
    Stark v. Simmons.
    
      Mechanics lien — Liability of building owner to contractor, compensated. pro tanto by valid claim gaa inst contractor — Owner may apply such compensation against sub-lienor.
    
    1. The liability of the owner of a building to a contractor for labor to be performed thereon is pro tanto compensated and discharged by a valid claim against such contractor, the claim being due to such owner when the contract for labor is entered into.
    2. In the absence of fraud and collusion the owner may insist upon such compensation against a sub-lienor.
    (Decided April 28, 1896.)
    Error to the Circuit Court of Cuyahoga county.
    Simmons filed his petition in the court of common pleas, the first cause of action being as follows:
    First cause of action. Plaintiff says that between the 19th day of April, and the 29th day of April, 1893, he performed four days manual work and labor as painter for one, W. C. Mullen, a painter contractor, which was applied towards the repair of a certain building belonging to and owned by the defendant, E. D. Stark, under and by virtue of a contract between the said W. C. Mullen and the said E. D. Stark at the agreed price of $3.00 a day; that no part of the same has been paid, and there is now due and owing him for the same from said Mullen the sum of twelve dollars. '
    That afterwards to-wit, on the 23d day of May, 1893, this plaintiff filed with said defendant, under the statute for obtaining a mechanics lien by material used and laborers, a true and itemized account of said work and labor done, which same was not disputed by said Mullen within ten days thereafter. Plaintiff says that at the time of filing said account with said owner there was due and owing from said Stark to said Mullen on said contract, so existing between them, a sum of money amply sufficient to satisfy the claim of this plaintiff, and that by reason of the premises there is now due and owing this plaintiff from said defendant the sum of twelve dollars, no part of which has been paid.
    Other causes of action were founded on liens of the same character taken by others on employment by Mullen and by them assigned to Simmons. The sum of the alleged liens was $53.00.
    The first defense interposed by the defendant was as follows:
    “He denies that he ever directly or indirectly employed the plaintiff, or had any contract relation, express or implied, with him or any one of the several persons named in the petition as assignors, to him of claims for work, or that he is in any manner indebted or liable to him or them for wages or anything else.
    “Further answering he says, some days prior to April 19, 1893, this defendant became the owner of a valid claim against Mullen for the sum of $82.00 then past due, and for the purpose and with the intent of getting payment and satisfaction of that amount he engaged Mullen to paint his building at the agreed price of $80.00. Defendant had no knowledge or information that Mullen, being himself a working painter, would employ any other person to work on the job. After the work was done Mullen was not satisfied with the set-off, and refused to accept a satisfaction of the $82.00 claim against himself in payment of the $80.00 claim, though admitting the validity of the account and his obligation to pay, and thereupon set on foot schemes to avoid the set-off.”
    A demurrer to this defense was sustained and a a judgment rendered in favor of the plaintiff, which was affirmed by the circuit court. A reversal of both judgments is sought upon the ground that there was error in sustaining the demurter.
    
      E. I). Stark, for plaintiff in error.
    
      E. J. Thobaber, for defendant in error.
   Shauck, J.

It is insisted that the ruling below is justified by Bullock v. Horn, 44 Ohio St., 420. It was there decided that where a mechanic, who under the employment of a contractor, and with the knowledge of the owner, has performed labor upon the construction of a-building, and, the account not being paid, takes the necessary steps to fix the liability of the owner and obtain a lien upon the premises, the owner cannot defeat the claim of such mechanic by setting off against it a claim against the contractor such claim not growing out of the contract and being acquired by the owner after the labor was performed. In that case the owner attempted' to make the subsequently acquired set-off available against the demand of the mechanic to defeat his right to resort to an indebtedness of the owner to the contractor which existed when the mechanic performed his labor. The opinion approves the view expressed in Phillips on Mechanic’s Liens, that the purpose of laws of this character is “to take from the owner money actually owing by him upon his contract, and apply it in the payment for the labor and material which the workman and material-men have contributed toward the performance of the same contract.” Here, however, the. contention of the plaintiff in error is, that upon the facts alleged in the pleadings, he was not at any time indebted to the contractor, and there was, therefore, no money which, within the purpose of the statute could be applied to the discharge of the claims of those who had performed labor upon the employment by the contractor. It does not seem to be doubted, that if the case were not affected by the statute relating to such liens, the plaintiff in error would be entitled to insist that his demand against the contractor, which was due when the contract was entered into, should compensate the demand against him founded upon the contract. Of the provisions of the statute in force, when this question arose, section 3204, is applicable. That section provides, in substance, that if the owner, by collusion or fraud, pays in advance of the payments due under the contract, thereby diminishing the fund available to the sub-lienor, he shall be liable, as if such collusive or fraudulent payment had not been made. This section appears to be exclusive in defining the. circumstances which will give to the sublienor a right to resort to an obligation which, as between the owner and contractor, had been discharged when the sub-lienor’s right accrued. The statute preserves the amount of the indebtedness of the owner to the contractor, as a fund for the satisfaction of the claims of those who take liens in accordance with its provisions; but it does not, for the purpose of creating a fund to which they may resort, enlarge the owner’s liability to the contractor as it may be fixed by the. terms of the contract and by the rules of law relating to the subject.

Judgments reversed and demiorrer overruled.  