private use. subject to a mechanic's lien, even if the same are (}wned by a corporation other than the city? If they are, would a purchaser at a foreclosure sale of a mechanic's lien thereon have the right to remove them and thus deprive the city and its inh&.bitants Qf their water supply? It is clear, without further elaboration, that the interests of the city are liable to be affected by a de<iree of the nature prayed for by complainant, and that if such decree is rendered, and a sale of the property be made thereunder, serious complications would at once arise, affecting the interests of the purchaElerand of the city. Moreover, if the property sought to be subjected to the lien was ordered to be sold without first settling the rights of the city ,no one could determine what rights he would acquire to thfl property in case he became a purchaser; and at a sale made under such cir.cumstances, it could not be expected that the real value of the property could be realized. It is to the best interests of both the complainant and the defendants that if the property is sold under a lien, it be sold to the best advantage. 'fhis cannot be done, save by settling, before the sale is decreed, what the rights are that a purchaser would acquire under the sale when made. In this question the city of Council Bluffs is directly interested, and therefore, without passing upon the question whether the ·city is an indispensable party under the first rule laid down by the supreme court, it is sufficient to say that the interest of the city in the controversy is of such a nature that, under the principle laid down in the second rule given by the supreme court, it should be made a party, in order that, as far as possible, the rights of all may be protected. If, then, this cause is to proceed fu. cher, the city of Council Bluffs should be made a party defendant. The demurrer presents another question, however, which goes to the right of complainant to a mechanic's lien under any circumstanct;\s, and that is that at the time of making the contract under which complainant claims a lien, and as a part thereof, the complainant con.traeted for and procured collateral sl:Jcurity on the same, and that ihereby the right to a lien is defeated. The Code of Iowa, § 2129, provides that "no person shall be entitled to a mechanic's lien who.
at the time of executing or making the contract for furnishing material or performing labor, or during the progress of the work, erection, building or other improvement, shall take any collateral security on such contract." In Bissell v. Lewis, 56 Iowa, 231, S. C. 9 N. W. Bep. 177, the court said: "The object of the statute doubtless is to prevent anyone from obtaining a lien who takes security for the amount due, or to become due, at any time before he completes his contract, be it for work or materials." As already stated, in the within contract, upon which complainant bases its action, it is provided that the waterworks company should deposit, as security for the full performance of the contract on part of the construction company, the sum of $10,000 in the Commercial Bank of St. Louis. In the statement of account attached to the bill, and forming part thereof, it is stated that on the twenty-first of December, 1883, there was paid on account the sum of $10,000, being the amount of collateral deposit made May 23d. The fair inference from this credit is that the sum agreed to be deposited as security was in fact deposited as required by the terms of the contract. Assuming this to be the fact, it then appears that the complainant, in making the contract for the furnishing of the materials for which it now seeks to establish a lien under the statute, contracted for the deposit of $10,000 as security for the payments contracted to be made to it, and the money was deposited as security in accordance with the terms of the contract. If this sum of money was deposited for the purpose stated, then it is clear that complainant did not rely upon its right to a mechanic's lien for security, but did contract, for and obtain other security thereon; and under the very terms of the statute conferring the right to a mechanic's lien, no such lien can be claimed or enforced, if the party claim ing the lien has taken security for the amount due, or to become due him, before he completed his contract. It was said in argument that all that could be inferred from the bill filed in this cause was, that the complamant had contracted to take security, and that it did not appear that such security had been in fact given. In ruling upon the demurrer it has been considered that the record sufficiently shows that the deposit provided for in the contract was' in truth made. If such deposit was not in fact made, leave is granted to complainant to amend its bill by averring that such deposit was not made. As the case now stands, the demurrer to the bill is sustained upon the ground above stated. The demurrer also presents the question whether it is shown that complainant furnished the materials in pursuance of a contract with the owner of the property upon which the lien is sought; it being claimed that the contract for the furnishing of the materials was made, not with the owner of the property, but with another party. 'This question can be better determined, if the case proceeds further, upon the final hearing than as now presented, and it is therefore reo served for decision at the final hearing. The same course will be pur-
HARRISON & H. I. CO. V. COUljCIL nWFFS CITY W. W. CO.
lmud in regard to the question whether thl;} property, upon which the lien is sougltt, is of such a public character that the court will not enforce a lien thereon under the provisions of section 3048 of the Code of Iowa, which exempts from sale upon execution public property necessary and proper for carrying on the general purposes of the corporation. That question will more properly arise in case the city becomes a party to this litigation, and it is therefore reserved for future disposition. The demurrer to the bill is therefore sustained upon the ground that it appears from the record that the complainant, before the completion of its contract for the furnishing of the materials, took and received collateral security, and is not, therefore, entitled' to a mechanic's lien. If the facts justify it, complainant has leave to amend its bill so as to show that in fact the security provided for in the contract was not deposited. If such amendment is made within 30 days from this date, then complainant is required to make the city of Council Bluffs a party defendant, in order that its rights may be heard and adjudged in this proceeding.
