Great Southern Fire Proof Hotel Co. v. Jones

delivered the opinion of. the court.

The Great Southern Fire Proof Hotel Company, a corporation of Ohio, made a contract with one McClain for the construction of a hotel building and opera- house at Columbus, Ohio.

McClain contracted with Jones & Laughlins, Limited, a partnership association organized under the laws of Pennsylvania, for a certain amount of steel to be used in the buildings which he undertook to erect.

Under that contract Jones & Laughlins, Limited, furnished steel of the value of 143,296.74.

Proceeding under certain statutes of Ohio relating to liens for mechanics and others, Jones & Laughlins, Limited, brought suit in the Circuit Court of the United States for the Southern District of Ohio against the Hotel Company, to enforce a lien asserted-by them on the hotel-building and opera house for the balance due on their contract with McClain. Various persons were made defendants because they asserted claims upon or interest in the property. It was a case in which the jurisdiction of that court depended'upon.diversity in the citizenship of the parties. Upon final hearing the Circuit Court dismissed the bill on the ground that the statute of Ohio of-April 13, 1894, (91 Ohio Laws, 135,) undér which Jones & Laughlins, Limited, proceeded, was repugnant to the Constitution of Ohio. 79 Fed. Rep. 477 . Upon appeal to the Circuit Court of Appéals, that court, being of opinion that the statute was constitutional, reversed the decree of the Circuit-Court. 58 U. S. App. 397; 86 Fed. .Rep. 370 . .The case was

Upon the return of the cause the plaintiffs filed an amended bill of complaint, which cured the defect in its original bill as to the citizenship of -the parties. The case went to a final hearing upon the merits, and a decree was rendered in favor of the plaintiffs. That décree was affirmed in the Circuit Court of Appeals. Great Southern Fire Proof Hotel Co. v. Jones, 116 Fed. Rep. 793 . The case is again here upon a writ of certiorari granted upon motion of the Hotel Company.

The statutory provisions; questions as to the constitutionality of which have been raised in this case, are certain sections of the Revised Statutes of Ohio, as follows:

“Sec. 3184. A person who performs labor, or furnishes machinery or material for constructing, altering or repairing a boat, vessel, or other, water craft, or for erecting, altering, repairing or removing a house, mill, manufactory, or any furnace or furnace material therein, or other building, appurtenance, fixture, bridge dr other structure, or for the digging, drilling, plumbing, boring, operating, completing or repairing of any gas well, oil well or any other well, or performs labor of any kind whatsoever, in .altering, repairing or constructing any oil derrick, oil tank, oil or gas pipe line, or furnishes tile for the drainage of any lot or land by virtue of a contract with, or at the instance of the owner thereof or his agent, trustee,' contractor or subcontractor, shall have a lien to secure the

“Sec. 3185, Such person, in order to obtain such.lien, shall, within four months from the time of performing such labor, or furnishing such machinery or material, file with the recorder of the county where the labor was. performed, or the machinery or material furnished, an affidavit containing an itemized statement of the amount and value of such labor, machinery, or material, or any part thereof, with all Credits and offsets thereon, a copy of the contract, if it is in writing, a statement of the amount and times of payment to be made thereunder, and a description of the land on which the gas well, oil well, or other wells are situated, or the land on which the hoiise, mill, manufactory, or other buildings, or appurtenance, fixture, bridge, or other structure may stand, or to which it may be removed; and the same shall be recorded in a separate book to be kept therefor, and shall operate as a lien from the date of the first item of the labor performed or the machinery or material furnished upon or. toward the property designated in the preceding section, and the interest of the owner in the lot or land on which the same may stand, or to which it may be removed, for six years from and after the date of the filing of such attested statement. If an action be brought to enforce such lien within that time, the'same shall continue in force until the final adjudication thereof; and there shall be no homestead or other exemption against any lien under the provisions of this chapter.

“Sec. 3185a. In all cases where the labor, material or machinery referred to in sections 3184 and 3185 shall be furnished by any person other than the original contractor with such

The contention of the Hotel Company is that the statute under which Jones & Loughlins, Limited, proceeded was repugnant to the constitution of Ohio; and that the "Supreme Court of Ohio having held'in two cases, Palmer & Crawford v. Tingle, and Young v. Lion Hardware Company, 55 Ohio St. 423 — determined before the bringing of this suit,- but after .the rights of the parties had been fixed by their contracts — that the statute was inconsistent with the state constitution, the duty of the Federal court was to follow those decisions, even if, in the exercise of an independent judgment on the subject, it was of opinion that the statute was constitutional. Is that view in harmony with the decisions of this court?

The leading case on this subject is Burgess v. Seligman, 107 U. S. 20 , 33. In that case, which was in the Circuit Court of the United States, the rights of the parties depended upon a statute of Missouri, which had not been construed by- the highest court of the State at the time those rights accrued under it; and the question arose whether the Circuit Court was entitled to determine for itself what was the true meaning

In that case Mr. Justice Bradley, delivering the unanimous judgment of this court, said: “The Federal courts have an independent jurisdiction in the administration of state laws, coordinate with, and not subordinate to,, that of the state courts, and are bound to exercise their own judgment as to the meaning and effect of those laws. The existence of two coordinate jurisdictions in the same territory is peculiar, and the results would be anomalous and. inconvenient but for the exercise of mutual respect and deference. Since the ordinary administration of the law is carried on by the state courts, it necessarily happens that by the course of their decisions certain rules are established which become rules of property and action in the State, and have all the effect of law, and which it would be wrong to disturb. This is especially true with regard to the law of real estate and. the construction of state constitutions and statutes. Such established rules are always regarded by the Federal courts, no less than by the state courts thejnselves, as authoritative declarations of what the law is. But where the law has not been thus settled, it is the right and duty of the Federal courts to exercise their own judgment; as they also always do in reference to the doctrines of commercial-law and general jurisprudence. So when contracts and transactions have been entered into, and rights have accrued thereon under a particular state of the decisions, or when there has been no decision of the state tribunals, the Federal courts properly claim the right to adopt their own interpretation of the law applicable to the case, although a different interpretation may be adopted by the state courts after such rights have accrued.

