Chapman v. St. Stephens Protestant Episcopal, Church, Inc.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 685 The appellant filed his bill in the circuit court of Dade County, for the foreclosure of a lien claimed by him for labor performed on and for materials furnished for repairing and enlarging church property used and occupied by St. Stephens Protestant Episcopal Church, Inc., of Coconut Grove, but the legal title to which was in Trustees of the Diocese of South Florida, a corporation. The latter corporation was created by act of the Legislature under the name of "The Protestant Episcopal Church in the Missionary Jurisdiction of Southern Florida" with full power to acquire property for the use of the Protestant Episcopal Church in the Missionary Jurisdiction of Southern Florida, or of any institution controlled by said church. The act among other things provides that no property used for parochial purposes shall be alienated or encumbered without the written application or consent of the constituted authorities of the parish and that it shall not be lawful for any parish or the corporate officers or congregation thereof to encumber, sell, transfer or convey any real property without the consent of the corporation. Later the corporate name was duly changed to "The Trustees of the Diocese of South Florida." *Page 686 In the charter creating the defendant St. Stephens Protestant Episcopal Church Inc., a corporation (which was in 1925) the corporation acknowledged itself to be a member of the Protestant Episcopal Church in the Diocese of South Florida, and adopted Constitution, canons, doctrine, discipline and worship of the Protestant Episcopal Church in the United States of America and also the Constitution and canons of the said Church in the Diocese of South Florida. The Charter of the last-named corporation provides that the officers by whom the affairs of the corporation are to be managed are a Rector, and a Vestry composed of not less than five lay baptized male members of the corporation, one of whom shall annually be appointed Senior Warden by the Rector, and one shall be elected Junior Warden. The Vestry shall also elect annually a secretary and a treasurer. The charter also provides that "No grant shall be made nor shall any change (charge) be imposed upon any consecrated church or chapel or any church or chapel which has been used solely for divine service belonging to the Parish, except by the consent of a majority of the whole Vestry at any regular or special meeting, nor without the consent of the Bishop acting with the advice and consent of the Standing Committee of the Diocese." At the time the property in question was acquired by the church, the organization at Coconut Grove was a mission under the Protestant Episcopal Church in the Missionary Division of South Florida. The clergyman then in charge of the mission raised certain money by subscription which, added to money obtained as a result of the sale of property it already had, was paid for the purchase of the property in question, and the title to the property was made to "The Protestant Episcopal Church in the Missionary District of Southern Florida." In his testimony, the said clergyman states that *Page 687 "A mission cannot hold property, not being a corporate body, it had to be held by a trustee or Diocese. * * The custom was for the diocese of mission jurisdiction to hold title to all mission property." When the Coconut Grove church was incorporated, it continued to use the same property. On June 5, 1923, the Trustees of the Diocese of South Florida at a regular meeting resolved "That whenever a parish shall incorporate under the standard form of charter which has been prepared by the Chancellor the Bishop shall convey * * * to the incorporated parish the property held by this corporation for such parish, provided that this resolution shall not apply to any property which is held by this corporation on any express trust." The church building and rectory belonging to St. Stephens Church were seriously damaged in the hurricane of September, 1926, and it became necessary to do something at once to avert greater loss. Being unable to get together a majority of the vestry, members thereof — less than a majority — authorized certain work to be done on the rectory so that it could be occupied by the rector who was then out of the city, but would return in a few days. On October 8th, following, at a meeting of the vestry, a majority being present, it was moved "That a committee be appointed, with full power to act, to consider widening the church to the South as far as the present North line of the sidewalk and to extend the back wall to a line with the extreme Eastern Wall of the present church building. The idea being to make no changes in the chancel, pulpit or the position of the organ console, but to arrange for a wall to extend across the new structure in a line with the wall at the right hand side of the sanctuary; this wall having a door from the church to the new space, which will be developed up into rooms for the choir and providing more room in the Vestry." Upon the motion being carried, Mr. Gray and Mr. Oemler, the latter being an architect, were appointed as *Page 688 a tentative committee to be approved by the Rector. A motion was then made and carried that the committee be instructed to o.k. all bills for payments and the treasurer was authorized to pay all bills so approved. It seems that committeeman Gray was not very active in looking after the repairs that were made, although he