NOTE. MecMnic', Lien-Exem}Jtion of Public Property. In Wilkinson v. Hoffman. 21 N. W. Rep. 816, it was held that Rev. St. Wis. 1878, 3314, authorizing a mechanic's lien, did not extend to a building, or machinery placed in a building, constituting a part of the water-works of a city i and COI,E, C. J., in delivering the opinion of the court, says: "It has never been understood that the statutes giving a mechanic's lien extended to or could be enforced against the building and real estate of a municipal corporation held for public use. The considerations founded on grounds of public policy and regard for the objects of municipal government forbid that this clause [Rev. St. 3314] should be held to apply to machinery placed in a building constituting a part of the city water-works as strongly as to exempt the building itself. The public inconvenience which would result from having such machinery removed is too obvious and grave to require any discllssion. The comfort, health, safety, and property of the citizens would be greatly endangered by allowing the facilities for procuring water to be suspended, even for a short period. In view of the serious consequences which would result by allowing the lien to machinery thus used, and which more than countervail any private advantage, we are inclined to hold that the provision does not apply in the case before us. True. the city has paid into court the price of the boilers; but suppose it had not done so, if the lien is givcn, they might be removPd. Consequently, on grounds of public necessity and convenience, we must hold that the lien did not attach. The case stands UJ10n the same ground as where material is furnished for a county court-house, jail, public school building, or other public buildings, which are held to be exempt from the operation of mechanics' lien laws." ,so, in Board, etc., Parke Co. v. O'Connor, 86 Ind. 531, it is said, overruling Shattell v. Woodward, 17 Ind. 225, that there is no provision in the mechanic's lien law of Indiana "to the effect that. such a lien may be acquired or enforced upon or against public property held for public use; alia in the absence of such a proviSIOn it must be held, in conforIlllty with the weight of decision elsewhere, that snch a lien can neither be acquired nor enforced upon or against such property held for public nse." See, also, Board, etc., Pike Co. v. Norrington, 82 Ind. 190; Lowe v. Board, etc., Howard Co., 94 Ind. 553; and Falout v. Board of School Com'rs, 1 N. E. Rep. 389. The principle laid down in the above cases is in accord with the law as decide.! in Eennsylvania, Foster v. Fowler, 60 Pa. St. 27; Wilson v. Commissioners, 7 Watts & S. 197 j Williams v. Controllers, 18 Pa. St. 275; New York: Brinckerhoff v. Board of Education, 37 How. Pro 520; Poillon V. Mayor of New York, 47 N. Y. 666; v. City of Brooklyn, 71 N. Y. 498; Iowa: Charnock v. Colfax Tp., 51 Iowa. 70; Lormg V. Small, 50 Iowa, 271 i Lewis V. Chickasaw Co., Id. 235; Whiting v. Story Co., 54 Iowa, 81; S. C. 6 N. W. Rep. 137; Illinois: Board of Education v Neidenberger, 78 Ill. 58; Bouton V. McDonough Co .· 84 Ill. 396; and Missouri: State V. Tiedern,aI1n, 10 Fed. Rep. 20. See. also, Frank v. Chosen Freeholders, 39 N. J. Law, 047; and Ripley v. Gage Co., 3 Neb. 397. St. Paul, Minn. ROBERTSON HOWABD.
(Oircuit Court, W. D. Missouri, W. D. October Term, 1885.)
SUBltOGATION - ADMINISTRATOR'S SALE-MORTGAGES- HOMESTEAD RIGHTS OF WIFE-NOTICE.
In Chancery. Wm . .4.. Wood, for complainant. L. II. Waters, for defendants. KREKEL, J. From the pleadings and evidence in this case it appears that in 1871 Burnsides and wife were living upon 60 acres of land in Livingston county, Missouri. While so living they borrowed $300 of school money of the county of Livingston, and secured it by giving a mortgage upon their homestead. Burnsides, not long after the giving the mortgage, died, and his wife administered on the estate. Burnsides, being indebted aside for the school money borrowed of the county, an order of the probate court was in due time made, directing the administrator to sell the land to pay debts, which she did, selling all the right, title, and claim of the deceased. At this sale, in 1875, one Bell became the purchaser, and he on the same day sold the land to one O'Dell, subject to the county mortgage. O'Dell afterwards substituted his own mortgage for the one of Bell; and had the original mortgage of Burnsides released. After this 0' Dell reBold the land to Bell, subject to the county mortgage O'Dell had given. Bell, being again the owner of the land, applied for a loan to the present plaintiff, and obtained it; so much of the loan as was necessary to pay the Livingston county debt being applied in that way,
Reported by Robertson Howard, Esq., of the St. Panl bar.