This section is from the book "The Law Of Contracts", by Theophilus Parsons. Also available from Amazon: The law of contracts.
The workman has a special property in the thing delivered to him, and may maintain an action against one who wrongfully takes it from his possession. If it perishes in his hands, without his fault, the owner loses the property. And from the authorities it might seem that the owner is also bound to pay pro tanto for the work and labor already expended upon it (where the contract does not provide otherwise), as well as the materials used and applied. (s) We doubt, however, if the practice in this country be altogether so; it is certain that a distinct usage to the contrary would control any such rule; (t) and without asserting that there is any such established usage, we think that, generally, where an owner leaves a chattel with a workman who is to labor upon it, and the chattel is accidentally destroyed when this labor has been partially performed, each loses what each one has in the thing destroyed; the owner his property, and the workman his labor. If the thing perishes from intrinsic defect, the reason for requiring pro tanto compensation from the owner would be stronger.
(r) Felt v. School Dist. 24 Vt. 297.
(s) Menetone v. Athawes, 3 Burr. 1592; Wilson v. Knott, 3 Humph. 473. See also Brumby v. Smith, 3 Ala. 123.
(t) It would seem from Gillet v. Maw-man, 1 Taunt. 137, that a general usage, to the effect that the workman was not entitled to be paid until his work was finished, would prevent his recovering for his work and labor on an article accidentally destroyed while the work was going on.
Where the workman is employed to make a thing out of his * own materials, it is a case of purchase and sale, or hiring of labor, and not of bailment. But if the principal materials are delivered to the workman, this is a case of bailment, although he has to add his own materials to them. (u)
(u) Merritt v. Johnson, 7 Johns. 473. This subject was thoroughly discussed in the case of Gregory v. Stryker, 2 Denio, 028. It was an action of trespass for a wagon, and the defendant, who was a constable, justified the seizure of it under an execution against one Rose; and the question was, whether the wagon when taken by the defendant belonged to the plaintiff or Rose. It appeared that the wagon in question formerly belonged to the plaintiff, and that he made a contract with Rose to repair it for him. Before the wagon was repaired it was worth but little, except the iron; none of the wooden part was used in the reparation, except the tongue and evener. When finished it was worth $90, and Rose's account for repairs amounted to $78.50. The defendant took the wagon in the possession of Rose immediately after it was completed, and sold it on the execution. Upon these facts the court held, that the property in the wagon still continued in the plaintiff. And Beardsleyt J., said: uAs the value of the new materials and labor used and employed in repairing or reconstructing the wagon greatly exceeded that of the old materials used in the operation, it was urged that this was really a contract with Rose to make a new wagon, and not for the repair of an old one; and, therefore, as most of the materials were furnished by him, his right of property in the vehicle would continue until its completion and delivery under the contract. No doubt where a manufacturer or mechanic agrees to construct a particular article out of his own materials, or out of materials the principal part of which are his own, the property of the article, until its completion and delivery, is in him, and not in the person for whom it was intended to be made. But it is equally clear, as a general proposition, that where the owner of a damaged or worn-out article delivers it to another person to be repaired and renovated by the labor and materials of the latter, the property in the article, as thus repaired and improved, is all along in the original owner, for whom the repairs were made, and not in the person making them. The agreement in such case is but an every-day contract of bailment - locatio operis faciendi; and the original owner, so far from losing his general property in the thing thus placed in the hands of another person to be repaired, acquires that right to whatever accessorial additions are made in bringing it to its new and improved condition. Nor am I aware that in this class of cases it is at all important what the value of the repairs, actual or comparative, may be. No case is referred to which proceeds on that distinction, nor any writer by whom it is adverted to as material. If we adopt this distinction, what shall be its limit? The general property must be in one party, to the exclusion of the other, for surely they are not tenants in common in the thing repaired. Shall we then say that where the value of the repairs falls below that of the dilapidated article on which they were made, the original owner has title to the article in its improved condition, and vice versa, where they exceed it in value, title to the article, as repaired and improved, passes over to the person by whom the repairs were made? Such a rule would certainly be plain enough, and probably might be applied, without great difficulty, to any particular case. But it would be found to give rise to a variety of questions never heard of in actions growing out of the reparation of decayed or injured articles; and the rule itself, I am persuaded, has not so much as the shadow of authority for its support. There are a multitude of instances in which the expense of proper repairs greatly exceeds the value of the article on which they are made. It is so in the lowly operation of footing an old pair of boots, and not infrequently in repairing
• 133 * Where materials are delivered to a workman, and a fabric is to be returned by him, made at his own election, either of those materials or of similar materials of his own, as if a certain weight of silver be given him, to be returned in the form of a silver goblet, or a certain quantity of wheat to be returned in flour, some difficulty has arisen, and some conflict of opinion. We should regard such a contract not as a locatio operis faciendi, but as creating an obligation of a different character on the part of the workman; one, indeed, more similar to a debt. If the contract expressly, or by a clear implication, imported that the fabric to be returned should be made specifically of the very material delivered, then, if the material should perish or be lost without the fault of the workman, it would be the loss of the owner. In the former case, where the workman was at liberty to use what materials of like quality he would, those delivered to him would be regarded only as a partial payment in advance for the thing to be made and delivered to him who advanced it, and the workman would be still bound to make and deliver this article. (v) a broken-down carriage. The principle contended for by the defendant is not necessary for the security of the mechanic by whom the repairs are made. He has a lien for his labor and materials, and may retain possession until his just demands are satisfied. This affords ample protection to the mechanic. And who, let me ask, ever heard that this lien was limited to repairs which, in value, fall below that of the original article on which they are made? Yet this limitation must necessarily exist, if the ground assumed by the counsel for the defendant is well taken."
 
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