stated that he was on the property about every day, and it is not in evidence that he o.k.'d any bills. Committeeman Oemler went ahead and made a verbal contract with the complainant to do the work on a cost-plus basis. No plans or specifications were made other than a drawing of the alterations to the church building and this was changed somewhat. During the progress of the work, the vestrymen generally were on the property every Sunday and some of them were there two or three times a week. The Rector returned the latter part of September or the first part of October and was there probably every day where he could, and sometimes did, consult with Mr. Oemler. Checks were drawn periodically to cover payrolls and material until some time in November when $10,850.00 had been paid on the work, while the contractor had paid out the sum of $15,597.47. Thereupon, the complainant was notified to cease work. He then demanded payment of the balance due him which added to the percentage claimed by him amounted to $7,087.09, and payment was refused. The master reported that complainant was entitled to a lien upon the church property for the payment of said amount together with interest thereon from November 26, 1926, and recommended that a decree be entered in favor of the complainant. The court sustained certain exceptions filed by St. Stephens Protestant Episcopal Church Inc., and dismissed the bill. We deem it established by the evidence that a contract was made with the complainant to do the work for the St. Stephens Protestant Episcopal Church Inc. on a cost-plus *Page 689 basis; that the complainant in good faith spent upon the work the sum of $15,597.47 of which amount he was paid $10,850.00; that the defendant St. Stephens Protestant Episcopal Church Inc. then had and continued to have possession and enjoyment of the property; that, to use the language of Bishop Mann, whose testimony was taken before a commissioner, "repairs of that sort are made by the rector and vestry. They don't have to consult the Bishop on the matter," from which we deduce that the Rector and Vestry had general authority under the church law to make such improvements, if it was in the power of the trustee to withhold it from them; that certain work was done which was not covered by the quoted resolution of the vestry, but that it was done under the supervision of Oemler, and the cost of this extra work is not apparent from the record; that the defendant, Trustees of the Diocese of South Florida, held the legal title in trust for the use of the Coconut Grove Church, the beneficial owner, and that said church could have obtained the legal title to the property in its own name at any time after it became a corporate entity. Under the terms of the resolution of the Vestry no limit was placed on the amount that was to be spent in repairing and making additions authorized to the property, nor was any detailed plan adopted by them. If there was any protest made or dissatisfaction shown during the progress of the work on the part of the Rector and Vestry as to the work that was done, the cost of it, or the manner in which it was done, the record does not reveal it. Under the circumstances disclosed by the record, St. Stephens Protestant Episcopal Church Inc. had the right to make a binding contract for repairs and additions to the church property. It is not argued here that the Vestry did not have the *Page 690 power to appoint a committee to see that the work was done, but it is insisted that one of the committeemen, alone had no right to make a contract with complainant, and that because the other member of the committee knew nothing of such a contract, it was not binding on St. Stephens Protestant Episcopal Church, Inc. "Liens prior in dignity to all others accruing thereafter shall exist in favor of the following persons, upon the following described real estate, under the circumstances hereinafter mentioned, to-wit (Sec. 5349 (3495) Compiled General Laws of Florida, 1927) * * * "In favor of any mechanic, laborer or other person who shall perform by himself or others any labor upon, or in the construction or repairs of any building or other work or structure, or additions to or upon any fixtures therein or thereon; upon such buildings, work or structure and the land upon which it stands. (Sec. 5350 (3496) Compiled General Laws of Florida, 1927) * * * "In favor of any person who shall furnish any building material for the construction, repair or use of any building, fence, railroad, canal or telegraph line, wharf, bridge, mill, distillery or other manufacturing work or structure, upon the said buildings, lines or other property, and upon the lands upon which they stand. (Sec. 5353 (3499) Compiled General Laws of Florida, 1927. * * * "As against the owner, absolute or limited, of the property, real or personal, upon which a lien is claimed, or person deriving through his death, or purchasers or creditors with notice, the lien hereinbefore provided for shall be acquired by any person, in privity with such owner, by the performance of the labor or the furnishing of the materials. Any purchaser or creditor whose title, interest, lien or claim in or to the property shall be created, or shall arise, while the construction or repair of such property as aforesaid is in progress shall be deemed and held to be a purchaser or creditor with notice. * * * " Section 5380 (3517) Compiled General Laws of Florida, 1927. *Page 691 There is nothing in the statute that excepts church property from the above-quoted provisions though it has been held, in other jurisdictions that a mechanic's lien cannot be acquired on a church building. The weight of authority however sustains the right to a mechanic's lien against such property. 