So in Carroll County v. Smith, 111 U. S. 556 , in which the principal question was as to the validity, under the constitution of Mississippi, of certain proceedings taken under a railroad charter, the Supreme Court of that State having-passed on the question, it was contended that its judgment was binding on the courts of the United States. But this court, speaking by Mr. Justice Matthews, said: “ It was not a rule previously established, so as to have become recognized as settled law, and which, of course, all parties to transactions afterwards entered into would be presumed to know and to conform to. When, therefore, it is presented for application by the courts of the United States, in a litigation growing out of the same facts, of which they have jurisdiction by reason of the citizenship of the parties-, the plaintiff has a right, under the Constitution of the United States, to the independent judgment óf those courts,, to determine for themselves what is the law of the State, by which his rights are fixed and governed. It was to that very end that the Constitution granted to citizens of one State, suing in another, the choice-of resorting to a Federal tribunal. Burgess v. Seligman, 107 U. S. 20 , 33.” And in Anderson v. Santa Anna, 116 U. S. 356 , 365, it was

In Folsom v. Ninety-Six, 159 U. S. 611 , 627, which involved a question of the validity of a state enactment, this court referred to Burgess v. - Seligman, and, speaking by Mr. Justice Gray, said: “There not being shown to have been a single decision of the state court against the constitutionality of the act of 1885 before the plaintiff purchased his bonds, nor any settled course of decision upon the subject, even since his purchase, the question of the validity of these bonds must be determined by this court according to its own view of the law of South Carolina.” In Barnum v. Okolona, 148 U. S. 393 , which involved the validity of certain bonds, and which bonds the highest court of the State had adjudged to be void under a local statute; the court said: “As against a party who became the owner of such bonds before the decision of the Supreme- Court of the State was rendered, which was the case here, we do not consider ourselves bound by such decision unless we regard it as intrinsically sound.” As late as Stanly County v. Color, 190 U. S. 437 , 445, relating to the validity of certain municipal bonds, this court reaffirmed the same prin

The plaintiffs insist that the Supreme Court of Ohio, in Railway Co., v. Cronin, 38 Ohio St. 122 , and Railway Co. v. McCoy, 42 Ohio St. 251 — which were determined prior to the contract between McClain and the plaintiffs — announced principles which, being applied here, would sustain the validity of the act of 1894. If this were true, then, in conformity with the settled course of decisions in.this court, we should hold that the rights of the plaintiffs under their contract could not be affected by a change of decision in the state court. But, as the Circuit Court of Appeals held, the two cases just referred to should not control the decision here. Those cases, it is true, related to statutes giving liens to those who performed labor and furnished materials in the construction of railroads. But it does not appear that any question was raised or determined in them as to the constitutionality of the particular statutes there involved.

On behalf of the Hotel Company, it is contended that the cases of Hampson v. State, 8 Ohio, 315 , Copeland v. Manton, 22 Ohio St. 398 , Dunn v. Rankin, 27 Ohio St. 132 , and Bullock v. Horn, 44 Ohio St. 420 , all prior to the act of 1894, announced general principles which, being accepted, would necessarily lead to the conclusion reached by the Supreme Court of Ohio in the two subsequent cases, above cited, in which section 3184 of that act was held to be in violation of the state constitution. It is, therefore, contended that our interpretation of the' con-.

In our opinion, neither the decisions of Palmer v. Tingle, Young v. Lion Hardware Co., 55 Ohio St. 423 , nor any

It remains to dispose of the question of the constitutionality of the Ohio statute upon which this suit is .based. In its consideration of the subject the Supreme Court of Ohio, in the Palmer-Young cases, referred to the Preamble to the constitution of that State, declaring that “We, the people of the State of Ohio, grateful to Almighty God for our freedom, to secure its blessings and promote our .common welfare, do establish this constitution;” to the first section of the Ohio Bill of Rights providing that “all men are, by nature, free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and seeking and obtaining happiness and safety;” and to the second section of the state constitution declaring that “all political power is inherent in the people. Government is instituted for their equal protection

The Circuit Court of Appeals expressed its earnest desire, in the interest of harmony of decision, to come to an agreement with the state court, but its sense of duty compelled it to sustain the coústitutional validity of the. statute upon which the plaintiffs based their claim. Upon a careful consideration of the objections urged to the. statute, and after an extended review of the authorities, the Circuit Court of Appeals held that the statute did not deprive the owner of his property without due process of law, nor unreasonably interfere with his liberty of contract; that the restraints put upon the owner by the provisions in favor of sub-contractors and those who furnished materials to be used by the contractor in execution of his contract, with the owner, were neither arbitrary nor oppressive; that such provisions were no more onerous than required by the necessity of protecting those who actually do the work or furnish the material by which the owner is benefited; and that as the legislation in question was sanctioned by the dictates of natural justice, and, as must be conclusively presumed, was known to the owner when he contracted for the building of his house, its requirements could only be avoided-by pointing out some specific part of the organic law which has been violated by its enactment.

■ We áre constrained to withhold our assent to the views