18 R. C. L. 884; 40 C. J. 60; See Notes in 78 Am. Dec. 696; 51 L.R.A. (N.S.) 161 and Ann. Cas. 1915D 1145; 20 A. E. Ency. Law (2d. Ed.) 289. In the instant case the trustees of the Diocese of South Florida held merely the legal title and the St. Stephens Church was the beneficial or equitable owner of the property. "In case of a simple or dry trust a mechanic's lien may exist for labor performed or materials furnished under or by virtue of a contract with, or the consent of the equitable owner of the property; but where a trustee has power to manage and control the trust property, a contract with the cestuis que trust alone, not consented to or approved by the trustee, is not sufficient as a basis for a mechanic's lien." 40 C. J. 110. As a general rule an equitable as well as the legal owner of property may create a mechanic's lien. The word "owner" includes the owner in equity as well as at law. Phillips on Mechanic's Liens (3d Ed.), Secs. 67, 188; 20 A. E. Ency. Law (2d Ed.) 330; Goldheim v. Clark, 68 Md. 498, 13 A. 363; Seitz v. Union Pacific Ry. Co., 16 Kan. 133; Springer v. Kroeschell,161 Ill. 358, 43 N.E. 1084. While it has been held here that persons who desire to avail themselves of mechanics' and laborers' liens should take care to inform themselves with whose estates they are dealing, when they make contracts and perform their labor (National Bank of Jacksonville v. Williams, 38 Fla. 305, *Page 692 320, 20 So. 931), it is also true that the owner is estopped to deny the agency where, without repudiating it he stands by and expressly consents to, or silently acquiesces in contracts for improvements entered into with a person who claims to be his agent. Also, the owner may, under the circumstances of the case, be estopped to deny the authority of his agent to enter into the contract, 40 C. J. 97. Furthermore, a corporation, the same as a natural person, may ratify and become bound by an unauthorized contract made on its behalf by its agent, if the contract is within the scope of its corporate powers and might have been previously authorized by it, (14a C. J. 373) and ratification "may be implied from the acquiescence in, or recognition of, the act by the corporation through its proper officer or agent, or from its accepting and retaining the benefits of the act, or from any other acts or conduct which reasonably tends to show an intention to adopt or affirm the act or contract, particularly where it appears that the corporation has repeatedly recognized and approved similar acts done by the officer or agent, and provided that at the time of such acts or conduct it has full knowledge or the material facts; and where the unauthorized act or contract is clearly beneficial to the corporation, a ratification may be implied from slight circumstances." 14a C. J. 382, 387. See also Atlanta St. Andrews Bay R. Co. v. Thomas, 60 Fla. 412, 424,53 So. 510, and Annotation, 7 A. L. R. 1446, et seq.; 2 Jones on Liens (3d Ed.) 451. Where authority is conferred upon two or more agents to represent their principal in a business transaction, it is the general rule that such an agency will be presumed to be joint, and it can be performed by the agents only jointly unless an intent appears that it may be otherwise executed; but if it appears from his course of dealing or subsequent approval that the principal has waived the requirements *Page 693 of joint action on the part of the agents by allowing a number less than the whole to act for him, the execution of the power by a number less than all will be valid. 1 Mechem on Agency (2d Ed.) Sec. 198; 2 C. J. 668. Inasmuch as the management of the affairs of St. Stephens Episcopal Church devolved upon the Rector and Vestry, and they, with the "consent of the Bishop, acting with the consent of the standing committee of the Diocese" had the power to impose "changes" (charges) upon the church property, it seems to us that when Bishop Mann testified that "repairs of that sort are made by the Rector and Vestry," this statement, uncontradicted, taken in connection with the evidence in the record relating to the conduct of the Rector and Vestry, authority was clearly shown for making the said improvements. If Oemler was not duly authorized by the Rector and Vestry to make the alleged contract with the appellant, the officers of the church either had actual knowledge of what he did, or they should have known because it was their duty to know it, and "negligent ignorance has the same effect in law as actual knowledge." Redstone v. Redstone Lumber Supply Co., 101 Fla. 226, 133 So. 882. By acquiescing therein and accepting the benefits flowing therefrom, they ratified Oemler's acts and now are estopped to deny his authority to bind the St. Stephens Episcopal Church. It follows that the appellant had, at the least, a lien upon the interests of the St. Stephens Episcopal Church in the property, and since the Rector and Vestry of the said Church had the authority of the defendant, the Trustees of the Diocese of South Florida, to make "repairs of that sort" (to the Chapel and Rectory) we hold that the lien is upon the whole of said property and that appellant has a right to have it enforced. *Page 694 The decree appealed from is reversed and the cause is remanded with directions to enter a decree for the complainant in accordance with the views herein expressed.